eBay's Meg Whitman on Building a Company's Culture

In a talk between the former eBay CEO and her colleague there, Rajiv Dutta, Whitman discusses how to create a company's character early on

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In February former eBay (EBAY) CEO and current California gubernatorial candidate Meg Whitman sat down with her former colleague Rajiv Dutta to discuss what they call "the character of the company"—a dialogue about business ethics that is particularly timely in light of the corporate scandals dominating the news today.

Dutta, who previously served as president of eBay Marketplaces, PayPal, and Skype, is currently the distinguished executive-in-residence at the Drucker Institute and the Peter F. Drucker and Masatoshi Ito Graduate School of Management in Claremont, Calif. His on-stage conversation with Whitman—one in a series that Dutta is conducting with leading executives—was part of the Drucker Centennial, a series of events marking the 100th birthday of the father of modern management, Peter F. Drucker. For more on the Drucker Centennial, including an events calendar, please visit www.drucker100.com.

A partial, edited transcript from the Whitman-Dutta event follows. (To see the full video, including questions from the audience, please go to http://www.youtube.com/DruckerInst.

Rajiv Dutta: There are so many questions I could give you. But I think the question that comes to my mind is just what does "the character of the company" mean?

Meg Whitman: I think it means the set of values and principles by which you run the company that really begin to become part of the DNA of the company. And "the character of the company" came from our good friend, Howard Schultz, who was on the board of eBay for many years. It was at a particularly knotty time in the early stages of eBay, and we were trying to wrestle with a problem, which I think we'll tell you about in a moment. And he said: "Meg, what kind of company do you want to run? What do you want the character of the company to be?" And it became the phrase that encapsulated for us what I think eBay became known for, which was that moral center, that sense of right and wrong, that we ended up I think doing a good job of instilling in 15,000 people in 30 countries around the world. And it's almost the sense that you know what to do. It's not written on a piece of paper, but you know what the right thing to do is.

And one of the things that you took a personal interest in doing was just saying that: "Listen, this is important." What was behind that?

I think it's important because companies form culture very early on and they get imprinted very early on with a sense of right and wrong. And it starts from the top. It started with the CFO, the President, and CEO. And so, I think I had this innate sense that we needed to establish very early on what the code of behavior was going to be, what the code of ethics would be. And it's easier when you have 30 people in a room. I mean, eBay was half the size of this room for the first year that we worked together. And I saw everybody every day. Rajiv saw everybody every day. And so, it's easier to imprint a set of beliefs and values when the company is small.

Every day there are teaching moments. Every day there are opportunities to grapple with issues. That is how organizations learn. And I think one of the early lessons in grappling with issues that we had is—it's hard to remember back to 1998, but the Internet was much more of a Wild West really than it is now. And there was something called the Digital Millennium Copyright Act. And what that said was that certain venues, like eBay, like AOL, were not responsible for the content on your site unless you actually looked for what was on your site.