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Re-seeing the Person Applying Subsidiarity in Business

Dr. Michael Naughton gives a speech at the Higher Calling Event in James B. Woulfe Alumni Hall. Photo by Chloé Knutson

“Subsidiarity challenges leaders to respect employees, meaning to re-see or to look again at the people with whom they work, and to recognize the unrepeatable, irreplaceable personal reality of each person,” Dr. Michael Naughton told an audience of 120 business people, faculty and students gathered for the annual Higher Calling dinner on Feb. 24 in James B. Woulfe Alumni Hall.

Naughton, director of the Center for Catholic Studies, gave these opening remarks as co-author of Respect in Action: Applying Subsidiarity in Business at the Higher Calling dinner, which is in its seventh year and is produced by the College of Arts and Sciences’ Center for Catholic Studies’ Ryan Institute for Catholic Social Thought and Habiger Institute for Catholic Leadership, in partnership with the Opus College of Business and Veritas Institute.

Practicing subsidiarity is no easy task for a leader, Naughton said. Personal preferences or blind spots can get in the way when trying to recognize the latent interests or abilities of an employee. Nor is it easy to develop and deploy an employee’s gifts in ways that serve both the individual and the organization.

So, why should a leader make the effort? Because one goal of subsidiarity, Naughton said, is to create “good work,” which will in turn have implications for creating “good goods and good wealth,” the three core objectives for the business leader who embraces his or her work as a “calling.”

It was through the lens of good work that Sister Maureen McGuire, DC, executive vice president of Mission Integration for Ascension Health, and Emery Koenig, recently retired vice chairman and chief risk officer for Cargill, Inc., reflected on the application of subsidiarity.

Finding meaning to inspire

Sister Maureen McGuire, DC, executive vice president of Mission Integration for Ascension Health.

McGuire discussed how the history of Ascension Health, the largest nonprofit health system in the United States and the world’s largest Catholic health system, is replete with examples of subsidiarity at work. From the time the Sisters of St. Joseph and the Daughters of Charity Little Sisters of the Poor first considered merging their systems, McGuire said their growth was grounded in the effort to be a participatory organization and was guided by two objectives. First, Ascension would provide care for all persons, especially the poor and vulnerable. Second, associates should find meaning in what they do.

Ascension Health operates in a rapidly changing industry, McGuire said. Yet, in a culture of subsidiarity and participation much can be accomplished, even in the midst of profound change. McGuire pointed to the $1.95 billion Ascension Health directs each year toward the care of the poor as evidence. But you need more than a culture of participation, she added.

“You cannot do a blessed thing without inspired people,” she said.

With that in mind, one of the first activities of the merger was to survey hundreds of employees to identify a set of shared values that would allow them to create a new organization with inspired people.

“Values create the heart of subsidiarity,” McGuire said.

Three values came through clearly and consistently: respect, reverence and wisdom. These became the inspiration for a new culture and a new, highly participative organization.

Creating such a culture, McGuire said, is a practical thing. For Ascension, this included a respect for the local identity of parts of the system. Choosing the system leaders was important, as was allowing decisions to move to the appropriate level. Through this approach, new and better processes were created by Ascension employees who knew those functions best – not by outsiders, and not necessarily by upper management.

Changing hearts and minds

Emery Koenig, retired vice chairmen and chief risk officer for Cargill.

Koenig joined Cargill in 1978. His 38 years with the company included assignments and increasingly significant areas of responsibility, primarily in commodity training and risk management, and finally, as vice chair and chief risk officer of Cargill.

Although neither he nor Cargill as an organization used the word “subsidiarity” to describe their internal practices, he said he looks back at experiences when practices essential to subsidiarity were on display. Learning to handle people with care, he said, was critical to a leader’s engagement and success.

“We had to focus on changing the hearts and minds of employees so each one knew where they fit and why they mattered,” Koenig said.

Affirming Naughton’s comments on the importance of employee engagement, Koenig said that one practical reason engagement matters is that engaged employees tend to stay around. He also suggested that engagement should be a concern for management because it has an impact on employee well-being, especially in matters of safety and turnover. As Cargill’s engagement scores climbed, its turnover rates dropped and its safety score improved.

Koenig’s special experience in risk management led him to an insight central to the notion of subsidiarity, he said. Risk management and crisis management are both enhanced, he said, to the degree that you give people parameters that define the area within which they are free to act. When these boundaries are clear and broad enough, he said, people can “play” creatively and effectively within them. The notion of distributed decision-making that is so much a part of subsidiarity also depends on the understanding of and respect for parameters.

“I don’t believe companies can or will be successful unless they adopt and apply subsidiarity,” Koenig said.