2. Build Business Case Commit Resources Set Base Line Vision, Goals, Projects Organizational Resistance Resolve Dilemmas Innovate Collaborate Integrate into DNA Reinvent Capitalism Where the movement is Where it is headed Sustainability
3. 1. Business Case - Drivers Resource Supply Costs, Shortages Energy, Water, Fish Do The Right Thing Owners Epiphany License to Operate Compliance and Regulations Chemicals, Air Quality Protect Reputation Improve Image, Brand Media, NGO, Activists Nike Interface Unilever HP Dow
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5. 3. Set Base Line, Identify Opportunities Making an inventory of past green activities motivates and reveals opportunities Internal External Strategic Enterprise Wide Functions Facilities Business units Low Energy Light Bulbs Reduce solid waste Recycle paper etc. Double sided printing Save water Many companies Community clean-up days Join local fund raising Local giving Many Companies Green products & technologies that were ahead of their time. Shell, Dow Coffee growers - Starbucks Sust. Fisheries - Unilever Diary farmers - Nestle
6. 3. Set Base Line, Identify Impacts Opportunities Corporate Infrastructure Human Resource Management Technology Development Procurement Inbound Logistics Operations Outbound Logistics After-Sales Services Marketing & Sales Financial reporting & Transparency Benefits, Training, Lay-off policies Suppliers Values e.g. Bribery, Child labor Green research, Conservation, Transportation Impacts Emissions, Waste, Energy & Water use, Hazardous Materials Packaging use & Disposal Transportation Impacts Truthful Advertising Transparency to Consumers Disposal of Obsolete Products, Handling of End-of life Issues (Porter & Kramer)
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Editor's Notes
Build Business Case. -Articulate need to change Appoint (Senior) Resources- Commit funds and people, establish ownership Set Base Line and Identify Opportunities- Make an inventory of activities and externalized impacts Develop Vision, Goals, Programs and Metrics- Align with company’s value creation Face Strategic Dilemmas, Resistance To Change- Resolve conflicts and threats to ongoing business. Find Innovations and Form Collaborations- In Value Chain, New Products, Services and Business Models Integrate into DNA and Transform Culture- Change the Business Processes Reinvent Capitalism, New Ethos
Build Business Case: Change management-issues and suggestions Change starts with the top most people believing that there is a need to change. They need to awaken to external patterns of change and must see both the need to act, opportunities from acting and risks to their business of inaction Take as much external input as possible. Use multi-stakeholder engagement. Be prepared to confront legacy issues- Legal departments will not want to open these issues. COMMUNICATE, ENGAGE AND COMMUNICATE MORE, Without employee engagement, progress will be slow. Continue to refresh the business case.. It is not a one off exercise
Change-management issues and suggestions. Not advocating that appointing a separate group to lead this effort is a must, as it has some down sides to it too. First the positives: It does signal to employees and to the outside world that the company is serious. It can make the change go faster as the dedicated staff can bring the required new tools for measurement and reporting etc into the company. The down side is it can leave it as a corporate “ Initiative” by- passing the core of the business and its activities, harder to integrate, takes ownership away from business units, employees… “ Oh no not another buzz word” and “here we go again… we had TQM, Six Sigma, now this too will pass..”
Change management. A CEO asking people in the company “ I want to know what are we doing in the area of sustainability? ” gets a lot of enthusiasm and people discover that many grass roots activities are happening and also some companies find things that were started years ago during the last green wave, but they were not developed or dropped because oil prices stayed too low. So this is a very good step: Suggestions for Change Management: Form focus groups, give some time off, brown bag lunches. Ask them to look back and look forward to identify ideas and opportunities Take these forward, roll them up from operational to strategic levels. Build confidence “ If we did them before, we can do them again. Publish them and communicate
This step can be done at many levels, at the operational level or at the strategic level by going through the various business processes and or functions. If done properly through cross functional groups they will find that there are connections between one box and another. E.g. lowering emissions in operations requires technology development and so they will start seeing the whole system and that addressing sustainability requires a systems wide approach and cross functional work. Challenges that people will come across and suggestions to change: Lack of financial systems – how to treat carbon as cash? Data gaps. There will be many- so need to make assumptions and be comfortable about making decisions. Make the assumptions transparent. Get the CFO on board. Develop improvement projects, small ones and big ones in cross functional teams as this is a systems wide challenge. Measure to learn and learn to measure.. How can you measure the impact of your company on biodiversity for example? Set the bar high as goals could erode. Identify owners and develop new tools ( e.g. Life Cycle Impacts and modelling) Measure and celebrate quick wins.
Companies can come up with sustainability projects that have very little connection between why they want to change (the business case) . They can alos do the easy things like give money as philanthropy or take a visible role in changing GHG policy while their GHG footprint is not their biggest problem.. So beware of losing sight of the business case. Second unless the projects create value to the business and add something to their profits the projects will die. They will get the chop and raise employee sceptisom even more. Two company examples: Unilever and Dow.
It is easy to lose time, money and motivation during the journey. Suggestions: Do not suppress the dilemmas and negative voices: See dilemmas as a source of innovation and ideas. Have empathy for the reasons.. Do not judge. Management must recognize that what is required is change in values. Need a plan to exit black and grow/ acquire green Reward systems need to be applied to make the change
What gets in the way of big company collaborations. Intense competition between companies in the same industry or sector Ego ( Company cultures have big egos). Lack of trust towards NGOs. Lack of experience of working with NGOs Think collaboration takes longer time… Peter Senge Quote“ Go alone, you may go faster… Go with other, you wlll go farther” Need awareness that “this” is bigger than our company
This is really not an issue for most companies if they allow employees to do the required. Most employees want to come up with sustainability ideas. Need to redefine criteria for “green” innovation. Weight innovations that bring social and environmental good higher Give R&D budgets for green innovations. Reward systems for green innovations. Make connection between green and profitability- pricing green products and scaling green is still in its early days
Changing rewards and recognition are essential for integration into values: Starting with the CEO, make sustainability a big part of their bonus and salary. Recognize that people have different opinions and engage all parties. Definition of sustainability that is large enough to include all employees and engage them. If employees were included from the beginning of the change process integration happens more naturally. Companies that start with all green missions e.g. 7 th Generation have no issues of integration a sthere is little conflict. The challenge is to include new employees as the company grows.
Is sustainability reactive or aspirational? If reactive it will be short lived and will fade away after pressure goes away. If aspirational then it will get employee motiation
Nestle case study he gives to explain Shared Value : 1. Obtaining a reliable supply of specialized coffees is extremely challenging. Most coffee is grown by small farmers in impoverished rural areas of Africa and Latin America, trapped in a cycle of low productivity, poor quality, and environmental degradation that limits production volume. To address these issues, Nestlé redesigned procurement. It worked intensively with its growers, providing advice on farming practices guaranteeing bank loans, and helping secure inputs such as plant stock, pesticides, and fertilizers. Nestlé established local facilities to measure the quality of the coffee at the point of purchase, which allowed it to pay a premium for better beans directly to the growers and thus improve their incentives. Greater yield per hectare and higher production quality increased growers’ incomes, and the environmental impact of farms shrank. Nestlé’s reliable supply of good coffee grew significantly. Shared value was created
