A New Business Model for Bookstores. . . from an Interview with Chris Morrow General Manager of Northshire Bookstore • Manchester, Vermont

“The whole industry is changing,” Chris Morrow acknowledged in his Northshire Bookstore office.   “The industry is certainly in turmoil, but things have shifted in our favor.”  Chris, whose parents started this Manchester, Vermont destination store, explained that over the last year and a half eBooks sales growth slowed considerably as print books solidified their base.

Chris Morros

Chris Morrow

Chris sees great opportunities:  “There is this opening to explore different business models.  Right now, we are the unpaid showroom for books. We do the marketing and get half the sales. The discovering of the books is still happening in the stores. It is interesting.”

Part of Chris’ driving force is his commitment to his employees, the community of book lovers, and the environment, all in addition to the financial bottom line: i.e. socially responsible business practices.  These practices will be the foundation to the shift in business model — in fact they may drive its success.

Monetize bookstores role as social change agents
“We need to create a business model around helping to move society in a direction it needs to move to.  We need better distribution of energy and goods, as well as retail manufacturing for local sustainability. We need to look at our use of resources and resource management. It is clear we need to get off of fossil fuels and away from our consumptive way of life.  It is time to get beyond consumerism as our way of life.

“I’m not a small store,” said Chris surrounded by enticing books and creative counterparts. “There will be some Mom and Pops that will stay around because they don’t need to take money out of the business. Other bookstores will have to be very diversified. There will have to be a conglomeration of products offered, such as print on demand. There will always be print bookstores, just like there are vinyl (record) stores; there will be boutique bookstores like that. The rest of us independent bookstores will have to diversify.”

The question is whether this diversification will be founded on local bookstores role as social innovators.  For example, Chris spoke of the idea of a preview night to support the mid-July SolarFest (www.solarfest.org) in Middletown Springs, Vermont.  “I am experimenting and trying to tie into this new business model using our marketing arm.  I can try to leverage that into also supporting SolarFest, in this case.  Where is the business model? That is what I am exploring at the moment.”

Chris created a panel on climate change, featuring activist Bill McKibbon. While the panelists were  all authors, it was more of a public conversation about climate change. “It is me being able to use the book store and access to the authors to highlight causes of interest to me.  I am extremely interested in environmental issues.”

In the past Northshire would invite authors to speak about their new books, there would be a signing, and the store would sell some books. Chris upped the ante to have events that are more issue-oriented.  “This is unusual for bookstores because there is no money in it,” Chris smiled. “It is getting harder and harder to run a bookstore, so our ability to do that sort of thing is lessening.”

The New York Times floated one idea to keep bookstores in the black — charging for author events.  Chris explained, “Bookstores spend a lot of time and energy getting authors here.  People come to the events and never buy the book.  It is a nice hour and a half out, and bookstores are trying to monetize aspects of bookstores in various ways.”

Creative ways to support employees — even under financial stress
“We’ve always had that sort of family business supporting the community through our employees.  In the past I spent a lot of time on the employee side of things, pushing the social responsibility mandate, and also expanding what we did in the community,” said of his past focus at Northshire.

“Strategically, I now run the company.  I have a staff liaison, but no HR department.  The Wellness Coordinator is really the point person for getting initiatives off the ground, such as the employee healthy eating initiative, an exercise machine in the building, a smoking cessation program, etc.  On the side, she also coordinates periodic storewide lunches, and a bunch of other small things around employee wellness.”

Northshire Bookstore employes 40 employees including the part-timers. Without the funds for a Sustainability Officer, it falls on the Wellness Coordinator to explore what type of initiatives the employees are interested in and put them together.  “In the past it was more haphazard, which is why I directed someone to coordinate it and get feedback.  There is a big squeeze on time and energy and I want every initiative to be valuable.

“We also have a Community Connections Coordinator.  She coordinates with local nonprofits such as a kids reading and nature program with the Equinox, etc.  We try to raise awareness through marketing Northshire Bookstore neighbor-to-neighbor.”

Chris finds the SR policies result in not only decreased turnover, but “a nicer environment for employees and an enhanced the workplace atmosphere, which is key.  The community-based work was always going on, we just enhanced it.  It certainly increased the bottom line, it drives sales.  The bottom line is how I manage the store in relation to the top line.”

“Employees are highly invested in a commitment to excellence and not necessarily within the social responsibility rubick.  It is about the books and a commitment to excellence in customer service.  They take pride in being able to read and communicate precisely about books, putting the right book in the right person’s hand at the right time.  There is a real art to that.  There is a real collaborative aspect to it.”

Although the image of the bookstore is not tied up in being a socially responsible organization, in fact it is a socially responsible business.  “We have people who take pay cuts to come work here because it is a good environment.  Physically and emotionally this is the hub of the town.  That is a big source of satisfaction for the employees,”  Chris noted that Northshire started out as an 1,000 square foot store, and over time, in very small increments, has grown to 10,000 square feet.Northshire Bookstore

“One of the luxuries you have as a business owner is shaping the business toward your own priorities,” Chris talked about his 1988 re-entry as an adult into the family business.  “I worked with my parents for a few years, they’ve always been involved in the community.  The term “socially responsible”. . . neither my parents nor our employees would not use that term, but that is what we do, who we are.  The store has always been active in community involvement.  With the environmental initiatives, that is definitely me driving the bus.”

Local imperatives drive state mission
“Book stores, historically, have been catalyst for change.  With big box stores and Amazon, we have been reinforcing the Buy Local message,” says Chris of his work establishing Local First Vermont.  “There are little Local First groups all over the country.”  There are a couple national organizations that are networks of all the networks such as BALLE (Business Alliance for Local Living Economies) on whose Board of Directors Chris served, and AMIBA (American Independent Business Alliance).

Chris became the Founding President of Local First whose members are local business owners, professionals, nonprofit leaders and government representatives who are committed to preserving the character and prosperity of Vermont’s economy, community networks  and natural landscape.

The Local First mission and vision is:     “To preserve and enhance the economic, human, and natural vitality of Vermont communities by promoting the importance of purchasing from locally owned independent businesses.  We envision a robust and sustainable economy fueling vibrant communities, built (in part) on the cornerstone value and practice of “buying local first”.  Local First is now a program of Vermont Businesses for Social Responsibility.” Chris is a past member of the VBSR Board of Directors.  (http://vbsr.org/local_first_vermont/local_first_about_us/)

“What I did is an extension of what they Local First was doing at the state level.  Then I started new initiatives on my own.  I went to Oberlin College which has a very strong public service component.  I think some of it is related to that.  Any good bookstore is intricately tied into the community by its very nature.  Bringing ideas and entertainment to the area has always been important to us,” Chris explained.

SR is not a luxury, just part of what we do
“It certainly is easier to manage when things are growing rather than when you are just managing,” Chris spoke of the industry challenges.  “However, socially responsible policies are not a luxury, it is just part of what we do.  I am spending time to install a 16KW solar array on our roof through the Efficiency Vermont’s SPEED, a feed in tariff program.  We put in the solar and they buy the electricity at a set rate for 25 years.   I have had to fill out a myriad of forms, as well as spending time and money with the accountant to figure this out.  On the surface, it has nothing to do with running a bookstore, although we have a display in our sustainability section on how we are doing this.

“We are also monitoring energy savings and I think it will be a decent ROI (return on investment).  It will not be huge, but it will be worth doing, especially considering the other non-monetary aspects as well.”

SR will build the model
Chris will continue to make these choices as he opens a second location in nearby Saratoga, NY, right on Broadway.  “It is booming over there, the fastest growing county in New York.  It is a college town with a strong local base,” he enthused.  His excitement was palpable as he shared plans for his new shop.  “The National Endowment for the Arts expounds on how important reading is to education,” Chris noted the support from NEA.  “Education is a foundation for a fulfilling life, for community vibrancy, so it is a big part of our mission to promote reading to kids.”

Chris said he will stay focused on changes in the book industry, reacting to them, and shaping them to Northshire’s advantage.  He, with others in the industry, will be looking for the business model that keeps bookstores at the center of their communities, there to knit communities together and promote social change.  If anyone can do it, Chris Morrow is a top contender.      http://www.northshire.com

Julie Lineberger & Ellen Meyer Shorb

Social Responsibility in Times of Financial Crisis . . . from an Interview with Jan Blomstrann, President and CEO of NRG Systems

In 1987 NRG Systems formally acknowledged the effort Jan Blomstrann was contributing to the young company by bringing her on payroll.  Founded in 1982 by David Blittersdorf, the company’s main accounting system at the time was a proverbial shoe box of receipts.  Working as a nurse, yet intimately involved in the growing enterprise, Jan noted the need to create a balance sheet.

Ahead of its time in terms of producing instruments to measure wind capacity and capability, NRG business management systems lagged behind the creative engineering aspects of the company.  Jan decided to take classes at Champlain College learning about both business and computers, also in their neophyte stage in terms of small business accounting.

In the late 80s, Jan was not particularly interested in wind energy. “This was in the infant years of wind energy,” she recalled.  “At a trade shows there would be 50 people, all engineers very excited about how a gear box worked.”

In fact, when she spoke to people about what she was doing, the initial reaction was: “You’re doing what?  Making wind instruments?  Trumpets?  Can you make money on this?”

Nurse turned CEO implements SR policies instinctively    JanBlomstrann

She was interested, however, in creating a business organization and management systems to professionally run the company.  “I did like the business part:  accounting, hiring people, figuring out how we were going to offer health insurance.

Although she did not label it at the time, the policies that made the most sense to her were socially responsible.  “It was just the right thing to do, especially in terms of (employee) retention.”

“NRG Systems, by nature of the product, is contributing something greater into the world.  I don’t think I ever thought of (the employee policies) as ‘I’m going to do things in a socially responsible way.’  Things just sort of evolved.”

Those policies included a compensation package of both salary and profit sharing as well as other benefits based on their company values.  “Our core values go back ten years or so, when we first got mature enough to do a strategic plan.  We said; ‘Let’s write down how we have been operating for twenty  years, and document it.’  Those core values — Environmental Stewardship/Leadership, Fair Employment, Profitability, Integrity, Innovation, Dedication. Our core values were reflective of who we were.”

Her ambivalence to the company product changed as the business grew.  “In the late 1990s young people started sending in resumes,” Jan reminisced. “They said: ‘I don’t care what it is, is there a job for me?’” Jan was startled at the requests that were predicated not only on the wind industry, but by her socially responsible policies. “It was very infectious for the employees to see the success of the company.  We were contributing to a new way of being and doing business. Those years were very exciting.”

With the success of NRG Systems, there came a time to move out of their rented sheet metal building.  “We had a desire to create something that had a lighter footprint on the planet.  It was time for us to move, and we felt it would be nice to walk the talk.”  This impetus coincided with her being named President and CEO of the company in 2004.

Architect Bill Maclay was given a power budget and this mandate: create a building that performs well, feels good, and is inviting.  “The entire process led to a LEED certification that taught us along the way,” Jan remembered of her company headquarters.  “It was the fourth industrial building in the world to get LEED Gold.  All materials were sourced as locally as possible.  No off gassing furniture or carpet were specified, no formaldehyde, etc.”

Renewable energy industry stalls — SR policies challenged
“The entire renewable energy industry was on a steep growth curve from 2002-2008, when we built our addition.  Then, the crash affected our business, and the wind industry, as capital dried up, and no wind projects were being developed.  A year ago both the US and Chinese market further dipped at the same time due to public policies,” Jan explained.

After years of strong growth the wind industry stalled.  A world-wide recession, coupled with a Congress unwilling to work with the President in supporting renewables, made a comprehensive energy policy impossible. Jan noted:  “Renewables were left with a simple tax incentive policy.”  Financing dried up.  Projects stopped completely.

Quite suddenly, NRG Systems had to make serious, and extremely difficult, decisions. At the onset, it felt like the company was being ripped apart.  Jan found herself staying up nights.  “It nearly killed me to do what we had to do last year, especially letting people go. When a lot of profits coming are in, it can mask the more stressful aspects of running a business; it’s easier to be creative.”

“In the boom years,” she continued, “with the profit-sharing variable as a component of pay, sometime people earned 50% above base pay.  With the downturn, there were some quarters without any profit-sharing at all.  In these times both the loyal and cynical elements can come from employees.  Although the cynical element wondered out loud if management knew what they were doing, the loyal element buoyed NRG Systems.”

“For example,” Jan quietly told a story, “we had an older man in electronics.  It was a tough year morale-wise, and we were not making as much money.  He got a little discouraged and was going to get another job. We talked.  He thought about it and decided to stay.  I saw him a few days later and said, ‘Thank you.  I am so glad you decided to stay. I hope it will be a good decision for you.‘  His response:  ‘I could go to the other company and make more money, but my wife is sick.  If I stay here, I know I can go to her doctor’s appointments with her.’  People go through different stages in live and go through different things.  I want someone coming through the door happy to be here.”

“The soul of the company is still there,” Jan mused.  “Our values are still there.  In terms of the benefits, we need to get some of them back.  But, I am not looking for this just so I can benefit;  I want everyone to benefit as we grow.”

One example is the mental health of the company.  With the difficulties, Jan wanted to give the NRG Systems team an opportunity to process their stress as a group. “This fall, we brought in a consultant who works on happiness, leadership, and personal accountability.  I gave him the charge to give a recasting exercise.  How do we recast this time into a new intentional story?  How do we look at this time as a positive step in the evolution of the company?

“The entire staff was split into four groups and did this exercise.  I was not part of it so that everyone had a full chance to vent.  People expressed anger, frustration, doubt.  It was just therapeutic.  They all said they appreciated the opportunity to do so in a group supportive way.  It was a good chance to get it out.  The gossipy water-cooler conversations came down, and the faith in leadership is coming round.”

With creativity, SR values adhered to
Jan found herself questioning how to stay true to values during this transition, realizing that things could never go back to where they were.  She explored new initiatives to offer positive reinforcement and recognize people in ways other than cash with a constant wish to portray her sentiments:  “You are all valued, you are all here, we have a job to do together.  This is what we are going to do going forward to rebuild.”

“We prioritized and focused on doing what we need to do to keep what is most important, such as preserving 401(k)s.”  While maintaining NRG’s policy of Open Book Management, “I brought in the word “budget’”.  This is one way of keeping core benefits, and core values, while evolving the company as a whole.

In doing so, some green benefits stemming from the NRG Systems core value of Environmental Stewardship, had to be shelved.  Jan ruminated about the decision to no longer subsidize employee hybrid vehicles.  “I’ve had to take some of the benefits away. I could not do it anymore.  No one lost the benefit who already had it, but nobody new can access it.”

She also mentioned a change in the company holiday party where, in the past, a band had been hired.  This year, in recognition of all the musical employes, Jan smiled, “Two bands formed themselves and got up at the party!  It was all in house.  Although it was a little quieter, it was more fun!”

While some company policies had to change, there is great evidence that the company values of NRG have never been at risk.  As Jan said, “It does not cost money to have integrity.  There are values behind what we do that don’t go away such as community relations and corporate giving.  This is still an important piece.  We give away less, but our program is still there.  I really don’t think its an either or.  Neither is Flex Time.  It is easy to have flexible work hours regardless of bottom line.”

One particular change, Jan is very disappointed about.  “We brought in a chef in 2006 or 2007 and provided lunch four days/week.  During this transition, I had to take as much cost out of our budget as possible. I would love to put that back in.  I keep asking myself, ‘Is there something else I can do to make sure everyone gathers at noon and has that benefit?’

“Previously, no one was using cars.  Everyone would collect at noon and there was a company conversation.  Productivity-wise it was unbelievable.  Meeting was productive.  Now we’re back to people getting in their cars for lunch, or eating at desks.” Jan ruefully concluded.

“It is easy and enjoyable to offer such policies when you are profitable and growing and things look great.  It’s more difficult when it’s not.”  Jan is looking to create changes that are not only for now, but the long term health of NRG Systems into the future.

Market stress re-orients business; SR still foundation
Jan’s words conveyed her long term thinking and belief in the future:  “The past is the past. Don’t think that if a certain contract comes in, it will go back to the way it was.  We need to create a new future for ourselves.  New things might happen, but in a new way.”

“We’re in a real transition phase as a company.  I would describe us as a company that grew quite steadily, we had a tremendous record.  It was exciting and fun to be in this business.  The ability was there to provide a great experience for employees.

“The last couple of years have been a huge wake up call. We are about half the size in terms of revenue and 25% smaller in terms of staff.  There’s had to be a real refocusing on what does it mean to be in business and what does it mean to be a good business?  I am asking that question of myself.  A few people were not there in the beginning and now see a company that is much more serious and much more stressed.  Where is the room for Social Responsibility?

“How do I take this company to the next stage in a much less privileged way, and emphasize the social responsibility aspect?  How do I make sure we continue to evolve?  I don’t think it’s an either or.  I think a lot of those things we did in those years contributed to our success, our intellectual level, institutional knowledge.  Keeping people improves institutional knowledge.

“The company is now a smaller group, working hard.  Policies were put into place that, once things turn around, a smaller group will see the benefits of.  The structure is still all there.  The morale and feeling about the company will turn around.

“There is the story to tell that we went through hard knocks, had to let people go, but we survived as a group and will continue.  By letting go of things of the past, we will be far more careful; lots of lessons have been learned along the way.  We are a smarter and better business than we were three years ago.”

Several years in, after fully establishing the values and policies of the company, Jan started feeling a connection to what NRG Systems was producing as well as the business administration of the company: “I started getting excited about wind energy when we talked about distributed energy, all the things that start to make it more than a machine.  And wind energy doesn’t put out belching smoke!”

“Fast forward today, it is in my blood and who I am.”  Good thing for NRG Systems, the blood flows both ways.

http://www.nrgsystems.com

NRG Systems Headquarters • Photo by Carolyn Bates

NRG Systems Headquarters • Photo by Carolyn Bates

Julie Lineberger

ReGreening a Company after Expansion . . . 
from an Interview with Sara Newmark, Director of Sustainability at New Chapter

New Chapter natural supplements and vitamins started early in the 1982 with co-founders Paul and Barbi Schulick preparing herbal remedies in the back room of a redwood saltbox nestled high in the Black Mountains.  They combined natural ingredients to create a pure product.  When New Chapter became a brand known for organic vitamins and supplements, consumers assumed it was green throughout, the avant garde of green and sustainability.  In truth, however, over the years of rapid growth, certain aspects of good stewardship were overlooked.

Enter Sara Newmark, daughter of Paul’s college buddy and then CEO Tom Newmark, who started her New Chapter career as an event planner.  In 2006, just shy of a year with the company, she sunk her incredibly infectious energy into a new role as Sustainability Officer. “Developing the Sustainability Initiative should have been easy, given the nature of our products.  However, with the day-to-day crazy busy growth we were experiencing, sustainability in terms of the entire company was never examined,” Sara remembered.

“We needed to catch up with our reputation in the marketplace.   We didn’t use 100% recycled boxes as it was expensive and the people in charge of purchasing weren’t aware of how important it was to mission and brand.  Now we’ve changed all the paper and boxes we use.”

Sustainability Initiative Slow Start
            With the CEO’s blessing, Barbi and Sara embarked on a Sustainability Initiative.  Barbi had a unique position in being both a co-founder and the wife of the other co-founder.  Sara had her own complicated relationship with the company.  Very successful in her position, she was still the CEO’s daughter.  Politically one would assume this to be a great asset, in fact it turned out to be a double edged sword.

“The combination of the CEO’s daughter and co-founder’s wife created some benefit and some liabilities.  The CEO gave the directive to top leadership, but we weren’t taken seriously. We had to fight to have it ingrained throughout the company,” Sara noted.

The two solicited the counsel of Liz Bankowski, a member of the New Chapter board who had run social issues for Ben and Jerry’s 20 years ago.  “She worked closely with us. It was Barbi, Liz, and me.  No one took us seriously.  It was not a company-wide decision to hire us as the sustainability team, which hurt us in the beginning.”

Sara, Barbi and Liz developed a sustainability matrix and presented it to the company at a staff meeting.  The matrix included all aspects of sustainability such as sourcing green materials for packaging, energy usage, carbon footprint, volunteerism for employees, workplace issues, community involvement, et cetera. “We said: We are going to start by going for the low-hanging fruit, internal changes.  We started with solid waste, purchasing and our employees behaviors.”

Low-hanging fruit – purchase of office supplies (pens, rulers, copy paper)
          The team started with something they thought would be easy:  office supplies.  “We decided to work inter-departmentally, and not house information within the sustainability office. I would be a resource, do the research, but the work would be housed within departments.”

“In other companies, you have to go through a VP for Purchasing.  At New Chapter, we didn’t.  All employees were allowed to order what they wanted though our Operations department.  I completed an audit of all purchases, compared prices and sustainability (recycled products, local sourcing, etc) creating spreadsheets that could be helpful.  Although some of the sustainable material prices were more expensive, taken as a whole, we could save money because we had never coordinated our purchasing of these items before.  It appeared that everyone loved it.”

However, not everyone did.  As there was no buy-in from Operations from the onset, the changes seemed imposed upon the department.  “It took many months to get buy-in from everyone.  In hindsight, it would have saved so much time to get leadership approval and work with Operations on the project rather than hand them an ‘easy to use’ spreadsheet.”

Challenges and the Slow Path to Sustainability
         “We then met with middle management.  We asked all the department heads: ‘Where can you make green improvements?’  We followed up.  They said they understood, but sustainability was always a separate item, pushed to the bottom of the pile of things to think about.

“Little by little, day by day, we started weaving sustainability into the fabric of everyday work, getting it into everyday conversation.” Sara noted how each new initiative that surfaced “We didn’t see changes right away nor get immediate satisfaction, but things started getting ingrained and started to change. Now sustainability is so part of who we are.

Sara’s Guide Points for Sustainable Sustainability:
Leadership needs to be Engaged:  Sustainability needs to be a leadership decision, something that leadership wants to see done.
Be a Yellow Light:  Relationships are the key business issue. Sara learned to not be a red light, a business stopper, but to be a yellow light, to get people to slow down and look at what we were doing. By working with people, adversaries can become allies.
Embed Metrics into All Reporting: Each department needs one or two metrics to measure, it needs to be part of the reporting structure.  Each department needs goals, and metrics to measure those goals.  For example, New Chapter now has KPIs (Key Performance Indicators) that each department has to meet quarterly.  We developed a matrix for goals that include Fair Trade, carbon footprint, solid waste, energy, opportunities, etc.
Find a Cheerleader: Sustainability efforts need a cheerleader, someone to keep accomplishment lists and publicize individual efforts within the company.  It can be a Sustainability Officer, but it does not need to be.
We save some money, we spend some money.

Need for a Sustainability Officer?
          A CSO (Chief Sustainability Officer) is not necessary for every company, in Sara’s opinion, although a champion is.   “Someone who knows how to ask the right questions and need to want to  interact interdepartmentally.

Sara, herself, is a good project manager who can identify a project and know what needs to be done to complete it. And for a company New Chapter’s size, with its commitment to sustainability, it works to have a separate department dedicated to these issues.  ”For years I was talking the talk, but not owning it, because I knew what was happening day-to-day at New Chapter, and we were not yet living up to where I thought we could be.  Now we are.”

New Chapter’s current brochure has a detailed list of the sustainability practices they now have in place. http://www.newchapter.com/sustainability/organic “We’ve done the work, integrated this into our fabric, reached the tipping point, and are not doing business as usual.  But,” Sara’s eyes twinkled. “we’ve just started!”

Julie Lineberger

Leading From Any Chair – An interview with Jed Davis, Director of Sustainability, Cabot Creamery Cooperative

Our blog posts to date have covered individuals who own their own company or work at the highest levels.  This interview is one of our favorite stories as it originates with someone who might best be described as “aspiring to the C-Suite.”  Jed is a terrific example of what one orchestra conductor calls “leading from any chair.[1]”

More broadly, this story illustrates the role middle management can play in successfully weaving sustainability into the fabric of modern businesses.  While there are many excellent examples of charismatic, iconic leaders who bleed green and lead from the front, they remain a minority (albeit a growing minority) across the business landscape today.

So if sustainability is to become the norm, leaders must emerge from within, not just from above.  These new, mid-tier leaders must have a deep seated vision, dogged patience, and an extraordinary ability to work through and with others.  In the particular case of Cabot Creamery, this approach shows terrific promise for evolving the historic dairy farmer cooperative into a sustainability-driven enterprise poised for future success.

From Director of Marketing to Director of Sustainability
In 2007, Jed Davis was Director of Marketing for Cabot Creamery Cooperative, best known as makers of “The World’s Best Cheddar.”   Cabot, which dates back to 1919, is owned cooperatively by 1,200 dairy farm families in New England and upstate New York.

That summer, David Hill, Cabot’s SVP Sales, had returned from a sales call where he was asked, “What is your Sustainability Program?”  This sounded very different from the oft-asked, “Are you sustainable?” Cabot routinely interpreted the latter as an opportunity to discuss the many benefits of cooperatives, including working landscape, strong rural communities and providing award-winning dairy products.

Roberta MacDonald, Cabot’s SVP Marketing, tasked Jed with developing a Sustainability Program.  Jed brought some perspective as Cabot’s longtime liaison to organizations such as Vermont Businesses for Social Responsibility, but this presented an exciting, new learning curve.  Roberta and senior staff endorsed seeking outside counsel as well and Cabot turned to Mark McElroy from the Vermont-based Center for Sustainable Organizations for guidance.

Work on fully developing a Cabot Sustainability Program continued.  By February of 2008, Jed went to Roberta to let her know he was spending 50-75% of his time on sustainability issues.  By March, it was 100%.  In early April, Roberta brought the situation to Rich Stammer, Cabot’s CEO.  He approved of creating a new, full-time position called Director of Sustainability.  Roberta supported Jed taking the role, but all agreed it meant Jed needed to leave Marketing, feeling that sustainability and “spin” needed to be comfortably separated.

Jed took a long view of his work.  He had in mind a five-year plan to make Cabot a sustainability leader.  Importantly, he knew he could not do it alone, nor could he become the “sustainability police.”  So he began to make the case internally, listen to the naysayers, create quantitative and qualitative measures, and developing a support network for himself that both informed and inspired.

Make the case internally
It seemed to Jed that Cabot’s business approach, on a day-to-day basis, was quite consistent with the principles of sustainability, perhaps in large part due to its cooperative heritage.  Still, the concept of Sustainability was not well-understood within the organization and was new to the radar screens of the CEO and the senior management team.   As a result, what Jed had in a title, he lacked in specific direction and commitment.  Jed needed to build support.

One of the key, original allies ended up being the farmers themselves, in the form of the cooperative’s Board of Directors.  Each voting member of the cooperative’s board is a farmer himself or herself.  Collectively they voted to support and fund a project with the Manomet Center for  Conservation Sciences to create a sustainability scorecard for use on dairy farms.

What the board articulated very well was that they felt underserved to engage in conversation with their key stakeholders – from neighbors to local and regional officials and beyond.  Intuitively they understood that in many ways, farmers are the original leaders in stewardship, but they lacked the vocabulary of Sustainability to have that conversation effectively.

They also recognized that to have a fruitful conversation about Sustainability, they needed to have measurements that spoke to their economic and social impacts, as well as their environmental impacts.  Since farming is an occupation for less than 2% of the population, the farmers on the board were seeking a way to thoughtfully answer a question they were hearing more and more often: “Why is your dairy farm important to our community?”

Jed began working closely with Manomet in crafting a scorecard, based largely on prior work Manomet had done in the forestry industry.  Very shortly it became obvious that this project had implications far beyond just Cabot and, in fact, on the scale of the entire dairy industry.

A year into the scorecard project – now called the Vital Capital Index for Dairy Agriculture – the leading, national dairy industry trade group, Dairy Management Inc., agreed to take on and fund the project while continuing to work closely with Cabot, especially on beta-testing the concept with farmers.  Elevating the project to a national standard reflected positively on Cabot’s pioneering work, while also advancing national efforts towards a more sustainable dairy industry.

Listen to the naysayers
At the same time, Jed knew he had to engage the senior management team.  Rich Stammer, Cabot’s CEO, was thoughtful about Sustainability but was looking for proof.  Rich is an extremely intelligent leader, but hardly one who would be confused for one of the more iconic, green leaders.  Cabot’s CFO, Ed Townley, admitted that at the time, he thought sustainability “was a crock.”  Jim Pratt and Ed Pcolar, SVP and VP of Operations, respectively, were focused squarely on the financial bottom line; much less on the social, economic or environmental bottom lines.  Jed began to work with each of these key allies.

At a pivotal meeting with senior staff, Jed and Mark McElroy were presenting the nuts and bolts of proposed Cabot sustainability metrics using context-based sustainability.  CEO Rich Stammer, whose doctoral degree is in agricultural economics, challenged an assumption about using per capita as an allocation method.  As the meeting broke, Jed’s heart sunk, only to rebound moments later as Rich came back into the room, clearly thinking deeply about the problem.  He asked Mark and Jed to rework the calculations to provide allocation, instead, by some measure of added value.  The resulting approach – a denominator that reflects contributions to economic value – was later dubbed The DeStamminator and has become a hallmark of Cabot’s efforts to advance context-based sustainability.

Create quantitative and qualitative measures
Jed also worked closely with Ed Townley, the CFO, to make sure that the sustainability metrics under development properly incorporated financial realities of the business.  Ed himself proactively sought confirmation externally by asking key retail customers, “What are you doing with respect to sustainability?  Do you have expectations of your suppliers?”  Their answers led him to understand that sustainability was much more of a priority in our supply chain than he previously imagined.

In terms of organizational structure, Jed’s position was embedded in the Operations Team, reporting to Jim Pratt, SVP Operations.  Here Jed’s focus turned to engaging key members of the Operations Team.  Initially, Jed arranged meetings with key managers and supervisors and “interviewed” them as if for a story about Cabot and its sustainability practices for a fictitious magazine, Sustainable Dairy.  The results were amazing.  Stories emerged that revealed true pockets of innovation within the organization at one extreme, and at the other extreme, as Jed noted, “I felt like maybe I was speaking Italian” based on the glassed-over expressions that met him.

From this exercise, Jed had a better idea of who was ready to go, as well as who needed help starting the engine.  For those in motion already, the focus turned to sharing best practices across the company.  Amazingly, it proved over time that others, once their “engines” were fired up, have become among the most progressive managers in terms of piloting sustainability efforts.

With tremendous support from Ed Pcolar, VP Operations, a creamery Green Team was created.  This inter-disciplinary, cross-functional team was set up to meet monthly and identify projects that fell within the realm of sustainability in Operations.

Environmental bottom line topics like solid waste and energy quickly emerged from within the group and soon projects in both areas were yielding bottom-line results to the tune of six-figures.  Senior management took note, even highlighting some of the efforts at that year’s annual meeting of the cooperative, so that the farmers could hear the progress.  The Green Team became emboldened by its own success.  Importantly, Jed doesn’t lead the Green Team but serves only as an advisor/cheerleader.  The team is led by one of its members.

Jed used these allies to build the case within Cabot that there was an extraordinary opportunity to adapt the way Cabot does business – to use Sustainability as a lens through which any and every employee can review their work and impacts and from that observation, choose a path of continuous improvement.  Properly executed, this approach yields something for everyone, from employee satisfaction, to bottom line gains, to environmental impact reductions.

Create a support network
At the same time as Jed built unlikely allies, listened to the naysayers, and used independent quantitative and qualitative measurements to make his case, he developed a support network that sustained him and leveraged the work of Cabot.

Two key groups emerged
The first was a yearlong fellowship through the Sustainability Institute called the Donella Meadows Leadership Fellowship Program.  Jed was chosen as one of 20 fellows from across the globe who met in person four times over the year for one week apiece.  The program, based on the work of former Dartmouth professor Dana Meadows, co-author of the seminal Limits to Growth in 1972, focused on visioning, reflective conversation, and thinking in systems.  Cabot supported Jed in this fellowship, an experience that had a monumental impact on his development as a sustainability change agent.

Jed also sought to network with other sustainability officers.  A casual network, nominally called the Northeast Dairy Sustainability Collaborative, was created with Cabot and Jed’s counterparts from Ben & Jerry’s and Stonyfield.  It was a unique opportunity to have three dairy brands with different product categories (cheese, ice cream, and yogurt) but  similar sustainability aspirations and social intentions work together.  The Sustainable Food Lab, an organization to which all three belong, facilitates two to three meetings a year for the group.

Leadership without authority
What I found powerful about Jed’s story is how he is exerting leadership without being in charge.  Rather, he is imbuing in others a desire to change the way Cabot does business– by educating, showing competitive data, driving internal statistics, and holding up a mirror to the organization.  Some individuals at Cabot are driven by the cost or competitive advantages.  Many have also been influenced by the sense of doing the right thing.  Jed would say the instinct to do the right thing has always been a deep-seated value of Cabot: a sort of Cabot karma.

Because of this, what Jed brings to Cabot is a natural fit.  That being said, here is one guy with a lot of ideas, some eloquent language, and a healthy measure of elbow grease that has made a tremendous difference.  One can truly lead from any chair.


[1] The Art of Possibility, Rosamund Stone Zander and Benjamin Zander, September, 2000.

9 October 2012 – Ellen Meyer Shorb

ReWiring Success is leading a workshop 8-10 February at the Rowe Camp and Conference Center

Make the Ordinary Business Extraordinary:  Change the World thorough your Work – a workshop lead by Julie Lineberger & Ellen Meyer Shorb

Do you wish that your work was aligned with your spirit? Are you committed to your career, but want to make the world a better place? What if you, no matter what position you hold in your company — owner, sales rep, driver — could make your business more successful by using strategies that improve the environment, your community, and the employees of the company?

You can.  Join the quiet revolution that is taking place around the world as businesses discover that they can make money and make a difference for the environment, community, and employees. This workshop will be a laboratory for you to learn what others have done, get up to speed on some practical options, and chart your own plan.

Julie Lineberger and Ellen Meyer Shorb have conducted dozens of interviews for their book and blog ReWiring Success: Socially Responsible Strategies that Work. Based on what they have learned, they train, consult, and coach individuals and businesses on how to use socially responsible strategies to take their business to the next level. For this workshop, they’ve created a vibrant and hands-on experience where you will tap into your deepest hopes for playing an active role in making the world a better place through your work.

Come get inspired. Get up to speed on tactical options to use in your business — open book management, socially responsible sourcing, community engagement, and the like. Then draft a plan to make it happen in your own workplace — and continue to be in touch with the workshop team once a month for six months following.

Whether you are part way down the path to building a business with heart, or are finally listening to that rumbling in your soul that tells you it is possible, this workshop will encourage, inspire, and enable you to do it.

Julie Lineberger is the co­founder/owner of LineSync Architecture, a green and sustainable firm that has garnered numerous awards for design, energy efficiency, and business management. A former chair of the Vermont Businesses for Social Responsibility Board of Directors, she teaches Organizational Behavior and Socially Responsible Business Management at Southern Vermont College. She has Masters degree in International Education from Harvard and has managed projects for the UN Development Program, the International Rescue Committee, the UN High Commissioner for Refugees, and various other NGOs throughout the world.

Ellen Meyer Shorb is a principal of Blue Sage Partners, a strategy consulting practice that works with visionaries to build teams to get things done. She holds a Master in Public Policy from Harvard and an MBA from Stanford and has taught leadership at Northeastern University, using the Adaptive Leadership model developed at Harvard. Before consulting she was a senior manager for several nonprofits in the fields of international relations, affordable housing, and community development.

 

Pushing an Industry into Sustainability . . . from an interview with 
Cliff Cort, President
, Triumph Modular Buildings

Cliff Cort is on to the world wide trend of modular building, with his very own twist. He notes that while the US market is sluggish on modular, buyers in other countries have wholeheartedly embraced the construction system. “There is less disruption to the site. It is quick. All over the world, people are wanting modular.” His twist to focus on “highly designed” and sustainable modular may be the game changer the US is waiting for.  As Cliff says, “Green is old news now.  The building code is making green the law as of late.”

Being an effective entrepreneur is about staying on the market edge. Cliff built Triumph Modular Buildings, and is now creating a piece of the company that is on that edge, by going highly designed green. Realizing the modular industry was made up of structures that had not changed in 30 years, Cliff decided time was ripe for change. “I knew everything was barely legal. Yes, all modular classrooms are built to code, but nothing more. They were the cheapest possible things – windowless classrooms. It was disgusting. I knew there was an unbelievable opportunity to raise the bar. The school systems have been getting what they asked for which is the least expensive alternative.”

The Importance of a Champion

In 2006 an architect from Germany, then working in Maryland’s Montgomery County school department, started a design competition in the United States. Familiar with modular construction in Europe, she knew America was lacking and needed to put together better buildings.

Cliff and his associates entered and won the competition for a green and energy efficient modular classroom design. They flew down to Washington, D.C. for the award. At that point, it was just a design. Cliff wanted it to be a reality. “My daughter was going to the Carroll School, so I asked: ‘How would you like to be the first one in the country to have a green modular classroom?’

“Steve Wilkins was the head of school and there was no precedent for what we were proposing. No one in the country had seen any green relocatable classrooms. It opened the eyes of all the dealers and manufacturers in the country.”



It IS Possible to Push an Industry


“There is this green movement coming. Sitting in front of a bunch of mobile modular industry folks, I was pushing them. The market did not push them.

“I knew I was in trouble with them because they were looking to maintain the status quo and maintain their existing assets. They were very protective of their legacy mobile buildings and classrooms,” Cliff explained.

A turning point came when the Executive Director of the Modular Building Institute said Cliff was right. “We have to embrace the green movement,” concurred Lori Robert from NRB Manufacturing, Ontario, Canada, and Vice President of the Modular Building Institute Board of Directors.

Cliff then created a green modular building that Harvard University used as a child care center for 18 months as they renovated another structure. “It won all these green awards including recognition from the Massachusetts Chapter of the US Green Building Council.  One judge said he voted for it because it sat softly on the earth.”

The trend continues. “We are looking into new prototype modular classrooms now.  For example, the Sprout Space classroom below is designed by one of the largest architecture firms in the world, Perkins+Will.  We hope to be able to deliver it nationally for a compelling price.  The financial result of our green projects have yet to pay back any big results, although word of mouth works and we have been invited to work on interesting projects lately.”

Expanding with Ideas and Energy


“People in schools are now starting to ask for green. Finally they are asking for green modular classrooms, addressing what we have been working on for years. It truly is transforming the industry. We have built the best temporary classrooms in the country two years in a row now. They are green, sustainable and relocatable.”

Cliff is abundant with ideas, some of them really radical in the opinion of the current industry. “I am trying to be relevant to the movement.”

Cliff also has ideas for modular power pad, a modular off-grid solar internet cafe type structure pictured below.

“You need to take risks to innovate.  I offered a group of people in my office to take the test to become LEED accredited and proficient.  I said anyone who got it by January 1, I would give a $10,000 bonus to.  Sure enough, the one who passed the test left the company a short time after.”

Cliff is fast paced, continually thinking, continually revising, pushing his company into the future. He is, in fact, challenging the entire industry.

Julie Lineberger

Product is Not the Mission . . . an interview with Don Mayer, CEO, Small Dog Electronics

Don Mayer returned his draft card to the Selective Service with a letter, as an act of civil disobedience.  He then called the FBI  asking why they hadn’t come looking for him. Similarly, Don has always worked in the business world with an eye to how to make the world a better place.  He continues to ask the hard questions about his company and the impact it can and should have.

Are there some lessons we can glean from Don that would apply to businesses switching mid-stream?  Don would say, “Yes!”

Mission
Early on Don learned the “product is not the mission.”   He lived with the Dreamers in North Wolcott, Vermont, a farm community that tried to grow 100% of their own food for a year. When the community moved to West Virginia, he stayed on the farm and started North Wind Power, a wind energy company.  He and his co-founders hoped that windmills would solve the energy crisis of the 1970s.

One day he found himself in a room with uniformed Navy personnel, giving a presentation for North Wind Power Company, and had what he called an “out-of-body experience.  I looked at myself and wondered what I would have thought of myself when I was a draft resister if I could have seen myself in that room.  I realized I would have done ANYTHING to avoid being there and being a defense contractor.”

From this experience he took the lesson that the “product is not the mission.  It’s more important that you build a company with a responsible social mission.”  His current company, Small Dog Electronics, sells Apple gear out of Waitsfield, Vermont.  Its mission is to “create amazing products to improve people’s lives.”  The website says:  “We are a socially responsible company, which means we have a multiple bottom line.  The effect we have on our environment, community, customers, and employees is just as important as maintaining our profitability.”

Don believes you can and should measure all these parameters, not just profit, but Small Dog’s impact on people and the planet.

People
On the importance of how you treat the people that work for you, Don says that in every company he has run (up until a few years ago and the advent of direct deposit) he delivered paychecks by hand, with a handshake, and a thank you.  “One day at North Wind Power Company, we couldn’t pay.  There was still the handshake, still the ‘thank you’.  All the employees worked another three weeks until we could pay them.  It became apparent that respecting employees was a smart business strategy.”

Small Dog Electronics offers dog health insurance to its employees, allows dogs in the workplace, has exercise facilities and a book group.

The flip side to that, is the relationship with customers.  At Small Dog Electronics, “We use a net promoter score to measure customer satisfaction. (We read a book on this together in our company book group).  We survey every customer, every transaction.  One question we ask is, ‘Based on this transaction, would you recommend Small Dog Electronics?’  There is a 10 point scale.  8,9,10 are promoters; 1,2,3 are detractors.  By department, we inform staff how their total NPS score is doing.”

Planet
But how does a small company in rural Vermont make a difference in the environment?  With respect to its own energy use, Small Dog has recently installed a large solar photovoltaic array that powers 100% of the electricity of the South Burlington Store and a good percentage of the Waitsfield location. They have also installed a FreeAire cooling system for the server that uses outside air to cool.

Beyond Vermont, Don says, “We partner with companies that have working conditions that we support.  As we become a larger player, we have more influence.  For example, we have leather cases for iPads being made in China.  We ask about the content of the dye, the tanning process, the hours employees are working.  The packaging on the paper had a PET coating (a polyester film) and we had them change it to oil, which is more environmentally benign.  I said, ‘I want the most environmentally safe packaging you can come up with.’  We have a guy in China that teams up with the producers.  Because we’re bigger, we get more attention now.”

Another initiative that has impact beyond Waitsfield are eWaste collection days.  In 2006, Small Dog held a Free eWaste collection day on Earth Day. “We received 50 tons of computers, TVs, and other electronics.  The next year, we took in 150 tons.  Then 175.  Now Apple completely funds both Small Dog’s four annual eWaste collection events in Vermont and New Hampshire and weekly pickups of eWaste at each of the company’s locations. And manufacturers are paying for recycling. We got a lot of publicity within Apple.”  The collection of Ewaste is now free at all of Small Dog’s stores.  In 2010 Small Dog lobbied and had the best eWaste law in the nation passed in Vermont.

Profit
So what about the bottom line?  “You have to decide what kind of business you want to be. You can be a good corporate citizen.  But you need to build a business focused on more than profit and have to figure out how to do this.”  Granted, Don says, it’s easier for some businesses to do this than others.  Many companies have low profit margins.

Small Dog has a wide array of ways in which it, as a business, draws its customers, employees, and suppliers in, and tries to make a positive impact on the world.  “On our website, we list eight or nine charitable organizations, human rights, women, gay, dog welfare. If customers donate, we match customers donations to the maximum extent of our annual charitable giving budget.  When Haiti had the earthquake in 2010, we raised $35,000 in 48 hours for Doctors Without Borders.”

He gives the most credit to companies that build a socially responsible business mid-stream. “I’m more impressed with the local gas station owner who wants to be sustainable.  If you’re already in business, making the leap is difficult.”

Build the Business with a Socially Responsible Mission
What resonated in our interview with Don is that any business, with any product or service, can be run in a socially responsible manner.  It is the mission of the business, rather than the product itself, that determines impact in the world.  This impact beyond profit can be measured:  employee commitment, customer satisfaction, dollars raised, clean manufacturing, tons recycled, etc.  In fact, the many ways to measure how the “people” and “planet” missions are only growing.

Don exudes possibility.  With Don it is clear that an ordinary product can have an extraordinary impact.

smalldog.com

Ellen Meyer Shorb

The Risks and Advantages of Socially Responsible Change: from a conversation with Mary Powell, Green Mountain Power

The executive offices of Green Mountain Power used to occupy 3,000 square feet on the top floors of a three story, glass building.  Now the current CEO, Mary Powell, has a stand up desk facing the front door occupying about 15 square feet.

It is a wonderfully stark image of a profound internal transformation.  In 1998, Green Mountain Power was a traditional, publicly traded utility facing bankruptcy. Now it is a financially sound, environmentally breakthrough utility providing 25% of Vermont’s energy.

The question that hung in the air as we talked to Mary Powell, the dynamo that drove this transformation, was, “Is this a classic case of a strategic realignment in the face of crisis – or are there lessons to be drawn from a traditional company reaching down to its core values and adhering to socially responsible principles in order to drive success?”  The transformation of Green Mountain Power shows how driving change through socially responsible (SR) principles can be both harder and easier than a traditional business turnaround.

When Mary came on board in 1998, under then-CEO Chris Dutton, she entered a company that had, “an arrogant reputation.  It was a big, stuffy area utility.”  She felt, “If we want to be saved, if we want customers to pay more money, we have to transform ourselves into a company worth saving.” Dutton agreed.  Mary and the senior team drove a change process that trimmed the fat in the organization reducing officers from 14 to 6 (now 4), employees from 340 to 200, square footage from 89,000 to 25,000, and the Executive area by 90% to 300 square feet.

Mary and the senior team clarified Green Mountain Power’s core values:  GMP would be the low cost, low carbon, incredibly reliable energy provider for Vermont.  “The neat thing about our values is that they align a lot with the State’s values.  We were looking at what key stakeholders want.  Vermonters want green and free.  Once you get that fly wheel spinning, it is amazing where it can take you.  We are becoming a renewable energy company.”

As with any change process that upends a company this dramatically, the changes engendered fear and pushback.   In the case of GMP, and other companies where SR principles drive change, Mary faced an additional layer of suspicion and politics.  Renewable energy was, and is, political.  There were factions opposed to renewable energy because of its perceived high cost, and/or because they didn’t believe in climate change.  On one side were the true green, anti-nuclear folks; on the other, the hard core Vermont Yankee supporters who wanted GMP to use nuclear power forever.

Fortunately, when Mary was made CEO, Dutton characterized her well; “fearless as she embraces change and new thinking.”  Mary said, “Courage is not the absence of fear, it is the presence of fear and the willingness to walk through it.  At times it was terrifying on a personal level.”

Mary contends that because driving change with SR strategies draws on deeply embedded values, it is powered, supported, and ultimately successful because individuals want and believe in this re-orientation.   “There were really smart, funny, committed, caring people.  Some who had strong environmental values, but they were over here in a pocket.”

Thus, Green Mountain Power, in committing to “low carbon”, aligned itself with a broad customer base that went beyond the naysayers and was able to leverage this market differentiation.  “Our vision was just about our customers and our vision for our customers.  The comment that ‘this is just a marketing ploy’ is not true.  It is really about our values.  We really want to see an energy future that is clean and green and renewable.  Have you seen another utility try to do a windfarm?  Tough decisions, but important ones, if a company is values-based and focused on the values of the majority of customers they serve.”

Taking a traditional, publicly held utility green faced some political landmines.  At the same time, it drove the current success (the wind project will greatly increase the size of the company) by tapping into a powerful customer value for clean, green, and renewable.   Driving a company to the next level with socially responsible strategies can be more risky and, at the same time, facilitate and ensure a profound transformation.

greenmountainpower.com

Ellen Meyer Shorb