CSR Wire just picked up our article!
CSR Wire just picked up our article!
Dear ReWiring Followers – This month’s post is a draft of an article we are shopping around. Any suggestions are most welcome! E & J
Fast Steps to Make the Ordinary Business Extraordinary: becoming a socially responsible business mid-stream
by Julie Lineberger and Ellen Meyer Shorb
Do you have a successful business, make good money, yet still unsatisfied? Perhaps there is a quiet fire in your belly gnawing at you, wondering: “Is this all there is?”
Cliff Cort of Triumph Modular decided to stoke those embers and rewired his business to create significant positive change not only in his own business, but in his industry as a whole. Cort wanted to build a legacy, he wanted to do something creative, and he wanted to make buildings he was proud of. While running a successful modular construction company, he latched onto the idea of offering Green Modulars (energy efficient and built with non-toxic, renewable materials). Fast forward ten years and now Cort is at the forefront of green modular buildings and making an impact around the world. In addition, he transformed the industry from formaldehyde boxes to non-toxic good design!
But what if you are hauling trash? Making cheese and milk products in Vermont or managing properties in Boston? Can you sell Apple products or vitamins or trucking services and make a difference in the world? Can an existing companies go SR/green?
What is a socially responsible business? SR businesses don’t evaluate or drive their business strictly on the financial bottom line, but rather a number of factors, including: environmental footprint, employee engagement, and connection to the community in which they do business. All SR strategies must be financially viable. In fact, our research shows that SR strategies add to the bottom line.
Ordinary businesses can go SR mid-stream We’ve spent the last three years interviewing companies with ordinary products and services about making the change to be driven by SR principles. These are not companies that were created to sell a green product, nor to serve their local community nor produce their product with minimal environmental impact. An increasing number of existing companies are changing how they do business and finding that doing so breathes new life, competitiveness, and efficiencies into production and market differentiation.
Strategies to re-orient an existing business How do you change an existing business to make it socially responsible? In talking to businesses across the country and across industries, we found 5 common and effective steps to “make an ordinary business extraordinary”:
• Stoke the Fire in Your Belly “Believe in what you’re doing, stick to it, hang in there.” This is not a simple group of aphorisms. The first step to rapidly make your ordinary business extraordinary is to WANT IT, to want to make a business that is much wiser and responsive and profitable. This means listening to yourself, tapping into your own hunger, fueling the fire in your belly.
Jan Blomstrann entered NRG Systems, a wind energy measurement device company, as a bookkeeper. Inspired by instituting SR human resources and supply chain policies that transformed her company, Jan transformed the company of which she is now CEO.
When Jan began, she was interested in creating a business organization and management systems to professionally run the company: accounting, hiring people, figuring out how to offer health insurance. 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. In the late 1990s young people started sending in resumes. 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.”
• Be a Champion or Hire One In an existing company, deep changes need a champion to educate and get buy-in from a variety of stakeholders.
When Ford Reiche owned Safe Handling in Lewiston, Maine, he spent two decades following the climate change debate, but made no changes in his trucking and transportation company until he met Andy Meyer. Andy was switching careers and wanted to make a difference in the environment; Ford saw his hunger and aptitude and hired him as his first “Chief Sustainability Officer.”
Meyer dug in, spent a lot of time on the floor, in the warehouses and docking garages and, with Ford’s support, initiated a sweep of initiatives that engaged the employees in thinking about how to save energy, thus saving the company money. Meyer started a program of noting good ideas and accomplishments on small steps with dollar bills at staff meetings. It was at once such meeting that an employee presented his research on a sign that requested people not to turn off a light switch. As it turns out, the light had been left on for three years and no one knew why!
• Build Unlikely Allies After 13 years with Cabot Creamery, Jed Davis was an assistant in the Marketing Department when he became filled with the idea of making the dairy cooperative more environmentally sustainable. It took him three years to convince Cabot management, but now the cooperative is being honored as a leader in the industry and individual farmers are greening their own businesses.
Currently Director of Sustainability, Davis worked across the Creamery to reduce solid waste. When Cabot controller Ed Townley first heard of Davis’ socially responsible goals, he rolled his eyes. Then Townley ran the numbers and realized the value of SR ideals both in terms of employee retention and reduced costs. He quickly joined forces with not only Davis, but Ed Pcolar who actually went with the trash hauler to the dump to count trash! After that experience, Pcolar had all departments weigh their solid waste and figuring out how to recycle just about everything. A few years into their initiative, the Cabot Creamery CEO was given an award for being an iconic leader!
• Implement Low Hanging Fruit First New Chapter Sustainability Manager Sara Newmark drew up a business plan to bring the Brattleboro, Vermont, company to its national leadership in sustainability. She initiated New Chapter’s sustainable policies with simple recycling, and in purchasing. Although she had created a business plan for the initiative, she saw a need to implement a few visible changes to start and then inspire others to follow.
She and company owner, Barbi Schulick, asked all the department heads where they could make green improvements, then followed up. An early and simple change was to check who was using recycled paper. As it turns out, different departments were sourcing their paper from different places. While recycled paper was more expensive than some were using, when all the departments switched to recycled paper, the bottom line expenditure for paper was less than had been previously spent.
Each department created goals and metrics to measure their results. An overall matrix for goals that included Fair Trade sourcing, carbon footprint, solid waste, and energy use was developed. The company then celebrated the department that recycled the most and who saved the most.
Little by little, day by day, they wove sustainability into the fabric of everyday work, getting it into everyday conversation. They didn’t see changes right away, nor get immediate satisfaction, but SR values started to become part of the way New Chapter does business. Now sustainability is who New Chapter is.
• Evaluate ROI from Multiple Angles and Share Casella Waste Systems Vice President Joe Fusco noted the coming changes demanded of his industry. Fusco says that they went from “hauling trash” to “managing resources.” Formerly any byproduct of a business was carted away to a landfill. Scraps of lumber, plastic, metal, packaging and food byproducts, all went to the equivalent of a cemetery to be buried.
Casella entered the recycling business and began to track repurposed resources. They celebrated with employees at each step by measuring and reporting out the difference they were making in environmental, community, employee satisfaction, and financial bottom line.
To assist in measuring what matters on a SR level, companies may use evaluation mechanisms such as the B Lab Impact Assessment (http://b-lab.force.com/bcorp/AssessmentReg) or Green America’s Certification Process, Green Gain, (http://www.greenbusinessnetwork.org/green-business-certification/how-can-your-business-get-certified.html). Such Corporate Social Responsibility Reporting, or Benefit Corporation Analysis, gives fodder to celebrate successes with the entire company.
Going SR mid-stream is harder and easier than simple change management In interviewing these companies, we asked ourselves, ‘Is this traditional change management? Are the strategies that we have outlined above the same that a company would have to use if switching a product line, expanding overseas, or consolidating three factories?’ In fact, the differences are important.
Going SR/green is a challenging transformation for a company to make because the field is still being created. In some cases, measurement tools have to be created industry by industry. Cabot Creamery joined with other dairy companies to design industry metrics and tracking, evaluation and reporting mechanisms.
Last, measuring financial success can be more difficult. The tie to employee retention and SR strategies is not always a clean nor direct causation. Payback terms may be longer than traditionally calculated. The metrics for success are not always an existing part of reporting systems to investors, shareholders, and owners.
On the other hand, markets and consumers are increasingly hungry for products and services that are made and distributed with a social conscience. We now have a language for SR, the “multiple bottom line” (planet, people, profits), “green”, “sustainable”, etc. The companies we talked to found that going SR engaged and retained employees. Resourceful ideas came from employees. Consumers were more attracted to companies with a social conscience. Energy savings and recycling saved the company money.
Perhaps most difficult to quantify, but most clear to those engaged in these transformations, is the fact that the employees and owners feel personally revitalized, engaged, and committed due to the conversion of companies to run in a socially responsible way. This intangible but powerful benefit can greatly propel a substantively significant change in business tactics.
This is an opportune time to go SR Ten years ago, making this kind of conversion would have been more difficult. An advisor on the board of an architectural firm recently admitted that 15 years ago she dismissed a strategic priority of the firm to be “sustainable.” Now the firm says, “We were green when it was just a color.”
There is momentum, a cultural change in the market, and a hunger among owners and employees to continue doing what they do so very well, but to positively influence the world, the environment, and their community, as they do so. While converting to be a socially responsible business can be logistically, culturally, and politically challenging, it is, hands-down, a smart business decision.
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.