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.
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