Fast Steps to Make the Ordinary Business Extraordinary: becoming a socially responsible business mid-stream

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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SR is a Strategy, not an End Point . . . from an interview with Will Patten of the Hinesburgh Public House

“Go for it with the Heart and stay in for Market Reasons”

“I always roll my eyes when I hear socially responsible business people say they need to feel good about what they do,” notes the practical Will Patten, co-owner of the Hinesburgh Public House. “Socially responsible business practices are the smartest and most effective way to grow and sustain a business, regardless how you feel about it.

Kathleen & Will PattenWill is in a good position to give such advice. Having owned a number of businesses himself, worked for Ben & Jerry’s Homemade, and served as the Executive Director of Vermont Businesses for Social Responsibility (VBSR), he has a big picture view of many businesses and has seen what works.

“Some business people may adopt socially responsible practices to please their kids or gain some publicity but those decisions are always short-lived. To be sustained, green choices need to be made for the good of the business. An owner must take a viewpoint that the business will do better financially by adopting SR strategies.”

“For example,” he says, using his current business, “it is hard to get employees to work for our restaurant given how far we are from Burlington. Our strategy is to institute open book management and profit sharing. It is better for us, and better for my employees. Environmentally, we searched all the options for garbage removal. We found that by simply separating our garbage, recycling and trash, our waste removal costs were significantly cut.”

SR has to make business sense
Will related the strategic decision of Villanti & Sons, Printers, a third generation shop in Milton, Vermont. “They decided to go to renewable paper and green inks, and they completely changed the position of their company. I was able to convince them to become a champion member of VBSR. They saw it as a wise repositioning of their company as they were able to get into the doors of larger socially responsible companies.

“Another example is Fletcher Allen Hospital who just won a national award for serving wholesome locally sourced food to patients. While the PR is always welcome, the outcomes have justified the investment of time and money. Patients are healthier, recover faster, when they eat good food.

Make money overseas and be a social activist
Starting with his natural food cafe decades ago in Rutland, Will instinctively created a socially responsible business using local foods, treating his employees well, and integrating with the community in which he had lived his entire life.

A serial entrepreneur, he then moved to opening one of Ben & Jerry’s original Scoop Shops. Completely dedicated to the SR principles and practices of the company, he started working in operations, becoming the Global Director of Retail Operations.. “I was working with “big business” and “big business people” in a way I could live with. It was great. The Scoop Shops were a center for political activism.”

He especially enjoyed the Ben & Jerry’s social enterprise vision. The idea is to partner with and donate to a nonprofit. “It was international and strategic philanthropy. All of this was in our mission statement, so it was strategized and taken seriously. The results of these efforts were publicly reported as equally important as our financial and product quality objectives.

Will’s experience at Ben & Jerry’s taught him that all businesses are organic, like everything else, and the more organically they are nurtured and grown, the longer and healthier their lives.

Drive business resilience across a state
His next life step furthered and pulled together all of his SR knowledge and experience. As Executive Director of Vermont Businesses for Social Responsibility (VBSR) for five years, he helped the organization more than double in size to 1,200 business members representing 10% of Vermont’s workforce.

As an outspoken leader of Corporate Social Responsibility, Will wrote numerous editorials, and created other opportunities to enhance and increase the amount of socially responsible strategies embedded in businesses in Vermont. “VBSR supports the SR business model with its services, its conferences, and its lobbying. We bring people together to talk about it.”

At Will’s core is a way of thinking about the world as a whole, and experiencing it via Vermont. “Vermont is old fashioned – an old fashioned model in a new age world, and SR drives this. Real corporate responsibility: it’s a movement,” he said of the changing business climate. “Vermont is the most entrepreneurial state because there are so few jobs. Social responsibility is not a moral imperative, but a better way to run a company. Folks go in it for the heart and stay in for the market reasons. SR is a very prudent business strategy.”

Decoupling health care from employment is SR
During his watch with VBSR, Will supported the Vermont Legislator’s passing of the Benefit Corporations Law, as well as the first steps to decouple health insurance from employment. “The Vermont business landscape is on the cutting edge. One reason VBSR is the most prominent BSR in the country is due to the success of so many Vermont companies with SR missions. I have seen businesses change one aspect or another as it proved to be financially beneficial. I see businesses going ESOP (Employee Stock Ownership Program).

“One interesting study is around health care and the decoupling of health care from employment. We now hear the Governor telling businesses to drop health care as we know it. Basing health care on employment is unsustainable. VBSR took the lead on that. It almost seems to be irresponsible,” Will remarked on the counterintuitive decision to not provide health insurance for employees.

“I am not going to offer a corporate plan for health insurance. I will invest in employees’ health, not their health insurance. I will contribute part of their salary through a health club membership. This is looking ahead, investing in employee health, not health insurance. Health insurance is a dumb investment. Flex time, mental health, physical health, that is looking ahead as to focusing on employee health to make sure they come to work every day.”

Measuring SR
“There are a number of tools that are helpful to business management, to help analyze SR results and help execute SR initiatives,” said Will. He spoke of VBSR’s SR Journey as a tool. “We need a metric to assist others through change. The Journey is a checklist for small businesses, a set of best practices to consider. It looks at various areas of impact: stakeholders, workforce, environmental footprint, supply chain.”

(Additional tools are available at Green America http://www.greenamerica.org, and BLab http://b-lab.force.com/bcorp/ BCorpRegistration.)

“Many are driven by business reality to SR. They stay with SR because of the bottom line rather than the heart. SR needs to drive the business. The younger generation is taking over. It is the future due to market realities.”

Will spoke about the importance of employee productivity, open book management, flexible time, and community support, especially to the younger workforce who is not willing to commit their entire lives to a company and only the bottom line as many of their parents did.

“Business strategy is driven by values,” Will continued. “What is the future you want? To get as rich as you can be? Wealth creation was the driver, it created laws. The world is changing. The bottom line is a foundational driver, but no longer the sole driver.

“If someone wants to turn their business more SR, I would ask, ‘Why?’ What is it that isn’t working? SR is a strategy. One does not achieve SR, it’s a perspective on how you operate a business. For companies that want to reinvent their culture, change their product lines, or survive hard times, it turns out that taking care of your people through SR practices may be the key.

Community support essential to restaurant’s success
Now, in his third retirement, Will is putting his theories to the practical test. He and his sailing partner wife, Kathleen, opened the Hinesburgh Public House in 2012. A bit older and wiser, they are working smarter to fulfill yet another dream, and again model SR practices. “I am trying to demonstrate what I spent 40 years talking about!”

opening night“I started the restaurant because Kathleen and I decided the town and community really needed it.” Dining in nearby a Bristol hang out, they saw people hugging each other and getting together because there was a place to gather and decided Hinesburg needed the same.

“So it was altruistic, which is stupid. But we were right, people in town needed a place to meet, have a glass of wine and hang out.”

“Another thing, we are a Community Supported Restaurant. Before we opened our doors, the community said they would support us and bought $45,000 of pre-purchased meals in subscriptions. In exchange, the first Tuesday of every month, we have a big dinner and half the sales go to some organization in the area. That was good marketing. Right away we had 75 prominent people in town who were invested in our success.”

These supporters also assisted in the evolution of the restaurant. “When we first opened and things were rocky, they gave us advice. We followed the advice and grew!”

“To deliver a reasonably priced good hot meal, the main thing is still a group of people who have to work as a team really really well. I hired my general manager because of his values. The importance of culture in a successful business is not to be minimized. I charged him with creating the culture that would be sustainable. He may not have all the horsepower from a straight business management, but he has the right values.”

“We have a five-part mission statement. One is to strengthen local agriculture. Another is to provide a gathering place for the community. We’re in the process of finalizing the language of the others. We have a Board of Directors with Bill and Kate Schubart as our Benefit Directors charged with writing a report on how we do with our mission statement. It will be public, it will be transparent, and it will be hard hitting. We did that every year at Ben & Jerry’s. If we succeeded at five goals and failed on two, the whole world would focus on those two. The main thing is to demonstrate how our mission and values are in line with our practices, and how that makes for good business.”

Parting advice — make your business more resilient
Global economic forces are requiring that we find new solutions for many new and daunting challenges. Resources – human, natural and financial – are increasingly limited and business people have to learn to conserve and protect them. Energy consumption, transportation costs and employee retention are examples of sky-rocketing business expenses. The most innovative and effective solutions to managing those expenses are called socially responsible business practices. Energy conservation, local sourcing and open book management are three solutions that have proven to be effective.

Will’s parting advice: “Socially responsible business practices that make a business stronger and more resilient are easily sustained. That will surely make you feel good.”

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

Teaching others How to Teach to Fish … an interview with Geof Brown, Vermont Country Store Head of Human Resources and Philanthropy

Even companies whose origins lie in authentic socially responsible values find their community involvement looking different today than it did decades before. Staying true to their roots, while evolving to meet modern needs is the story of The Vermont Country Store (VCS) and its successful philanthropy program. Issues of employee engagement, local community involvement and humility were all carefully considered and rewired to update VCS programs under the watchful eye of Geof Brown.

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VCS, a multi-generational family owned business, enticed Geof to seek a position where he could truly make a difference in the lives of employees and in the communities where they live and work. After a 20 plus year career in human resources and change management, primarily in the retail sector, Geof followed his creative passion by establishing an inn and event business at the Williams River House at Fox Chair Mountain Farm in Chester, Vermont. VCS, however, provided Geof the opportunity to serve as the company’s Head of Human Resource and lead their commitment to local community-focused Philanthropy.

The Vermont Country Store’s roots in Vermont go back eight generations, and family values still play a fundamental role in dictating how the Orton family maintains close ties to the community. As Geof explains, “The Orton family, along with our CEO Bill Shouldice, provides proper sponsorship to our philanthropy program around our core values: authenticity, commitment to product, commitment to employees, commitment to the community, and being sustainable financially. We leverage all of our resources — funding, product and volunteerism — to maximize the reach of our program and model our values.”

One founding value of VCS is giving back to the approximately 65 communities in which its employees live and work. ”There is a desire on the part of the Ortons to be humble in their giving – it is who they are at their core. They feel a responsibility to share their success with their communities, but do not seek publicity for their generosity,” Geof said. “They know that when our communities are thriving, so does our business. The Ortons have been ‘paying it forward’ long before it was a catch phrase. They embody the generosity of spirit and independent thinking that make Vermont a special place.”

Under the leadership of VCS Board Chair Eliot Orton and CEO Bill Shouldice, Geof and VCS’s Philanthropy Coordinator Ann Warrell, have implemented and improved the company’s philanthropic programs, so that they address contemporary community needs and employee interests. Over the past several years, VCS has started to share what is working for them outside their four walls in order to inspire other Vermont businesses to do the same.

Employee Engagement and Local Giving
Geof and Ann explored two key issues that were intimately linked — how to increase employee engagement while making more of a local impact. By using these two principles as drivers, they were able to enhance existing programs and provide new offerings, and in so doing, maximize their existing philanthropic funding, while increasing employee involvement.

Community Teams
One of VCS’s most successful programs is its Community Action Team (CAT) model, in which teams of employees lead philanthropic giving efforts.

“Eliot’s direction was to make any giving program be grass roots,” Geoff said. “He and Bill Shouldice instituted CAT teams to ensure that the majority of our funding was given through employee-centered decisions and hired an individual to coordinate their activities. Today, we bring our four CAT teams together semi-annually to share ideas on their grant-making decisions and other initiatives,” Geof said. CAT teams can also support non-profits through volunteerism. “CATs spend time helping when it’s their hands that are needed most. This flexibility helps them address real needs at a grass roots level, which is in keeping with our mandate,” Geof notes.

“With the success of the program, we kicked it up several notches to educate teams about working within guidelines and allocating resources according to established priorities. Keeping these priorities in mind, they can independently decide to fund local non-profit organizations in amounts up to $5,000,” Geof explains.

“In the past two years, we have completely maximized all available funding resources. Now we are working on a web-enabled system to more efficiently track and process grant requests. All of this furthers our focus on maintaining momentum and encouraging philanthropy within our CAT teams and with all our employees.”

Dollars for Doers
“VCS had a traditional matching donation program for many years. However, it was not being used to its fullest capacity, as the matching donation funds were never fully utilized,” Geof said. “We realized that people did not have personal funds to donate, but were volunteering all over the place.

“We came up with a program we call Dollars for Doers where we match an employee’s volunteerism with $10 per hour for each hour worked. We are always trying to think about how to do things in a more practical way, which is in keeping with our values,” Geof continues. “Volunteerism is in the spirit of our employees. This is a way we can empower them, while we serve to strengthen our community.”

Manager Contributions Program
With the success of these programs, VCS also wanted to reinvigorate its existing manager donations program to reward personal community involvement. “Under the old program, managers were able to direct a certain amount to the local charity of their choice. We upped the ante by creating a two-tiered program that rewards personal involvement. We are willing to double what managers can give if they serve on a board, do community service, or create a personal giving pledge. This gives them more of an incentive to become involved, and model community involvement to their employees, which, in turn, inspires more involvement,” Geof explained. He participates by serving on the Manchester Chamber of Commerce Board of Directors.

“We encourage our managers, and all employees, to recognize the more complex needs of the community. We believe our philanthropy program pushes everyone toward becoming involved in ways they never did before. These actions create experiences and knowledge that serves both the community and VCS.”

Good for Others is Good for Us — in Geof’s Words
“The intersection for VCS and philanthropy is that we seek to build employee retention by empowering all employees to volunteer, and by rewarding their efforts through our matching programs. This is something that distinguishes VCS from other larger businesses in our region, and makes people want to stay with the VCS family,” said Geof. “The Ortons’ commitment to community, and the way we are able to put those values into action, is consistent with being a sustainable company.”

The Vermont Country Store isn’t interested in fitting the definition of sustainability. Instead, they are focused on doing the right thing — for their customers, their employees, and their community. They know that keeping their values in the forefront is all the guidance they need to ensure that they will continue to be successful and able to give back for generations to come.

VCS wanted their philanthropic work to be real and practical, not just an ideal, and an important milestone was for staff and managers alike to become more engaged. By reworking their philanthropic programs, and motivating employees, VCS has been able to put their philosophy into practice. By selectively sharing and speaking out, VCS is serving as a model for other Vermont businesses, inspiring them to teach how to fish, which is a win-win situation for all.

vermontcountrystore.com

Julie Lineberger