Archive for the ‘Business & Economics’ Category

New discussion course for business sustainability

Sustainability is a huge topic. And many feel it lacks a clear definition. No wonder so many businesses that want to do the right thing don’t know how or where to start down the sustainability path.

Enter the nonprofit Northwest Earth Institute, based in Portland, Ore. NWEI has answered the call of businesses and other organizations looking for a way to start — or perhaps kick start — sustainability initiatives. NWEI’s response is a new discussion course designed specifically for the workplace, called “Sustainable Systems at Work.”

In the interest of full disclosure, I am on the NWEI board. As someone who’s participated in previous NWEI discussion courses, I can vouch for the power and inspiration in the model of peer group learning used by NWEI.

Each of NWEI’s courses takes a grass roots approach to sustainability, consistent with the Institute’s mission of “Inspiring people to take responsibility for Earth.” The previous seven courses offered by NWEI are designed to inform and inspire people in support of individual behavior change. The new workplace course is tailored to empower groups of employees at all levels to create or support sustainability projects or programs within their business. This bottoms-up approach creates employee champions for sustainability, as well as employee buy-in for environmental or social initiatives already in place.

Over a course of five sessions (60-90 minutes each, typically one session per week), employee groups will:

  • evaluate the current economic model and consider the case for change
  • examine the concept of sustainability from an organizational perspective
  • evaluate principles and frameworks for guiding a vision
  • identify tools and strategies for implementing a framework
  • develop an action plan to advance organizational change

The course book, produced in cooperation with The Natural Step Network, contains articles and excerpts from experts and authors on business and workplace sustainability. The readings and companion discussion questions and exercises are designed to move employees quickly from learning and conversation into action. Mike Mercer, executive director of NWEI, says it’s all about engaging employees from the ground up.

Most organizations are launching sustainability initiatives from the top down, which they should. However, for culture and practices to change within an organization, employee commitment is a must. We believe innovation at its best occurs at all levels, and is driven by shifts in thinking. Our programs drive just that.

So if your business or some business you know is looking for a door into sustainability or the key to unlocking employee passion for sustainable change, get in touch with NWEI. They can help.

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Where being tough meets doing good

Alysa Rose, president of Rejuvenation, could feel the culture of her company drifting a couple years ago. She could see it in the lost sense of urgency, and she could hear it in the voices of her employees.

“The most heartbreaking quote I heard from an employee, a relatively new employee, was: ‘When I got offered a job at Rejuvenation, a friend said, Well that’s great. Once you’re hired at Rejuvenation, you’re never fired.’ And I thought, wow, that’s not what a healthy culture is about. It’s about people contributing and making the business stronger and being accountable for that.”alysa_rose_leadership2

I spoke with Alysa a couple times earlier this month as part of a series of interviews I’m planning with leaders of sustainable, privately owned businesses to gather and share an inside look into operating a triple-bottom-line business. It’s important to understand that Rejuvenation has a well-deserved reputation for its socially responsible business practices, built painstakingly since its founding in 1977. Based in Portland, Ore., the privately held company is America’s largest manufacturer and leading direct marketer of authentic reproduction lighting and house parts. It goes to great lengths to minimize its impact on the environment and support the causes that contribute to livable communities.

In the circles of corporate social responsibility, “doing well by doing good” is practically a business mantra. And under the leadership of Alysa and founder/owner Jim Kelly, Rejuvenation knows what it means to do good and to do well. But as Alysa’s experience in her business demonstrates: Doing good socially and environmentally does not guarantee financial success.

“It’s important to be very clear-headed about it all. You can’t do good unless you’re making money. You’ve got to make money. That’s where you have to start. You have to have an exceptional business plan that drives profitability. Because if you want to give back you have to have a base to give back from. It’s hard enough to run a good business; complicate it by being mission-driven or values-driven and you’ve got to have a damn good business model. I think that’s why Rejuvenation is successful.”

Ass on the line

Alysa and Jim know the importance of profitability; unfortunately, as became evident in 2007, too few managers and employees in their company were as clear-headed on the financial front.

“People really wanted to work at Rejuvenation, not because they were excited about contributing to our growth and profitability, but because we had a reputation for treating everybody so well and they wanted to come along for that ride. It was out of balance. Our performance started suffering.”

That’s when Jim and Alysa added a seventh core value, sans sugar coating. They called it “ass on the line.” They considered calling it accountability but decided that sounded too “corporate” and easy to dismiss. To drive home their message, Jim and Alysa met with every dinning_room_hathwayemployee in small groups and made it abundantly clear what would be expected of them going forward.

“We asked them to make a commitment. I said, ‘Don’t take this lightly. Take this in. Go home. Think about it, talk about it with your loved ones and make a commitment whether you want to be here or not.'”

As it turns out, some employees and managers were uncomfortable with the much higher expectations of accountability and decided to quit. In hindsight, Alysa says, she and Jim could have presented the information in a less threatening way, “but we are in a much better place now.”

Having halted the cultural drift before the recession took root proved fortuitous. “I can say we are leaner, and we are tougher and quicker,” Alysa says. That has left the company far better equipped to ride out these tough times.

When values collide

While “ass on the line” has had its desired effect in building financial accountability, it doesn’t mean social and environmental responsibilities are any less important at Rejuvenation. When values collide, as they frequently do, Alysa’s team takes the challenge head on.

“The point is we have those discussions. Does it add complexity? Yes. Does it add a degree of difficulty? Yes. Does it add time in most situations? Yes. And that’s just how it is. And I think it’s a struggle for some. I think it’s a struggle for business managers who come from a more straightforward environment. And it might be a little more complex for employees. But it’s also much more rich.”

While the company has worked hard to integrate “ass on the line” into its culture, Alysa says it’s not the company value she holds closest.

“Of all our values, ‘goodness’ is the shortest one. That’s the one that gets me up in the morning. If you’re going to dedicate your life to something or even a few years to something, you want to believe that doing it is going to leave the world a better place. So the goodness is that the world is a better place because Rejuvenation is here. We employ people. We provide great products. We preserve old buildings. We give back to our community financially. We educate our employees.”

And they teach the rest of us in business: Sometimes you have to be tough to do good.

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Marketing in a world of eco-intelligent consumers

Many marketers don’t feel obligated to know or otherwise take responsibility for the entire environmental and social story of the products they help develop, promote and sell. If they’re not careful, their customers may know the full story before they do, leaving them with a potential sales and reputation mess to clean up.

Daniel Goleman, author of the popular book “Emotional Intelligence,” explains the growing empowerment of eco- or social-minded shoppers in his new book “Ecological Intelligence: How Knowing the Impact of What We Buy Can Change Everything.” Goleman says consumers face an information gap that prevents them from easily knowing and comparing the personal, social and environmental health impacts of individual products they are considering for purchase. That gap, however, is closing, thanks to the emergence of new mobile and point-of-purchase information technology that makes it easier to access the accumulating ecological and social data and ratings of individual products.

The hope and the promise Goleman sees for these new forms of IT is “radical transparency.”

Ecological transparency becomes radical when its analysis encompasses the entire life cycle of a product and the full range of its consequences at every stage, and presents that information to a buyer in ways that demand little effort…Radical transparency means tracking every substantial impact of an item from manufacturing to disposal—not just its carbon footprint and other environmental costs but its biological risks, as well as its consequences for those who labored to make it—and summarizing those impacts for shoppers as they are deciding what to purchase.

Goleman credits the company GoodGuide for its pioneering efforts to equip the shopping public with “comprehensive and rigorous information at the point of purchase.” GoodGuide’s technology platform is still in beta form, but it shows potential for dramatically tilting the information playing field in the direction of the consumer. According to Goleman:

GoodGuide surfaces a product’s backstory. It can calculate the specific environmental impacts during manufacture, transport, use, and disposal. It can perform this calculation down to a single chemical among a batch of ingredients. On a macro level, it can rate how well a given company stacks up against others in its field on environmental, health, or social performance, as well as determine which brand or company has been getting better over time. GoodGuide can evaluate a company’s policies, its disclosure of key information on products, and ultimately a company’s impacts on consumers, workers, communities, and the environment.

And now GoodGuide offers a free iPhone app that provides mobile access to data on more than 70,000 products, according to its website. Goleman says GoodGuide has harnessed decades of industrial ecology research to provide precise metrics of various processes and products. Perhaps most significantly from a marketing standpoint, “GoodGuide cuts through greenwashing to the underlying facts,” Goleman says.

Although GoodGuide remains at beta stage, Goleman says the tool is nonetheless “a concrete example of how radical transparency might work” in the aisles of shoppers’ favorite stores. It may be a Microsoft or a Google that ultimately provides the transparency system that is most widely accepted. In any case, Goleman sounds confident it won’t be long before consumers have fast, convenient access to information that helps them align their purchases with their values at the place and time they’re ready to buy. I share his confidence.

For marketers, the takeaway is this: Your customers will eventually have all the credible facts they need to decide whether your company or product satisfies their health and sustainability values and how you compare to your competitors. At that point, you’ll have little choice but to ensure the stories you tell about your company and products square with the facts your customers will have at their fingertips. Do you know your products’ “environmental impacts during manufacture, transport, use, and disposal” down to a single chemical used in its ingredients? And how about the labor and trade conditions up and down your supply chain? It’s only a matter of time before not knowing or not caring to know that information will come back to bite the offending company either in lost sales or in damaged image.

The “radical transparency” Goleman describes won’t appear overnight and it may never be fully realized in the market nor embraced by the consumer, but the information trends are clearly working in favor of the customer, whether a business or an individual. One of the trend drivers is demographics. In an interview last month with public television’s Bill Moyers, Goleman said he believes the younger generations have the greatest motivation to preserve the world and their ever-expanding use of social media will accelerate the sharing of consumer knowledge. This, he says, will create a shift “that will make it not only feasible for companies, but actually essential for companies to do the right thing.”

Smart marketers will get ahead of the trend and make radical transparency their competitive advantage.

Update: As I was about to publish this post I came across Joel Makower’s review on June 17 of Goleman’s book. He isn’t nearly as optimistic as Goleman about the transformative potential of radical transparency, for either consumers or producers. “I can’t argue with the premise, but my 20 years of watching the green marketplace leaves me, well, unsold,” Makower writes. Goleman responds to Makower here. He says, “I don’t believe the last 20 years offer apt data points for projecting the next 20. It’s the future I’m talking about, not the past.” I’d suggest you read the book and decide for yourself.

Update: Daniel Goleman references my post in a piece he wrote for Harvard Business here.

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Looking for the brand among all the branding

I left a day-long conference on branding this week inspired in several new directions. But I couldn’t shake a nagging question: In our fascination with the new tools of branding are we forgetting what we’re supposed to be building—namely, the brands of our businesses?

I found inspiration in the material of several speakers who persuaded me the latest mobile devices we otherwise call cellphones are a cultural game changer. I don’t think it’s a stretch to say their impact will be as great as radio, television, personal computers and the Internet were when they emerged on the scene. I understand why marketers are salivating at the prospect of turning these smart devices into conduits for branding and promotion. The conference also deepened my appreciation for the branding possibilities of social media. One presenter says they’re transforming our customer dialogues into “multilogues.”

Lost in all the buzz this conference and others like it generate around mobile and social media and other leading-edge branding techniques is the brand itself. We seem to be taking the brands of our businesses for granted. We assume our businesses have a clear, shared understanding of what we stand for and what makes us different and relevant. So rather than concern ourselves with the basics of the brand, we obsess over how to use the hip branding tools du jour, such as Facebook, Twitter and iPhone apps.  

As marketers, we can’t afford to confuse branding with the brand itself. Branding is doing, brand is being—it’s who we are as a business. It’s easy to let the doing of marketing consume us, especially when there are far more cool ways to connect with customers than ever before. We get into trouble when our eagerness to deploy compelling technology blinds us to why we exist and who we are as a business or brand. These fundamental questions of being are unchanging, whether for humans or for human organizations. They’re also questions many businesses and marketers avoid. They require a period of introspection and reflection that many businesses feel they can’t afford. They’re moving too fast, they tell themselves.

Or perhaps the existential questions of purpose and meaning make us uncomfortable—what if we discover there’s no there there in our business? So as marketers we busy ourselves with the doing, the branding. And we add the likes of Twitter, Facebook and mobile marketing to the still unfinished business of perfecting blogs, websites, webinars and other digital channels. We end up building brands in the way improv artists make up the story as they go along. The process may be entertaining, but the resulting brand is purely random.

In the immortal words of Yogi Berra, “If you don’t know where you are going, you’ll probably end up someplace else.”

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The brand truth: ‘You are what you do’

Last night, in a rugged NBA playoff game between the Los Angeles Lakers and the Denver Nuggets, LA’s Kobe Bryant was sent sprawling to the floor after being tripped by Denver’s Dahntay Jones. After seeing the TV replay, the ABC announcers all believed Jones intentionally tripped Bryant, although the referees missed the obvious foul. Play-by-play announcer Mike Breen, in an apparent defense of Jones, said the Denver player was not considered “a dirty player” in the NBA. To which analyst Jeff Van Gundy responded, “You are what you do.”

In other words, it doesn’t matter whether Jones is considered a clean or dirty player, because that was a dirty play. And if he continues to make plays like that (in an earlier game Jones pushed Bryant in the back as Bryant went in for a layup), he’ll earn an undesirable reputation as a dirty player. 

Maybe only an NBA fan and branding consultant like me would offer Van Gundy’s words as a caution to those who oversee their firm’s brand. All of our carefully researched and cultivated efforts to develop a certain image among our stakeholders are only as effective as the collective behavior of our organization. That’s why I believe managing your business’ brand or reputation is not simply an exercise in marketing. Who you say your business is in your marketing counts for far less than what you do as a business. 

Logos and slogans do not define your brand. Actions do. When the spotlight is bright and the pressure to perform is great, how do the executives and employees of your organization behave? That’s where you’ll find the truth of your brand.

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Sustainable opportunity in a ‘culture of thrift’

A “culture of thrift” may be taking hold in the US. That scares the many businesses that depend on Americans resuming their profligate ways. But if you’re a business leading the way in sustainability, this consumer shift could be just the opportunity you’ve been waiting for.

A Pew Research Center survey in April found Americans of all stripes are reconsidering the luxuries and necessities in their lives. For instance, fewer of us consider microwave ovens, TVs, air conditioners and clothes dryers necessities. In addition, 80 percent of adults have made moves to economize one way or another in this recession, such as shopping at discount stores, eschewing name brands for cheaper alternatives and opting for lower-cost cell phone and cable/satellite TV plans.

Not surprisingly, those respondents hit hardest by the recession, such as losing their jobs or their retirement savings, are more apt to have taken cost-saving steps than those less affected. Even so, Pew Research says:

(T)his distinction doesn’t apply to changing perceptions about what’s a luxury and what’s a necessity. These shifts have occurred across-the-board, among adults in all income groups and economic circumstances — perhaps suggesting that consumer reaction to the recession is being driven by specific personal economic hardships as well as by a more pervasive new creed of thrift that has taken hold both among those who’ve been personally affected and those who haven’t.

Pew doesn’t speculate on whether this new consumer ethic is a long-term shift. The New York Times, however, says we shouldn’t be looking for Americans to return to spending like drunken sailors anytime soon. “The economic downturn is forcing a return to a culture of thrift that many economists say could last well beyond the inevitable recovery,” the paper reports.

Where the New York Times cites the pain this could cause businesses reliant on consumer spending, TIME magazine finds a silver lining for individual Americans:

A consumer culture invites us to want more than we can ever have; a culture of thrift invites us to be grateful for whatever we can get. So we pass the time by tending our gardens and patching our safety nets and debating whether, years from now, this season will be remembered for what we lost, or all that we found.

And what many people are finding in this painful recession is what’s really important in thelr lives: time, family, friends, community, learning, the security of living within their means, doing meaningful work. For businesses down the road to sustainability, this is your silver lining: You’re already where many of your customers are coming to and where they will expect businesses to be in the future. 

Marketing consultant Avi Dan, addressing marketing strategists in Ad Age, says the period we are in now “represents a complete social and economic reset.” He writes:

As consumers learn to live within their means and frugality replaces an abundantly wasteful consumerism, sustainability will become an essential benefit to your customers. Customers will uncompromisingly penalize products and brands that are perceived as wasteful of scarce resources and harmful to the environment, from SUVs to bottled water.

Many, perhaps most, businesses are frightened by this prospect because they have so much catching up to do. Avi Dan is speaking to them when he says, “Marketers will risk being left behind if they don’t rethink everything.”

If you’re among those firms that got serious about sustainability some time ago, you’ve not only rethought — you’ve acted. So smile. The times are now on your side.

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