Are strategies to embed CSR into existing companies the same as traditional change management?
By Julie Lineberger and Ellen Meyer Shorb
Do you have a successful business, make good money, but feel unsatisfied? Perhaps there is a quiet voice gnawing at you, asking, “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 business, but the entire industry. 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 classroom buildings built with non-toxic, renewable materials). Fast-forward 10 years and Cort is today at the forefront of green modular buildings, making an impact globally. Further, he transformed an entire industry from using formaldehyde boxes to non-toxic, efficient designs!
But what if you are hauling trash? Making cheese and milk products in Vermont or managing properties in Boston?
Can you sell Apple products, vitamins or trucking services and make a difference in the world? Can an existing company shift gears to become socially responsible [SR] and green?
Can Ordinary Businesses Become Socially Responsible?
We’ve spent the last three years interviewing 50 companies with ordinary products and services that decided to make 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 or produce their product with minimal environmental impact. And yet, they joined a legend of existing companies that are changing how they do business, finding that doing so breathes new life, competitiveness and efficiencies into production and market differentiation.
So how do you change an existing business to make it socially responsible? We found five common and effective steps:
1. Stoke the Fire in Your Belly
“Believe in what you’re doing, stick to it, and hang in there.” This is not a simple set of aphorisms. The first step to rapidly make your ordinary business extraordinary is to WANT IT, to want to make a business that is wiser, responsive and profitable. This means listening to yourself, tapping into your own hunger and fueling the fire in your belly.
Jan Blomstrann started at NRG Systems, a wind energy measurement device company, as a bookkeeper. Inspired by the results of instituting socially responsible human resources and supply chain policies, Blomstrann transformed the company – of which she is now CEO – by adopting socially responsible principles across the board.
When she began the process, her main priority was to create a business organization by instituting management systems that professionally ran the company: accounting, hiring the right people, figuring out how to offer health insurance, etc. 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?’” Startled that the requests were predicated not only on the growing wind industry but by NRG's socially responsible policies, she noted, “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.”
2) 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. Meyer was switching careers at the time 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 in the warehouses and docking garages and, with Ford’s support, initiated a sweep of initiatives that engaged employees in thinking about how to save energy, thus saving the company money. Meyer also started a program of noting good ideas and accomplishments on small steps with dollar bills at staff meetings. It was at one such meeting that an employee presented his research on a sign that requested people not to turn off a light switch. As it turned out, the light had been left on for three years and no one knew why!
3) Build Unlikely Allies
Jed Davis had been at Cabot Creamery for 13 years when he became obsessed with the idea of making the dairy cooperative more environmentally sustainable. It took him three years to convince the Cabot management. Now 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 he ran the numbers. He quickly joined forces with Davis and Operations SVP Ed Pcolar who actually went with the trash hauler to the dump to count trash. After that episode, Pcolar made it mandatory for all departments to weigh their solid waste and figure out how to recycle just about everything. Today, the company is considered a leader in the environmental space.
4) Implement Low Hanging Fruit First
New Chapter Sustainability Manager Sara Newmark drew up a business plan to bring the Brattleboro, Vt., company in line with its reputation as a national leader in sustainability based on the quality and sustainability of its procurement practices. Although she had already created a far-reaching business plan for the initiative, she saw a need to implement a few more visible changes to inspire others to follow. She initiated New Chapter’s sustainable policies with simple recycling and in purchasing recycled materials.
Along with owner Barbi Schulick, Newmark started by asking all the department heads to evaluate where they could make improvements. An early and simple change was to check who was using recycled paper for all their printing. Turned out, there was no consistency in who the departments were sourcing their paper from. While recycled paper was more expensive, by switching organization-wide, their cost fell significantly.
Next, each department created a matrix of goals and metrics including fair trade sourcing, carbon footprint, solid waste and energy use. The company then celebrated the department that recycled the most and who saved the most.
Little by little, they wove sustainability into the fabric of their operational culture. They didn’t see changes right away, nor did everyone get immediate satisfaction, but the values and principles slowly started to become part of the way New Chapter does business. Now sustainability is who New Chapter is.
5) Evaluate ROI from Multiple Angles and Share
Noting the impending impact depleting resources could have on its industry; Casella Waste Systems went from “hauling trash” to “managing resources.” In the mid-2000s, according to Vice President Joe Fusco, the company switched from hauling a ton of byproducts to the landfill to hauling an increasing amount of “waste” to be recycled, re-used and sold in the last decade.
Once Casella entered the recycling business, it began to track its repurposed resources, celebrating each metric by measuring and reporting the difference they were making environmentally, in their community, among their employees and to its financial bottom line.
Social Responsibility: Easier than Simple Change Management?
When interviewing these companies, we continually asked ourselves whether their transformations fell under traditional change management. Were the strategies these companies were taking the same if they were switching a product line, expanding overseas or consolidating three factories?
Turns out, there were some critical differences.
Embedding social responsibility into an organization is a challenging transformation for a company because the field is still pretty nascent. In some cases, measurement tools have to be created industry by industry. For example, Cabot Creamery decided to join hands with other dairy companies to design industry metrics and set tracking, evaluation and reporting mechanisms in place so the entire industry could move toward greener practices.
Besides, measuring financial success is difficult. And the connection between social responsibility and employee retention is not always a clean one nor is it always possible to show direct causation. Payback terms may be longer than traditionally calculated and these metrics are not traditionally an existing part of reporting systems for investors, shareholders and owners.
On the other hand, markets and consumers are increasingly hungry for products and services that are made and distributed by companies with an explicit social bend. We now have an entire new field of language for social responsibility – the “multiple bottom line” (planet, people, profits), “green,” “sustainable,” etc. Further, the companies we talked to found that social responsibility engaged and retained employees, consumers were more attracted and savings from energy efficiency and recycling boosted the company's bottom line.
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. This intangible but powerful benefit can greatly propel a substantively significant change in business success.
Time to Embrace Responsibility
Ten years ago, this conversion would have been difficult.
Today, there is momentum, a cultural change in the market, and a hunger among owners and employees to continue doing what they do well while positively influencing the world, the environment and their community. While becoming a socially responsible business can be logistically, culturally and politically challenging, it is, hands-down, the smartest business decision you'll ever make.
About the Authors:
Ellen Meyer Shorb is a principal of Blue Sage Partners, a strategy consulting practice specializing in meeting facilitation.
Julie Lineberger is the co-founder/owner of LineSync Architecture, a green and sustainable firm in southern Vermont, and a Board Member of Green America and Past Chair the Vermont Businesses for Social Responsibility Board of Directors.
ReWiring Success, like Ellen and Julie, combines the philosophies of global sustainability, nonprofit humanitarian development and for-profit earnings.