Retooled leaders for sustainable times

CSr“ BP – which was working hard to develop an image ofresponsibility for the environment and investing in newtechnologies – had its hand forced by the recent events inthe Gulf of Mexico, just as bankers had their hands forcedas the global debt markets imploded 24 months ago. ” ‘Retooled’ leaders for sustainable times How can leaders move their organisations toward sustainability? By Richard Brubaker force them to retool structure, processes, products, and people. In retrospect we are coming to understand that the conditions B eing the leader of an were not unique and are indeed increasingly becoming the norm organisation, regardless of – conditions where the constraints of the company, the economy, size or profitability, isn’t easy. and the environment are aligning in new order. It is a role that requires a combination of knowledge and experience - to Areas for retooling know how to overcome the immediate When speaking about the issues of sustainability that challenges presented; to foresee the leaders must now focus on there are potentially hundreds of large-scale changes that will offer industry specific challenges to be noted. In simplest form,opportunities (or negative impacts); to make the decisions that these challenges fall into three broad categories: economic,will guide the organisation through regulatory changes, shifting environmental, and societal.consumer habits or economic cycles. Since the first commercial business opened its doors, Or to guide the organisation when all of these things are the primary focus of organisations and leaders has beenrequired at the same time, like in 2008, when the perfect storm on economic sustainability, or more specifically, economicof economic, environmental and societal pressures all came growth. But how many of these leaders have been focused onto bear on organisations. At that time, organisations that were building true economic sustainability? Perhaps, as the 2008once able to focus without too much external pressure on their recession showed, not as many as were once thought. This wasmission of returning profits for shareholders were thrown into the demonstrated when illiquid banks forced many businesses tomiddle of what were believed to be unique conditions that would move to cash-based models, and that many of these models November/December 2010 Supply Chain Asia 27

CSrwere unable to sustain existing operations. The recession also single innovative product, into developing systems and processesshowed just how few firms could grow without access to cheap that alter the way the organisation functions. These processesand easy credit. require an investment in people and will become the foundation Over time, many organisations are also coming to understand for future leadership and organisational capacity.(and pay for) the relationship between environmental concerns Engagement: Building buy-in for any retooling can be extremelyand business plans. For some, there has always been a simple difficult, especially when catalysed by outsiders or a moralunwritten rule that polluting the environment is bad for business imperative that cannot be supported by a business case. It is– so they don’t do that. But for others the environmental critical for leaders to be able to build the stakeholder buy-in thatconsideration was about access to cheap resources and is required. A process of analysing stakeholders, understandingthe savings that could be found in differences between their positions, educating them on the issues and planning, andenvironmental standards around the world. Now, as citizens have above all engaging them as equals to highlight mutual benefitsgrown more aware of the impact on the environment economies, and work through hurdles. Engagement is critical to the long-termorganisations, and consumption systems have, they have started success and sustainability of the changes.to understand that through increased pressure on firms they can Commitment: Leaders need to know that the steps being takenreverse some of these impacts. This pressure, when combined are the right ones and the short-term pain the organisation maywith stronger local regulations is forcing organisations to move experience is worth it. At times, they will need to go to the mataway from local standards to a platform of global standards. to defend their vision and decisions. Were it any easier, it would The importance of responsibility to society has also become have been done already.a growing pressure on organisations. Pressures from internal “and external stakeholders are forcing many firms to take on the It is critical for a leader embarking on a pathadditional responsibility of ensuring the entire supply chain iscompliant – that supplier factories are not polluting local water of sustainability to have a clear vision of wheresources, that sales agents or distributors are not engaging in the organisation needs to be; the changes thatacts of corruption, and that employees are volunteering their need to take place; how the changes will occur, andtime. Unwritten requirements that, while largely voluntary and when they will occur. This vision requires a claritylacking quantitative measurements, are often graded in the pressthrough the constant CSR award ceremonies held and reports supported by more than just a moral imperative,on performance produced. although that is an important aspect for some, andQualities required for sustainable leadershipIn considering the qualities of a ‘retooled’ leader, here are eight has to be understood and supported by others. ” Execution: Everyone has ideas. Sometimes good ones. But it takestraits they should be equipped with: leadership to take those ideas and do something with them that will bring benefit to the organisation. The best leaders will beVision: While all leaders need to have a plan, a mission, and a those who understand risks of failure measured against the risksense of vision, it is absolutely critical for a leader embarking of ‘business as usual’ and against the potential opportunity, andon a path of sustainability to have a clear vision of where the then align the organisation in a way that mitigates the risks andorganisation needs to be; the changes that need to take place; captures opportunity through a programme or process with anhow the changes will occur, and when they will occur. This vision underlying and compelling business plan.requires a clarity supported by more than just a moral imperative, Monitoring and reporting: To ensure that the retooling of people,although that is an important aspect for some, and has to be processes and organisation is occurring ‘as planned,’ and whetherunderstood and supported by others. or not tweaks to the programme need to be made, a system ofTiming: Managing a business in a way that reports results on a regular monitoring and reporting needs to be in place. Thisquarter to quarter basis is a very different skill set and need than must be transparent and allow for debate. If done properly,for a business that is in the process of a core change. Leadership the monitoring and reporting process will allow for an ongoingof managers and executives is required to plan and execute along opportunity to update and engage stakeholders, somethingan appropriate timeline with the understanding that results that important to their long term commitment.can be shown over short timelines will be very different to those Scale: For many organisations preaching change and winningover the longer term, and to ensure commitment to the timeline awards, it is done off the back of a successful project or a singledeveloped. product. Ways have to be found to scale these small successesProjects vs. Programmes: Leaders undertaking the retooling for across the organisation, across the system, and over the longtheir company will need to move beyond pet projects and/or a term. Leaders need to find the effective ways to do this and28 Supply Chain Asia November/December 2010

CSrensure the maximum benefit of retooling is returned to the become leading agents of change in the textile industry andorganisation. have undertaken a number of initiatives that address the labour On a nearly daily basis the merits and foundations of and environmental issues found within their industry whileleadership are spliced, debated, and studied. Leaders are profiled maintaining their leading position. Esquel extends its influencethrough a variety of mediums and graded against one another: beyond its own operations by involving suppliers, customerswho is the most innovative; which organisations are the best and – more recently – universities that it works with to promoteemployers; whose employees have volunteered the most hours, research and capacity in the organic cotton arena.and which factory has the highest safety ratings. For many still looking to understand the issues of Interface Flooring – Even with the recent global focus onsustainability and the steps they will need to take, it is important sustainability being peaked, there are few industrial or consumerto remember that it is a topic that is largely defined by context organisations that have gone as far as Ray Anderson andand time. That, while investment bankers and energy executives Interface Flooring. A process that began with Anderson comingwere revered for their profit-generating capabilities for much to understand the role of his firm in creating waste and pollutionof the past 20 years, the last two years has altered the context not only resulted in Interface radically altering the nature of itsby which executives and organisations from these industries products by moving away from large area flooring and carpetingare judged. BP – which was working hard to develop an image to create modular solutions, but also altered production lines byof responsibility for the recycling all waste from theenvironment and investing factory floor and customers.in new technologies – hadits hand forced by the recentevents in the Gulf of Mexico, “ Leaders need to know that the steps being taken are the right ones and the short-term pain the organisation may experience is worth it. At times, It was a process that while catalysed by a moral imperative has, according tojust as bankers had their Anderson, returned hundredshands forced as the global they will need to go to the mat to defend their of millions of dollars to thedebt markets imploded 24 vision and decisions. Were it any easier, it would firm in cost savings and newmonths ago. This leads to the widerlessons of sustainability, have been done already. ” sales combined. Timberland – Undertaking aand the fact organisations have to change and executives have process where a brand moves from a model that is looking toto make difficult decisions in order to remain in the market. compete head to head with others on a cost basis to one whereWhile there may have been a time when a leader could focus on the product is designed and manufactured with environmentalthe quickest path to profitability and not have to be concerned considerations first – celebrating diversity, and raising moneywith the externalities of their decisions, the expectations being for social causes – is not a decision that many firms wouldplaced on them are becoming very different and, at times, very take lightly or take at all. According to the retooling of thedifficult. Timberland business and its products, the firm, its processes, But for those executives looking to take a leadership role and its employees are to be (a) carbon neutral by the end of thisand retool the organisations they are charged with leading, this year (b) continuously design and market recyclable productsis a time when one can, through a series of research, planning, that are low in cost, have a reduced environmental impact,and retooling, take the opportunity to improve business models, and have a revenue generating after-life (c) offer fair, safe anddevelop products and processes that will provide long term non-discriminatory workplaces globally, and (d) encourage andstability for your organisation and catapult it to a leading engage employee volunteerism.position. Richard Brubaker is visiting professor of Sustainability at the ChinaCase studies: Europe International Business SchoolEsquel – An industry dogged by consistent questions of waterusage, chemicals, labour conditions, and high-embedded carbon Resources on leadership: Big Think (bigthink.com) - Big Think is a global forum connecting people andfootprints throughout the supply chain, the textile industry is ideas.facing a significant amount of pressure to change. Unfortunately, Ethical Corporation (ethicalcorp.com) – encourages debate and discussion on responsible business through publishing, conferences and independent researchas with many other industries, the underlying economic dynamics and advisory work.being what they are (focused on low costs) the move towards Global Reporting Initiative (globalreporting.org ) - The Global Reporting Initiative’s (GRI) vision is that disclosure on economic, environmental, and socialsustainability is a difficult decision. The founders of Esquel, performance become as commonplace and comparable as financial reporting, andone of the largest producers of cotton t-shirts in the world, have as important to organisational success. November/December 2010 Supply Chain Asia 29

Retooled leaders for sustainable times

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