Pure strategies empowering sustainability at stonyfield

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  • 1. A pureEnterprise Case StudyCompanywide sustainability efforts are no longer thedomain of just a few niche, dark-green brands.Regulations, customers, shareholders, resource scarcityand a tough economy are pressuring a growing number ofwell-established companies to set first-time sustainabilitygoals in areas such as energy use, waste reduction, andwater consumption. But goals alone are no guarantee ofsuccess. Market-leading sustainable brands like SeventhGeneration, Patagonia and Stonyfield Farm learnedthrough trial and error that unless these initiatives areintegrated with regular business processes, they fall shortfor a host of reasons. With these lessons in hand, a secondwave of companies can avoid costly missteps and garnerthe value of effective planning on the first try. What thesebusinesses need is a tried-and-true process for settingappropriate sustainability goals, making them meaningfulto the organization, and establishing the accountabilitysystems necessary to succeed.“We had a great wayof measuring ourfinancial metrics, butwe didn’t really haveagreement within thecompany around oursustainabilitymetrics,”Nancy HirshbergFORMER VP OF STRATEGICINITIATIVES, STONYFIELD FARMEMPOWERING SUSTAINABILITY AT STONYFIELDa pureEnterprise case study
  • 2. Background: Failure of Sustainability as an ‘Add-on’Once a company grows beyond 50 employees with well-defined divisions undercareer-track managers, it may have numerous, disjointed programs for environmentaland social performance. Without clearly established long-term goals and a place inthe firm’s annual planning and budgeting process, these programs are typicallymarginalized and fail to serve core business processes. As add-ons, they achieve littlewith each passing year, and sustainability managers end up relying on persuasion toencourage various parts of the business to embrace sustainability. Inevitably, when itcomes to crunch time (and it always does), division managers focus on the tasks forwhich they are tracked and accountable to the executive suite. The head ofmanufacturing may agree in principal to additional work that would reduce energyuse or solid waste, but when the going gets tough, he or she buys the equipment andhires the personnel to achieve increases in productivity, improvements in quality, orwhatever other markers have been set and agreed upon by senior management.In 2001, Stonyfield had the “add-on” dilemma. It was the fifth largest yogurt maker inthe U.S. with just over $50 million in sales of organic and natural products. NancyHirshberg—at the time Vice President of Natural Resources, and VP of StrategicInitiatives—and her small staff were solely responsible for the environmental andsocial attributes of everything from plant operations to packaging to coordinatingwith the organic industry. Double-digit growth year over year and a never-endingbattle to meet consumer demand threatened to overshadow the company’s longhistory of environmentalism, and with new hires from the conventional dairy industryquickly filling expanded tiers of management, Hirshberg recognized the need for acomprehensive framework to talk about sustainability throughout the company. “Wehad a great way of measuring our financial metrics, but we didn’t really haveagreement within the company around our sustainability metrics,” Hirshbergexplains. “So, we wanted to develop a baseline for measurement, and then have aprocess for the company to set goals and buy into them.”Hirshberg pulled together a team of 12 middle managers and began developing acomprehensive set of performance metrics. Over the course of six months, theysolidified 15 metrics on employee well-being, 5 indicators for family farms, and 8for the environment (in addition to existing measurements for profitability andquality) for a grand total of 36 indicators in a single tracking system. The aim wasto produce a quarterly report and a dashboard from which managers throughoutthe company could identify progress and gaps within their spheres of influence.”What we learned from that process was that 36 metrics are way too many, and theywere just overwhelming for people,” Hirshberg says. The system collapsed under itsown weight in a little over a year. Ultimately the team rationalized the list of 36metrics down to seven total, a change that improved measurement and tracking, butdid little to motivate behavior change or drive accountability within the company.STONYFIELD’SMAP TEAMSFACILITY GREENHOUSE GASEMISSIONSEliminate GHG emissionsassociated with facilityenergy use through energyefficiency, renewable sourcesof power and sequestration.GREEN CHEMISTRYIdentify chemicals thatreduce or eliminate risks tohuman health, environmentaltoxicity and greenhouse gasimpacts while ensuring foodsafety and product quality.MILKDevelop best practices tominimize impacts from theproduction andtransportation of the milkgoing into Stonyfieldproducts.STONYFIELD WALKING OURTALK (SWOT)Conduct all Stonyfield events,activities, and purchases in amanner that is consistentwith the company’s missionand values.SUSTAINABLE INGREDIENTSEnsure the company carefullyconsiders its mission whenmaking purchasing decisionsabout ingredients.TRANSPORTATION &DISTRIBUTIONDevelop best practices tominimize emissions from thetransportation of finishedproduct.WATERReduce overall waterconsumption whilemaintaining superior quality.ZERO WASTEEliminate waste andmaximize recovery ofmaterials.SUSTAINABLE PACKAGINGCreate the mostenvironmentally sustainableproduct packaging possible.“We wanted to organizearound our impact on theplanet… build agreementwithin the company aroundthose areas, and then holdpeople accountable.”Nancy HirshbergFORMER VP OF STRATEGIC INITIATIVES, STONYFIELD FARM
  • 3. ABSOLUTE REDUCTION INTRANSPORTATION GHGEMISSIONS FROM 2006-2011CORRESPONDING TO $14.7MILLION IN AVOIDED COSTSSAVED BY PREVENTINGMILLIONS OF POUNDS OFWASTE PLASTICTHROUGH PACKAGINGREDUCTIONSPERCENTAGE OFRENEWABLE (BIO-BASED)PACKAGING USED AS OFEND OF 2011DOLLARS IN SAVINGS FROM17% REDUCTIONIN FACILITY ENERGY USEAND GHG EMISSIONS FROM2007-2011The pureEnterprise™ ProcessAt this point, Hirshberg went back to the drawing board with the assistance of TimGreiner, Co-founder and Managing Director of Pure Strategies. “The development ofa company-wide sustainability measurement system was useful,” Greiner notes. “Butultimately the metrics didn’t matter. The responsibility for sustainabilityperformance remained with the sustainability department, and no one else wasreally accountable for moving the dial on the metrics. The goals and initiatives werestill Nancy’s.” Together they turned to the strategic process, called pureEnterprise™,developed by Greiner and Pure Strategies partner Bob Kerr through work withearlier clients. The first major step is to gain executive-level commitment for anintegrated vision of sustainability. In the case of Stonyfield, CEO and Co-founderGary Hirshberg (Nancy’s brother) provided this support, along with the company’sCOO and other senior VPs, who threw their weight behind a company-wideinitiative called the Mission Action Program (MAP). The new program was based onthe company’s founding mission: To serve as a model for environmentally andsocially responsible businesses that can also be profitable. “We wanted to organizearound our impact on the planet,” Hirshberg says. “The whole idea was to buildagreement within the company around those areas, and then hold peopleaccountable.”The following summer, Hirshberg and Pure Strategies launched MAP with an off-sitemeeting of senior company leaders, department managers and key staff, dividedinto teams for each impact area (see page 2 sidebar). The teams set near-term andstretch goals, and budgets to be included in the coming fiscal-year’s planningprocess. Pure Strategies provided technical expertise as needed, in many cases,giving teams the confidence to set stretch goals for which they could not yetimagine an immediate solution. The Packaging team, for example, set a goal ofachieving 100 percent sustainable packaging (by the Sustainable PackagingCoalition definition) and to make 5 percent annual improvements towards this goalbetween 2007 and 2015. “What’s so unique about Pure Strategies and Tim Greineris that he not only has the technical knowledge, he also has theorganizational-management piece down. He knows the people stuff,” Hirshbergsays. “For instance, at our kick-off meeting there were certain things that couldn’tbe said by me, they had to be said by an outside person—such as his impressions ofus compared to other companies, or what other companies out there are doing.”Each team had a 30-day period after the initial kickoff to review its commitmentsand determine what support and resources the team would need before submittinga one-year action plan for CEO approval. In addition to setting sustainability goals,the teams agreed to incorporate those goals into the HR process for jobdescriptions, performance reviews and bonuses. “This was a critical shift in the wayStonyfield addressed sustainability,” Greiner adds. “We attached it to the peoplewho were responsible for all the key decisions—What do we source? Where do wesource it? What do we make? How do we make it? What do we package it in? Howdo we move that product?”For the next six months, Hirshberg’s staff and Pure Strategies assisted the teams asthey continued planning and moved into implementation. When they reconvenedthe following summer to present the results of their work, Greiner says it wasobvious the organizational culture already had begun to change. “Some teamsknocked it out of the park, and others didn’t,” he says. “But you could sense thosemiddle managers and project-team leads wanted to be successful. They didn’t wantto get up there in front of their peers and report they hadn’t progressed ontheir goals.”
  • 4. Stonyfield Buy-InSemi-annual summit meetings continued off site for the next few years withastounding results. “Because we launched it with such a powerful, emotionaltraining, people became very engaged, and then they just started doing it. Itworked incredibly well—far greater than we ever anticipated,” Hirshberg says. “Forthe first time in our history, it absolutely unified us under clear, commonenvironmental goals that we could hold people accountable to, and it allowedsustainability to no longer be about me and my staff. The process gave usownership and buy-in. From certain areas within the company we’d always had it,but from others we didn’t. This got managers throughout the company to ownresponsibility for our environmental performance. From then on it wasn’t looked atas: ‘Oh, this is Natural Resources’ thing.’ They saw us more as facilitating theprocess, rather than making it happen.”Hirshberg adds that for many in the company MAP is exciting, because it demonstratesthe connection between environmental and financial performance. Sales continue togrow while the company’s environmental impact is visibly reduced. Stonyfield is now theleading organic yogurt maker in the U.S. and has expanded its product portfolio toinclude numerous successful products and brands. The company sources more than 300million pounds of organic ingredients annually, supporting roughly 200,000 acres oforganic production each year—the majority of which is located in the U.S. In addition, allof the company’s organic milk comes from Organic Valley/CROPP, a national dairycooperative with 1,300 family farmers throughout the U.S. In recent years, the companyhas received awards and recognition from organizations including the United Nations,EPA and the National Wildlife Federation, as well as a diversity of publications likeTreehugger.com, Real Simple magazine, Vegetarian Times, Dairy Field magazine, andBusiness Week.“The process gave us ownership andbuy-in. From certain areas within thecompany we’d always had it, but fromothers we didn’t. This got managersfrom throughout the company to ownresponsibility for our environmentalperformance.”
  • 5. Tim Greiner, Pure StrategiesCo-founder and Managing Director,specializes in building environmentaland social integrity into products,brands, and businesses. He consultswith domestic and overseasmanufacturers, socially responsiblebusinesses, and environmentaladvocacy groups. Current andformer clients include Seventh Generation, The North Face,Timberland, Stonyfield Farm, U.S. EPA, NRDC, Walmart,Millipore, and Dell.Tim holds a bachelor’s degree in Materials ScienceEngineering from Rensselaer Polytechnic Institute andmaster’s degrees in Environmental Policy and Businessfrom the Massachusetts Institute of Technology. He is afounding member of the Massachusetts Toxics UseReduction Planners Association and a former BoardMember and President. He is also founder of the Cape AnnClimate Change Network and is a Fellow at the LowellCenter for Sustainable Production. Mr. Greiner has workexperience in industry as a Process Engineer for FairchildSemiconductor. He also worked for the MassachusettsOffice of Technical Assistance (OTA) as Project Directorand Chief Engineer.About Pure StrategiesIn the past 15 years, Pure Strategies has lednumerous clients through the strategic planningprocess we call pureEnterprise™. This includesclients such as Radio Flyer, Aurora Organic Dairyand Rockline Industries. Whether it’s a companywith $20 million or $2 billion in revenues,integrating sustainability into a business is ascalable process that’s much more than utilizingmetrics, appointing a sustainability officer, ordeveloping a host of good sustainabilityprojects. It’s about understanding— How do wemake the business case? If a company can makethat case to gain competitive advantage, savemoney, or increase customer loyalty, then thequestion is: How do we operationalize that? Howdo we weave it into the fabric of the business ina way that gets people in every division to careabout sustainability performance? That’s whatpureEnterprise™ does.Watch Tim Greiner’s webinar: “GreeningStonyfield Farm” at ww.switzernetwork.orgPure Strategies helps organizations such as Stonyfield Farm and many others to develop meaningfulgoals and create a clear pathway for enterprise-wide execution.“What’s so unique about Pure Strategies and TimGreiner is that he not only has the technical knowledge,he also has the organizational management piece down.He knows the people stuff.”ENVISIONSet SustainabilityVision and GoalsENGAGEAlign LeadershipDevelop SystemsSocialize within OrganizationEXECUTEIntegrate into BudgetImplement ProgramsCommunicate ResultsThe pureEnterprise™ ProcessTo contact Tim Greiner directly:(978) 525-0480tgreiner@purestrategies.comPureStrategies.com