UT Austin Sustainable Business Summit
I spoke on a panel at the Sustainable Business Summit at the McCombs Business School at UT Austin this weekend, and it was interesting to hear the perspectives of the other speakers and also have a chance to have some good debate about what sustainable business means and how we can accomplish it. Given that this was their first one and it was taking place on a Saturday, turn-out was impressive and energetic. Kudos to the student organizers for such a well-run conference with a nicely diverse and well-qualified range of speakers and panels.
There were two keynotes and they highlighted some of the themes that came up throughout the summit (more on this below).
The first was by Lee Matecko, Global VP of construction and store development for Whole Foods. Lee was received quite warmly (and was on home turf since Whole Foods was founded and is headquartered in Austin), and detailed at length the many activities that the grocery chain is doing in the name of sustainability. It was interesting to hear how each region works quite independently and can experiment with new approaches to sustainable practices, which if successful are then picked up and done more nationally.
The second keynote was by Jeff Renaud, Director of GE’s Ecomagination initiative. Jeff predictably got a cooler reception given GE’s spotty reputation to say the least (which Jeff acknowledged, such as the polluting of the Hudson River). But it was interesting to hear the extent of GE’s work, and how it sees significant opportunities in green energy in particular. However, as with any large company that is in the midst of a transition there is also much that did not get talked about that is not so much on the favorable side of the ledger, and questioners were quite pointed in bringing these up after Jeff finished his (nicely designed) Powerpoint.
Green branding discussion
I was on the panel entitled “Coloring your company green”, which unfortunately smacked of greenwashing. Fortunately neither myself nor the other panelists were interested in that approach, so the discussion was more substantive and I certainly found it interesting. The other panelists were from New Belgium Brewing (makers of Fat Tire Ale), Citi, and H-E-B (a grocery store chain in Texas and New Mexico), and we all talked about what our companies are doing in terms of communicating sustainable practices.
The questions from the audience were also very good and stimulated lively discussion. My main points were:
- Adding “green” to your brand is no different than adding any other new attribute to your brand. It has to be seen as a logical and credible shift, and you have to walk your talk or the credibility gap widens and breaks over time. You can’t take on any major new attribute overnight, so be prepared for the long haul.
- The approach to doing this is quite different if you are a company founded on sustainable practices (e.g. Whole Foods, Patagonia, Method), or if you are a company shifting to become more sustainable (e.g. GE). The former are given a lot of latitude, the latter very little.
- Adding green to your message is going to either reduce, grow or shift your customer base, so be ready for that
- Clarity: be clear about your mission, your approach and your goals.
- Humility: Don’t pretend you’ve got the problem licked - no-one does and you’re not fooling anyone. Be humble about what you’ve achieved and how far you have to go.
- Authenticity: Speak with an honest voice. Green has an ethical element to it that many other brand aspects do not, so tread lightly and engage in two-way dialog.
- Specificity: Don’t just provide a high-level gloss, but talk about specifics that substantiate your position. As noted below, sometimes this is difficult to do as they can be complex and dull, but it is vital.
Several themes emerged from the talks I was able to see, and from discussions with attendees.
- Companies who are trying to become more sustainable are in a Catch-22. If they start talking about what they are doing, the bar instantly gets raised infinitely high and they get hammered for all the things they are not doing. So this creates a disincentive to talk publicly until major progress has been made. However, improved brand image is one reason for companies to initiate sustainable practices, and if they can’t talk about it then the value is reduced. This slows progress. The good/evil framework might have been useful in the past to spur action, but today it is outmoded and suboptimal. We need a more balanced dialog that acknowledges successes while also encouraging improvement without letting companies rest prematurely on their laurels.
- Sustainable business is very complicated, with many inter-related and often conflicting issues and stakeholder perspectives. Unifying these takes a lot of work and cross-departmental and cross-vendor coordination. A lot of it is pretty dull stuff, but necessary.
- Communicating the story to customers is very difficult. Again much of what is involved is pretty boring to end customers and are difficult stories to tell, so finding the right stores that are easy to communicate but substantive at the same time can be a challenge. For example in Lee’s talk there were some well known efforts that Whole Foods has, but there were many “invisible” activities in their supply chain, distribution fleet, and stores themselves which I was unaware of.
- Individual employees can have tremendous amounts to contribute to knew approaches, but two things are required to bring this to fruition: First the company has to show from the top-down that it is serious about sustainability, and put in place things that demonstrate this. (Lee talked about how all of Whole Foods full-time employees - 90% of their workforce - get fully paid health insurance, and 93% of stock options go to non-executives as opposed to 25% on average in the US. On my panel I talked about how frog offers incentives for employees to buy hybrid cars and use public transit, and switched to electronic paystubs instead of paper ones. These sometimes small things add up to show an overall commitment that frees employees to think sustainably.) Second, the company has to be open to suggestions from employees. Again, Lee gave examples of how the company absorbs employee ideas and disseminates them.