All In: The Future of Business Leadership

David Grayson, Chris Coulter & Mark Lee

 

Posted in: Guest Writers, Speaking Out, Strategy

All In: The Future of Business Leadership

July 30, 2018

From their new book, All In, David Grayson, Chris Coulter and Mark Lee share the hallmarks of true business leadership on sustainability.

Businesses can no longer be hesitant or half-hearted about sustainability. They have to go All In. One critical aspect of going All In is having a comprehensive Plan to embed sustainability throughout the business, explaining “What we do and what we aspire to do as an organization.” Think of the Unilever Sustainable Living Plan, M&S’s Plan A or Mars with their “Sustainability in a Generation” Plan.

There are several essential enablers of an effective Sustainability Plan. These are:

  • Being comprehensive and internally consistent; covering all core business activities; integrated across functions, strategic business units and markets
  • Articulating a compelling business case based on sustainability of the business and of the planet
  • Including stretch goals based on science and aligned with the UN Sustainable Development Goals as well as clear metrics, rigorous measurement, and timely reporting and disclosure
  • Ensuring that the Plan is championed and driven by top leadership who are constantly re-selling the Plan with the new data and examples required to keep it fresh and relevant
  • Pursuing it persistently, even through adversity, and being responsive to changing societal expectations
  • Ensuring individual and organisational rewards and resources are aligned with delivery of the Plan

One company which has been developing an increasingly comprehensive sustainability plan is Walmart.

Walmart and its then CEO Lee Scott hit a ‘threshold moment’ in 2005 with Hurricane Katrina. Kathleen McLaughlin, Walmart’s present Chief Sustainability Officer, told us, that after the storm “the company sprang into action reflexively,” with Scott giving permission to Walmart personnel in affected regions to do whatever they perceived to be needed and right for their communities, without worrying about how the company would judge it or account for it later.

Even before Katrina, however, Scott had started a series of “listening sessions” (sessions that current Walmart leaders continue today) with critics and experts like Fred Krupp of the Environmental Defense Fund. McLaughlin related how Katrina pushed Scott to the next level, to ask “What would it take for Walmart to be that company, at our best, all the time?”

More than ten years later, Walmart continues to work on its Plan. It has been refined – McLaughlin emphasized the way Walmart’s view of sustainability has expanded beyond its direct operational impacts to a perspective that takes in the entire value chain – but it remains focused on what the company can accomplish using its commercial strengths, with McLaughlin holding “It is only possible to maximize the business value of a company if it is addressing the fundamental social and environmental issues of our time via the core business.”

McLaughlin expanded on how Walmart tries to maximize value in such a manner, providing this overview of the company’s comprehensive approach:

“Our core business is about bringing people safe, affordable food, apparel [and] household goods in many countries around the world. That in and of itself solves a social need for access and affordability, food safety and so on. We are trying to do it in a way that uses our strengths to create additional shared value – simultaneously creating value for business and for society.”

McLaughlin identifies three ways in which Walmart creates win-wins for society and for the business:

  • First, we aim to use our jobs and purchase orders to create economic opportunity for associates and suppliers from farmer to manufacturer.
  • Second, we are working on sustainable supply chains. By working with others, not only can we reduce emissions, create a more circular economy, move to more sustainable chemistry, and so on – in doing so, we can improve product quality, enhance availability, manage risk, improve cost structure, enhance customer trust and loyalty.
  • The third big area for us is local community where, because we are a retailer and we have physical presence with people, products, and assets on the ground, we can make a difference on things like disaster relief or hunger relief. For example, as a food retailer, donating unsold food reduces food waste and it also provides charitable meals.

Walmart’s systems thinking approach has proved instrumental in leading the sustainability agenda through the business and collaborating with others to accelerate systemic change, says McLaughlin.

Today Walmart is applying its core business strengths to issues as diverse as:

  • Wages and workforce success based on more and better training and development, higher starting wages and quicker raises;
  • Reducing fleet emissions by doubling efficiency in the ten years to 2015 through a combination of initiatives n;
  • Waste, where the company has realized 77% waste diversion in its own operations thanks to interventions like shifting food labels from “best before” to “use by”;
  • Chemicals transparency, where all Walmart suppliers will be required to disclose their use of chemicals of concern by this year; and so on.

McLaughlin says everything Walmart does, especially in leveraging supply chain partner contributions through The Sustainability Consortium (in which the majority of Walmart suppliers participate) “is about system acceleration.” This commitment to acceleration and the true scope of their ambition and the comprehensiveness of their Plan is best represented by Project Gigaton.

Announced in April 2017, Project Gigaton aims to reduce emissions in Walmart’s supply chain by 1 gigaton (1 billion metric tons) by 2030.. By providing an emissions reduction toolkit and working with suppliers, Walmart is committed to eliminating a gigaton of Scope 3 emissions (indirect emissions that occur in the value chain) between 2015 and 2030 – “equivalent to taking more than 211 million passenger vehicles off of U.S. roads and highways for a year.” The initiative sums up the strengths of Walmart’s Plan: hugely ambitious and purposeful, science-based rigour full institutional support, rooted in collaboration, and with quantifiable business benefits. Walmart has promised to pursue Scope 3 progress not just on energy, but also on agriculture, waste, packaging, deforestation and product use and design.

Companies that want to go All In will identify their material impacts and develop a comprehensive Plan with stretch goals based on societal context and the best available science.. Such plans will be fully integrated with, and indeed will become the business strategy over time.

 

Edited extract from “All In: The Future of Business Leadership” by David Grayson, Chris Coulter and Mark Lee, published by Routledge.

www.AllInBook.net

COMMENTS