Home: http://www.Daxle.net
Date: June 2, 2011
Book: The Responsible Business: Reimagining Sustainability and Success
Speakers: Brian Oates & Carol Sanford
Source: http://www.daxle.net/imprint/media/Imprint_089_Sanford.mp3
Permalink: http://www.daxle.net/archive/the-responsible-business

Brian: Welcome to Imprint: Business Author Interviews, from Daxle.net. Today's book is The Responsible Business, Reimagining Sustainability and Success. Carol Sanford is joining me today. Carol, thanks for joining me on the program.

Carol: I'm glad to be here.

Brian: Wouldn't many just say, Carol, "I take care of my customers. I take care of my employees. I take care of the owners," whether that's a stockholder or a private enterprise, "If I do those things then I feel like I'm being responsible. Am I missing something?" How would you expand that?

Carol: First, I wouldn't argue with anyone who says that they're pursuing that. What I am trying to do is add a way to think about it that really lets people probably become innovative, in regard to what it is they think they can do for responsibility. Let me say what I mean by that. I think that, often, when we answer the question, "How are we being responsible to our customers, consumers, employees, the Earth, etc?" we do one of two things. One is that we have kind of a checklist of either best practices or something that says, "Okay, I take things back from my customers when they're unhappy. I give my employees benefits of the kind that are beyond what others do." What we don't ask is, "Am I actually improving the quality of the life of the people that are involved? Am I improving the quality of the stakeholders lives, including Earth's life?" So, for example, we can take back something from a customer when they come in, or make sure they get the plate they were served replaced if it's not good, but the real question is, "Am I asking, from the people that choose to do business with me, either because they can't do it for themselves or they don't want to do it for themselves, or they think we can do something great, do I really understand how they are assessing what responsibility means and not how I am, when I look at them?" So the first thing is that you've got to get out in the shoes of other folks, in the lives and the minds and the total experience, not through customer surveys, because that becomes intermediated, like there's something between us and them.

So the second thing is; are you really thinking about it systemically? Most of those things are measured separately. So we'll say, "Alright, there is a set of things we do for customers. There's a set of things we do for employees. There's a set of things we do with our suppliers, another one for Earth, another one for community, and then, by the way, there's something for the investor or the constituents, if it's in the case of a government or a not-for-profit." Do we see them as a system and understand that we actually can create a much more mutually beneficial system if we had a way to think about how they are all related. In fact, part of the challenge with the triple bottom line is...I mean, the good news is that it got people talking about things that they hadn't been talking about, but it leaves them splintered, as though they are not related in a system. So my book was to try and do those two things and do what I call 'make responsibility the DNA of everyone in the organization, every day, in every decision'.

Brian: How do you deal with the gray areas of responsibility. For instance, I drive a car. If a semi-tractor trailer rolls over on top of my car while I'm driving it, I don't expect to survive that. I just don't have that expectation. Now, I could drive a tank. If I drove a tank then come at me with all you've got. That's fine, but it's unrealistic that we're all going to be driving tanks around in case a semi-tractor rolls over on top of us. How do you deal with that?

Carol: Well, you're speaking about, actually, one of the big concerns that I have about how people talk about responsibility, which is that there are sort of absolutes in any one arena, or there are compromises in any one arena. What I really want people doing is to begin to have it be the kind of conversation people have about how it is that we're making a decision that could make a difference. So I'm going to give you a real example, which is not in the book, but it's the story of the DuPont Corporation. As they looked at the airbag question, where small children, small women, were being killed by airbags - only a couple, but still, we're not counting that it's okay to have 2% of people die with airbags. So the real question was; what is it that is really causing the problem here? It turns out that there were 267 suppliers building the dashboard of an automobile, into which an airbag went and many of the problems that were happening were because of the electrical connections of the different suppliers who were building. The second thing was that there were not real connections to the converter who was making the airbag, from DuPont, who was making the fibers. So they created champion teams who said, "We want to take on responsibility for the life of a person sitting in a car, in the case of an accident," which is your example. In doing that, they started to integrate so that all the suppliers were talking with one another so that they changed how they were measuring the success of their fiber. It had to do with the number of web-breaks that happened in the converter's operation so that they were able to beat even the next best competition by 8 times the strength that happened. So the safety really was evolved.

So the question of; will we ever get it perfect, or will we be able to make the trade-offs? That's probably not a question we will ever be able to answer. What really matters is; are each of us thinking about, in our business, with our customers and converters, and then the life of someone, can we keep seeing what role we can play in making that life - in this case it was a literal life, but I the case of a meal it's more of a lively experience - can we connect - and in this case we connected every operator, every marketing person, every sales person, every R&D person to that dashboard, and that became the measure. I mean, a literal dashboard here, a dashboard of a car, so that everyone was designing based on a wholly integrated system and thinking about everyone connected to it. That changes the conversation. If we had everyone do that then who knows, we might could build a combination of transportation systems that made sure that we could move what we needed to move in large trucks, but each of us could get there safely, but we can't if we work on them separately. Does that make sense?

Brian: Yes, that makes sense. One of the stories in the book that I would like you to tell is one that deals with layoffs. That's a terrible topic, no one wants to lay off people, no one wants to be laid off and we see companies handling it all different ways, job fairs, training programs, bringing in consultants to help update their resumes and help them with interview skills, but you worked with a company that did something that wasn't just different, but I would say was remarkably different. Tell us about it.

Brian: This is Kingsford Charcoal. I was blessed to be a part of this event. Kingsford Charcoal, when we started to work with them, had 11 manufacturing facilities, quite a variety of contractors, and yet they were not able to meet the growth demands that we were setting forward on strategy. As we started to bring in a new way of doing work, a new education process, it got very clear that a variety, probably up to six of these facilities, needed to close. The one that I wrote about in the book is symbolic of how all of them happen, but there are some specifics of it that are very exciting. It was in [inaudible 0:07:46] Alabama. It was a Kingsford Charcoal manufacturing facility. In one year in advance of knowing that it was going to close everyone in the facility was told it was going to close but that they had principles they were going to use, and one of those was that no one would be without the same or better job. They would not lose their current job until they had the same or a better quality job in the community. Everyone in the facility them became involved in how to make that happen. We work with the community colleges to build capability and we did a lot of work at looking at what we're missing in terms of services and product offerings in [inaudible 0:08:23] Alabama and we found that people were commuting up to 100 miles for everything, from mechanical service - which meant they usually had to be towed - to accounting services to do their taxes. We offered people the opportunity to go to school to become certified. During that time they're still running this facility. They're still packing, and the efficiencies are increasing almost every three months. We were doubling the output we were able to do with less and less waste. That's because people knew they were going to be fine. We worked with the mayor, the city council, the economic development corporation, and we built capacity in the community, such that when the entire thing was said and done and that facility was closed down, and it was closed down so smoothly there was not even one bump in the road, everyone had the same or a better job. Over 15% of them were put into entrepreneurial worlds. Some of them went to work for others. The city council and the mayor sent a note to the board of Clorox, who owns Kingsford Charcoal, and they said they could not believe how strong their community had become as a result of this effort, in a layoff situation, the closing down of a facility, which normally reduced the number of jobs. This had increased, in fact almost doubled the number of jobs and it had raised the level of income average for the community. Not only that, most, I don't remember the number, but a significant number of the workers sent letters to the board, and a couple of them went it...Will [inaudible 0:09:53] led this effort and John [inaudible 0:09:55] and Jerry [inaudible 0:09:56]. I should give you their names because they're amazing human beings. They were the ones who then brought these people to have conversations so Clorox could know that they had a story to tell and that they had created something totally amazing. It was one of the greatest experiences of my life, too.

Brian: That is beautiful. I love it. Alright, Carol, tell us what's in this book. Tell us what's in there that would help the person who picks it up and reads it.

Carol: Well, the core of the book is a system to be able to think about responsibility in a holistic way that is part of the DNA of the business. The way of describing that best is that it's moving from the triple bottom-line to the quintessential top line. Now, bottom-line is what's left over, right? Top line is when you're growing and creating new revenues and new directions and new businesses. Now you have to have both, but when you work on only the bottom line you tend to work on an efficiency model. How do we do less harm, less waste, how do we just drive more? So even when you put planet and people in there you just figure out how to do less harm to your employees or less harm to the community, or give back to the community. You're not saying, "How is it that we could actually grow?" So the book has the idea that everything starts from what a business is really about, which is providing, preferably product offerings, whole systems of products that have services and so forth in them, in a way that changes the life of the people who choose to buy them.

Once you know how you're going to do that, the second phase in the system is to connect every person who works in that stream, and I think we even get rid of the word employs, because you're really talking about everything from the supply relationships, contractors, the people who are hired inside and outside the company, and you connect them to those customers and their lives, not the consumer reports, not the translation, but really becoming champions, as I said in the case of the DuPont story. Then you say, "Now, what we want to do is do that in a way that Earth has more capacity to regenerate itself every time we work and touch Earth." That means you actually have to change how people understand how Earth works. Right now we have a few people who set some guidelines, standards, they'll give us a certification that we're not doing it, but people in the business don't actually know whether or not they're doing anything, except that they have some reports. So this system says, "Work with understanding Earth." It's the same thing in the community then. So it's the next phase, you're moving from Earth into a sense of, "Don't give back to the community only, give as you do business there." In the case that I talked about here with Kingsford, they were giving as they did business. It was a part of the business, it was a way they did business. It was not philanthropy. I'm not opposed to philanthropy, but it was maintaining and building the unique identity of that place. This gives you, in the final return, what I call 'enduring ethical returns' to the investors. So the system works for the investor because the other four aspects in an integrated system have been brought together. The book is full of stories like the Kingsford story and much more about that, stories about what Colgate did in Africa around the elections, many more small business stories like Seventh Generation and how it went from being a very small brand to a national brand, small catering companies, some stories about red hats, so I have few of the hi-tech stories in it and Synergen devices, which is building solar panels. So what you get is the stories of how people did it, the system of how they thought through it and there's even pieces that tell you all the things you're likely to run into and here's some ideas about how to have conversations and work on it. Finally, it gives you a measuring system so that you can have a different way to measure, and not all of it's about numbers. How's that for the quick overview?

Brian: I would say that's pretty good. [laughter] Carol Sanford has been my guest, and the book is The Responsible Business. Carol, thank you so much. I appreciate you stopping by.

Carol: You're very welcome. By the way, there's a lot of free stuff on my website at CarolSanford.com if anybody wants more.

Brian: CarolSanford.com, and also the book website is TheResponsibleBusiness.com and for more business author interviews visit Daxle.net.