Small Business

Making Sustainability Part of Your People Strategies

Tuesday, June 03, 2008 / KW

If you happen to be a human resource professional, or if you own or run a smaller company and have "people" functions as part of your mandate, check out this good article by Adrienne Fox from the current issue of HR magazine. (It also happens to quote our fearless leader Andy Savitz, but that's not the reason we like it.) The piece offers a fine, thorough overview of lots of ways companies can get the HR department aligned with broader sustainability goals. Read it and ask yourself: How many of these strategies have we tried? Which ones should we experiment with?

Apocalypse Nau? No, Just Business Reality

Wednesday, May 14, 2008 / KW

It seems as if there's a bit of angst among believers in sustainable business over the demise of Nau, an apparel company based in Portland, Oregon, that aimed to make and sell outdoor clothes and sportswear made from recycled materials using environmentally friendly business methods. "Is this a bad omen for sustainable startups?" wonders at least one blogger.

For what it's worth, my answer is No. The failure of Nau reflects less the inherent weakness of the sustainable business concept and more a series of miscalculations made by the company's management, most of which had nothing to do with environmentalism or social consciousness but rather with plain old business sense.

As this article details, Nau committed some of the same management blunders that have doomed thousands of other startups. They counted on a website to generate 50 percent of their sales, then dawdled over repairing the site when it proved to be awkward and difficult to use. They chose not to make their products available through traditional retailers, thereby eliminating a potential source of vitally-needed early revenue. They decided to "mute" the appearance of their logo on their garments, eschewing a powerful tool for building brand awareness and loyalty.

And most dangerously, they overspent, especially on personnel: "Among the 60 employees at [Nau's] Pearl District headquarters, about 10 held the title of vice president or higher ... Most hailed from large companies such as Nike." In other words, they hired pricey talent accustomed to big-company perks and working conditions — always a risky choice for a brand-new company.

Given these mistakes — all of which, I hasten to add, are easier to spot in retrospect than they would have been at the time — it's not hard to see why Nau ran out of funds and couldn't find a venture capitalist willing to provide another infusion of money.

The lesson of Nau's collapse? A would-be sustainable company needs to be run at least as well as a traditional firm — because having great environmental and social goals doesn't exempt you from the laws of business physics.

The Shallow End of The Pool — Ten Simple Footprint-Reducing Steps For Businesses

Thursday, April 17, 2008 / KW

In somewhat the same vein as the story we posted yesterday about reducing your computer systems' energy use, here is a nice little article about ten business practices that can lighten your footprint on the planet. It's from a site we just encountered called Ecopreneurist.com. No profound insights or amazing strategies here — just a collection of practical, down-to-earth tips you may find valuable if you're a business manager. If the concept of sustainable business is one you are just getting your head wrapped around — which we suspect is true of many visitors to this blog — this could be the shallow end of the pool that makes it easy for you to get used to the water. Enjoy!

Taming Your Energy-Hogging IT Department

Wednesday, April 16, 2008 / KW

Here's a neat little column on making your company's IT department more environmentally friendly. It's from Preston Gralla, editor of GreenerComputing, and it's filled with simply, practical steps that take relatively little time or money but can reduce your energy consumption significantly. There are also links to other sites that flesh out the details and describe various techno-tools that can save you even more. And it does it all in just a few hundred words. It's a model of fine, useful sustainability reporting. Great job, P.G.!

P.S. Oh, and when you're ready to delve a little more deeply into the same set of issues, check out this article and the set of related links. As you can see, the folks at GreenerComputing have done a lot of thoughtful research into the kinds of practical info needed to make sure that environmentally-friendly IT practices really work. A great source for companies that are ready to travel this path.

The Challenges Of Taking On a Corporate Partner Without Abandoning Your Sustainability Values

Saturday, December 08, 2007 / KW

Check out this fine article by Amy Westervelt in Sustainable Industries magazine. Titled "How (Not) To Sell Out," it's a thoughtful look at the complexities of trying to protect a company's sustainability focus even after partial or total control has been ceded to a mainstream corporate investor.

In the article, Westervelt talks to green business pioneers who felt betrayed by the corporations they sold out to (such as Greg Steltenpohl and Paul Hawken), to others who chose to back away from potential buyouts in order to stay true to their long-term mission (such as Gary Erickson), and to still others who believe they've found a comfortable niche as in-house green business advocates after selling their firms to larger corporations (Gary Hirshberg, Frederick Schilling).

The key to the successful outcomes enjoyed by the last two entrepreneurs (CEOs of Stonyfield Farms yogurt and Dagoba Organic Chocolate, respectively) would seem to be due diligence — not just about the financial status of the proposed acquirer, but about its business history, demonstrated values, and industry role.

In the case of Schilling's Dagoba, which sold out to Hershey, the structure of the overall chocolate business is what made the crucial difference. In Westervelt's article, Schilling says, "Ninety-eight percent of cacao is grown by millions of small, independent family farms, and on small farms the model is always multicropping. In itself, as a commodity and industry, cacao is really a sustainable crop, and in terms of the environmental aspects of our product, Hershey would keep that up simply because of the nature of the supply chain and cacao as a commodity."

In the case of Hirshberg's Stonyfield Farms, the acquiring firm, international giant Danone, had a long-standing commitment to corporate social responsibility, dating back to the time of former CEO Antoine Riboud, father of the current CEO Franck Riboud. (For example, Danone collaborated with Grameen Bank founder Muhammad Yunus in creating Grameen Danone, a sustainable "social business" designed to provide low-cost, nutritious yogurt for poor families in Bangladesh. This story is one of the central themes of the new book Creating a World Without Poverty that I collaborated on with Yunus.)

Although Westervelt doesn't delve into this company history, it must have been an important factor in helping to convince Hirshberg that Danone would be the right kind of corporation for him to collaborate with in bringing Stonyfield Farms to next level of growth and expansion.

All in all, a very well-done article — one that gets beyond generalizations to examine the nitty-gritty issues involved in one of the most difficult decisions any entrepreneur has to make.

Dipping Your Toe in the Lobbying Waters: Some Good Advice For Small Businesses

Saturday, September 29, 2007 / KW

Over at Sustainable Industries — a "green business leadership" magazine we've just added to our blogroll — columnist Kevin Sweeney offers some thoughtful advice about how small businesses should interact with government. Although he doesn't use the phrase, his suggestions are all designed to maximize the "sweet spot" you can hope to find through lobbying efforts — the area where social benefit and business advantage overlap.

Sweeney's chief recommendations for effective lobbying include:

"No secrets." In other words, don't say or do anything in private that you wouldn't want reported on the front page of tomorrow's Wall Street Journal.

"Focus on frameworks." That is, look for ways to influence the philosophical direction and broad regulatory structure of government policies in ways that will be good for the environment and good for your business.

"Don't go it alone." Look for partners in the environmental community who can give your efforts greater expertise and credibility. (We would add: Partnerships with others in the business community can also be a valuable source of added strength.)

Oddly, Sweeney ends his column with a seemingly contradictory point: That, in the long run, business and society would be better off if companies were completely uninvolved in lobbying efforts. We're not sure we agree, and we're not even sure we fully understand Sweeney's argument here. (If companies pay taxes, like other "citizens," shouldn't they have a right to express opinions about the government policies and programs they pay to support? Seems logical to us.) But you should read and decide for yourself — Sweeney's a smart guy with much to say that's relevant and worth learning from.

Small Businesses, Too, Can Profit From Sustainability Strategies

Monday, August 27, 2007 / AS

When I'm asked, during a speech or an interview, to name some companies that are leading or lagging on sustainability, I invariably start talking about global corporations — companies like DuPont, General Electric, Unilever, Citibank, or PepsiCo who are racing to get to the top of the Dow Jones Sustainability Index, or companies like Exxon who appear either to not get it or to not care.

I often forget to mention small business, which is a serious mistake. Small business is the engine that drives economic growth, creates jobs, and provides many people with their initial view of how companies operate. Unless sustainability takes hold in businesses of three, twenty, or one hundred employees, it will not take hold at all.

If you help to run a small business, you need to be thinking about sustainability issues — and especially if one of the following five descriptions applies to you:

You provide goods or services to a large business. More and more large companies are “greening their supply chains” by making environmental and/or social performance a condition of sale. Wal-Mart, for example, has just imposed packaging reduction requirements on its 60,000 suppliers, many of whom are small businesses. McDonald’s has a strict supplier code of conduct that encompasses everything from the treatment of animals to the use of pesticides to child labor. You should look at some of the codes and requirements now being applied by big companies to the small firms they do business with; similar requirements may be coming your way in the near future.
You can benefit by being seen as part of your local economy. Many consumers are now making a conscious effort to “buy local” as a way of supporting the communities in which they reside. Locally-grown produce has long been considered fresher and of higher quality than food shipped in from parts unknown. Now concern over climate change is making people more aware of the environmental consequences of shipping food and bottled water long distances. Lots of people are shopping at local, independent stores rather than chain outlets because they feel there is more accountability. As a small business manager, you can look for ways to participate in — and benefit from — the buy-local movement.
You see a way to increase your profits by helping to solve environmental or social problems. Many companies whose business mission is to help solve environmental or social problems are booming. In my home state of Massachusetts, the clean-tech sector, composed primarily of small businesses, is growing at a strong clip, from solar power to biotech. Small companies like Waltham, MA-based Recycline are making successful businesses out of helping consumers and society reduce waste.
You see a way to reduce your costs by being more environmentally or socially conscious. Of course, small busineses, like large ones, can save money and help the planet by reducing waste and by saving water or energy, especially with the cost of fuel and waste disposal rising in many places. And because your business is relatively small and simple (compared to a global giant like GE), identifying and implementing opportunities to "green" your processes is likely to be easier for you than for a Fortune 500 company.
You see a way to build your business by linking it to a social or environmental cause. Many consumers like to do business with companies that share their values and are putting their money where their mouth is by supporting causes they believe in. There are all kinds of examples, involving businesses both large and small — for example, The Dancing Deer Bakery in Boston's Roxbury district donates a percentage of profits to local environmental and social causes, especially to helping the homeless.

Small businesses have many built-in advantages in the pursuit of sustainability. There are far fewer internal barriers (read: bureaucracy) to creating triple bottom line initiatives and tracking their progress in a small organization, and spreading the word among managers and employees is also easier when workers are numbered in the teens rather than the thousands.

Finding the time and the resources to get going may be the biggest challenge, but if you start by identifying a solid business case — that is, a clear and compelling argument for the profit-boosting potential of an environmental or social project — the resources can usually be found.