TherePodcast - Christine Arena - The High Purpose Company
Listen to our podcast with Christine Arena, author of The High Purpose Company and Cause for Success. In this interview, Rick Mavrovich asks Christine “who these High Purpose Corporations are” and “how they got there.”
FULL TRANSCRIPT
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Rick: Good morning everyone and welcome to this week’s podcast. This is Rick Mavrovich and Thereblogging, where we feature thought leaders, doers and change agents in the conversation of doing well, by doing good.
This week we have a very special guest, Christine Arena, author of The High Purpose Company. She is also author of Cause for Success. She’s a noted speaker, management consultant and sits on the board of advisors of several Green companies.
Christine. Welcome.
Christine: Thanks for having me on your show.
Rick: Thank you.
Christine: My first podcast.
Rick: Christine, I have to tell you, when I came across your book and I picked it up and I read the inside jacket and I went through the table of contents, I hated you. Because this is the book I wanted to write. So, kudos’ to you.
Christine: [laughter] There is room for more! This book could have been a thousand pages long. We ended up cutting a lot of chapters out because we were afraid people would just be, “Okay, we get the picture. Thank you.”
I think there are a lot of people like you, who want to write about this topic and I encourage them to do so.
Rick: Why don’t you tell us a little bit about your most recent book, The High Purpose Company. What is it about?
Christine: This book demonstrates why corporate responsibility is good for business. It enables readers to easily distinguish between true and false corporate responsibility.
Or, if you’re an executive, that basically translates to the difference between winning and losing strategic approaches.
Rick: What inspired you to go down this path? To write this book?
Christine: I think that this issue of proving the “business case for corporate responsibility” is still as important as it ever was. Because unless business leaders understand this case, in terms of how they will benefit, in terms of their company becoming healthier and more competitive, I think that a lot of people will not invest in corporate responsibility. Or if they do they will not invest the right way.
So, I think it’s very important to bring this information to light and make it, first of all, as easily understandable as possible and also, as actionable as possible.
Rick: So, you’re telling me that Harvard Business School and all of the other notable business rags have not made the business case yet?
Christine: What’s interesting is, We were on the Harvard Business Review’s reading list for this last year, this particular book, The High Purpose Company. That was the first corporate responsibility book ever to make the HBR Reading list.
Rick: Wow.
Christine: Now we have lost of authors, and notable Harvard professors writing books about this.
It’s really interesting, traditionally Harvard Business Reviews’ point of view on this was that there’s a market for virtue, but perhaps is a niche market. So, while there may be some advantage, competitive advantage to investing in corporate responsibility, it’s not going to be a thing that’s going to make or break the future of a company.
In my book…I try to refute that myth by showing real world evidence that proves that huge multi-nationals, from Dupont to GE to Toyota, have catapulted their performance forward by investing in green.
Rick: You talk about the litness test, in your book, regarding CSR, Corporate Social Responsibility, what is that?
Christine: First of all it’s important to point out that this book is based on extensive research and I didn’t do it alone, I did with a seasoned team of MBA’s. We spent thousand of hours, over a year, investigating well-known corporations that actively promote their commitment to society and the environment. Meaning they spend tens of millions on corporate responsibility every year.
And, rather than judge these companies as good or bad, we looked into which ones were actually making the biggest difference to shareholders in society, or which ones were producing the best returns. And we structured our inquires around this very simple litmus test question.
The question is: Is purpose invaluable to the company? In other words, many companies out there claim to stand for some higher purpose, some social or environmental cause that serves the common good, but fewer of those companies actually absorb and reflect that purpose, to the point where their own success depends on it.
So, in true High-Purpose Companies, purpose and financial performance are fundamentally intertwined, whereas in false high purpose companies, the opposite is true.
Rick: Well, what about the entrepreneurs or the business persons who have found the companies, from the get go, with the intention of making a high purpose corporation. Do they pass the litness test in terms of creating…hitting the triple bottom line?
In other words are the profitable?
Christine: Some are and some aren’t. If you look at, for instance, Berkinstock, in it’s early years. That was a company very committed to doing good, but financially had a lot of challenges.
My hypothesis is, that unless a company profits from its investments in corporate responsibility, those investments are difficult to continue to make. They are in fact, unsustainable.
So, there are a lot of small start-ups that started with this great vision and then were either acquired by a bigger company or ended up not performing so well.
But then on the other hand there are tons and tons of small companies and innovative start-ups that were founded with a purpose and that are enormously successful because of that purpose.
So, really, there is no difference between a small company or an entrepreneurial start-ups ability to be a High-Purpose Company or a multi-national’s ability to do so. Both can qualify and both kinds of companies were included in this study.
Rick: Now you mentioned a key word, innovative. Would you say that each one of the companies, that pass the litness test are innovative?
Christine: Yes. Actually you hit the nail right on the head. In the best cases corporate responsibility is approached as a form of innovation. The most successful companies, the companies producing the best social environmental and financial returns are highly innovative.
They look at unmet needs, huge world problems that are unsolved, community issues that need dealing with, and using their greatest strengths they reverse-engineer solutions to those problems. And that is what makes them so successful. That’s why they profit so much from corporate responsibility, because they’re actually selling things and providing things that people really, truly need.
So, absolutely, there is a definite positive correlation.
Rick: Can you give us two examples.
Christine: I can give you two examples, one small and one large company. On the large front, GE is a good example to point to. And here is the important thing that I want your listeners to know. High-Purpose Companies are not necessarily perfect. They are not necessarily perfect with flawless histories and GE is a great example, because it definitely has an imperfect history. It has a history of trying to block environmental legislation. It still has legacy issues, like that Hudson River PCP incident.
Rick: Right. Right. I remember that.
Christine: Historically it’s been very slow to deal with some of these challenges, but, if you look at the way it is currently investing in environmental technologies, if you look at what the company stands for today, GE says it exists to “provide imaginative answers to the mounting challenges to our ecosystem.”
That is the long version of this campaign its running called Ecomagination. But, behind that marketing language is a $1.8 billion annual investment in new environmental technologies. There are probably three or four-dozen products that range from water scarcity solutions to energy efficient dishwashers, to hybrid locomotives, all that meet unmet social environmental needs.
Then from those products GE makes about $10 billion annually. And it tells shareholders that very soon, by 2010, it expects those revenues to reach about $20 billion. That’s really critical.
So that’s why Jeff Immelt says, “Look, we’re not investing in green because it’s moral or trendy, we’re doing it because it’s the right thing for our shareholders.”
Rick: I actually saw an interview and there are clips of it on my, under video, on the website. It sort of took me back to a moment when he was asked what does he think about doing well by doing good? And he said, “You know, I don’t have any hobbies in my life. My job is simple; to generate value for shareholders.” And he said that the reason why they created the eco-imagination program was he connected the dots and he saw what was happening in the world in terms of water scarcity, pollution, regulations coming in strong through out Europe and Asia and eventually in the United States. He saw great opportunity. I believe he’s the one that coined the term “Green is Green.”
It took me back a bit and it helped me realize something, that companies…this is my theory, that companies, it’s okay for a company to enter into the CSR conversation or doing well by doing good conversation, from the business side of it, versus going into it with the intention of making a difference in the world. Would you say that your analysis supports that?
Christine: Yes. I mean here’s the thing. It actually doesn’t matter what the intent…it doesn’t matter if the motivation is entirely greed, entirely financial, or if someone is just…if the corporate leader is just a Good Samaritan. And that may take people by surprise and they may go, “What are you saying?” But here’s the thing, the thing that matters most is the impact that these companies ultimately have. It’s the environmental footprint. It’s what they leave behind. That’s what matters. It’s the tangible stuff that actually makes a difference in our world.
So, the companies that pass my litness test have done one thing in common and that is…are you familiar with the law of attraction?
Rick: Absolutely.
Christine: These companies ask themselves: “What in the world are we here to do that others can’t or don’t do?” Beyond the money we make and the products we sell, what makes us invaluable to people and worthy of succeeding? What is our purpose?”
High-Purpose Companies answer those questions and then using their greatest strengths, they innovate to meet that goal. And every company that passes my litness test, you’ll see in the book, they have penned a statement of purpose. That’s not a coincidence. They literally put a ton of resources and energy into imagining and meeting that purpose.
So for instance, at Toyota, their purpose, as they say in their own language is to “make sustainable mobility a reality.” And you can see how that’s played out.
Rick: Oh, the success of the Prius for example.
Christine: That’s right, and even just the technology, Hybrid Synergy Drive, which has absolutely changed the industry…Toyota intends to do for the internal combustion engine what digital did for the world of photography. Basically that’s the analogy. They’re looking to make the internal combustion engine obsolete. That’s their goal.
So that affects the financial performance of the company to an enormous extent. If you remove the thread of purpose from Toyota, it’s competitive position would be severely compromised.
Rick: Why?
Christine: Because it’s so financially profitable right now. Because that’s what sets the company apart.
Rick: Why would they collapse? If they took away that purpose, how are they tied into it? Why in your book, your making the statement that they are now dependent on the purpose. I believe you said something to that affect.
Christine: Yes I did. Because if you look at the way these innovations unfold, the way that one innovation leads to another, leads to another, and then you have a chain of innovative reactions. So you have a company’s decision to fulfill a purpose followed by, for instance in Toyota, this creative leap, which was the discovery of Hybrid Synergy Drive. Which then infiltrated Toyota’s product line, which then caused customers to become extremely loyal, which then increased Toyota’s revenue’s by an enormous percentage, which is actually all in the book.
Then you can say, okay, 30% of Toyota’s revenues come from this. And then if you look at the way it’s operating, you can see that Toyota has taken the idea of environmental effectiveness and applied it to its processes. It has a bunch of zero waste manufacturing facilities. It’s incredibly efficient on so many levels. But a big part of that efficiency comes from Toyota’s dedication to becoming a greener and leaner company. That effort has made Toyota more competitive.
If you removed that facet from Toyota, it would be worse off than it is today. So, Toyota has gotten to a point, according to people inside the company, according to Toyota’s shareholders, where purpose is invaluable to the company. Therefore the company is performing better, financially and is invaluable to society.
If you look at the difference between Toyota and Honda, which is in the same class, and you compare that to Detroit automakers performance there’s a big difference.
I’m not saying it’s 100 percent driven by green initiatives, but that is definitely a part of it. So, if you look at what Ford is doing now, what GM is doing now, those investments, the way those companies are allocating their wealth, they are investing more and more in hybrid and other advanced technologies, from fuel cell to all different kinds of things.
That is the way the market is moving and Ford was one of…I’m sorry, Toyota was one of the first companies to seize upon that.
Rick: You just said three things that I want to make sure we touch upon. Number one is loyalty. Number two we still have to talk about, in an example of a small company. And, number three, Ford, what did Ford do wrong? They just declared, what was it, a $12 billion or $16 billion loss for the past year.
Christine: The great Bill McDonough always likens the Ford case and Ford’s turnaround to trying to turn the Titanic around on a dime. Because Ford is a company that is so bulky, so set in its ways…it’s kind of like if you look at the performance between Jet Blue and traditional dinosaur airlines…
Rick: Right. Delta, TWA.
Christine: Right, they have this huge bulky infrastructure. The psyche at Ford, as Bill Ford Jr. has himself said many times, was very old school. Ford, Jr. had a difficult time trying to convince the people inside Ford that innovation was the company’s way forward. He actually took that and made it into a tagline.
In the book we chronicle communications that Ford, Jr. made to the people inside Ford and at one point he got so frustrated with the mentality there, that he said…he basically said, it’s my way or the highway. He said if you don’t agree with this idea that we need evolve, we need to move in this new direction and become responsive to the realities that face our business, environmental and financial, then you should leave. You should probably go somewhere else.
Rick: What’s happening? Why isn’t it turning around? I understand the analogy of the Titanic, but Bill Gates turned his company around with his famous memo. I know it’s a different culture right there, but…
Christine: It’s a different culture, yeah. I wish it would happen faster, more quickly for Ford. Yeah, I don’t understand this thing in the auto industry. Maybe your listeners understand this. I don’t get why companies, like GM for instance, that just unveiled this really fancy fuel cell car at the last auto show. Then when asked, that’s really advanced technology, it’s a zero emissions vehicle, when can we expect that on the road. They were like, “in ten years.”
I mean, why such a long innovation curve? Why does it take so long for Detroit automakers to get in the market with something that seizes today’s opportunities? Can I tell you, I don’t know the answer to that question. I have been asking that question. I don’t know. I mean what do you think?
Rick: I think they’re asking the wrong question. Instead of asking why, asking how can we get it to market much sooner.
Christine: I agree. I agree. And people have been saying that for years. If you look at the way Toyota…Ford has really done some pretty innovative things lately, from its River Rouge facility, which is really fascinating, to now it’s new Piquette [sp 17:52] which is going to kind of, I think, re-imagine the future of the car and what that can be.
Now, before Ford, Jr. left he was saying things like we want to put Toyota, we want to give Toyota the pinch and really create something that’s even more advanced than Hybrid. Whether that’s actually going to take hold in the company now, I don’t know. Seems like the questions shouldn’t just be what, it should also be when, like why aren’t we doing it now?
Rick: If you don’t understand the automotive industry, how about the financial industry? For example, you may have seen on the website I’ve profiled many times the leadership within Citi Group and the stumbling steps that they’ve taken along the way towards transformation. I don’t know if you know Chuck Prince has declared a high vision. I don’t know if it’s stated as a purpose, but it’s a vision to be the most respected company, financial services company, in the world.
Have you been following the company?
Christine: I have been following the company. First I want to say it’s not that I don’t understand the automotive industry, what I don’t understand is the archaic nature of the mentality that pervades the automotive industry. I do not understand why they are so slow to respond, because the evidence that they need to speed up and become more adaptive for their own sake is everywhere. And right now Detroit automakers are still fighting, like EPA standards and so forth, when really what they should be doing is engineering solutions that exceed standards. Those companies fighting regulations are going to be playing catch up forever.
So, what I’m doing is questioning the mentality. And I would question the mentally of the financial services industry, too. If you want to talk about a small company, by the way, if you look at the financial services industry model, that is an industry model that is driven by industry standards. Not by social needs. So, if you look at, say, Wainwright Bank and Trust, that’s a small company, it’s a Boston based, local bank, and they have really gone against the grain in the financial services industry by going, “We are going to reverse-engineer our financial solutions and the nature of our loan products to the needs of our local community. The nature of the terms that we issue, the nature of our internal culture and policies, will all be designed around the needs of our constituents.”
By doing that, Wainwright has become one of the best performing local banks in Boston and a bank that is really known for taking a stand when it comes to social justice issues. They really carved out brilliant niche for themselves.
Rick: Can you give an example?
Christine: Sure. Well, they are known as the bank that people trust…if you just go to Wainwrightbank.com you’ll see, they’re literally known for providing a portfolio of “responsive” lending products.
They have basically said this whole corporate responsibility thing isn’t as much about being “responsible” as it is about being responsive. It’s about stepping back and saying, “What is that our customers need and how can we better serve them?” “What is it that society needs?” And how can we fill that gap?
In Boston, I’ll give you a specific example, there is a very big gay population and Wainwright really took a stand for gay marriage. It was the only bank to stand up for gay marriage rights by writing formal letters, by helping to petition, by creating a culture inside the bank that is very supportive… Robert Glassman, the president of Wainwright is famous for saying, “People who work here don’t have to look or act like a Wall Street banker. They can just be themselves.”
Their policies, they give family healthcare to same sex couples. They look at same sex couples as any other couple and they sort of give healthcare…aware healthcare to families and do not discriminate. And that’s very different from what others in the industry do.
Rick: So how does that translate to the bottom line for them? How profitable are they?
Christine: They’re extremely profitable. In fact, they have the lowest default rate and the highest retention, customer retention rate than any other bank in the area.
They’re tremendously successful. In fact they just keep growing and they’re kind of, now, wrestling with… how successful do we want to be?
So they have really become known as “The People’s Bank.” And that’s a very special thing for that particular company. It’s definitely worked and if people are interested they can just go to Wainwrightbank.com and kind of read more about the companies offerings and it’s financial performance.
Rick: Okay. Will do. Now, let’s go back to loyalty for a moment. How does being a high purpose tie in, or not being a high purpose corporation tie into loyalty with all the stake holders in the corporation, whether it’s the employee’s, the customer’s, the share holders, the community, whatever?
Christine: Well, the connection is, I go back to being responsive. So, here’s how it translates. At Jet Blue Airways, for instance, that’s an airline that dedicates itself to “Bring humanity back to air travel.” That’s literally the company’s purpose…
Rick: Oh, God.
Christine: I’m not kidding.
Rick: No, no, no. I’m not being critical. I’m just groaning with relief that finally someone gets it.
Christine: Oh, it’s hilarious, because if you think about it, that purpose indicates that the entire airline industry is inhumane. So, that’s what makes me laugh, because it is. Because all of us have experienced that.
Now, the way Jet Blue has done that, the way it has brought that purpose to life is by making the conscious effort not to treat passengers like herds of cattle. By listening to its employees and saying, “What can we do to keep you here? To make you happy.” One, for instance, this is just one out of dozens and dozens of examples that are in the book.
A couple of years ago Jet Blue asked it’s employees, that work at the call center, you know, when you call 1-800-Jet-Blue.
Rick: Sure, uh-huh.
Christine: They did…they routinely do employee surveys. In one such survey a number of employees indicated that they would like to work from home. So, instead of fight that and say, “Ah, that’s not going to work…” etcetera, etcetera. They allowed that.
At this point 90 percent of all Jet Blue call center employees work from home. So, the joke in the press was, when you call 1-800-Jet-Blue, you’re talking to a housewife in bunny slippers.
Rick: So, you’re not talking to somebody in Bangalore or in Hong Kong?
Christine: No, absolutely not. You’re talking to someone who’s working at home. And that has saved the company an enormous amount of money, okay, because diminished overhead. Say there’s a storm, they don’t have to wait for their call center employees to get to work. They can immediately start working from their homes. The retention rates at Jet Blue are better than any other airline. This is just the employee retention in turn over.
The pilot turnover at Jet Blue is zero, zero percent. The employee turnover is like five percent or less, which is unheard of in the travel industry. And every single year Jet Blue wins more customer appreciation awards than any other discount air carrier.
So, in my book I list the number of awards that Jet Blue has won. It’s True Blue program is one of the fastest growing award programs.
So, you can see, there are statistics to back up the fact that there is definitely a correlation between loyalty, both employee and customer, and a purpose-driven mission. Or a responsive means of operating.
Rick: So, it sounds like a true, triple bottom line company, will be not only responsive to its employees, but to its customers and I guess, all stake holders.
Christine: That’s right. All stakeholders. If you’re Starbucks, who are your stakeholders? They’re the people, the hundreds of millions of people, literally, all over the world who are growing coffee.
Rick: That’s right. Yeah.
Christine: What do those people need? What issues do they face? How do you structure your coffee source and policies in order to deal with the issues that those people face on a day-to-day basis, therefore in improving their quality of life, the quality…the coffee you sell and therefore the nature of the company itself.
Rick: Well, look what happened with Bob Nardelli. Bob Nardelli was asked to leave because he was not being responsive to one of the most important stakeholders, which are the shareholders. He was shutting them down at shareholder meetings. And his command and control style, obviously was not allowing that type of responsiveness you’re speaking about.
So, it sounds like it’s being validated from both ends of the spectrum, your theory.
Christine: I think that is a great example. We found in the study a positive correlation between the level of collaboration, within a company, and the level of corporate responsibility effectiveness.
So, in other words, the companies that incontestably passed our litmus test, on the highest end of the scale, and you’ll find them in chapter seven, had…they had the opposite of command and control cultures.
In some companies they had eliminated hierarchy all together. Those were…they were cultures where people were not afraid to speak up. Where the company’s policies, decisions, products, services, great ideas, could really, could literally come from everywhere and anywhere. And the company had created an environment where that kind of grassroots innovation was possible.
So, we thought, when my research team and I were looking up the studies and results, we looked at those companies in the highest echelon and thought, that can’t be a coincidence, because what we’re talking about is the opposite of the traditional command and control culture. We’re talking about totally innovative, collaborative cultures. And those cultures enable better CSR performance.
Rick: So, what you’re saying is really that innovation plays a key role in finding different ways to be responsive to all your stakeholders.
Christine: That’s right. So, here are the positive correlations. So, there is an integral link between purpose, innovation, collaboration and triple bottom line effectiveness. The higher you climb up the ladder of corporate responsibility effectiveness outlined in my book, the more collaborative, the more innovative and the more effective you tend to be.
So this book actually does kind of present a new way to look at quality in corporate responsibility. And to really kind of go, “What does it take to do this exceedingly well?” “And, what are the companies that are making the biggest difference in the world?” Whether they’re the large companies, or small local companies, what do they all have in common?
Rick: Well, what about a company like Apple? Undisputedly they’re one of the most innovative companies in the world. Do they pass the litness test?
Christine: No they don’t.
Rick: Why?
Christine: Because purpose is not invaluable to Apple, from a corporate responsibility point of view. They’re becoming better. They’re starting to…you know, recycle more. They’re starting to deal with e-waste a little bit better. They’re starting to look at they manufacturing process a little more carefully.
Are they leading edge? Would I call them out of the great example of corporate responsibility effectiveness in the technology industry? No, I’m sorry to say. And I’m an Apple customer. That bothers me about Apple. And I think it’s going to continue to pursue this, but no, purpose, from a corporate responsibility point of view is not invaluable to Apple at this time.
You can be a highly innovative company, without being highly effective corporate responsibility wise. But you cannot be a highly effective corporate responsibility wise, without being innovative.
Rick: But can you maintain sustainability, within innovation, or be, let’s say a profitable company in the long run…I don’t know if you looked at any of the metrics…and not follow a high purpose strategy?
Christine: Can you be sustainable and not follow…the high purpose company, that’s actually a finding of the research. We didn’t go, “Hey, which companies out there that are high purpose companies.” Instead, we looked at which companies out there are investing in corporate responsibility, which of those investment strategies are paying off best? Which companies are performing best – excelling at corporate responsibility? And we noticed that of the companies that are performing best, they had all answered that question, which is, “What in the world are we here to do?”
So, this idea of a High-Purpose Company, that’s actually a research finding.
Rick: So, is Wal-Mart actually turning the corner, in terms of corporate social responsibility?
Christine: They certainly are. And the reason they’re turning the corner, and this is not to say Wal-Mart is perfect. We found all kinds of issues…Wal-Mart is probably the most complicated case that we analyzed.
Rick: It’s a behemoth.
Christine: It took about a year and we probably interviewed about 75 to 80 people, just for Wal-Mart. And, you know, it was really interesting, but what we found was, that’s a big company that definitely connected the dots. They have connected the dots between profitability and sustainability.
The reason they continue to invest in green, the reason they continue to set supply change standards that are much more aggressive in terms of green, and the reason they continue to make their stores more energy efficient, their truck fleet more efficient, and sell more organic products than any other retailer in the United States, is because they see and they experience that profitability.
If it was not paying for Wal-Mart, let me tell you something, they wouldn’t invest. That is a definite…that is a company that, more than any other company in the world, is extremely motivated by how much money it can make. And it can clearly see that this is the right thing to do on every level. It is the right thing for shareholders and for society.
Rick: What advice would you give to someone like Chuck Prince, who’s trying to turn around his company and become the most respected company in the world?
Christine: To be the most respected company, you first need to be respectful. So, I would say, if you want to be respected, then you need to start by respecting the people who support the company, including the people who work for you, the people who visit your bank and keep you in business. Even respecting the people who are, perhaps, having difficulty paying back their loans. And that doesn’t mean you just dismiss their delinquencies….you don’t make money doing that. But you can learn to be flexible and to meet their needs, you know …if you want to create love and devotion for your company, then you need to emulate the desired result. That’s my advice.
Rick: That sounds very biblical. So, what advice would you give to the middle manager who’s sitting there leading, perhaps, a division or several departments and the manager, he or she, has a desire to become a triple bottom line manager. What advice would you give to them?
Christine: One of the most interesting findings, in this study, is that purpose can come from anywhere in a company. And whereas in a few cases it’s a top-down thing, where a CEO has some revelation that he wants to become a green company and then he, you know, communicates that dream to the company and therefore the company tries to move in that direction. In most cases that we looked at, it was the other way around.
It was the manager that had a great idea and that idea took hold within the company. And it worked so well that it informed the company’s policies and then eventually, it started to inform the company’s product development cycle.
So, in most cases and there are dozens outlined in the book, these innovations came from people in the middle ranks of the company. It trickled up, not down. So, I would definitely say, make sure that you continue to look for ways that your company can perform better. And if you have a great idea, do not worry about getting your…you know, crossing boundaries. Just do your part to bring those ideas to fruition and to the attention of senior leadership. That’s how it happened at McDonalds, Nike and a huge number of companies.
Rick: Can you give an example?
Christine: Sure. At McDonalds, in the 90’s things weren’t going so well. I don’t know if you remember going into a McDonalds in the ‘90’s. The stores look like heck.
Rick: Yeah, it wasn’t clean.
Christine: It was so grose.
Rick: It was grungy.
Christine: It was grungy. There was no recycling. Things…you know…packaging was a disaster. The whole experience was abysmal. So, a guy named Mats Lederhausen, who was a manger, and he was actually a part of McDonalds Sweden, decided…he had actually been experimenting, because you know it’s a franchise run company.
Rick: Right.
Christine: So, Mr. Lederhausen, with his father, ran a number of McDonald’s stores in Sweden. And they had been experimenting with green for years, because Europe is advanced compared to the United States. We’re, I think, five or ten years behind a lot of European companies, in terms of our mentality about all of this. And certainly in terms of agility and sophistication in implementing strategies.
So, in Sweden, that McDonalds was experimenting with green energy, using green energy sources, recycling, using more local organic ingredients,. And it was all working so well in Sweden.
He, at one point he told me, that he just got to the point where he thought “I just don’t want to work for McDonalds anymore.” This company, you know, is just, they don’t get it and they don’t understand the connection between quality and green and they’re never going to get it.
So, he wrote a letter of resignation to the senior management at McDonalds in the US and he basically said…
Rick: But he was a franchise owner.
Christine: Yeah, he was a franchise owner, and he was like, this is what we’re doing in Sweden and this is what I think of what you guys are doing in the United States, and this what I suggest and by the way, I quit. So a couple weeks later…this is in the book, this is a true story, I’m not making this up…a couple weeks later he gets a call and they basically said, “We love your ideas. Thank you for the feedback. And by the way we do not accept your resignation.”
And to make a long story short, which I never do, he is now the managing director of McDonalds Ventures.
So he basically came to the states, started working for corporate, is partly responsible for the strides McDonalds has made in the last ten years and is now leading a huge group within the company.
Rick: So, transformation can happen from anywhere in a corporation.
Christine: Absolutely. I mean that…most of the cases in this book all talk to…we found out where did it start? How did it start? And most often it started with somebody in the marketing department, or somebody in product development or some scientist, for instance, like at Dupont, that’s how it happened. Or, I mean, you know, literally it can happen from anywhere and that’s how it usually occurs.
Rick: Ah. Christine, any final words for our listeners?
Christine: I would definitely say, we need to, in this industry, get away from this fixation on judging companies as good or evil. That’s just not constructive. So, I think my message to investors and consumers would be, look, if you really want to make a difference with your dollars, then support the companies that are actually responding to world demands versus the ones that are just talking about doing so.
And if you’re an executive or manager, definitely do your part to try to make this change happen, because it is possible. And worthwhile, too.
Rick: Christine, thank you so much. We really appreciate you coming on the show and sharing with us your hard earned wisdom. We hope to have you back again on this show. Any plans on what’s next for you?
Christine: No. Actually, yes. I mean, now what I’m trying to do, instead of sitting in my laboratory and writing, I’m trying to get out there and help companies implement this change. To be better at, you know, not just talking about necessary change, but actually helping to make that happen. So, I think that’s going to kind of be my focus for a little while now.
Rick: Christine, we really wish you the best and thank you so much. We look forward to having you back on the show. So, thank you and take care.
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Rick: And to you, our listeners. Thank you for coming again. We hope you join us next week for, yet again, another exciting pod cast featuring leaders, doers and change agents in the conversation of doing well, by doing good.
To learn more about the triple bottom line and corporate responsibility, please visit us on our website at www.thereblogging.com. That’s T - H - E - R - E - Blogging.com. And on the podcast, you will also find information regarding Christine Arena’s website.
Thank you very much. This is Rick Mavrovich and thanks so much for listening.
Friday, January 26, 2007
there.podcasts featuring:
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thought leaders -
doers
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and change agents
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in the conversation of “Doing Well By doing Good”.
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