Saving the planet: we’re in this together - How to leverage your value chain to act on your sustainability commitments

Written by Meg Mateer , Larissa Araripe Rand & Annemarie de Jong

Truly sustainable choices as a company are some of the hardest to make, especially when short term financial gains are far from clear. But what if these choices became easier by working together with your value chain partners? This was the question that sparked a learning journey designed to help one of our clients, MegaGroup - a wholesales in water technics company -?achieve their sustainability commitment. What did they learn along the way? Collaboration is key for healthy, resilient growth and contributes to greater impact and profit. Also, that sustainability goes beyond “doing good”. Often, it is a win win win: good for business, good for the supply chain, good for the planet.

On?a crisp September week, a group of ambitious and committed social impact leaders gathered in the Lohnhalle in Germany’s Ruhr area. The building - which has been repurposed as an entrepreneurs’ community center and meeting space – used to be where miners went to collect their salaries and is one of the many structures still standing reminding us of the heavy coal industry that shaped the Ruhr area for more than a century. Nearby stands the Gasometer, a metal drum of gigantic proportions which formerly stored industrial gas and today has been transformed into a spectacular, innovative setting for cultural experiences - currently displaying The Fragile Planet, a beautiful exhibition inviting us to contemplate the inevitable human dilemma of caring for or exploiting the Earth. It is an excellent representative of the fundamental, systemic change this region has undergone. The group was initially hesitant about gathering here – as the region works to reinvent itself as a bedrock of sustainability, its former character still lingers in the popular mind. Yet, it is precisely the continuous and open interaction between past and future that makes the region a flourishing site for innovation in sustainability solutions. It is in this surprisingly inspiring and resilient environment that the group, the management team of our client MegaGroup - together with their country directors, suppliers, and category managers - came together to discuss their own sustainability ambitions and how to get into action.?

Earlier in the process, we had worked with MegaGroup to develop their ESG targets through a series of inter-organization sessions. Although the group was able to move towards cognitive and rational commitment, real leadership and accountability were proving harder to realize. Ultimately, sustainability discussions remained separate from daily business decisions, and the ESG targets were easily sliding to the bottom of the priority list (sound familiar?). MegaGroup’s CEO, Bernard Verburg , saw that the only way forward was to incorporate sustainability into the very core of the company’s business strategy and day-to-day operations. He notes,?“Our?sustainability?targets were successfully set, but the question now was, how can we work together to go beyond talking the talk and get into action? We also realized that MegaGroup is part of a larger value chain ecosystem and to make a lasting difference, it’s important to involve our stakeholders within this value chain. We wanted to understand: what are the things that either block or boost our?sustainability?commitment?”.?At the same time, MegaGroup was going through a change in governance within the organization and wanted to make sure that the leadership team was both empowered to get into action and aligned in this new governance structure.?How could MegaGroup achieve these aims and really bring it close to home???

To have a group of busy leaders commit and be present for a three-day offsite journey is not an easy ask in the business world these days. But we have had many years of experience in delivering these types of journeys and know what is needed to move from tension and resistance to trust and collaboration for long-lasting action.?Bernard, CEO of MegaGroup, remarks:?“It was a real adventure – we left the process design entirely to Better Future. I would highly recommend doing a journey like this outside of your organization. Also, make sure to give it the time and space needed to make change happen. For example, initially I thought we could shorten the journey by one day – but giving it three days was the time investment needed to achieve our aims.”

Over three days, we worked using 3 levels of change (1) Personal (2) Relational and (3) Systemic. We held open and honest discussions starting with the first cup of coffee in the mornings, talking about sustainability, leadership, and governance. We welcomed new ideas and perspectives from colleagues and suppliers, appreciating the time and opportunity to think beyond business as usual. We paced introspectively inside a gigantic metal drum, contemplating our responsibility towards our teams, our society, and our planet. We enjoyed each other’s relaxed company over dinner, connecting at a human level. The group shared openly and candidly, and came out with powerful insights and a way forward. Individual resistance and doubts gave way to collective enthusiasm and action plans.

What made the shift??

In our fifteen years of leadership and organizational transformation consulting, we’ve realized that??it’s not enough to simply bring diverse stakeholders together. Each journey is a unique experience that exposes our clients to new perspectives, has them experience what is possible beyond their default assumptions, and build the leadership skills needed to realize social change: things like the?Inner Development Goals (IDGs)?of self-awareness, collaboration, driving change and caring for others and the world.??For MegaGroup and other clients, we designed a bespoke program based on our core principles below.?

• Inclusive – we are bridge builders. We believe that for to make real sustainable shifts, we must bring together diverse stakeholder groups and connect them also to radically different voices and marginalized perspectives – that way, paradigm shifts are possible. All participating organizations benefit and act as mirrors for one another by helping see the individual and collective patterns that otherwise might be blind spots.
• Immersive – we took MegaGroup, like our other clients, out of office and out of context. Instead of working on fostering philosophical or cognitive skills, new mindsets and collective behavior shifts are created through lived experience - lessons that are learned through this experience can be taken back and igniting transformation within the organization.
• Invested – we ask our clients during these journeys to think about the broader context in which they operate in and commit to something larger than themselves. We require a genuine interest in learning and a commitment to investing the time, knowledge, experience, and budget needed to make transformation happen.?

What shifted as a result from this journey??

Personal:

• From resistant to energetic -??in the leaders at MegaGroup over the three days, we saw a shift in?the hesitation to get into action around sustainability and argument that “my clients don’t ask for it”??towards the energy, drive, and creativity their value chain partners demonstrated. And because we brought many stakeholders together, this personal shift happened on a larger scale. Bernard notes,?“We decided to invite more people, including category managers - they are the ones with the direct contact with suppliers – and it became very easy for them to become “infected” and to spread ESG thinking, especially because?there was?ample room for people to both speak up about their doubts but also to feel like if they weren’t investing in sustainability, they were missing out.”
• From convinced to curious –?What struck us was the willingness of MegaGroup to listen and learn; we put a lot of effort up front in preparing that with all stakeholders involved and kicked off the journey with a lot of focus on connecting and listening. When leaders come together to truly listen to each other, perspective shifts and larger transformation is possible.

Relational:

• “we” before “me” –?After the journey, country leads discovered and committed to bigger impact and ambition of MG over the competition between the country teams.?
• Learning from and leveraging each other:?bringing the value chain together means joining silos and allowing for peer-to-peer learning that unlocks unexpected insights, new perspectives, and motivation. The MegaGroup team realized that to deliver on their own sustainability commitments, they did not have to reinvent the wheel. They could leverage the momentum and innovation from their suppliers to help make their own products more sustainable. It was with this perspective that the MegaGroup team quickly got into action. Bernard notes,?“We were so influenced and inspired by our own suppliers that we realized that we could also be that kind of influence on our customers, who, at this moment, feel less urgency than we and our suppliers do.”
• New governance to help get into action:?the group deep dived into the perspectives of their individual roles, their specific teams, and the company’s overarching goals. They identified points of conflict and collaboration and designed an action plan for each sustainability item in the agenda, including a new system of sponsorship and accountability mechanisms.?

Systemic:?

• From visionary to practical:?inspired by their suppliers, MegaGroup?identified eight important initiatives that they could implement relatively easily, and which contributed to reducing their carbon footprint as well as helping them develop a more circular business model. The quick wins ranged from switching to sustainable packaging materials to promoting more eco-friendly products on their website and from measuring their carbon footprint to incorporating personal sustainability targets for employees.
• Sustainability supports innovation:?Going into the journey, MegaGroup had two seemingly separate aims – one on sustainability and the other about innovating their internal governance structure and organizational processes. After the journey, they realized that in fact, their sustainability ambitions and their organizational processes were interconnected. Bernard Verburg notes,?“We learned that these aims, in fact, had a lot to do with each other and could help each other out. For example, sustainability became an area where we could execute a new governance structure that helps with many parts of our business. Similarly, we realized that fostering new way of working and collaborating was essential to delivering on our sustainability commitments.”

How to get started

Bernard’s final advice to companies wanting to initiate their own value chain journey?

“First, don’t go into this without having a plan or roadmap. This ensures fertile ground to build upon. Also, be strategic about who to have on the journey. Identify and leverage the best partners for innovation and collaboration throughout the value chain, both on the supply and demand side. Eventually, pressure to change will come from both sides. And finally, keep expanding the ecosystem, involving middle management and other stakeholders.”

We’re grateful to be supporting organizations like MegaGroup on their journey to transform from inside out. We are a social impact consultancy working at the intersection of leadership, culture, and strategy. If you’d like to learn more about this project or connect with one of our consultants, please reach out to Daria Ofman?[email protected]?or Larissa Rand?[email protected].?

Or join our webinar on Wednesday December 7.?Sign up via this link