PatrickMcNamara,MBAAppreciativeInquiryConsultingpmcnamara@aiconsulting.org 1

Trends & Best Practice in Sustainability Greener by Design – Hosted by GreenBiz.com – May 19 & 20, 2009

• Complex problems/issues are to large for one company, community or country to solve alone

o Systems thinking is necessary for larger system impact o Smart networks are being used for collaborative, innovative

solutions Supply chain networks go beyond industry associations to

focus on sustainability – including a wide variety of players Customer e-networks connect companies to user needs Internal networks share green team learnings

o Decisions are being made differently Including a broader stakeholder group

• To be effective, you need to change the rules

o So social norms are permanently changed, and o The system is transformed

• What does it take to be a transformative company?

o Be adaptive – practice “radical evolution” o Consider both the business life cycle and the physical lifecycle (life

cycle analysis) o Pay attention to consumer/user experience & values

• Innovation today is…

o Focusing on the solution, the whole experience o Includes materials, behaviors, attitudes

Because customers make decisions on experience, values, beauty and their social awareness of a product’s use

65% of US population seeking green, 25% buying green

• To be green: o Build awareness of what you’re doing o Quantify impact o Increase quality of your offering

• Key learnings/trends

o Bigger, systems thinking is the name of the game o Collaboration and smart networks engage stakeholders o Decisions are made on social acknowledgement and whole

experience

PatrickMcNamara,MBAAppreciativeInquiryConsultingpmcnamara@aiconsulting.org 2

Advancing Socially and Environmentally Responsible Supply Chains Hosted by the Stanford Center for Social Innovation and the Stanford Global Supply Chain Management Forum – May 21, 2009

Context: Social and Environmental Responsibility o Achieve business objectives and operate profitably, sustainably,

and responsibly o Innovative solutions that change business processes, mitigate

risks, and accelerate time to market o Sustainability strategy tied to global standards such as the UN

Global Compact, UN Millennium Goals, and the Brundtland Definition:

Meeting the needs of the present generation without compromising the needs of future generations

Key themes of conference: stakeholder engagement, industry groups, supply chain engagement, measurement & metrics

Stakeholder engagement o Gather stakeholders around an issue

Existing industry group or new “issues-based” group o Establish norm of collaboration for insight & understanding

Pay attention to anti-trust and IP issues o Develop shared vision, aspirations & goals

Shared standards & principles (make them real!) • Environment, health, safety, ethics, labor

o Ask, “where can we have the most impact?” Share best practices: reduce, reuse, recycle… Task forces address impact areas: metrics, replication,

packaging, logistics/distribution, retail execution, etc. o “Green ambassadors” promote benefits of going green

Education: supplier training once a quarter Awareness through media Engagement of employees

Key Success Factors for Industry Groups

o Top management involvement, embedded in organizations All major functions need to “get it”

o Entire industry involved o Open/honest communication, transparency o Sharing information is allowed o Independently fact-based & verifiable o Relevant for product, customer & market o Rigorous & honest (it’s okay to make mistakes) o Engage & educate employees – they like this!

PatrickMcNamara,MBAAppreciativeInquiryConsultingpmcnamara@aiconsulting.org 3

Engaging the supply chain – Eight steps to sustainability

1. Deploy collaborative technology Internal and external collaboration It’s how you invent your future! It drives productivity, growth, and innovation Creates capacity within the organization

2. Establish governance

For internal alignment o Eco Board – vision, strategy, execution o Green Task Force – goals, roadmap, delivery

3. Take an holistic view

Engage entire supply chain o Planning, ordering, service, manufacturing, quality,

delivery, customer experience o Look at root causes and whole system

“Stakeholder Ecosystem” – many partners

4. Identify key areas of impact – across supply chain Environmental: energy, waste, water, hazmat, footprint… Social: health, safety, ethics, IP, diversity, worker rights

5. Align strategy externally

Identify all stakeholders Be proactive Leverage & engage industry alliances

6. Create an action plan

Design & evolve: manufacturing, packaging, transportation, service, reverse logistics (disassemble & reuse)…

7. Everything must be measured! Measures of your overall eco-impact: data drives change

o Life-cycle analysis o Carbon footprint calculator o ROE: return on environment! o Internal metrics on these measures

Metrics in supplier risk areas: brand risk, employee harm, reputation…

o Establish supplier assessment process High level + detailed self-assessment

o Create supplier metrics: e.g. Wal-mart scorecard o Work with suppliers to ensure accountability o Validate with site audits

Put it all together: measurement, education, awareness, action

8. Be adaptive: change your agenda as the world changes