Category Archives: Morning Walk

Morning Walk: Sustainability Leadership for Your Startup

Larger companies have the resources to support all of the activities of a chief responsibility officer or chief sustainability officer including the creation and maintenance of a dedicated group or department to focus solely on developing and executing a sustainability-related strategy.  Sustainable startups do not have that luxury, yet sustainable entrepreneurs must recruit a sustainability leader during the first days following the launch of the business in order to establish a foundation for all of the sustainability-related initiatives that will be required as the company grows and help the fledgling company establish credibility and legitimacy with respect to sustainability among its stakeholders.

There will be a temptation to choose someone who already has important responsibilities with respect to human resources or operations to serve as the startup’s sustainability leader.  In many cases the founders will have no choice given that there is insufficient capital to fund a full-time sustainability leadership position.  However, every effort should be made to make sustainability the primary responsibility of the sustainability leader and provide him or her with enough time and other resources to effectively take on the required tasks.  In turn, the sustainability leader needs to understand that he or she is working in a startup situation and that “all hands on deck” will be the operating principle for months, if not years.  As such, he or she should be comfortable with addressing the broad range of potential issues and activities that can be placed under the sustainability umbrella including environmental, health and safety matters; recruiting a diverse team; volunteering and other philanthropic initiatives and community engagement.

The startup sustainability leader needs to have certain specific skills and personality traits.  He or she needs to be able to think strategically, not only using the traditional and formal tools of strategic and financial planning but also being able to grasp and implement important concepts such as strategic philanthropy and creating “shared value”.  The ability to clearly articulate and communicate the company’s mission and purpose, as well as the company’s sustainability commitments, is also essential since the sustainability leader will, along with the CEO, be on the front lines of engaging with the company’s key stakeholder constituencies.  Beginning with new hires and community groups, the sustainability leader will need to engage in dialogues to explain the company’s sustainability mission and commitments and gather information from stakeholders regarding their concerns, goals and objectives and expectations regarding their relationship with the company.  Communication skills will also be needed in order for the sustainability leader to participate in broader initiatives on environmental and social issues that the company needs to join in order to establish itself within the sustainability community and gather the knowledge and connections necessary for it to ultimately become one of the recognized leaders in its area of activity.  The sustainability leader also needs to have knowledge of the company’s processes, products and technologies in order to help the CEO and other senior managers identify sustainability-related opportunities and risks.

Perhaps the biggest contribution of the startup sustainability leader is contributing to the creation of an organizational culture in which dedication to sustainability is firmly embedded.  When the position is created and the CEO and candidate for the position sit down to discuss whether or not to proceed, both parties need to take the measure of the other and confirm a commitment to building a sustainable enterprise.  The sustainability leader needs the enthusiastic, authoritative and public support of the CEO and the CEO needs to know that the sustainability leader will be able to help the CEO follow through on the sustainability commitments he or she will be making to board members, investors, employees, customers and community members.  The sustainability leader needs to be involved in the vetting of each new team member and work with them to explain what sustainability means to the company and the role they will be expected to play in building a sustainable business.  The sustainability leader needs to plant the seeds for what will eventually become larger environmental and social projects: launch recycling programs; encourage telecommuting; offer employees opportunities to volunteer with community-based nonprofits; lay the foundation for certified B corporation status.  All this will take time and substantial amounts of energy—the sustainability leader should expect to meet regularly with everyone in the organization during the first few months while the size of the team remains manageable—and will often seem daunting given the paucity of resources; however, the good habits formed will serve the company well as years go by and the company’s core competencies with respect to sustainability emerge.

For further discussion see the Sustainable Entrepreneurship Project’s materials on Sustainability for Small Businesses and Startups.

Morning Walk: Let the Light Shine In

Yesterday I was writing about recommendations that had been made by the Corporate Responsibility Officers Association (CROA) on aligning sustainability strategy with the overall business strategy of the firm.  Interestingly, the CROA argued that the first thing that had to be gotten right before companies could go any further was “transparency”, which involved a deliberate decision by the company, through its board and senior executives, to dedicate resources to improving the ability of stakeholders to hold the company accountable for its sustainability initiatives by making more information publicly available.  Generally, transparency, which is executed through implementing reporting and communications processes for informing stakeholders about the nature and progress of a company’s sustainability-related, falls a few feet down the road on the path to sustainability prescribed by pundits.  You begin with goals and commitments, move on to planning and implementing operational changes and then you turn to figuring out how to track performance and report the results both internally and externally.  All of this makes sense, but somehow the idea of putting transparency at the beginning seemed to make perfect sense and open opportunities for sustainable entrepreneurs to take bold steps with their ideas for having a meaningful impact on the environmental and social issues that they are most passionate about.

The first thing to consider is that the term “transparency” has been much more frequently used over the last few years according to survey done by those who track these sort of things.  One can speculate as to why this is, but the main point is that transparency has come to be front and center on the societal stage.  What’s interesting for planning for sustainability is that the word transparency traces its lineage back to the medieval Latin term for “shining through”.  In the context of a sustainable startup, I think that means making a clear and public commitment to all of the stakeholders of the company to be clear about the goals of the business, open in communications with stakeholders, direct in setting goals and measuring progress and, most important, accountable for promises made and actions taken.

In practice, transparency begins for a sustainable entrepreneur by sitting down, either alone or with the other founders, and taking a hard look at what is driving the formation of the business.  In other words, looking past dreams of fame and fortune to discover the true purpose of the mission–the goal that will fuel the passion to build a sustainable business.  Once this fundamental introspection has been completed, transparency requires the “sunshine” of dialogue with, and scrutiny from, the prospective stakeholders of the company: potential investors, employees, customers, suppliers and community members.  These discussions, popularly known as “engagement”, need to happen in the earliest days of the business in order to establish trust and create commitments and performance metrics that are meaningful to the groups that are most important to the success of the venture.

Transparency seems easy and natural and every sustainable entrepreneur should expect that he or she will need to set up processes to report on progress toward the company’s key strategic goals and sustainability issues.  However, transparency requires bravery and a strong will because it means making very visible commitments at a very early stage in the venture and empowering stakeholders to be brutally honest in their critiques as the business unfolds.  It also means adding a significant investment of time on stakeholder engagement to a plate that is already full with developing the initial product or service, raising seed capital and convincing others to bring their talents and experience to an untested company.  There is no doubt that all this might lead to a quick and painful demise for the company or, at the very least, a dizzying set of decisions resolving the needs and expectations of all of the stakeholders.  But, with persistence, the sustainable entrepreneur can use the tools of transparency as guide to build trust, demonstrate leadership and accountability, effectively design processes and systems, empower employees to innovate and create a competitive advantage.  Knowing what needs to be reported to stakeholders focuses the sustainable entrepreneur on results and frees him or her to create culture in which employees are also focused and motivated and a brand that is comfortable and meaningful for external stakeholders.

Alan Gutterman is the Founding Director of the Sustainable Entrepreneurship Project, which engages in and promotes research, education and training activities relating to entrepreneurial ventures launched with the aspiration to create sustainable enterprises that achieve significant growth in scale and value creation through the development of innovative products or services which form the basis for a successful international business.  Visit the Project’s Library of Resources for Sustainable Entrepreneurs to download handbooks, guides, articles and other materials relating to sustainable entrepreneurship and keep up with the Project’s activities by following Alan on LinkedInTwitter and Facebook.

Morning Walk: Until We Meet Again

Last week we decided to resign from our membership in a local club.  While there were certain things about the services that had disappointed us, the main reason was that we were not using the facilities and didn’t want to continue paying a fairly healthy monthly dues assessment.  We had an equity membership so we needed to sort out how to return the membership to the club and whether or not we would be eligible for some sort of redemption amount.  I sent an e-mail to the president, membership director and general manager of the club.  A day later I received an e-mail back from the general manager acknowledging our request to resign and informing us that based on the bylaws we would need to continue paying monthly dues for another two months.  He also said that if there was any particular issue that we had with the club that he would like to hear about it in order to improve the experience for other members.  All of this was fine; however, his message was written to “Mr. and Mrs. Gutterman” and this reminded me that one of the things that had bothered us was that he, as the general manager of a fairly small club that thrived on relationships, had never taken the time to introduce himself to us and develop a personal connection even though he had several opportunities to do.  As the general manager, that’s his job.  His predecessor had been just the opposite: he knew everyone and treated everyone as if they were the most important person in the club.

The president of the club eventually wrote to us also and dutifully expressed his regret that we were leaving.  He was a “volunteer” who we did not know and I feel that those folks do enough without being saddled with the responsibility of knowing all of the members.  I wrote back and thanked him but also said that based on my reading of the bylaws the general manager’s statement that we owed additional dues was incorrect.  I had previously asked the general manager to check on this with someone and copied him again on my message to the president.  Well, it eventually turned out that we didn’t have to pay the additional dues, but the point of the story is that I never heard directly from the general manager again.  The “details” were delegated to the controller in the club’s office.  The president did write back one more time to say that he had heard everything had been sorted out and to wish us well.  We never heard from the membership director who, like the general manager, had been around the club for a fairly long period of time and had not reached out to introduce himself to us.

I know all of this is not “life and death” and my issues with a couple of people at a club are not high on anyone else’s list of things to think about.  My point, however, is that when someone acts the way that the general manager did they give people the impression that they really don’t care about developing and maintaining a service relationship.  A sustainable entrepreneur necessarily starts with a very small group of clients or customers and she needs to treat each of them as if they are the most important.  They may not be, at least in terms of current or future revenue potential, but they are the first stop on building a strong brand and reputation.  Don’t leave relationship building to others in your organization: make time to do it on your own and coach others on how to do the same.  And, although it will be difficult in some cases, be present and engaged when a customer or client decides to leave.  The general manager’s handling of the dues question and delegating it without explanation left a bad taste in my mouth and makes it difficult for me to recommend the club to others, at least while he’s supposed to be the face of the club in terms of services.  Also, the general manager, and sustainable entrepreneurs, should not assume that a departing member, client or customer is gone from their lives for good.  Time and experience has shown that former business partners may return to the picture in the future, often in a position of being to provide an opinion on how they were treated in the prior relationship.  So, when a client or customer leaves it isn’t “good bye”, it’s “until we meet again”.

Alan Gutterman is the Founding Director of the Sustainable Entrepreneurship Project, which engages in and promotes research, education and training activities relating to entrepreneurial ventures launched with the aspiration to create sustainable enterprises that achieve significant growth in scale and value creation through the development of innovative products or services which form the basis for a successful international business.  Visit the Project’s Library of Resources for Sustainable Entrepreneurs to download handbooks, guides, articles and other materials relating to sustainable entrepreneurship and keep up with the Project’s activities by following Alan on LinkedInTwitter and Facebook.

Morning Walk: Whatever You Do, Get the Client’s Name Right

A team I work on received a fairly lengthy letter from a client last week complaining about the size of the bill he had received from us and detailing all of the errors that he saw with our work product.  Everybody receives one of these communications from time to time, hopefully not too often, and it’s easy to get angry when somebody is challenging your integrity and expertise.  For now, some of the members of the team believe that the client was posturing to negotiate a reduction in the bill, probably because he and his colleagues were unable to close the project for which our work was being done.  That may be true, and perhaps our side should have gotten a better idea of the risks that the client was facing in its own business before taking on the project; however, I think we need to view every client or customer, regardless of how painful it might be sometimes, as an opportunity to learn and improve.

In this case, two things stood out to me.  First, the client had pointed out, correctly, the header on two of the pages of a 50+ page document that we had provided referred to a different client.  The client took this as a sign that we had simply tried to palm off our work product from a different project without spending time on this client’s specific needs.  He was wrong about; however, he did have a point.  In my mind that was sloppy.  I missed it in my review of the document and tried to rationalize it by thinking that I was too busy concentrating on the real meat of the document and that the way I set up to view the document on my laptop didn’t always show the header on each page.  That’s all well and good, but at the end of the day we made a fundamental mistake: we got the client’s name wrong!  I was told a long time ago that if you did something like that you would lose the confidence of the customer or client and it wouldn’t matter how good the rest of your work product was.  It was a simple and valuable lesson that had now been refreshed.

Second, we had a loose arrangement with the client for a “fee cap” on this particular project and the client was clearly upset when he received a bill that was well in excess of what had originally been discussed.  From our side we thought the client should have clearly understood that the pieces we had to pull together in order to move the project forward could not reasonably have been done within the cap amount.  The problem is that it’s not the responsibility of the client or customer to be reasonable about the resources and time that we need to fulfill our promise to deliver.  That was our job and we failed to take the time up front to find out as much as we could about the project in order to provide a better quote and, just as importantly, we didn’t communicate with the client as the project proceeded about some of the new information that would eventually lead to the project coming in over budget.  Failure to communicate was compounded at the end by simply delivering a very large bill without someone from our team providing an explanation and establishing a platform to discuss mutual misunderstandings on both sides.

We’ll see what happens in this case.  The client has asked to terminate the engagement and all indications are that the client is trying to tie up loose ends on a project that was not successful on its side, regardless of the work that we did.  We will respond, it’s not wise or appropriate to simply be silent.  When we do respond, both to the client and to ourselves, we need to be honest: admit mistakes when they are clear and demonstrate how we can learn from them.  Double check names and headers?  Of course.  But also set up a better way to continuously communicate with customers and clients about their expectations.  This sounds easy, but today customers and clients often don’t want to be bothered.  They view certain products and services as commodities and they just want the best price and nothing more.  My experience is that it is rarely that easy and you need to proactively engage with customers and clients from the very beginning to build relationships and trust.

Alan Gutterman is the Founding Director of the Sustainable Entrepreneurship Project, which engages in and promotes research, education and training activities relating to entrepreneurial ventures launched with the aspiration to create sustainable enterprises that achieve significant growth in scale and value creation through the development of innovative products or services which form the basis for a successful international business.  Visit the Project’s Library of Resources for Sustainable Entrepreneurs to download handbooks, guides, articles and other materials relating to sustainable entrepreneurship and keep up with the Project’s activities by following Alan on LinkedInTwitter and Facebook.