Leading Sustainable Organizations
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Dave Stangis, vice president of corporate social responsibility and sustainability for Campbell Soup, believes that setting “big, hairy, audacious goals” is necessary to set up the kind of tension needed to motivate and inspire the people who need to reach them. Two years ago, Campbell set ambitious ten-year targets for improvements in product nutrition profiles, employee engagement, and environmental impact.
To achieve the goals, Campbell is relying on top-level CEO involvement and formal governance structures that work for its complex, global organization. It’s also collaborating with external partners, and making the sustainability conversation part of its recruitment efforts.
Stangis, formerly the director of sustainability at Intel, joined Campbell three years ago. He was hired to create and execute a top-to-bottom strategy around corporate social responsibility and sustainability.
He talked with MIT Sloan Management Review‘s Managing Editor Nina Kruschwitz about the kinds of language and conversations that propel a sustainability agenda, the benefits of engaged employees, and using stakeholder conversations to see into the future.
Your title sounds like it covers a lot of territory. What areas are you focused on?
I was hired three years ago to create and execute a strategy around corporate social responsibility and sustainability from top to bottom. In Campbell’s culture, sustainability generally refers to environmental sustainability and CSR, or corporate social responsibility, applies to almost everything else.
There was a little bit of very positive negotiation with the CEO at the time about what the focus areas would be, and how we were going to put measures in place. Three focus areas were as you would expect: the workplace or employees; the community; and the environment. The fourth was around what we were going to stand for in the marketplace.
What kinds of goals did you set to measure progress in those areas?
We set ten-year destination or directional targets. In the workplace, it was to get to 100% employee engagement in our CSR strategy. That’s not for a personal sustainability plan, but for advancing our focus areas. That’s included in personal performance reviews and in compensation and management systems. In the environment, it was to cut the footprint of the product portfolio in half over the next ten years, measured by water and greenhouse gases per (metric) tonne of food produced. In the community, it was to improve the health of young people, measured by a 50% reduction in childhood hunger and obesity in ten North American communities, starting with our hometown community which is probably the most challenging: Camden, New Jersey.
Which goals were more difficult to get enlistment around?
The goal of 100% employee engagement was the most straightforward. It’s a culture set Campbell already has, even if not everybody knew exactly what that would mean in detail. The language of the goal was familiar.
The environmental goal was more challenging. What would it mean to cut half of our footprint? What would we measure? We made it an efficiency metric as well, so that if a manufacturing plant could get more efficient, they were able to contribute. It wasn’t just, “save water, save energy.” If they can produce product with the same resources, they win too.
The marketplace goal was the hardest. I was advocating for a destination of the healthiest product portfolio on the planet in ten years. Campbell has been working on a nutrition and wellness path for a long time, so people were on board philosophically, but meeting and measuring that goal meant different things to different people, so we made that one more directional: we came to agreement to continually advance nutrition in the product portfolio.
The social impact (or community) goal, moving from counting volunteer hours and tons of food donated to including a metric for the change in people’s lives really required a leap of faith. We needed to find the right partners, and put some real science behind it.
Camden has all kinds of challenges, from poverty to drug use to violence, and we needed to get clear on what role we could bring to bear to help break that cycle. We’re a convener. Our partners include coalitions of local healthcare partners, who will help drive the metrics to educators, care-givers, community gardens and other solutions to strengthen the local food web. Everything we’re doing is going to be open source. Any data that we collect, both baseline and progress or outcome measures, will be public. What may work here may not work everywhere, so it’s not a recipe for universal success, but by making it open source, other communities can choose and try what may work for them.
What kind of governance structure do you have to support your goals?
You definitely need CEO commitment; it would be a mistake to try to do anything without it. I was lucky enough to be brought in at a level where I could have a conversation with the CEO and we could simply talk about this. He actually wanted to move quicker: let’s go down the hall; we can set these goals in ten minutes and we’ll just get it done. But I had only been here a couple months and knew it would be much better to build some enlistment with the key officers and lieutenants, so that they felt like they were a part of the process. Our new CEO, Denise Morrison has engaged directly and challenges us to align business and societal level goals.
We have four chartered teams under each of those four focus areas. The people on those four functional teams don’t report to me. These are vice preseidents, senior vice presidents or directors. For example, the executive co-chair of our Sustainability Leadership Team is our senior vice president of supply chain, who covers all of our manufacturing plants. And then we have representatives from packaging, manufacturing — globally, as well as Europe and Asia — logistics and transportation, procurement, and sustainable agriculture. They report into different business units and different parts of the company but are critical in driving the environmental sustainability strategy for the company.
With these formally chartered teams you get content expertise, you get decision-making ability, and you drive accountability. It’s really the only way I know to make it work in a complex, global company.
Many companies have set shorter-term, more manageable goals. What made you choose such a long horizon?
When you set annual goals, you think small: this is what we did this year; we think we can do that next year, let’s make that our goal, and then if we’re good and lucky we’ll exceed it. Not only is it a do-loop in terms of repeating the same steps over and over; it really isn’t a goal. It’s a description, it’s a prediction of what you think you’re going to do.
Setting longer-term goals allows you to put some tension in the system, tell stories about challenges, opportunities, good years and bad years. People might not know how they’re going to get there, but at least they know the direction they’re going. I think it’s a much more effective way to drive system-wide, enterprise change.
Do you consider it a creative tension?
The biggest change I’ve seen is what happens when we really give people permission to just think about what’s possible. For example, we’ve had people who were working on packaging every day as part of their job. Some were interested in sustainability, others were core packaging engineers.
Once we set a goal and put some tension in the system, they came up with packaging design guidelines that are now integrated into our process. When they first looked at it, they thought, how could we ever do this? But once they started working on it they realized, “We can do this and more.” Now if we’re going to change a package, we ask ourselves, can we make it lighter; can we make it more recyclable; can we introduce more recycled content? In less than a year they defined a baseline assessment all the packaging they use, not only just in terms of number of units, but the materials. They’ve now set a goal to take out 100 million pounds of packaging over the next decade, which I’m confident they’ll exceed.
In terms of cutting our emissions, one of our sub-goals was around renewable energy. How do we get to half the greenhouse gas emissions without half the energy? We knew if we were going to try to make these goals, part of that solution had to be renewables, but — Campbell Soup? We’ve never really tackled renewable power. We’re not sure know how to it.
But earlier this year we announced a power purchase agreement and land lease agreement at our largest soup plant in Ohio. Sixty acres of solar panels and a ten-megawatt facility are already under construction. We’ve already signed another agreement to do another two megawatts on fourteen acres out in California. We have smaller installations in Toronto, and another 10,000-square-foot installation in Texas. This wasn’t even on the radar screen three years ago. It just wasn’t in our current solution set. We have great people who want to do the right things for business and the environment. In some cases, we just have to give them permission.
I don’t think many of these projects would have just happened. I believe those were all a result of setting big, hairy, audacious goals that we really weren’t sure how to achieve. At this point we’ve set a direction, and we’ve set a destination, and we’ve set a time constraint around some of them. But the reality is, there’s still plenty of creative tension in the system.
You mentioned earlier that the easiest goal to get accepted used language that was already part of the culture.
When I talk about these concepts inside the company I actually try to dispose of all these words — sustainability, CSR. I really try to view it as a way to bring a different, a more informed point of view to our decision-making that allows us to drive competitive advantage.
If you create a CSR strategy as something “extra” then when times are good, I’m happy to support it, but when it’s tight and it’s business and I have to meet my numbers, I just don’t have time this quarter for it, all right? If you set it up that way, you’re just setting it up for failure. So my goal has been, from day one, to make CSR and better business, one and the same.
How can I help my HR team with whatever their metrics are, using the tools that are in the sustainability/CSR toolbox? Maybe it’s to bring the best and brightest students to the front door, or to keep them when you’ve got them here, or to bring them through the hiring system quicker. We use the same thought process on the manufacturing side: If your metric is making the same amount of food for the lowest possible cost, what can I do from a sustainability side to help you drive your cost down? I’ll take care of translating that into the great environmental impact and the waste saved or the waste diverted to landfills or the greenhouse gas impact, but I want to help you save money and make Campbell more competitive.
In fact, if you just think in terms of cost savings, for the last three or four years, our sustainability investments have met our internal rates of return. We’re saving millions of dollars. One year was more than $5 million saved annually. Once the savings are there, they are there forever, because you’ve changed the way you do business. And 5 million one year, 2 million another year, 3 million another year — by the time you add these things up and they start to compound, it’s just amazing.
What kinds of collaborative activities are you involved in along the value chain?
We have collaborations in most areas. For example, we don’t have our own fleets of trucks, so our logistics and transportation people are working with our shippers, the firms we hire, educating them on things like EPA SmartWay certification, helping them get smarter in terms of how they can be more efficient as shippers.
Most people wouldn’t view us this way, but we’re an agricultural business. Almost everything we make originates on the farm; we’re just not vertical anymore. We recently hired a manager of sustainable agriculture. He’s conducting a stakeholder survey up and down the value chain — farmers, suppliers, customers — to figure out what our priorities should be in that strategic area.
Of course we also consider our customers collaborators. We had a sustainability summit last week and several suppliers came in and gave our customers advice on everything we’ve talked about so far: how could they do it better; what kind of information could they leverage; how could they partner with their suppliers.
And much of this would also necessitate internal collaboration, too?
Yes, it requires real partnership inside the company. A handful of senior leaders are now working to enhance alignment and tone across the company’s strategic communications. We help create the positioning for the company, decide how to communicate our messages to various constituencies from analysts to community stakeholders. It’s a small team, but it’s a partnership. It includes investor relations, corporate communications, CSR, legal, governmental affairs, and brand advertising. We’re really driving it as a group.
How does sustainability figure into marketing and brand positioning? As a consumer, I don’t particularly associate Campbell’s with sustainability.
That’s one area that we’re under-leveraging. If you were to take a look at Campbell three years ago and Campbell today, you’d see a big difference in terms of awareness among thought leaders. We receive recognition from socially responsible investors, and the groups that rank organizations, but not from consumers. It’s important to do it well. You need to be consistent in what you tell people.
Some companies have done some good work in this area. I don’t believe anybody’s gotten it perfect yet, and we won’t, either. But we haven’t tried yet. It is not intuitive to everybody that we need to engage consumers in CSR, and if we need it, what it would look like. So it’s an education process.
How does your sustainability work help position you for the future?
One of the things that a good CSR or sustainability officer does is scan the horizon for what’s coming next, to help shine a light on external trends. Even if you have top notch consumer insights, talking to a wide variety of external stakeholders about different issues can help you see what’s coming. It is all about marketplace and competitive intelligence. With effort, you can see out a year or two from now, we need to be in front of this issue or it’s going to come bite us. Issues are just that — issues — it’s how they are managed that makes them risks or opportunities.
For example, if you’re coming up with a new product or a new package, you might want to know in advance what the lifecycle impact of this new package is, so that six months from now or a year from now, you’ve already predicted what the challenge or opportunities of those impacts might be from an environmental resource standpoint, instead of just waiting until some NGO tells you your package isn’t very sustainable.
It’s important to reach out, both to other people and information sources. I actually meet each year with social investment analysts, in person. And instead of being afraid of issue advocates — I don’t want to talk to that person, they always challenge me, or I don’t like that group because they often attack my industry — you seek them out. You say, “Look, we may disagree on tactics, but in terms of healthy nutrition and making sure people eat right and good food, we have the same objectives. What kind of things do you think we should do better?” Not that I can do them all today or tomorrow or perhaps ever, but I think it’s a smart way to do business.
We publish an emerging issues alert internally for our leadership team. We monitor the most controversial things — and the most innovative approaches — throughout the week in different ways. We want to make sure people are aware of the challenges and can learn from the external environment. It’s just another way to acceleration organizational learning.
Have you seen any changes in recruitment, or retention?
People want to come work here; we have to beat them off with a stick, because we’re much more visible in this space. I was just out at Net Impact again for the third year in a row (as a Campbell employee) and these students are excited. We’re attracting a different caliber of candidate and a different level of thinking. Not that the students we had before weren’t great, but now people are thinking that they can do more. They can come in not to just do a job, but they can come in to do their job and solve some problem — and ultimately that makes Campbell more competitive.
We do new employee orientations every other Monday. I’m able to go into the session and say, “Hey, you’re going to be in our supply chain organization. This is the kind of work you can help me with, that you can help your business with. Whatever you’ve got a passion for, here’s how you can bring it into Campbell and here’s how you can make your job more enjoyable and make an impact in whatever you’re interested in, in the community and in your life.”
It’s the definition of win/win. It’s all upside. And not only can you see the light bulb go on when you’re talking to them, even the skeptics can see the light bulbs going on in the people next to them. It’s contagious.