[MUSIC] This is Mike Rosenberg with Strategy and Sustainability. This is session three, we're looking at strategic options that a company has with respect to its natural environment. And this is segment four, where we're looking at show and tell, which is one of the different five strategic options which, I think, are completely legitimate, as I do talk a little bit about another one, but we're not going to go back to that, which is the one we call break the law. So if you remember, it's about environmental sensibility. This is the In the framework, this is how much the civil society, the regulators, shareholders, customers look to a company in terms of its environmental footprint. And how much is that company engaged with these issues within its management team and even its employees. The other access is the level of compliance which is going to be minimal. Or is the company going to go beyond compliance and do much more than the law requires? In the case of Show & Tell, this is the choice for companies when they choose to do more than the law requires, for a wide variety of reasons. But then says why not tell the world about it, because in fact there may be some parts of the civil society of consumers who are customers, who are interested in what we're doing. This is a choice that has made here, which is do more and to talk about it. A show and tell is a line from an American Educational System, little children are encourage in first or second grade, when their six or seven years old, to bring something from their house, and tell the class about it. So it's about, hey I brought this from home, I want to tell everybody what I am doing. And this is the idea of where show and tell comes from. I think the most amazing example of show and tell and the business community today us Unilever under the leadership of Paul Polman. Unilever does a lot of things, all right in terms of his engagement with the natural environment, and does a really good job telling a story. Mr. Bowmans is on the Global Sustainability Council. He's been given awards, but really, the company does have a deep commitment to this stuff and is doing a lot of things. Their sustainable living model is really an example that many other companies are following in terms of how a company can engage with the natural environment. Part of their issue is, where does Unilever come from? It comes from selling soap, and soap is good in their view. Soap is good, because soap keeps those hands clean, keeps people from disease. And they see themselves as a force of good in the world. But, of course, soap can also have a downside effects. Soap can also, of course, have negative effects on the environment. And Unilever is working pretty hard to match that. But they're also talking the story, telling the story as much as they can. Now, there is a difference between show and tell, which is related to what I talked about in session two, which I called environmental PR, it's one of the most response in the past in what's called the greenwashing. Greenwashing comes from whitewash. The whitewash is, we've done something wrong, we're going to paint over, we're going to paint it white, in this case, because we want to be more environmental, we're going to paint it green. And this is where this idea of greenwashing comes from. And there's a gentleman in the United States that consults, kind of a pioneer in this area, Kevin Turf. And he says you can tell when a company's doing greenwashing. Because if they spend more money talking about what they're doing in terms of the environmental performance than actually doing it, then it's probably greenwashing. But if they're doing a lot of stuff and also talking about it, then it might be what I'm calling show and tell. Patagonia, for example, is an example of a company which has deep, deep convictions and they talk about it. Their ad, don't buy this jacket, find a used one. Borrow a jacket, do whatever you need. Only buy it if you really need it. And this is authentic. So the two things which really distinguish, I think, some companies is first that there's deep environmental sensibility on the part of the people of the company, that this is important. That this really become part of their culture, and then there's sincerity in what's going on. Sincerity at the board level, sincerity at the middle level and even at the rest of the employees at the firm. Before doing show and tell though I think it's important the company really look at the costs of doing that and also looking at the returns they expect to get. Because it's not an easy thing to do. The founder of Patagonia said, to live a transparent life, I won't use his exact words. But he said it was very difficult. He used a more colorful language. And it's a pain every day to be transparent. So your company really needs to think about this. This is what I want to do. And part of the reason it's so important is if you tell everybody how clean you are, you better be clean everywhere because green peas another activist will check. Volkswagen had a big, big deal about their BlueMotion campaign. How green Volkswagen was being. How its new diesels were so environmentally friendly. [COUGH] And that gave them even bigger problems. Because Volkswagen had a huge campaign about how environmentally friendly their new generation diesels were. And that caused the unusual problems when it turned out that they weren't. So the issue of Show & Tell is that you better be clear that this is deep that this is real. That your people are sincere and and that it's really going to stick. In terms of the key aspects, monitoring control becomes critical, you must know exactly what's going on everywhere. And you must have a culture which embraces honesty and embraces accountability in environmental matters. So if something is a little bit wrong it gets fixed by your own people before anybody else finds it. Communication, of course, is critical. Unilever, for example, has a fantastic PR machine to tell the world all the wonderful things it's doing and at the same time this communication has to have a special understanding of the complexity of some of these environmental issues. Because as we said in the early sessions, a lot of this stuff is complicated, the mathematics are complicated, the assumptions you need to make to build the models are complicated. And it's important that the communications team understands these nuances, especially when you're making so much noise. I believe financial modeling is important so that there's a real understanding of the costs of such compliance. Going beyond compliance, the cost of doing all this stuff. And also, some ability to estimate the benefits. One of the challenges, which we'll pick up in session six, is typically in this space. The cost of going beyond compliance can be very well shown. You can figure out exactly what it costs. The benefits sometimes are much more fuzzy. Customers are paying more money, maybe not. Buying more maybe, becomes much more complicated to do. Senior management must be involved Senior management must lead these kinds of efforts. They must understand the issues. And they must be able to personally communicate the strategy, with shareholders, and stakeholders, employees, and even the environmental interest groups. And finally, I believe that a show and tell strategy needs the highest level of engagement. Everybody in the company needs to understand why we're doing this, and why this is important. Because if they don't walk the talk, eventually someone will make a mistake. Typically in these kinds of companies you'll find the sustainability council, which if you remember, in a wait and see was representatives of the different units now becomes the actual heads of the units, who need to be on it. And then, sometimes it has a direct report to the CEO Sustainability Manager. And in many cases you see that they actually have a small team. So the whole thing requires a slightly beefier effort on the part of the company because there the key challenge is really is to make sure that everybody has access, that these issues get the attention they need and that everybody's accountable. Show & Tell can be very powerful, but I would only recommend Show & Tell to those companies which have the environmental sensibility. Already coming from the outside, and a little bit on the inside, and are really willing to go all the way. [MUSIC]
