People, Planet, Profits & Projects

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Richard Maltzman
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Batter up!

A Complex, Swirling Mess

Secondary Risk in the Playground

Look up!

Amazing Fiets of Success

Market Basket Analysis

If you live in the New England area of the United States, you probably know about DeMoulas supermarkets.  Mostly branded, "Market Basket", these 71 stores dominate the area, often pushing aside large national (really international) chains, such as Stop & Shop and Hannaford.

Recently, however, the stores have been all but shut down by a labor and leadership dispute that is about the way in which the company is run and who should be at the helm. 

Why do we bring up a supermarket in a blog about project management and sustainability?

We actually never intended to do this until we ran into an editorial by former US Secretary of Labor Robert Reich, who served under Gerald Ford and Jimmy Carter.

Now, before you read the editorial, we want you to be aware that we are aware that this is not a political blog, and we usually try to stay away from pure politics and economics.  And this editorial does drift into the philosophical and political area in the way it discusses capitalism and labor.  But at its heart, the editorial makes a beautiful point quite beautifully, whether you agree with Reich on anything else.

We think the editorial is important because:

  • it talks about a focus on a wide set of stakeholders (like Project Managers do)
  • it honors the intersection of business and sustainability (like we assert Project Managers should)
  • it takes, in general, a more long-term, holistic view of success (which we think all of us can use)

We place the editorial below, with the highlighting our own, so you can draw your own conclusions.

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In recent weeks, the managers, employees, and customers of a New England chain of supermarkets called “Market Basket” have joined together to oppose the board of director’s decision earlier in the year to oust the chain’s popular chief executive, Arthur T. Demoulas.

Their demonstrations and boycotts have emptied most of the chain’s seventy stores.

What was so special about Arthur T., as he’s known? Mainly, his business model. He kept prices lower than his competitors, paid his employees more, and gave them and his managers more authority.

Late last year he offered customers an additional 4 percent discount, arguing they could use the money more than the shareholders.

In other words, Arthur T. viewed the company as a joint enterprise from which everyone should benefit, not just shareholders. Which is why the board fired him.

It’s far from clear who will win this battle. But, interestingly, we’re beginning to see the Arthur T. business model pop up all over the place.

Patagonia, a large apparel manufacturer based in Ventura, California, has organized itself as a “B-corporation.” That’s a for-profit company whose articles of incorporation require it to take into account the interests of workers, the community, and the environment, as well as shareholders.

The performance of B-corporations according to this measure is regularly reviewed and certified by a nonprofit entity called B Lab.

To date, over 500 companies in sixty industries have been certified as B-corporations, including the household products firm “Seventh Generation.”

In addition, 27 states have passed laws allowing companies to incorporate as “benefit corporations.” This gives directors legal protection to consider the interests of all stakeholders rather than just the shareholders who elected them.

We may be witnessing the beginning of a return to a form of capitalism that was taken for granted in America sixty years ago.

Then, most CEOs assumed they were responsible for all their stakeholders.

The job of management,” proclaimed Frank Abrams, chairman of Standard Oil of New Jersey, in 1951, “is to maintain an equitable and working balance among the claims of the various directly interested groups … stockholders, employees, customers, and the public at large.”

Johnson & Johnson publicly stated that its “first responsibility” was to patients, doctors, and nurses, and not to investors.

What changed? In the 1980s, corporate raiders began mounting unfriendly takeovers of companies that could deliver higher returns to their shareholders – if they abandoned their other stakeholders.

The raiders figured profits would be higher if the companies fought unions, cut workers’ pay or fired them, automated as many jobs as possible or moved jobs abroad, shuttered factories, abandoned their communities, and squeezed their customers.  

Although the law didn’t require companies to maximize shareholder value, shareholders had the legal right to replace directors. The raiders pushed them to vote out directors who wouldn’t make these changes and vote in directors who would (or else sell their shares to the raiders, who’d do the dirty work).

Since then, shareholder capitalism has replaced stakeholder capitalism. Corporate raiders have morphed into private equity managers, and unfriendly takeovers are rare. But it’s now assumed corporations exist only to maximize shareholder returns.

Are we better off? Some argue shareholder capitalism has proven more efficient. It has moved economic resources to where they’re most productive, and thereby enabled the economy to grow faster.

By this view, stakeholder capitalism locked up resources in unproductive ways. CEOs were too complacent. Companies were too fat. They employed workers they didn’t need, and paid them too much. They were too tied to their communities.

But maybe, in retrospect, shareholder capitalism wasn’t all it was cracked up to be. Look at the flat or declining wages of most Americans, their growing economic insecurity, and the abandoned communities that litter the nation.

Then look at the record corporate profits, CEO pay that’s soared into the stratosphere, and Wall Street’s financial casino (along with its near meltdown in 2008 that imposed collateral damage on most Americans).

You might conclude we went a bit overboard with shareholder capitalism. 

The directors of “Market Basket” are now considering selling the company. Arthur T. has made a bid, but other bidders have offered more.

Reportedly, some prospective bidders think they can squeeze more profits out of the company than Arthur T. did. 

But Arthur T. may have known something about how to run a business that made it successful in a larger sense.

Only some of us are corporate shareholders, and shareholders have won big in America over the last three decades.

But we’re all stakeholders in the American economy, and many stakeholders have done miserably. 

Maybe a bit more stakeholder capitalism is in order.

The editorial was retreived from Robert Reich's own web page - here.

Posted by Richard Maltzman on: August 21, 2014 11:15 PM | Permalink | Comments (1)

Good, Gooder, Goodest

We highly recommend that you watch this TED video first.  It would be a good thing to do.

 

Or, you could skip it, read this, and then go back and watch it.

But you should at LEAST spend the few minutes it takes to watch it.

In it, the speaker, Simon Anholt, describes the rationale, history, and makeup of the Good Country Index.  As he says, it's not about good, better, and best, but good, gooder, and goodest - meaning good as in "the opposite of selfish".  He's put together a set of measurements which assess companies and yield a ranking from top to bottom of the world's "goodest" countries.

In and of itself this is insteresting to project managers.  Why?  In our book, Green Project Management, we say that a project run with green (read that now as sustainable) intent is the right thing to do but it also helps the projet team do things right.  It means - as Simon Aholt says (although in relation to countries) that the success of the project actually goes UP if there is more focus on collaboration, more of an outward than inward view, more of an unselfish (think multiple-stakeholder rather than project-team) execution of the project.

But beyond that connection, Anholt's TED talk points to a website called goodcountry.org which has this Good Country Index we mentioned above.  And what is a major component of the weighted table (one of our favorite PM tools) that makes up this mega-database of counrty goodness?

It's a section called Planet and Climate.  Here is a deep link directly to that section.

In it, Anholt's team analyzes:

  • Biocapacity Reserve
  • Hazardous waste exports
  • Organic water pollutants
  • CO2 Emissions
  • Other GHG emissions

These elements make up part of the score of a country's goodness.

And if they apply to countries, and countries get their Gross Domestic Product (GDP) via a portfolio of programs and projects, then clearly, the same applies to us as project managers.  That's the origin of the very name of this blog!  Have a look at the scores in this area, and then kick up a level and look at the other elements.  It's interesting information, presented in a visually pleasing and intuitive way. 

Don't worry, we know what you're thinking.  You're probaly wondering which country was number one, right?  Which one won the World Cup of goodness, beating the good and gooder countries to be the very goodest...right?  Well, we're going to let you tell US since you watched the video.  Or, you can march right back up to the top of this post and watch the video to find out.

If you do, watch it from a project perspective.  Subsitute projects for 'countries'.  Maybe you, just like that mystery country, can be the goodest project team around.

Goodest wishes!

Posted by Richard Maltzman on: July 10, 2014 10:00 PM | Permalink | Comments (2)

All Our Patent Are Belong To You: Tesla and Altruism in Eco-Business

Some of you may be familiar with the phrase "All Your Base Are Belong To Us", which has become somewhat of an internet meme with its own Wikipedia entry and acronym: AYBABTU.  It's a result of a poor translation from Japanese in a popular game called ZeroWing.

The phrase became so popular it shows up (in one form or another) on church signs...

and T-shirts...

 

That's when you know you've made it as an expression!

 

But we bring this up not because of t-shirts or churches or even video games, but rather because of a short but intensely interesting and powerful post by Elon Musk, the CEO of Tesla Motors, who used this internet meme as a basis for the title of the post - to be cute and yet memorable with a very important message for innovators.  Musk said, in short:

Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal. Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.

This is long-term thinking in a company that was built on long-term thinking.  We simply invite you to read the post and let us know how you feel about what, in effect, is open-source development of electric vehicles.

How would this work in your industry?

Does this have implications for projects and project managers?  We think so.  A penny for your thoughts?  Maybe... a whole base for your thoughts?

Posted by Richard Maltzman on: June 17, 2014 02:32 PM | Permalink | Comments (0)

Climate Change Change Is Real

Categories: Activism, Leadership

We DO NOT know if climate change is real.*

What we DO know, as an absolute, undisputed fact, is that climate change change is real.

Here's the executive summary, fellow project managers: whatever you believe or don't believe about climate change is actually trivial from a project management perspective, compared to the fact that businesses are initiating changes to their fundamental business plans and business cases based on what they perceive to be an issue important for their survival.

Projects - by definition - are about change.  Projects are initiated to incorporate changes, and they are selected by businesses based on their fit with the portfolio of programs and projects that help them stay true to their long-term, sustainable success.

Back slowly away from this blog post, and read this article.  Then return.

If you read the article - great.  That means you can skip this pull-quote because you've already got the point.  For those of you who didn't, please at least read this:

'...many businesses in Boston and beyond are taking matters into their own hands, preparing for a warmer world in which severe weather, rising sea levels, and increased flooding threaten property, operations, and earnings.

Developers have moved electrical units from the basements to rooftops of buildings in the Seaport District along Boston Harbor. Utilities in New England have elevated substations several feet above the ground and replaced wooden electrical poles with steel ones that can withstand powerful winds.

Insurance companies, in response to clients, are testing products designed to protect against varied effects of climate change, and providing more coverage against natural disasters. The Hartford insurance company now offers small businesses policies against losses due to widespread power outages, a growing concern as major storms occur more frequently.

“We think the time for debating [climate change] is over,” said Ed White, vice president of customer strategy and environmental for National Grid, a British company with its US headquarters in Waltham. “We see it occurring. We’ve lived through the flooding, we’ve seen the damage that it had to our communities and our equipment.”'

So, in other words, as we said in a previous blog post, "Get Your Head Outta The Sand", your sponsors are "on board" with climate change.  This means:

  • projects are already being launched by businesses in response to challenges posed by perceived threats (and in some cases opportunities) caused by climate change
  • enterprises are more commonly connecting their fundamental mission statements and Corporate Social Responsibility (CSR) with their portfolios
  • a knowledge of the issues, the language, the nature of climate change is an advantage whatever your beliefs
  • jobs - even entire career paths - are bending to the reality of organizations responding to climate change.

What kinds of organizations are reacting to climate change?  Is it just biofuel companies, fair-trade clothing co-operatives, and organic food family farms?

Hardly.

Again, from the article:

'Insurers, too, are concerned about hurricanes, tornadoes, and wildfires occurring more frequently. Three of the top six years for catastrophic insured losses have occurred since 2005 with a combined $142 billion in expenses, according to the Insurance Information Institute, an industry research group that has tracked the costs since 1989.

Data about climate, which was primarily used by federal agencies and insurance companies in the past, is now sought by all types of businesses and organizations, from health care providers to banks to manufacturers, said Kyle Beatty, the president of Verisk Climate. Verisk, headquartered in New Jersey, bought a Lexington climate research firm six years ago in anticipation of growing demand for climate information.

A retailer may want to know the likelihood of major storms downing power lines and triggering blackouts that would close stores, Beatty said. A manufacturer might want to diversify suppliers if a particular contractor is in a flood-prone region.

“The business reaction is to the fact that they’re experiencing impacts to their operations and earnings that they haven’t in the past, they need strategies to address that,” Beatty said.'

So it's retailers, manufacturers, insurers, financial institutions.  These are the types of organizations that get their work done through - you guessed it - projects.  That means they need project managers who understand the background and drivers of these changes.

We insist that it's time to get smart about this, if only for increased job opportunities and security.  Stay tuned to People, Planet, Profits & Projects.  We'll continue to keep you knowlegeable about sustainability and project management - and the increasingly important intersection between the two.

 

*although the overwhelming majority (97%) of climate scientists will tell you that it is...

Posted by Richard Maltzman on: May 22, 2014 01:08 AM | Permalink | Comments (0)

Get your head out of the sand!

Categories: government, Leadership

We know that some project managers are climate change skeptics.  We know that project managers aren’t limited to any part of the political spectrum.  We get that sustainability may seem like a hifalutin, pompous, philosophical idea that just isn’t that, well, project-managy.

We get all of this.

In fact, it’s important that a project manager be a skeptic.  Blindly accepting an overly optimistic estimate, for example, can doom a project.

And yet, take this example: as a team leader, we cannot tell what motives our team members have – we can only observe their behavior.   We need to manage our project teams on that observed behavior, and the best of us look for the root motives to understand and work with team members’ interests.

See: http://www.sparknotes.com/psychology/psych101/motivation/section1.rhtml

Now, take the example and expand it to what we observe (whatever we believe) when it comes to climate change.

Case in point: Boston.  There is a cover story in a recent Boston Globe Magazine entitled, “Getting Ready for Global Warming – Boston Under Water”.  In it, you will find a list of five things that Boston is doing right now to prepare for the effects of global warming.

Every single one of these “things” is truly an initiative which consumes resources, has a definitive start and finish date, is unique and… well..  does this sound like anything familiar?  It should.  Because all five things are projects.

So our point is this.  Wherever you stand on climate change – you believe it, you’re cynical, you’re skeptical, it’s a sham, a conspiracy, whatever – wherever you stand, real projects are being launched that need real project management expertise and real project managers.

So, for example, would you want to be out of contention for a project to redesign buildings so that their first floors are 42 inches above the current 100-year flood level, with all electrical and mechanical systems on the roof, where a surge resistant reef is built around sites along the waterfront, and it is designed to keep working even after a Hurricane Sandy-like superstorm?

Now let’s open up our blinders even further, beyond Boston, beyond the United States.  The EU has just approved more than 280M Euros for new environmental and climate change projects. - 

So you see, whatever you think of climate change…wherever you are on the political spectrum.. if you want to expand your own portfolio of project management opportunities, it may pay to  get increasingly conversant on the topics of climate change risk and the response that businesses are planning.  And executing.  Now.  Right now.

Ignoring this, by keeping your head in the sand, or letting your own views cloud your view of these opportunities could be hazardous to your career.

Thoughts?

Posted by Richard Maltzman on: May 04, 2014 02:07 PM | Permalink | Comments (5)
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