People, Planet, Profits & Projects

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.

When looking at the intersection of project management and sustainabilty, we at EarthPM are often intrigued by the places where we find sustainability in action.

This post is about a combination of several aspects we've recently blogged about:

• long-term thinking
• sustainability integration into the business plan
• sustainability as a strategic advantage
• open data and sharing of proprietary data for the greater good

And... where on earth do we go to for this post?

Mars.

Yes, Mars.  But not the planet, the company, Mars, Inc.

The website they've put together to describe their efforts in sustainability even has a title like our blog here at Projects@Work - "People, Planet, Performance".  So we can tell they've got it right!

What caught our eye was this article from Triple Pundit.  In it, they describe Mars'  2040 target to eliminate all fossil fuel energy use and greenhouse gas emissions (GHG) from its direct operations.   You can read about that in their press release here, and you can go to the Mars site directly and read about it here, in a section called "sustainable in a generation".  For your convenience we summarize some of the background philosophy here:

"Why does Mars care about climate change? Why have we committed to making our operations Sustainable in a Generation? Why do we invest in scientific research to improve agricultural crops?

The answer lies in our objective to create a mutuality of benefits by doing business in ways that are good for Mars, good for people and good for the planet. To ensure focus and effectiveness, we root our business decisions in scientific understanding. We strive to understand and quantify our impacts using accepted, publicly available data where possible, and to develop science-based strategies in response. Our targets are based on what is needed to solve the problem, rather than relying solely on what we can achieve in the immediate future.

One of the key scientific inputs we have used in this process is the concept of Planetary Boundaries¹, a highly-respected analysis based on a review of existing research which identifies nine environmental impacts and the point at which each one will cause catastrophic harm to human wellbeing."

This is great, but what got us even more curious was the element of sharing data - going with more "open data" (as we blogged about on EarthPM's blog recently, in relation to Aneesh Chopra's book, Innovative State).

That aspect of Mars' work can be summarized in a project-oriented effort called The Cocoa Genome Project.

This is "a five-year program launched in 2008 by Mars, IBM and the US Department of Agriculture to sequence, assemble and annotate the cocoa genome. In 2010, a preliminary version of the cocoa genome was publicly released in order to allow scientists to apply this knowledge as soon as possible to benefit growers. The genome findings were made available to all—including competitors—through the Public Intellectual Property Resource for Agriculture (PIPRA) and the Cacao Genome Database. PIPRA is a non-profit initiative that provides developing countries with access to agricultural technologies".

Has this reaped any benefits?

According to Mars:

"Breeders are already using this knowledge to identify traits of disease resistance, enhanced yield, efficiency in water and nutrient use, as well as climate change adaptability among the world’s cacao trees. Ultimately, this will result in healthier, stronger and more productive cacao cultivars which will improve farmers’ yields and income. As well as supporting breeders on the ground, the Cocoa Genome Project has also enabled Mars to develop genomics capabilities in collaboration with a diverse set of partners—work that will help to modernize cocoa production and improve the flexibility of the supply chain."

So the investment is paying off.

These two elements shown in Mars' business plans - long-term thinking and open data - are exemplary. 

So have a handful of M&Ms and applaud Mars' efforts.

Are these principles being integrated in your organization?

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!

With the USA's Independence Day celebrations upon us, it seemed appropriate to talk about independence and interdependence.  In both cases, we refer you to the very PMBOK(R) Guide that defines the framework, knowledge areas, and processes of project management.

Let's get ::interdependence:: out of the way first.  As we know, projects are run by organizations to accomplish the mission, vision, and values of the organization.  We only ininitiate a project if it is aligned with the business objectives of the entity that sponsors it.  So there is an inherent interdependency between projects and the programs and portfolios under which they are executed.

This concept can be carried forward to our message* of sustainability by virtue of the need to line up the projects with the CSR (Corporate Social Responsibility) messaging of the parent organizations.  We'll repeat our ongoing challenge to project managers: check the "About Us" section of your company's external web page and se what your leaders are saying to the world about their commitment to the environment, to employees, to the community, to the shareholders.  Is your project connected to (interdependence!) these statements?

We have seen significant evidence of projects that may line up with one element (usually, of course, economic in nature) but are way, way, WAY off in terms of the other 2 pieces of the bottom line (social and ecological).

So - in the interest of brevity - just know that the PMBOK(R) Guide speaks to this significantly. If you don't believe us, have a look at Figure 1-1 of the Guide on page 5, and this sentence from page 4:

"Although the projects or programs within the portfolio may not necessarily be interdependent or directly related, they are linked to the organization's strategic plan by means of the organization's portfoliio".

So now on to independence!

In this context we want to talk about independence from bias and reliance on facts (as in, "we hold these truths to be self-evident"). 

As the hurricaine season begins to unfold, we were looking at Hurrricaine Arthur on wunderground.com, a website devoted to independent weather reporting.  There we found a great page which provides facts on climate change based strictly on independent science.  Unfortunately, due to the politicizing of this science, even an independent weather page was compelled to put this statement on their page:

"Based on the evidence, more than 97% of climate scientists have concluded that human-caused climate change is happening. Climate change is already causing significant impacts to people and ecosystems, and these impacts will grow much more severe in the coming years. We can choose to take economically sensible steps to lessen the damage of climate change, and the cost of inaction is much higher than the cost of action."

Click here for the full Wunderground page on climate change - it's a great resource for facts.

The other piece related to independent climate change facts was found oun this site:

Click here for a report on climate change funded by the Koch brothers which should please even those who are concerned about any fraud in climate change.

So to wrap up:

As project managers, we are - by definition - interdependent on our organization's mission, vision, and values.  We can use this interdependency to our advantage, as an opportunity as a source of authority and power when we want to assure that our projects are properly linked to the goals of the organization.

Also - as project managers, we should seek facts and base our decisions on independent, validated sources of information.  We should remain independent when it comes to negotiating differences amongst our project team members.  Independence is key for us, even as mentioned in the PMBOK(R) Guide in terms of procurement and arbitration.

So declare your own PM independence gather and deal with facts only as facts, whether it's dealing with CSR objectives, climate change, or a simple argument between team members that you are refereeing.

To our American readers, happy July 4th!  And since that is a date on EVERYONE's calendar, we wish EVERYONE a happy July 4th, too!

*The best way to see our message is here at Projects@Work in this blog, at http://earthpm.com, and even better by reading our book, Green Project Management.

A variety of electronic sensing devices are being used in projects to reduce energy costs and help the bottom-line.  The interesting thing is that they can be integrated into present manufacturing with little or no cost difference.  When sustainability is planned in, it can be a lot less costly than retrofit. 

A prime example of this is in the car industry.  We all know that it will be a long time until we are weaned off of fossil fuels to power our automobiles.  Therefore, it is critical to be able to stretch the limited supply we have.  Let’s say you are a project manager working for a major automobile manufacturer and your project is the implementation of a new transmission (or engine, or even a steering system).  As a stakeholder in the company (they do pay your salary), because of your position within the organization, and your interest in sustainability, you may want to ask the question as to whether all sustainability options are being considered for this project. 

One company, ZMDI, is providing solutions to help auto manufacturers squeeze out every ounce of efficiency to increase fuel economy and reduce greenhouse gases (GHGs).    Using their “smart sensors” ZMDI is providing “Advances in transmission, engine and steering systems deliver greater power density and fuel efficiency so that today’s lighter and smaller power trains can provide significantly more output power and fuel economy than traditional designs.”  It also provides integrated circuitry in: battery monitoring “Monitoring the status of the car battery with our smart battery sensor solutions enables automatic start-stop features in cars, which can reduce fuel consumption up to 8%”, ethanol sensing:  “ZMDI’s IC solution enables optimization of fuel injection based on the real ethanol value and therefore helps reduce emissions”, and electronic steering,  "ZMDI’s IC solution enables using magneto-resistive sensors, which can enable an electronically controlled motor in the steering mechanism instead of using an hydraulic servo steering mechanism.”

The above graph and statement below were from http://www.zmdi.com/why-pink-new-greenand the 2013 data is based on ZMDI’s forecast.

The graph above shows the fuel savings and greenhouse gas (CO2) reduction achieved through ZMDI products in the automotive segment per year. Because the number of new energy-efficiency products introduced each year has increased, the savings in fuel could be significantly raised each year.

The fuel savings achieved in 2012, approximately 4500 M liters of fuel, corresponds to the loads of approximately 20 supertankers.

The accumulated annual savings since 2004 is approximately 18,000 M liters of fuel, which corresponds to the loads of approximately 80 supertankers.

The above graph shows significant savings in fuel savings and the more these types of integrated circuits, and e-sensing devices are utilized, the more the savings will be both in fuel costs and in GHG emissions. 

One of the more e-sensing technologies and a popular choice for renovation and new building projects is motion sensors.  The major advantage of motion sensing technology is that it eliminates the human factor, for the most part.  Lights are turned on and off and heat and cooling can regulated depending on the movement within an area, regulating the need for energy.  How many times do we walk out of a room and forget to turn out the light.  E-sensing technology can be used to keep a room at a constant temperature depending on the heat load generated without human intervention turning the thermostat up or down.  Of course humans will have to program the devices.  For motion sensing devices, that might include setting the arc around the sensor for activation, for instance.   But once set, it is repeatable.  Sustainability also includes the “people” element (planet, profits, and people).  In an effort to reduce the “germ” factor, sensing technology is being used to open and close bathroom doors so that people don’t have to touch the door handle.  Similar motion sensing technology is used for handicap access and for advancing paper hand towels. 

The more information we can possess the more influence we will have.  As sustainable project managers, our quivers contain a lot of arrows.  One of those arrows is the consideration of e-sensing/motion sensing technology on our projects.