“Success does not come with being compliant or doing the bare minimum. If you have zero fines and zero failures in compliance, then your success criteria is nothing.”
Written by Kathryn Battista and Jim Fava.
An Introduction from Jim Fava
Since publishing the initial Golden Rules, we decided to reach out to leaders in our community to learn about how they have used the rules as accelerators to culturally embedding sustainability into their core business practices. In our last blog we interviewed Al Iannuzzi, Senior Director of EHS and Sustainability at Johnson & Johnson. In this final interview, we are pleased to have the honour of speaking with Ron Voglewede, Director of Sustainability at Whirlpool.
Our Conversation with Ron
Jim Fava (JF): Why don’t you start by telling us who you are and your role with Whirlpool?
Ron Voglewede (RV): Thanks Jim, I am the Global Sustainability Director for Whirlpool and have been at this company for 22 years now. I grew up here in a leadership development role, doing forward-looking, long-term analysis around new products and innovation and working in advanced development of refrigeration for years. From there I moved on to a more global business development role through looking at the precursors for Product Life Cycle Management. I helped bring a more life cycle view and thought to our products, which is why I was asked to form a global group to run Whirlpool’s overall strategy and execution to bring Life Cycle opportunities and sustainable business practices to our company. We now have a pretty robust team of 12-13 people around the globe who are working on various aspects of material issues, market facing concerns, compliance risk mitigation and understanding how you truly bring value to this idea of sustainable business and life cycle thinking.
JF: Thanks for that background. Let’s explore the Five Golden Rules. Our first of the Five Golden Rules is bringing your customer in. Here we are talking about shifting company focus to the customer, looking at the full range of potential impacts along the entire value chain. Can you speak on your experiences with Whirlpool as the power and value of a customer to drive sustainable changes or changes in innovation within the business?
RV: At Whirlpool, there are two things that we did relatively quickly in our strategy that was very successful:
- We took a consumer value approach to sustainability as opposed to a regulatory approach to fully understand what our customers value the most.
- We brought in our stakeholders in the process. Stakeholders are our partners and help drive value for your business.
We learned really quickly that not every consumer is the same, they can change by region. At Whirlpool we have regional functional groups, to get us closer to our consumers in order to understand what is really important to them. Not only do you have to bring your customer in, but you also have to be true to bringing yourself in, by bringing in all your stakeholders. For example, we took a proactive approach to IKEA, one of our customers. We were one of the first ones to forge a relationship with them to understand what their end goal was and what they really wanted to achieve in their role as a consumer retailer in a world that is going to have constraints. We were able to redefine their supplier scorecard for what it really needs, by putting it into a language that consumers will understand and what they are really concerned about. You have to tie it the whole way from end to end, by working together with your partners along the value chain. That’s how you will truly succeed with bringing your customers in.
JF: I like that, not only do you have to bring your consumer in, you really do have to bring yourself in. You have also talked about our second rule, that success requires focus and action. Obviously, you can’t do everything, but it can become difficult to have a clear understanding and knowledge of sustainability priorities that are most important to the company. How do you define what is important and how do you make sure actions are actually taken at Whirlpool?
RV: We have an operating model where we really focus on two things: Outcome and Progress. For example, we did a materiality assessment to try and understand where our consumer fits on our list of material issues. In this assessment, we decided at first to not include consumers and stakeholders to see what our list of issues would be. Our long list of 50 issues went down to six material issues. We did this because we know that sustainability with the end consumer is going to continue to grow and be a key differentiator over the short and medium term, but that long list can be overwhelming. You don’t need to bite off more than you can chew. Focus comes with action and action drives the focus. Success requires action to gain focus, but you have to do it in a way where you can identify what can get done. You can only make progress, because each step drives the next steps, which will get you more value, which will then get you more buy-in to do more things, which gets you more team members, etc. So instead of trying to do everything up front, narrow it down to 4-6 key items. It was an awesome first step on our progress map.
JF: Our third Golden Rule is that value is more than just tightening your belt. This can be tied back to business value: cost savings, brand enhancement, risk mitigation and generating revenue. So please talk a little bit about what this rule means to you and Whirlpool.
RV: To me, this is the most critical of the five rules. Success does not come with being compliant or doing the bare minimum. If you have zero fines and zero failures in compliance, then your success criteria is nothing. We were very critical at the start to do two things:
- Shift compliance to value; and
- Think of sustainability as an investment. It has a return.
Once you define that value, you are switching the conversation from just cost and budgeting to the value of that investment. Proactive behaviour is always cheaper than being reactive. For example, your fridge breaks and now you have to buy a new one. In this case, you are always going to pay more because you need that new fridge right away. Whereas if you were reactive, and anticipated an old fridge breaking, then you could try and get a deal, look for the best price, really put some thought into it. Proactive behaviour is always cheaper. Once you put it in those terms to executives then they get on board much quicker. This mentality shift takes a while but leads to a huge change in attitude.
JF: Now you are speaking the language of executives. I like that.
RV: Yes! This type of language really gets buy-in. For example, back in May, we were on a Panel with Ernst and Young at Sustainable Brands. On this panel, we presented using language that one would specifically use with a CFO by talking about converting risk avoidance into dollars saved. All of a sudden, the C-suite understands. Financial proof works a lot better than proof based on fear alone.
JF: Let’s look at the fourth rule, if you don’t know your destination, any tool will get you there. You need to have a strategy for how the information generated from the tool will be used in a company. Could you speak a little bit about how this rule applies at Whirlpool?
RV: This one is tricky because it is one that a lot of people tend to mess up. Tools are not solutions. Tools don’t give you results, they give you data. If that data is not being used to drive a result, then you’re just getting more numbers. We were slow to understand this. Now, we don’t set ourselves up with a tool before we set up what our outcome is, and that outcome better be linked to our strategy or it’s completely useless. Tools should be used to drive focus – that ties back to your second Golden Rule – and have an output that brings your customer in – your first golden rule – then you know you have the right tool.
JF: Yes, you can’t just purchase the software and then think about what your program looks like afterwards. Moving on to the last of our Five Golden Rules, Without a seat, three legs of a stool are useless. The three legs I’m referring to are: environmental, social and economic perspectives, with the seat of the stool being governance/strategy/management systems within the organization. So please speak a little bit about how the governance of a company really helps to drive the sustainability programs and strategy.
RV: Governance isn’t about one person having ownership, you have to have ownership by other people too, which is critical to success. The more focused you are, the better the governance you have. If you’re trying to govern 20 things, good luck. Enterprise goals are important, but you need to break them down into functional goals and then create ownership on the team’s part so that the goals are achieved. First, you must make sure everyone understands what you are trying to achieve. For example, I have six versions of the same presentation. I do this to tailor my objectives and get buy-in from various audiences and departments within the organization so that they can understand the issue at hand. I’m not going to talk to the marketing team in the same way that I would talk to a development engineer, why would you? Once they understand, then you can let go by creating more ownership from other people.
JF: One final question for you Ron, are there any rules that you might consider adding to this list?
RV: You’ve got to have a positive attitude to create positive impacts. People get more motivated about feeling good and having a positive impact. I read a quote once that really inspired me and that is that ‘Negative people have a problem for every solution.’ You will have a lot of people telling you there is no value in what you are trying to achieve. You have to ignore that. You have a chance to make big impacts both in people and for the planet.
This isn’t a new golden rule, but it’s an attitude that you should have for all the golden rules.