Last month at a conference for startups in Silicon Valley, I met several people who work at large corporations and institutions. I wondered why people from WalMart, NASA and the company that makes waterproof fabric GoreTex were attending a conference for budding entrepreneurs. Each said they wanted to help their organization be more innovative.
More than a popular buzzword, innovation is the essence of a startup. Steve Blank, the co-author of The Startup Owner's Manual, defines a startup as an organization that "works to solve a problem where the solution is not obvious and success is not guaranteed."
Several years ago I worked at a green social media startup called Greenwala. Our team was excited about the possibility of making a big impact but also knew we would probably need to launch before we were ready. The project felt like taxiing down a runway while we were still bolting wings on a plane. Still, the experience was fun because everyone on the team was so engaged and committed.
Companies that are more established can generate the energy and employee commitment that startups enjoy even if they have already developed a product or service they are happy with. This is where expanding the company’s sustainability program comes in.
Sustainability adds value to the company while using fewer resources. Think about energy efficiency, water conservation, waste prevention, green building and alternative commuting. Sustainability projects not only require employee engagement to successfully implement, they also result in increased employee engagement. Benefits include not only saving money for the company, but improving employee health and increasing employee productivity.
Here are several examples of medium-sized companies that understand the connection between corporate environmental sustainability projects and the best qualities of startups.
1) Sustainability is about innovation
Robert Jones, Marketing Manager at National Raisin near Fresno, CA, believes that his company’s sustainability program is part of what makes them special. He explained:
“Our production process is fairly straightforward. We grow grapes, we dry grapes, we package raisins and we ship raisins. There’s not much that’s innovative about it. But you should have seen our employees when Pacific Gas & Electric came to present a $200,000 rebate check for our 12 million gallon methane digester. Between that and our 3.53 MW of solar, our employees were so proud.”
Robert believes that their sustainability projects are their innovation and help make them “one of the elite companies in Fresno.”
2) Sustainability helps organizations operate better cross-functionally
Startups are generally non-hierarchical, networked organizations that encourage employees from various departments to work together. The open floor plans of startup offices facilitate cross-functional collaboration. Traditionally businesses segregate office functions by department which creates a silo effect and restricts interdepartmental communication. Employee involvement in sustainability projects helps to overcome the silo effect.
A construction company in Austin, TX, started a green team for environmental reasons but ended up enjoying an unexpected separate benefit. Karen Heet, the Sustainability Manager at Journeyman Construction, said:
“One thing that came out of the green team that you wouldn’t think had anything to do with green or sustainability is because we were all in different parts of the company, operations and accounting and such. One of the things we realized, talking to each other on a monthly basis, was that there was no communication across departments.”
Green teams with members from each department also end up operating better cross-functionally because employees with different job functions get to know the challenges and concerns of each other. This results in more empathy and effective problem-solving among colleagues.
3) Sustainability helps retain top talent
For companies that are growing and want to retain their top talent, sustainability projects provide key support. Dave Stuart, a technical services manager at Ghirardelli Chocolate in San Leandro, CA, explains that losing a valued employee is expensive. On-boarding a new person costs about $60,000 including recruiting, relocation costs, lost productivity and training, according to Dave. Ghirardelli is currently making investments in their main manufacturing building and offices because they want to keep the high quality employees they have happy and productive. Many of these upgrades are also measures that green their operations.
What’s interesting about Ghirardelli is that they have a LEED green building, have several electric car chargers, encourage alternative commuting, have switched to reusable transportation packaging and are about to install a large solar system. Yet they don’t mention these sustainability projects on their website. Their sustainability web page talks about the West African farmers from whom they purchase cocoa beans.
4) Sustainability attracts top talent
Thinking beyond the talent a company already has to the talent a company wants to attract, sustainability programs assist here as well. Baby Boomers are starting to retire in large numbers. Many top level managers are struggling to replace them. In order to attract top talent from the Millennial generation, one key differentiator involves sustainability. According to the Journal of Sustainability Education, between 92 and 96 percent of Millennials want to work for environmentally conscious organizations. Recruiting the next generation of workers will be easier for businesses that have already greened their operations.
Sustainability is a journey, not a destination. Companies do not need to achieve ambitious goals of net zero energy and zero waste right away. Consider Auris Surgical, a startup that develops surgical robots. Given the sophisticated technical work the company does, this fast-growing company has an extensive and rigorous hiring process to find top talent. Their employees, mostly in their 20s and 30s, expect the basic green amenities they’ve grown up with: a comprehensive recycling program, bulk snacks that minimize packaging, and bicycle racks for the large number of employees who bike to work. Auris doesn’t call the projects a sustainability program. They consider them the bare minimum Millennial employees demand.
5) Sustainability engages employees
When trying to recruit or retain employees, one goal of Human Resources is to engage employees so they are happy and productive at work. Unfortunately, an annual Gallup poll found that less than one-third of U.S. employees are engaged at work. This number has held steady for the past decade.
While about 30 percent of employees are emotionally committed to their work and their company, 50 percent are not engaged and 17 percent are disengaged according to the Gallup poll. Clearly there is room for improvement and sustainability programs can help.
Susan Hunt Stevens, the founder of WeSpire, a technology company that focuses on employee engagement with sustainability, has found that:
“Employees who engage in the company’s sustainability and corporate social responsibility initiatives have statistically significant increases in their overall engagement rate.”
Evidence of this can be found at American Licorice, a zero waste candy manufacturer in Union City, CA. Joaquin Almaguer, the Safety and Sustainability Coach, credits the company’s employee engagement program as a major reason turnover at the company is so low. Each month the company randomly chooses one employee who takes mass transit to work and gives him or her a $25 gift card. Even small efforts can make a big difference to employees.
Employees who feel appreciated, listened to and engaged are at the heart of successful companies. One element that engages them is a sense of purpose. Sustainability projects lend meaning and help employees feel part of something larger than themselves. The energy and sense of purpose that are alive in startups can be embedded in more established companies through expanded sustainability programs.
One company that particularly understands this connection is Rainin, a lab supply company in the San Francisco Bay Area that makes pipettes for university labs and biotech. David Greenwood, the manager of Quality Assurance and Sustainability, pulls it all together. He explains:
“We consider ourselves fairly green already. It’s one of several things you can do as a package to attract Millennials. One of them is your green message. Another thing is your general work environment. Is it collaborative in the way the furniture is designed and laid out? Do you have conversation areas? Being a green company is definitely a piece of it. My boss and I are planning to take down the cubicle walls to have more of an open office space and bring in a touch of Silicon Valley.”
Companies that are larger and more established than startups are borrowing elements of Silicon Valley’s organizational culture of innovation when they expand their sustainability programs. The benefits these larger companies realize stretches way beyond environmental benefits. David Greenwood from Rainin sums up what they're trying to accomplish when he says "A happy employee does a better job."