First in a two-part series
The next morning, Rose checked his email.
“That’s scary,” read one.
“This is amazing,” read another.
“We ought to be able to do something,” read a third.
“I actually had about 75 emails,” Rose recalled in the Guardian six years later. “For me, that was the green light saying, ‘These guys want to do something.’”
That “something” had been kicking around in his head for years, and Rose started fleshing it out for investors: The time is right, he told them, for a new kind of company that will thrive by being “sustainable” across its entire supply chain. That, he said, meant improving everything from the way it interacted with the thousands of small farmers who produce its raw materials to the millions of people who buy its products. He asked investors for £200 million to get the program off the ground – arguing that it would eventually pay off in lower energy costs and reduced risk – and he started telling employees that the company needed to completely change the way it buys, produces, and packages each of the 30,000 products it sells.
It took a while for people to realize just how deep those changes were going to go.
In those three months, the company convened dozens of working groups to assess its resources, clarify its goals, and anticipate challenges. They quickly realized that, due to changes implemented decades earlier, the company already had an advantage over other retailers.
“Ninety-eight percent of what we sell in our stores is our own private-label product,” says Barry. “[That means] we’ve got a good understanding of our supply chains – the factories, the farms, the raw material sources that produce our goods – so we could put in place pretty good standards to make sure bad things didn’t happen.”
But by the time the three months were up, they had something much more ambitious than “making sure bad things didn’t happen”. Specifically, they had 100 concrete commitments to be achieved in five years and ranging from the opening of a model “green” factory to helping disadvantaged and disabled people get jobs to making sure their wood was certified under the Forest Stewardship Council (FSC). The commitments were spread over five areas – climate change, waste, raw materials, fair partner, and health.
But they had a problem.
More on Bionic Planet
This article is adapted in part from episode 17 of the Bionic Planet podcast, which features an in-depth, annotated interview with Mike Barry. Bionic Planet is available at Bionic-Planet.com, as well as on iTunes, TuneIn, Stitcher, and pretty much anywhere you access podcasts. You can also listen on this device here:
There is no Plan B
As they raced towards implementation, the company’s head of internal communications, Robert Nuttall, realized they’d created a massive, complex plan but had forgotten to come up with a way of communicating it.
“Literally two nights before we launched it, he looked across at me and said, ‘Mike, you’ve got this hundred-point M&S sustainability plan, and that’s great. Well done. Greenpeace will love it. But it will mean nothing to 32 million customers or 83,000 colleagues. Give me a little bit of money. I’ll go away and help you invent a brand,’” Barry recalls. “He came back with, ‘Plan A, Because There is no Plan B.’”
Although the plan was to eventually involve all suppliers and consumers, it began by focusing on what the company could achieve on its own.
“What Marks & Spencer owns are lorries, offices, and stores,” says Barry. “But the true impact of any retailer is downstream and upstream: think of all those thousands of factories, tens of thousands of farms, raw materials sources, the cotton fields, the palm oil…and the 32 million customers buying three billion items a year from us.”
The quickest way to ensure sustainable supplies was to work with established standards like Fairtrade and the Forest Stewardship Council (FSC), as well as newcomers like the Leather Working Group, but these only covered a small portion of the company’s products. So Rose began meeting with suppliers bilaterally to see what they could and couldn’t deliver – and says most of them were willing to give it a shot – largely because they saw Plan A as an opportunity to get ahead of the sustainability curve.
Making it Pay
Critically, Rose argued that sustainability should become a pillar of their business plan – one that would spark customer loyalty and improve the company’s operations by making them more efficient (by, say, reducing energy costs) and more resilient (by making sure it had reliable supplies that wouldn’t evaporate with climatic extremes or social unrest).
“We’re very clear that, over the next 5-10 years, there will be real disruption in the marketplace,” says Barry today. “M&S wants to be well-positioned and ready for that disruption.”
But the plan didn’t come cheap: it would cost £200 million to implement, with money going into partnerships with small farmers and energy-efficiency investments, and financial payoffs would take years to materialize. Like Paul Polman at Unilever, Rose had to stare down investors and his own board of directors, and he did so relentlessly.
“Plan A was part of the drumbeat, and every week I would raise the subject,” he wrote. “The fact that I was the person chairing it meant that the senior managers at M&S had to come.”
By the end of 2008, the company had ratcheted up the its reliance on green energy and slashed its overall electricity usage 25 percent per square foot of floor space – a drive that helped Plan A swing into the black by the end of 2009.
But the global economy had slid into a ditch, and customers weren’t buying green in numbers that Rose had hoped. He realized they needed to ramp up their consumer engagement if the plan was to pay off.
“Internally, Plan A has been a powerful change brand, helping 75,000 M&S employees and 2000 suppliers to see the links between activities as disparate as taking trans fats out of food, reducing energy use and promoting Fairtrade,” wrote Barry in a 2009 piece for the UK marketing magazine “Campaign”.
Consumers, however, were slow to catch the bug, and that led to an epiphany.
Click here for Part Two: How Marks & Spencer is Building a Global ‘Sustainability Tribe’.