Companies that are built to last need to do more than just go green: All stakeholders must become integral contributors to a passionate mission
The owner of a McDonald's franchise made news recently by opening an eco-friendly restaurant in Cary, N.C. It has energy-efficient refrigerators, low-flow toilets, tables made from sunflower seeds, and even recharging stations for electric cars.
This McDonald's (MCD) is surely going green. But that doesn't make it sustainable.
To many people, sustainability means solar panels, wind turbines, and LEED-certified buildings. And that means that too often, sustainability is parked over by the recycling bins and isn't core to the work. But sustainability is more than just going green or being green. It is, fundamentally, a mindset. It's a way of thinking about business—a mode of leadership and behavior that aims to create lasting value as opposed to piling up short-term transactional wins. It's not as much about wind turbines or solar panels or green buildings as it is about the reason we want those things: so that our companies and our world will be better off tomorrow than they are today.
We need to reframe and reclaim sustainability to take the term beyond "green" and make it relevant to the work businesspeople do every day. We need to recognize that sustainability is a powerful way to forge deeper connections with employees and customers.
Making these deeper connections with stakeholders is more important than ever. Let me offer a brief look backward to explain why. Throughout most of human history, sources of power were finite. In the land-based economy of the middle ages, the more land people owned, the more rent they could charge. In the capital-based economy spawned by the industrial age, the more capital people had, the more interest they could charge. Money talked. So did oil and minerals.
goodbye, command-and-control management
In these zero-sum economies, people accumulated and hoarded the sources of power in order to impose their will upon those who had less. And hierarchical leadership habits arose—such as command-and-control—that worked well enough for a time.
No more. In today's knowledge economy, the sources of power—information and ideas—are infinite. Since we can't hoard information, leadership habits forged under the old rules are less effective. Just as important, people want more than a paycheck from their jobs—they want to feel that they're working with others to accomplish something important that they could not accomplish alone. So we are shifting from "command-and-control" to "connect-and-collaborate," from exerting power over people to generating power through them.
There are some companies that have been around a long time that understand what it means to be sustainable in every sense. DuPont (founded in 1802), Procter & Gamble (PG) (1837), and General Electric (GE) (1878) are all big companies, but their size is not what has kept them going. All have become environmental leaders in recent years, but that's not the key to their success, either. They are sustained by their values and culture, by how they do what they do.
finding meaningful sources of connection
Which brings us back to McDonald's. Like many other large companies, McDonald's now takes an expansive view of sustainability rather than a narrow one. On signs outside its restaurants, McDonald's used to brag that it had served billions of people billions of burgers. In the closed, fortress world, they said: "Look at us—we're big, so we must be successful." In today's more connected and transparent world, McDonald's is finding deeper and more meaningful sources of connection.
Some franchise owners may still post signs about "billions" served, but the company has stopped counting and instead is more likely to talk about values, its workplace, health, and philanthropy. Now, McDonald's tells its employees: Perhaps the single most important thing to consider in a McDonald's career is the role you play in the community.
Protecting the environment is a big part of that community role. McDonald's minimizes the weight of its packaging and maximizes the use of recycled materials. It won't buy beef from rainforest areas. It encourages its suppliers to follow best environmental practices. It's transparent about its activities and engages with outsiders on a company blog devoted to social responsibility called Values in Practice.
the new pardigm: connect and collaborate
Those values go well beyond being green. McDonald's has responded to America's obesity epidemic by offering healthy choices on its menu, being transparent about its ingredients, and even encouraging customers to get more active. The company is trying to connect on values across the board and not just in a siloed approach. It provides training and promotional opportunities for entry-level workers. And like many companies, it gives back to communities, notably through the long-running Ronald McDonald House Charities.
In these tough times, values matter more than ever, and coercion and motivation are becoming less effective and less relevant leadership modes. Leaders can't coerce their people and expect to be sustainable in today's work. And they can't use money to motivate them, either—there's not enough money to throw around. Instead, leaders who aim for maximum impact must inspire their people to connect, collaborate, behave, and perform. And in case you're wondering, I have no commercial relationship with McDonald's. However, I do see McDonald's as an example of a company that is not compartmentalizing its values and is working hard to live them.
Ric Richards, the franchise owner of that eco-McDonald's in North Carolina, gets it. Sure, he's doing the green thing. But it's what's behind those efforts that matters. At the restaurant's grand opening, which was attended by other franchise owners, staff, friends, family, the city's mayor, and yes, Ronald McDonald himself, Richards declared: "Passion is what built this restaurant." And a passion for making the world better is what makes companies truly sustainable.