ERB PERSPECTIVE BLOG

By Kristin Steiner

fulFillI never dreamt of becoming an entrepreneur. I always imagined an entrepreneur’s life to be filled with long, stressful days constantly in promoting mode, while being fully aware that 90% of startups fail.1

It wasn’t until one day–when throwing away an empty bottle of shampoo–that I envisioned a different way to consume household products: a social venture called fulFILL. At that moment I realized, becoming an entrepreneur was now inevitable.

While tossing the bottle, I paused, appreciating the sheer volume of the product I was about to discard. Technically, I threw it in the recycling bin, which only 34% of people do.2 Then I thought about how recycling also has its flaws.fulfill2

First of all, it’s cumbersome and confusing for consumers. For instance, a waste audit conducted by the Ross School of Business in the spring of 2015 at the University of Michigan found that over 50% of the contents from the building’s 30 garbage cans should have either been recycled or composted.3 Furthermore, the recycling process is energy intensive and it is difficult for waste management businesses to generate a profit. fulFILL is a solution to common plastic waste by focusing on the reuse portion of the reduce-reuse-recycle initiative.

Borrowing from the 1940’s milkman service model, we refill containers conveniently at your doorstep. Customers order their favorite brands of shampoo, lotion, soap, etc., place their empty containers on their doorstep, and we refill them. According to the Environmental Protection Agency, the average American contributes 4.4 pounds of waste every day and plastics are the third largest contributor at 30%.2 Landfills require vast amounts of land, disrupt local habitat, and produce harmful toxins such as methane and leachate.4 Additionally, the price of your typical household product includes a 10-40% markup for packaging.

fulfill3fulFILL is a refill service for household products that seeks to lower these alarming numbers by encouraging a lasting behavioral change that is sustainable, affordable, and convenient. In providing household and beauty products at an affordable price and delivering them, fulFILL also enables all residents to engage in the sustainability conversation, particularly the lower-income and low-mobility communities. These communities have often been left out of this dialogue under the guise that environmental responsibility equates to higher product prices and, in many cases, this is true. However, by purchasing our products in bulk sizes from distributors, fulFILL is able to resell at a lower price compared to the local drugstore, therefore inviting all income levels to shop sustainably.

fulfill3With our mission and revenue model in mind, The fulFill team set out to raise capital, better understand our customers, and test out our business with a pilot run. The funding from our Erb Cool Project allowed us to attend Startup Weekend Detroit where we pitched our business to a group of startup experts/accelerators and entrepreneur hopefuls. It was here that we met a talented web designer who was excited by our idea and was able to launch the first draft of our website in two days. We surveyed roughly 170 residents and gained valuable insight into customer purchasing frequency, brand preferences, and commitment to sustainability. We also received valuable advice on pricing and negotiating with Consumer Packaged Goods (CPG) manufacturers.

Shortly after placing second at Startup Weekend, we learned that we also received a small grant from the Dow Interdisciplinary Award. This allowed us to purchase products, containers, and modest marketing materials. In order to take part in the climate discussion, we entered the MIT Climate CoLab competition, a global competition to create proposals and solutions to climate change. fulFILL was fortunate enough to make it to the final round and won the Judges Choice Award in the Waste Management category.

Eight months after the idea was born, co-founder Brittany Szczepanik (dual MS SNRE / MSE CoE, seen on the right in the above photo) and I are proud to call ourselves social entrepreneurs and to constantly be promoting our business. We are passionate about our mission – to lower our individual waste contribution, one bottle at a time – and we thrive on the daily challenges that come with launching a startup. Now officially open for business, we are in the midst of marketing to densely populated apartment buildings and senior citizen communities in Ann Arbor. Look for fulFILL, coming to your doorstep soon!

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1  Forbes. Jan 2015. “90% Of Startups Fail: Here’s What You Need To Know About The 10%”
2  U.S. Environmental Protection Agency (EPA). 2011. “Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Facts and Figures for 2010.”
3  University of Michigan Planet Blue. Feb 2015. “Ross School of Business Waste Audit and Waste Education Day”
4   Environment Victoria. “The problem with landfill.”

 

With her 8+ years of project management and sustainable engineering expertise Kristin is interested in becoming a leader in the clean technology industry. Combining her previous work experience, her business acumen from the Ross School of Business, and her technical expertise from the School of Natural Resources and Environment she hopes to be instrumental in finding business strategies or managing innovative products in the renewable energy space.

 

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By Sean Pavlik

Sean Pavlik (Erb 2018) at the 2016 Green Sport Alliance Summit at Houston’s Minute Maid Park.

Sports organizations are increasingly leveraging their cultural and market influence to promote sustainable communities. Last month, I had the opportunity to attend the 2016 Green Sports Alliance Summit at Minute Maid Park in Houston, Texas where I heard stories on this topic from a wide array of sports practitioners and league representatives. A longstanding interest of mine, the intersection of sports and sustainability is at the forefront of my SNRE master’s project work with the National Football League’s (NFL) Green Bay Packers.

The Green Sports Alliance (GSA) is the leading organization working on sustainability issues with professional and collegiate sports teams, venues, and events. Established five years ago in the Pacific Northwest with just a few local teams, the GSA now counts over 370 teams and venues among its membership. Below are a few takeaways and observations from last month’s Summit.

Teaming Up With the Community
At the Summit I spoke with Linda Gancitanois, who was honored by the White House last year for her work as the founder of the “How Low Can You Go?” energy challenge in Florida. Teaming up with the National Basketball Association’s (NBA) Miami Heat, the program connects 80 local schools in a friendly and educational energy-saving challenge. Each year, the winning schools are recognized on court at a Miami Heat game during the NBA’s Green Week. For the 2015 challenge, participating schools saved an impressive 1.5 million kilowatt hours of electricity and lowered their energy bills by nearly $150,000.

Striking Corporate Partnerships
Collegiate sports programs such as the University of Colorado at Boulder and the University of Texas at Austin have established sustainability partnerships with corporations such as BASF, Wells Fargo, PepsiCo, White Wave Foods, and Coca-Cola. Sponsorships such as these are a true win-win for both parties. Athletic departments have greater capabilities to take their sustainability programs to new heights while the corporations receive positive recognition that boosts their on-campus recruitment efforts.

The University of Colorado’s sports sustainability efforts are perhaps the most advanced in the nation. Among their recent initiatives, the University athletic department teamed up with corporate sustainability partner Wells Fargo to launch its Water for the West Campaign in early 2016. The Campaign aims to raise awareness of water conservation in the region through a pledge campaign and in-game interactions such as the Wells Fargo “Make it Rain” half-court shot competition at basketball games.

Innovating the Built Environment
Beyond partnerships, sports venues and events are increasingly incorporating sustainability into the design phase. LEED certification has been achieved by over 30 sports venues worldwide, and the NBA’s Sacramento Kings and NFL’s Atlanta Falcons are aiming for a LEED platinum standard for their new stadiums, which would be a first. Both venues will incorporate innovative cooling features to allow the facilities to “pre-cool” before games by opening wall or roof panels, reducing the energy spent on air conditioning.

While the LEED standard largely focuses on environmental sustainability, the WELL Building Standard is focused on ensuring that buildings should be developed with people’s health and wellness at the center of design. The WELL Standard is based around seven main concepts: air, water, nourishment, light, fitness, comfort, and mind. Although relatively in its infancy, the WELL standard is being used in the development of Los Angeles’ 2024 Olympic bid.

Looking Forward
Attending the Summit in Houston showed me that there is great momentum within sports leagues, teams, and venues to use sports’ public influence to advance sustainability in our communities. Catalyzing efforts from organizations like the Green Sports Alliance are key to expanding this movement to both the local and international levels, with the power of partnerships apt to play a major role.

 

Sean comes to Erb after spending three years working at the intersection of government and business in Washington, DC, and two years teaching abroad in Japan. He has experience in project management, energy markets and policy, international politics, government affairs, and the non-profit sector. In his previous position in Washington at a congressionally charted NGO, he led international legislative exchange efforts with key U.S. allies focused on energy, trade, and security issues. Highlights include organizing and leading four U.S. congressional delegations to Japan, the most recent of which visited Fukushima, Tokyo, and Hiroshima in May 2015. Sean is a 2010 graduate of Northwestern University, earning his B.A. in Environmental Sciences (with honors) and International Studies along with a Certificate of Distinction in Japanese Language. During his three years at Erb, Sean looks forward to exploring corporate sustainability and renewable energy efforts in the U.S. and globally, starting with an Summer 2016 internship at Rocky Mountain Institute’s Business Renewables Center in Boulder, Colorado.

 

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By Mikaela Rodkin

 

Our team with Kevin McManus, a veteran in Daleville AL and founder and CEO of Discovery Recycling.

Across America, 89% of businesses employ less than 20 people. These small organizations represent the backbone of our economy.

On May 1, 2016 I set out on a five week road trip as part of Ross Open Road with three other Ross MBAs to discover the heartbeat that keeps these businesses going. The premise of Open Road, formerly MBAs Across America, is simple: five weeks in five different cities with five different social impact or community minded entrepreneurs.

For the entrepreneur, our group becomes part of their team and they benefit from some of the MBA knowledge we have gained over the past year. For us, it is an opportunity to understand the unique struggles and triumphs of a woman that was inspired to pivot from her career following the 2010 BP Oil Spill, or a family that has survived 28 years of community changes to become a beacon of stability in their neighborhood. Over the course of our five weeks on the road, our team endeavored, to push the needle even just a small bit further in the work they are committed to.

For myself, I couldn’t have known the impact these five weeks would have on everything from my understanding of the word “entrepreneur,” to the grit, self-doubt, passion and vital partnerships that characterizes the daily lives of the vast majority of business owners in the United States.

With teammate Iris Nguyen at Wiregrass Rehabilitation Center in Dothan, AL – a community partner of Discovery Recycling.

With teammate Iris Nguyen at Wiregrass Rehabilitation Center in Dothan, AL – a community partner of Discovery Recycling.

The Process

In our planning process, our team deliberately chose a diverse group of entrepreneurs with a range of backgrounds and experiences, cross-cutting geographies, company missions and methods of delivery. For example, we tackled a Thanksgiving holiday operational model and costing analysis for the Thomas’ at Sweet Potato Sensations in Detroit; value chain definition and best practices of the e-cycling space for Kevin McManus at Discovery Recycling in Daleville, AL; a pro forma and scenario-based analysis for Tippy Tippens with Goods that Matter in New Orleans; human resource structure and communication plans for Claire Morel with AMP360 in Austin, TX; and an analysis of Connecting for Good’s model effectiveness for Tom Esselman in Kansas City.

Prior to the start of every week, we had a series of calls to determine where we could make the greatest impact. One of the sole consistencies in our work was meeting the entrepreneur where they were in their journey, and ensuring that our suggestions were relevant to their needs and maturity as a company. Our time wasn’t about making change for five or ten years down the road; it was about making an impact tomorrow.

My initial motivation to spend five weeks with Open Road was twofold. First, I want to maximize the MBA/MS – to pursue as many interests as possible to maximize the completeness of my graduate experience. My second reason was empathy. Despite having traveled the world in the Navy, there are entire social ecosystems I do not understand. Open Road was the opportunity to push myself out of my comfort zone, listen more than I speak, make a positive impact with partner entrepreneurs and form a bond with my three other travelers in five short weeks. Throughout it, I learned five paramount lessons.

 

Our final day with Sweet Potato Sensations in Detroit, going over an activity-based cost accounting spreadsheet with family co-owner Jeff Thomas.

Lesson 1: Entrepreneurship is not synonymous with Silicon Valley, Venture Capital, or Technology.

Before Aaron, Blake, Iris and I met with the Thomas family at their restaurant Sweet Potato Sensations in Detroit. Observing a steady stream of local patrons order their famous sweet potato pies, we began to understand how our perceptions of entrepreneurship would be challenged. Espy Thomas, Jeff and Cassandra’s daughter, relayed to us the dominant narrative that Sweet Potato Sensations was often viewed as anything but entrepreneurial. At 28 years old, it is neighborhood icon in an economically depressed area of Detroit. Sweet Potato sensations is often overlooked by a burgeoning community of sexy co-working spaces, bourgeois textiles and high-tech apps contributing to Detroit’s urban renewal.

Working alongside the Thomas’, not only did I see entrepreneurship in their support of the community and other local businesses, but I also saw a family-run business that has survived 28 years of community turnover, politics transformations, and difficult economic realities. Through it, they have adapted and grown while maintaining their commitment to the ideals and deliciousness that inspired their business in the first place.

 

Claire Morel, founder of nonprofit AMP360 in Austin, TX in Urban Co-Lab. AMP360 is addressing the systemic issues around justice-affected individuals through education and employment empowerment.

Claire Morel, founder of nonprofit AMP360 in Austin, TX in Urban Co-Lab.

Lesson 2: An entrepreneur cannot stand alone, even with the best of ideas.

“Tippy isn’t about making a buck, she is about making a difference,” one of Tippy Tippen’s, Chief Eternal Optimist of Goods that Matter, retail partners in New Orleans. From Detroit to Kansas City, we saw the critical contribution of community support in helping a small business survive. This thinking was also continually reflected back by the community partners about their local entrepreneurs. A successful entrepreneur truly has an ecosystem of suppliers and buyers, believers, supporters, and champions. “Networking” is a term that we throw around the Winter Garden at Ross to relate to recruiting, or getting to know our fellow MBAs. Never once did I hear the word “networking” with the entrepreneurs. It was about finding people that connected to the work they were doing, and about the countless hours that went in to nurturing, building upon and giving back to their community. Despite the incredible differences in geographies, missions and organizational structures of the entrepreneurs this idea of the community and their place within it was a constant.

 

Karita Matlock, Program Director for Connecting for Good in Kansas City, explaining the refurbishment and hardware access part of CFG’s mission.

Karita Matlock, Program Director for Connecting for Good in Kansas City, explaining the refurbishment and hardware access part of CFG’s mission.

Lesson 3: “Entrepreneur” is rarely used as a form of self-identification.

It was interesting to see the variability in how entrepreneurs self-identify. Despite having started a company in my first year at the School of Natural Resources and Environment with three other graduate students, I still struggled with the self-identifying as an “entrepreneur.” Each of the five individuals we partnered with identified as the thing they were trying to create: maker, recycler, and cafe owner. This concept underscores the importance of exposing MBAs to small organizations – it’s about redefining business categories, and of reconsidering the labels that are applied to business.
 
 
 
 
 
 
 
 
 
 
 

Tippy, Chief Eternal Optimist, of Goods that Matter in New Orleans is no stranger to tough times, and also triumphant ones.

Tippy, Chief Eternal Optimist, of Goods that Matter in New Orleans is no stranger to tough times, and also triumphant ones.

Lesson 4: Passion and self-doubt go hand-in-hand.

Starting something new, adapting to changing times, evolving your brand and building a support base that empowers success, is exhausting. It requires immense amounts of energy, even on days that you have none. Despite the glory often attributed to being an entrepreneur in today’s media, for small businesses and entrepreneurs it is a constant struggle of identity and the often unanswered question of “am I doing what I should be doing with my life?”

To our team, on the outside, it was easy for us to proclaim “Yes! What you are doing is important, it is necessary!” Our team found that,if nothing else, this external validation and support was paramount to any other advice we could have provided.
 
 
 
 
 
 
 
 
 
 
 
 

CEO Tom Esselmen and Co-Founder Rick Deane at Connecting for Good in Kansas City, are working to bridge the digital divide through a holistic, wraparound approach.

CEO Tom Esselmen and Co-Founder Rick Deane at Connecting for Good in Kansas City, are working to bridge the digital divide through a holistic, wraparound approach.

Lesson 5: Whether or not someone has an MBA, business is a tool for social good.

During my dual-degree experience, I have heard of numerous examples of social intrapreneurship and social enterprises reshaping the way that business can contribute to issues of social and environmental justice. This thinking was constantly reinforced during our Open Road experience.

As graduate business students we are afforded an opportunity to think about the difference we want to make in our world, and we have a plethora of people to inspire us along the way.
 
 
 
 
 
 
 
 
 
 

Open Road will stand as one of the most important experiences as an Erber. My team had an opportunity to bond deeply over issues around social impact, business for good, and the future projections of our careers. We also encountered numerous adventures and misadventures along the road, living through everything as a unit. Ultimately, the most rewarding aspect was the relationships we developed with the entrepreneurs. Each week we tore ourselves away from a small community that we had built. Throughout Open Road and into the rest of the summer, we continued to circle back to the five entrepreneurs, to share in their progress on the work that we did together. This was the truly transformative element of our journey; hearing the entrepreneurs talk about the impact we built together.
MAP, Master’s Project – everything about Erb is to drive that hands-on, engaged experience with the world. Open Road was a full embodiment of that. The lessons I’ve learned from my five-week Open Road experience will be with me for a long time to come.

Mikaela traveled to Detroit, Southeast AL, New Orleans, Austin and Kansas City as part of Open Road working with Sweet Potato Sensations, Discovery Recycling, Goods that Matter, AMP360 and Connecting for Good.

 

Mikaela is interested in sustainable food systems, particularly in regards to food processing, consumer choice and sustainable agricultural practices. While at University of Michigan, she is focusing her studies on innovation solutions to issues relate to food access with a multidisciplinary team for Innovation in Action, and researching a certification for sustainable cattle farming in Brazil for her SNRE Master’s Project. Prior to joining the Erb class of 2017, Mikaela served for over six years in the U.S. Navy as a Surface Warfare Officer. Serving aboard two warships, Mikaela deployed to the Persian Gulf and South China Sea. During her time overseas, as well as during a 10 month round the world independent travel in 2013-2014, Mikaela became increasingly interested in the intersection of culture, business and politics of food in a domestic and international context. Mikaela graduated with a B.S. in Political Science from the U.S. Naval Academy in 2007. In her free time, she enjoys hiking, traveling and writing.

 

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By Montana Stevenson

21266319392_a0b2edb6db_oFrom trying to hold multiple crates of fruit to discussing the feasibility of market solutions, balance became an idea that I repeatedly thought about during my 2015 summer internship with the Arcadia Center for Sustainable Food and Agriculture’s mobile market.

Arcadia operates a mobile farmer’s market that makes 19 stops a week in the Washington, DC area. The mobile market consists of an old school bus and a box truck outfitted with freezers and external market shelves for customers.

Arcadia’s mission is to bring sustainably grown fruits, vegetables, meats, eggs, and dairy products to neighborhoods in DC that don’t have access to weekly farmers’ markets at an affordable price.

This is a difficult balance to strike. A sustainable product is often more expensive. Combined with the need to support the logistical challenge of getting the product to 19 neighborhoods, the price to
customers in these neighborhoods would normally be high. To combat this problem of affordability, Arcadia raises funds through grants and donations to increase their customer’s purchasing power. They accept all forms of federal food benefits like SNAP dollars, Senior Farmers’ Market Nutrition Program checks, Produce Plus, and WIC Farmer’s Market Nutrition Program checks. Through grant funding, Arcadia is able to cover the cost of doubling the value of many of those benefits so that customers spending their federal benefits can buy more food at the market.
As part of my internship, I surveyed customers about their experience shopping at the mobile market and also asked them about where they shop for their groceries.

Key Findings:21088973658_b816a0478c_o

  1. Price is often a top concern for people shopping at the market. While some customers felt that the prices at the Arcadia market were too high, others felt that the prices were justified by the higher quality of the food.
  2. Most customers reported eating the majority of their meals at home and therefore spent significant time shopping for food to prepare at home. Many expressed dissatisfaction with the quality of the produce in the grocery stores and supermarkets they shopped at, which were often the one’s that were closest to their homes or places of work.
  3. Customers wanted more produce variety. Arcadia is certainly limited in the amount of variety it can provide when compared to a traditional farmers’ market because it is only one vendor and so can only sell what it can fit in its vehicles.

21088763710_986627afa8_oA lot of customers appreciated the Produce Plus program and Arcadia’s matching of federal food benefits, which increase the affordability of healthier, sustainably grown foods.

Though some customers balked at whether to buy certain varieties of beans or plums, there was also a large contingent of customers, particularly older customers, who shared stories of growing up on a farm, or, as some people put it, “in the country.” Many in this group expressed excitement about seeing a vegetable or fruit variety that they hadn’t seen in a store but had eaten as a child. Now they could purchase that variety right in their neighborhood.

Today, there is much discussion of the opportunity to use market solutions to solve social problems. In Arcadia’s case, sales cover a percentage of the market operation costs and by increasing the numbers of market stops and the volume of food sold, the organization hopes to increase the percentage of costs covered through sales.

This brings me back to the idea of balance and how this organization is seeking to fulfill their mission while also increasing their financial sustainability. I think it is very rare that a pure market solution can address a social issue. I think what actually ends up happening in many cases is a nonprofit or social business finds a balanced solution. For example, relying on sales from both low and high income customers, or on a mixture of sales, donations, grants, and/or government support, to successfully achieve their mission.

21250610406_1226b4ed8f_o

 

Montana joined the Erb Institute after four years working in international development on microfinance and health projects in sub-Saharan Africa. She provided project management and communications support to an international health project funded by the U.S. government. Prior to that she spent 10 months working in Uganda & Kenya for a microfinance initiative, where she helped launch new village-level loan programs, conducted surveys with program clients about experiences with banking and managing a business, and worked with a local bank to develop protocols for a transition to independent banking program. While at Ross/SNRE, she is looking to shift gears to focus on sustainability in the U.S. food system. She is particularly interested in how to bring healthy, sustainably grown food to market while reducing the creation of food waste.

 

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By Matt Gacioch

23387958490_f361c8328f_oPrior to my 2015 internship at Rocky Mountain Institute (RMI), I had preconceived thoughts on the activities and effectiveness of think tanks. Perhaps more than I should admit, I had the image of a group of smart people contemplating some of the most daunting problems of our day. In my mind’s eye, those thinkers were largely isolated from the world where those problems lived. It is with this mindset, that I entered the Transportation practice at RMI where I hoped to gain a better sense of the space think tanks occupy in a world of markets, politics, communities, and the environment. What follows are observations on that role, within the specific context of RMI.

Closing Gaps
The space between technology and business is sometimes more cavernous than technophiles would tend to expect (or desire). Whether it’s institutional inertia or lack of information or an expectation that consumers will adhere too closely to their status quo bias, even smart strategic innovations can simply be overlooked. Fortunately, think tanks are often funded specifically to bring good ideas to market faster. For example, RMI’s Business Renewables Center (BRC) was established to take existing off-site renewable energy technology and accelerate adoption by corporate partners, many of which already have clean energy goals.

Acting as Liaison
Think tanks are seen as trusted advisors. They can be resources and consultants at many different levels of government to help convey the science that underlies decision-making. Further, government representatives have utilized think tanks in the development of economic plans supporting initiatives to achieve specific objectives (e.g. a “clean, prosperous, and secure energy future” in the case of RMI).

Citizens can also utilize think tanks as reliable interpreters of information from academia, government, or the private sector. For example, RMI’s Devi Glick (SNRE/SPP ‘12) put together this synopsis of President Obama’s Clean Power Plan.

Arena for Entrepreneurship
When a group of some of the world’s experts collaborate together on solving difficult problems, it’s perhaps no surprise that innovative for-profit businesses ideas sometimes emerge. RMI’s work on lightweighting automobiles in the early 2000s spun off into Hypercar Inc, which then turned to manufacturing and broadened its scope to become Fiberforge Corporation.

Pushing the Limits of Innovation
The usefulness of think tanks in the world of business is often tied to the fact that so many members of the organization come from outside the world of research. It’s quite powerful when ex-corporate executives, engineers, etc. are suddenly able to unabashedly explore whole systems solutions without being constrained by siloed corporate structure. Whether opening up a process of collaboration with a corporate partner or simply providing insight from internal collaboration, think tanks can adjust paradigms that benefit corporations and even full industries.

 

Matt works to mesh the power of business with the influence of public policy within the context of a universal climate and environment. His aim is to fundamentally redirect the way humans interact with their natural and social surroundings, to move towards a path of intergenerational “sustainability” through implementable business solutions. (Editor’s Note: This goal is not too lofty).

 

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By: Carolyn Kwant

Every month the Erb Institute for Global Sustainable Enterprise highlights a particular area of interest surrounding sustainability. This month the Erb Institute focuses on business sustainability; which is central to everything that our institute stands for. The timing could not be better as we highlight partner, Ford Motor Company as it announced a seismic shift in its business model this week; pivoting to be both an auto and a mobility company on June 15, 2016.

Henry Ford famously said, “Great businesses do well by doing good.” Ford is continuing this legacy, harnessing innovation to navigate the significant and complex global issues of climate change, supply chain sustainability and human rights.

Ford-Gives-Back

The Ford Motor Company is clear that mobility is a critical part of the answer.

Why? (UNEP: World Business Council for Sustainable Development)

  • “The Mobility Divide” – Lack of access to transportation and information are both symptoms of poverty and key factors in keeping families, communities and nations poor.
  • “By 2050 the world is forecasted to rise to 9 billion, with most living in India, China, Africa and Latin America. Unless this population can be brought into the global market, two thirds of the World’s future population could be living in poverty.”
  • “Increasing mobility is associated with economic growth and development:
    • It connects people to jobs, markets, essential services and political representation.
    • It enables business to contribute to development, by serving new markets and unlocking new resources.
    • It reduces the trade barrier effect of costly and unreliable transport, enabling poor regions and nations to become more competitive.”

In this brief video, Ford highlights one of its signature initiatives: Project Better World, providing vehicles and services to meet the critical mobility needs of underserved communities. This initiative brings medical care and supplies through partnership with Riders for Health to rural parts of Nigeria, as well as helping remote areas reached by World Vision South Africa where improved connectivity serves multiple needs in underserved populations. Ford is on an exciting path and we here at Erb are excited to see where this takes them next.

 

Carolyn-crop-formal-webCarolyn is the Marketing and Communications Manager and comes to the Erb Institute with a varied set of roles and experiences from companies such as, Unilever, Sears Catalog and Lintas: Campbell-Ewald. A consulting opportunity at The New Center in Ann Arbor afforded Carolyn an opportunity to explore marketing in the non-profit arena. More recently, living as an ex-pat in China, she worked in the Marketing Department of the Concordia International School of Shanghai to improve their communications and presence with respect to elite international programs in Asia. Carolyn holds a B.A. from The University of Michigan and an M.B.A. from the Kellogg Graduate School of Management (Northwestern). Carolyn is most interested in the power of market forces to effect real and lasting change toward sustainability.

 

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By: Jenna White

I left Ann Arbor on May 3, 2015 and within 24 hours found myself in the Kyaka II refugee settlement in Uganda. Kyaka II was established in 1983 as a settlement for Rwandan Tutsi refugees. Kyaka II later received Rwandan Hutu refugees, refugees from Burundi, the DRC and a few from Ethiopia and Somalia. In 2005, the influx of refugees from the DRC increased the population of Kyaka II to over 17,000. Currently, there are 1600 refugees, mainly from the DRC.

Kyaka II is a ‘settlement’ rather than a ‘camp’ meaning that self-reliance and freedom of movement of refugees is encouraged. Refugees in settlement are encouraged to cultivate food, and food rations are decreased over time. The idea of self-reliance indicates a need for economic opportunities. One such opportunity is employment at the MakaPads facility.

I was lucky enough to be invited by Dr. Moses Musaazi, the innovator behind MakaPads to conduct a Social Life Cycle Assessment of his company. MakaPads produces sustainable sanitary pads out of papyrus reeds. The pads are the only trademarked biodegradable sanitary pads made in Africa. Biodegradable pads are a necessity in Kyaka II as traditional pads soak up excess moisture and quickly fill up pit latrines. Incinerating pads, washable pads, tampons, and cups are not viable options for various cultural reasons.

In response to a need articulated by the UN for a solution to the problem of disposable pads, Dr. Moses developed a low-technology method for using abundant papyrus which can be harvested for free and using the pulp as the absorbent for the pads. The majority of the operation does not require electricity, and is heavily dependent on manual labor – intentionally.

MakaPads was developed as a way to solve the environmental problems caused by traditional pads, and also to provide employment to refugees. I intended to capture the full social impact of the company using the UNEP’s Social Life Cycle Assessment (S-LCA) tool. However, I quickly realized that the social impact of MakaPads was much more than could be distilled into an Excel spreadsheet.

It became clear that income generated by MakaPads allowed employees to feed their families without relying on food rations, send their children to school, and in some cases start up side businesses. I interviewed all 40+ employees at the facility. At the end of each interview I asked them how their lives had changed as a result of working for MakaPads. Many interviewees became quite emotional as they shared their stories. Many had been forced into a life of stealing, even prostitution in order to provide for themselves and their families. Having a reliable income and steady employment has helped to restore their dignity and to provide many with hope for the future. As one employee stated, “before I had this job I did nothing all day. I just sat around and was depressed. Now I have hope.”

Not surprisingly, there is no line item for “hope” on the UNEP’s S-LCA. However, by going to the camp and interviewing employees I was able to see what measurement tools cannot capture. I am still a believer in the importance of measuring social and environmental impacts, but this experience served as a profound reminder, that some of the most powerful impacts of business (restoring dignity, providing hope) are not easily quantified.

 

Learn more about MakaPads’ story and see how their products are made:

Jenna at the MakaPads facility at Kyaka II next to bundles of pads that are ready for final packaging.

Jenna at the MakaPads facility at Kyaka II next to bundles of pads that are ready for final packaging.

MakaPads intentionally employs more women than men.  However, men are recruited for specific jobs including harvesting and chopping of the papyrus.

MakaPads intentionally employs more women than men. However, men are recruited for specific jobs including harvesting and chopping of the papyrus.

Much of the production of MakaPads is outdoors.  Employees manually mix the ingredients and let them dry in the sun.

Much of the production of MakaPads is outdoors. Employees manually mix the ingredients and let them dry in the sun.

Employees dip specially designed trays to create sheets of absorbent.  The trays are then left on racks to dry.

Employees dip specially designed trays to create sheets of absorbent. The trays are then left on racks to dry.

Makapads uses different blends of ingredients in their sheets.  In the background is a batch using more papyrus that is in the drying process.  The MakaPads employee is producing a different layer that uses more recycled paper.

Makapads uses different blends of ingredients in their sheets. In the background is a batch using more papyrus that is in the drying process. The MakaPads employee is producing a different layer that uses more recycled paper.

After sheets are dry enough to be cut off of the trays they are placed on the ground under the sun to continue drying.

After sheets are dry enough to be cut off of the trays they are placed on the ground under the sun to continue drying.

The ladies in the who work on sealing pads share a few laughs.

The ladies who work on sealing pads share a few laughs.

Jenna has 8+ years of experience as a strategy consultant at boutique firms, and as an independent contractor. She has experience leading engagements with public and private sector clients including Fortune 500 corporations, multilaterals, private foundations, and nonprofits.

 

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By Kristine Schantz

23055469194_a81cc16788_kWith the end-of-the year rush, graduation celebrations and goodbyes now behind us, we are setting forth on the exciting but uncertain next phase of our lives. We have been offered an incredible privilege to re-enter the workforce with brand new opportunities; one that also comes with tremendous responsibility as future business leaders.

We are beginning this next phase of our careers and lives in an incredibly complex world. Here in the U.S., political polarization has created a widening gap between conservative and liberal thinkers, limiting productive dialogue and shared purpose. Our sense of security is questioned as violent acts target people while doing everyday activities, like going to work or enjoying an evening out. Our natural environment – the resources we depend upon and the air we breathe – is at risk due to the strain we have placed on it through human activity.

We have discussed and even experienced many of these challenges here at UM through classes, action-based learning and leadership development opportunities. We have been guided by our talented peers, faculty, staff, alumni, visitors and the broader campus network. We have been pushed in classes that challenge us and by perspectives that question our outlook on the world. We are different people walking out UM’s doors than we were walking in.

Of course, this is only the beginning, though. What we have prepared for over the past two or three years we must now actually do! And the expectations of business have only expanded. Yesterday’s commitment to maximizing shareholder value is today’s commitment to the “triple bottom line:” not only profit, but also the people and planet impacted by our business choices. The hard reality is that we cannot continue on the path we are currently on, and also expect ongoing and unlimited growth along with a healthy and productive future.

In our lifetime, we have been fortunate to operate in a world with relatively minimal resource scarcity. If water is low here, we pipe it in from there. If a mineral stock is short, we simply dig deeper. When labor becomes expensive, we relocate to where it costs less. But this is not, or unfortunately cannot be, the reality of the future. In the future, there will not be a new place to shift production or a new natural resource stock to tap. So we have to act today, as business leaders, to make some changes to ensure our collective future.

But, isn’t this something we can task our “sustainability” or “CSR” departments with doing? After all, that’s what us Erbers are for, right? None of us is responsible for solving these issues alone, but each of us is responsible for doing something. Mahatma Gandhi once said, “Whatever you do will be insignificant, but it is very important that you do it.” So, what role do you see business playing in addressing these challenges, and how will you, and we, be a part of this?

The truth is that no one here can solve climate change or global human rights abuses alone, but together we represent an incredible potential, re-entering the work force with the belief that we can do things differently, and maybe even better. Together we will establish the expectations and norms around what business is and is not. So whether or not you have “sustainability” in your job title and whether you work for a small social enterprise or large corporation, we – as business leaders – will play a crucial role in defining how the business world handles the environmental and social challenges before us. In fact, I believe that we need responsible leadership in traditional business functions – Operations, Finance, Marketing – even more than we need another social enterprise.

What do I mean by responsible leadership? As a supply chain manager, you get to know the conditions and concerns of the workers who produce and transport your company’s products. As a strategy manager, you encourage diversity and creativity of thought so that employees with innovative solutions are heard and supported. As a financial analyst, you find new ways to consider non-financial impacts, like human rights and carbon emissions, when assessing a new project. Of course none of these actions alone will reverse the collective impact of our actions to date, but they will build awareness, interest and compassion, which together ultimately serve as the foundation for meaningful progress.

Our world is undoubtedly complex, and our challenges intimidating. Perhaps one place to start, then, is with what we care most about and hope most passionately for in the world around us. Do you hope for a more peaceful future? A more equitable distribution of opportunity? A healthier natural environment? Whatever your hope is for the world around you, how will you use business to make it a reality?

As we step forward into our new roles as global business leaders, let us think about the contributions we can each make to ensure that business is used as a force for good. Let us build upon the lessons we learned on and off this campus about positive leadership and impact, and show that UM really does develop leaders who make a positive difference in the world.

 

Kristine joined the Erb Institute after nine years of international development work in Africa, with a focus on stakeholder engagement and program management in the field of community economic development. While Director of Programming and Training for the Peace Corps in Guinea, Kristine earned a Meritorious Honor Award from the State Department for her role in safely evacuating and successfully rebuilding the Peace Corps program over two years amid ongoing political instability. Kristine’s experiences in developing contexts have shaped her passion for complementary and collaborative action to address human challenges. Her work with Nike in supply chain, Fiat Chrysler Automobiles in supplier engagement and Apple in conflict minerals have honed her experience in supply chain sustainability and responsible sourcing. Kristine graduated summa cum laude from Hope College with a B.A. in Management. At the University of Michigan, she held fellowships from the Center for Positive Organizations, Center for the Education of Women, Dow Sustainability program and Peace Corps; she was also a Graduate Student Instructor at the School of Natural Resources and Environment. Kristine enjoys running, cooking naturally and spending time with loved ones, including walks with her beloved Guinean dog Olive.

 

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Joe Arvai, University of Michigan

So-called “nudge units” are popping up in governments all around the world.

The best-known examples include the U.K.’s Behavioural Insights Team, created in 2010, and the White House-based Social and Behavioral Sciences Team, introduced by the Obama administration in 2014. Their mission is to leverage findings from behavioral science so that people’s decisions can be nudged in the direction of their best intentions without curtailing their ability to make choices that don’t align with their priorities.

Overall, these – and other – governments have made important strides when it comes to using behavioral science to nudge their constituents into better choices.

Yet, the same governments have done little to improve their own decision-making processes. Consider big missteps like the Flint water crisis. How could officials in Michigan decide to place an essential service – safe water – and almost 100,000 people at risk in order to save US$100 per day for three months? No defensible decision-making process should have allowed this call to be made.

When it comes to many of the big decisions faced by governments – and the private sector – behavioral science has more to offer than simple nudges.

How to decide how to help Syrian refugees? REUTERS/Marko Djurica

How to decide how to help Syrian refugees? REUTERS/Marko Djurica

Behavioral scientists who study decision-making processes could also help policy-makers understand why things went wrong in Flint, and how to get their arms around a wide array of society’s biggest problems – from energy transitions to how to best approach the refugee crisis in Syria.

When nudges are enough

The idea of nudging people in the direction of decisions that are in their own best interest has been around for a while. But it was popularized in 2008 with the publication of the bestseller “Nudge“ by Richard Thaler of the University of Chicago and Cass Sunstein of Harvard.

A common nudge goes something like this: if we want to eat better but are having a hard time doing it, choice architects can reengineer the environment in which we make our food choices so that healthier options are intuitively easier to select, without making it unrealistically difficult to eat junk food if that’s what we’d rather do. So, for example, we can shelve healthy foods at eye level in supermarkets, with less-healthy options relegated to the shelves nearer to the floor.

Likewise, if we want to encourage more people to be organ donors, choice architects can design the form we fill out at the DMV so that the choice we make without thinking is the one that may allow us to save someone’s life in the future.

In my own research group, we lump these kinds of interventions under the umbrella of passive decision support because they don’t require a lot of effort on the part of a decision-maker. Indeed, these approaches are about exploiting – not correcting – the judgmental biases that people bring with them to all manner of decisions, large and small.

Since the publication of “Nudge,” there has been a proliferation of interest in bringing choice architecture into the policy mainstream. Even institutions like the World Bank and the Organization of Economic Cooperation and Development are rolling out their own nudge units. And, you shouldn’t be surprised to learn that the private sector has jumped on the increasingly crowded bandwagon of for-profit nudging.

We’ve successfully tested nudges for water conservation and sustainable food choice. Others have applied nudges to an even broader range of contexts. There’s no denying that choice architecture can work like gangbusters, which explains the widespread interest.

Sometimes a nudge isn’t enough

Nudges work for a wide array of choices, from ones we face every day to those that we face infrequently. Likewise, nudges are particularly well-suited to decisions that are complex with lots of different alternatives to choose from. And, they are advocated in situations where the outcomes of our decisions are delayed far enough into the future that they feel uncertain or abstract. This describes many of the big decisions policy-makers face, so it makes sense to think the solution must be more nudge units.

But herein lies the rub. For every context where a nudge seems like a realistic option, there’s at least another context where the application of passive decision support would be either be impossible – or, worse, a mistake.

Climate change is an example of a 'wicked problem' facing society. REUTERS/Sean Gardner

Climate change is an example of a ‘wicked problem’ facing society. REUTERS/Sean Gardner

Take, for example, the question of energy transitions. These transitions are often characterized by the move from infrastructure based on fossil fuels to renewables to address all manner of risks, including those from climate change. These are decisions that society makes infrequently. They are complex. And, the outcomes – which are based on our ability to meet conflicting economic, social and environmental objectives – will be delayed.

But, absent regulation that would place severe restrictions on the kinds of options we could choose from – and which, incidentally, would violate the freedom-of-choice tenet of choice architecture – there’s no way to put renewable infrastructure options at proverbial eye level for state or federal decision-makers, or their stakeholders.

Simply put, a nudge for a decision like this would be impossible. In these cases, decisions have to be made the old-fashioned way: with a heavy lift instead of a nudge.

Often, decisions are more complex

Complex policy decisions like this require what we call active decision support.

In these cases, specialists trained in the science of decision-making must work with people both to help them to overcome predictable biases and to approach decisions in a way that is different from how they might otherwise make them instinctively. To inform and structure these kinds of decisions, we – like choice architects – also look to insights from the behavioral sciences.

For example, we have a rich understanding of the decision-making shortcuts that people apply, as well as of the predictable biases that accompany them. So, we know what to be on the lookout for when we help individuals and groups make better decisions.

When evaluating problems that unfold over long periods of time, we know that people tend not to look at cumulative effects, or consider how choices made today may restrict the choices that can be made in the future.

Likewise, we see that decision-makers struggle with questions about how to put boundaries around the problem before them. For example, who really counts as a legitimate stakeholder, and who doesn’t? Likewise, are there hard deadlines or financial ceilings that must be obeyed? Or are these really soft constraints that can be challenged if the right option can be identified?

We’ve also learned that decision-makers often fail to adequately account for the broad range of objectives that ought to guide their decisions, as well as the performance measures that let them know if they’ve achieved them. And, we know that the manner in which people search for alternatives is often incremental at best. People look to obvious and easy-to-find options, the tendency that nudges exploit, at the expense of the creativity that’s required to address the really complex challenges.

Perhaps worst of all, we observe that people avoid the necessary trade-offs when a choice can’t simultaneously achieve all of the objectives that they deem to be important. It’s often the case that the objectives that push emotional hot buttons, like fear, are the ones we pay the most attention to when trade-offs are difficult or uncomfortable, even if these objectives play a relatively small role in terms of advancing our overall well-being.

Active decision support helps decision-makers to overcome all of these obstacles, as well as others.

Unlike nudging, the intent of active decision support isn’t to direct people toward a specific course of action. It is to structure the decision-making process so that resulting choices are defensible – in other words, in line with our prioritized objectives. For big policies, this includes the deliberate balancing act between social, economic and environmental well-being.

The good news for policy-makers is that a wide range of tools and approaches are available which may help them make more defensible decisions.

Active decision support approaches work by breaking complex decisions into more cognitively manageable parts. And they are desperately needed. The wicked problems faced by society can’t be nudged away. Emergencies like the humanitarian crisis in Syria and the slow violence of climate change cry out for active decision support.

Yet, as governments amass nudge units, and as the private sector adopts a behavioral mindset in their marketing and public relations offices, the need for behavioral insights that support complex decisions goes unmet. Why? Perhaps because
active decision support is often seen as something smart, educated people in the pubic and private sectors should be able to do intuitively, on their own. But, the simple truth is, they can’t. And, without investing in building the internal capacity for active decision support, they won’t.

Joe Arvai, Max McGraw Professor of Sustainable Enterprise, and Director of the Erb Institute for Global Sustainable Enterprise, University of Michigan

This article was originally published on The Conversation. Read the original article.

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By Susan Kayser, Erb Institute Postdoctoral Fellow

My previous post – “How a Few Offenders Create Industry-Wide Reputational Issues: ‘The Reputation Commons Problem’” – focused on how the collapse of Rana Plaza created a reputation commons problem for the apparel industry. In review, a Reputation Commons Problem occurs when the careless actions of a one or a few companies have negative repercussions for other companies within that same industry by drawing attention to social or environmental issues common to that industry.

A reminder amidst the rubble of what over 1,000 people died for in the Rana Plaza garment factory collapse in Bangladesh.So, how have apparel brands responded since the collapse to fix the reputation commons problem? Some have taken sincere actions that have both improved the working conditions at their suppliers and the industry’s overall reputation. Others have been accused by NGOs of taking only symbolic actions in an attempt to appear as if they have made improvements, when none have actually been made. Others still have done nothing at all.

After a catastrophe industry members can reduce public and NGO pressure by joining corporate social responsibility (CSR) programs as a show of good faith that the industry can handle these issues on their own (e.g., King, Lenox, and Barnett, 2002). It’s not surprising then that industry specific CSR programs are often created (or gain tremendous popularity) after a catastrophe occurs. In the wake of the publicity surrounding the collapse of Rana Plaza, two groups were created: the Bangladesh Accord for Fire and Building Safety (the Accord) and the Alliance for Bangladesh Worker Safety (the Alliance).

Originally conceived in 2010, the Accord was designed to be a voluntary program, requiring member brands to make a 5-year binding commitment to improving fire and building safety at their Bangladeshi suppliers. However, despite additional tragedies including another garment factory collapse in 2005 and a series of fires at factories (supplying to major apparel brands like JC Penney, The Gap, and VF Corporation) the Accord failed to receive enough support from companies to be successful (Clean Clothes Campaign, 2013).

Sadly it took the collapse of Rana Plaza to create sufficient public attention to the appalling health and safety record of the Bangladesh garment industry to drive members to join the Accord. Just one month after the collapse more than 40 apparel companies had joined. Currently, there are more than 200 members.

The collapse also led to the creation of a second group, the Alliance, which was spearheaded by The Gap and Wal-Mart. The programs have similar goals of auditing Bangladesh garment factories and making needed improvements. They even have similar sounding names. However, the Alliance has received scathing criticism from NGOs as being a watered down and symbolic version of the Accord. This is largely because unlike the Accord, membership in the Alliance is not contingent upon a legally binding commitment to take actions that would improve factory safety conditions. It also lacks the same level of transparency regarding the results of the audits.

Consider the example of Joe Fresh, whose branded apparel was found at the site of the Bangladesh factory collapse. In the digital era a photo in the rubble can be immediately televised globally; the punishment of the brand swift, unmerciful and devastating. In this example, irate customers vowed to boycott Joe Fresh. But, because Joe Fresh responded quickly by committing to paying compensation to the victims and by joining the Accord, Joe Fresh managed to escape public backlash.

Companies are incentivized to appear as if they are taking action, without actually making any expensive improvements. This practice is known as “greenwashing” when referring specifically to environmental practices. However, it’s incredibly difficult to know the company’s intent. Are apparel companies trying to manipulate the public into thinking that they will take action, when they never really intend to do so? Or, will they actually pony up the cash and make improvements?

Further complicating matters for stakeholders, it is possible for apparel companies to join either program symbolically. Given the less transparent nature of the Alliance, it is impossible to tell which members have not contributed to making improvements to factories. Moreover, even the more stringent Accord, some brands are marked as having failed to pay the program’s dues.

So much of the debate surrounding the industry’s response to Rana Plaza has been about whether members of the Accord or Alliance are contributing as much or even at all to the overall improvements in Bangladesh. However, this debate ignores the set of apparel brands that really deserve criticism: those that source from Bangladesh but haven’t joined either group!

This post is based off of a working paper by Susan Kayser (Kayser, 2015).

 

Susan-KSusan Kayser is an Erb Institute Research Fellow with a concurrent appointment as a Dow Sustainability Fellow at the University of Michigan. Prior to her Post-doctoral Fellowship, she received by PhD from Indiana University in the Business Economics and Public Policy department with a minor in Strategic Management under the supervision of John Maxwell.

Her scholarly research uses econometric analyses to study non-market corporate strategies related to corporate environmental practices. Her dissertation work focuses on how strategic non-market actors, such as civil society organizations, can influence firm decisions to commit to Corporate Social Responsibility initiatives, follow through with those commitments, and their value to the firm. Susan’s dissertation was named the Organization and Natural Environment (ONE) division of the Academy of Management best dissertation award. Her most recent stream of research, which is under development with Thomas Lyon [University of Michigan], focuses on how the characteristics of manufacturing facilities’ and their parent organizations, along with their respective institutional environments, influence facilities’ decisions to reduce or increase their greenhouse gas (GHG) emissions.

 

References
Clean Clothes Campaign. 2013. The History behind the Bangladesh Fire and Safety Accord. July 8. Accessed December 2015, http://www.cleanclothes.org/resources/background/history-bangladesh-safety-accord.
Barnett, ML. 2006. Finding a working balance between competitive and communal strategy. Journal of Management Studies, 43: 1753–1773.
Barnett ML, Hoffman AJ. 2008. Beyond corporate reputation: Managing reputational interdependence. Corporate Reputation Review, 11(1), 1150-1170.
Barnett ML, King AA. 2008. Good fences make good neighbors: A longitudinal analysis of an industry self-regulatory institution. Academy of Management Journal, 51(6), 1150-1170.
Kayser, SA. The Cost of Corporate Social Responsibility after a Catastrophe. Ross School of Business Paper No. 1261. Available at SSRN: http://ssrn.com/abstract=2543011 or http://dx.doi.org/10.2139/ssrn.254301

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1  Source: http://bangladeshaccord.org/signatories/. Last accessed December, 2015.

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