Partnerships and Purpose at Sustainable Brands

By Sara Soderstrom, Erb Faculty Member

I was excited to attend and present at Sustainable Brands 2018. My research focuses on how organizations are engaging with sustainability challenges, and my work’s motivation stems from my deep-seated hope that business will transform how we address the many societal challenges that we face today. I believe that business is uniquely situated to help solve challenges like climate change and poverty. It was inspiring to hear from hundreds of companies at Sustainable Brands that are working to redefine how they do business—to do well by doing good.

As a University of Michigan faculty member, it was also exciting to have an opportunity to share my research with an audience of practitioners. My academic career often feels split—research and conferences with other academics, and teaching with practitioners. Yet for our research to have impact beyond the ivory tower—as Professor Andy Hoffman at Erb challenges us to do!—we must engage with practice around data collection, analysis and sharing of findings. Sustainable Brands was a great chance for me to do that.

I shared research I had done a few years ago with Kate Heinze, associate professor of Sport Management, University of Michigan. We did a case study on the Detroit Lions and how they developed a new, more strategic approach to engagement with the local community. Kate and I had been working on a different research project in Detroit, focusing on FoodLab Detroit and the emergence of a sustainable food economy in the city. As we spoke with different food entrepreneurs, we kept hearing about the Detroit Lions as an example of a fantastic partner to these early-stage business people. We started to explore what the Lions were doing and how they were having such a positive impact.

New Partnership Models

The Lions had recently transitioned from a traditional model based on charitable giving to a more focused development model with the  goal to “support transformational efforts that improve the wellbeing of metro Detroit’s underserved communities” (Lions’ Living for the City, 2013). In our assessment, we found the Lions’ narrower and deeper approach (focused on community health and local development) to be more strategic, and necessitating a stronger commitment to the city. This novel model of sustainable partnerships for impact contrasts with a more standard approach to community engagement—philanthropic donations of funding.

Needs Identification

An initial step in the Detroit Lions’ new approach was to complete a concerted, bottom-up process of identifying the city’s needs. The Lions community relations team met with many leaders throughout Detroit—to learn from them and better understand all the activities and expertise that already existed in the city. The team then identified how their own strengths mapped to a long list of community needs, narrowing their areas of focus to those topics that were the best fit between city need and team resources and goals. Thus, the Lions were deliberate in the areas they selected and focused on these two primary areas to develop and strengthen linkages with community stakeholders. Our research identified this as a critical element of their success—recognizing what skills they had and how they could apply them to the city’s needs.

The team [Detroit Lions] then identified how their own strengths mapped to a long list of community needs, narrowing their areas of focus to those topics that were the best fit between city need and team resources and goals.
Communication and Outreach

Once community partners were identified, the next step was communication and outreach. The Lions mindfully considered both what their role should be and how their involvement should be perceived. It was clear to both Kate and me that the Lions’ path towards mindful engagement was critical in their successful outreach. Several key themes were identified that characterize these partnerships:

Respect and humility: listen to different perspectives, defer to the expertise of various partners, and respect the knowledge and experience of long-standing community organizations
Enabler role: engage in a helping, rather than self-serving and imposing, manner
Authenticity: a more genuine commitment to helping Detroit’s revitalization; not simply about money or visibility
Mutual benefits: partnerships that benefit themselves and their partners in terms of more specific organizational goals
Brokerage: connect different organizations committed to aiding Detroit

As I shared these findings with the audience at Sustainable Brands, it was affirming to hear how much these ideas resonated. Leaders across different companies met with me after to discuss how they are developing partnerships for their own projects and to ask about various considerations with respect to building sustainable partnerships for impact. The talk also generated a thought-provoking discussion about “what is impact?” that touched on how to measure the impact of community partnerships, the importance of recognizing causality, and the critical step of defining—and aligning—objectives for each partner in a project.

I look forward to continued conversations about impact through partnerships. Through my research, teaching and engagement with practitioners, I hope to connect with many in the Erb community.

Note: research findings adapted from Heinze, K. L., Soderstrom, S., & Zdroik, J. (2014). Toward strategic and authentic corporate social responsibility in professional sport: A case study of the Detroit Lions. Journal of Sport Management, 28(6), 672-686.

Former Erb Institute PostDoc, Panikos Georgallis received one of five Veni grants that were awarded to researchers from the fields of economics and business, out of 59 total grants to researchers from the social sciences and humanities.  Veni grants are targeted at “outstanding researchers who have recently obtained their PhD and allows them to conduct independent research and develop their ideas for a period of three years.”
The Veni grant will provide the sum total of €250,000 towards Georgallis’ work in understanding moral markets.  Georgallis added,

“I am honored to receive the Veni grant by the Netherlands Organisation for Scientific Research. The grant will enable a better understanding of the evolution of moral markets, and help nurture these sectors which have a dual impact on economic and social change. I look forward to getting started!”

Applications are assessed in a nationwide competition based on the quality of the researcher, the quality, innovative character and academic impact of the research proposal, and the potential for knowledge utilization (see here).”

Grant Proposal

Let it shine: The emergence and evolution of moral markets
Moral markets, sectors that emerge to foster social change, are critical for society. But what are the circumstances that spur and sustain these markets? Using data from the European solar sector, Georgallis will develop a novel framework of the emergence and evolution of moral markets.

A list of the 154 Veni laureates, working titles and a brief summaries of the research projects can be found here.

Panikos Georgallis is an Assistant Professor of Strategy at the Amsterdam Business School, University of Amsterdam. His research examines the interaction between firms, social movements, and governments, with an emphasis on settings with strong links to sustainability.  Connect to his work here: http://www.uva.nl/profiel/g/e/p.georgallis/p.georgallis.html
Activists and industry

For many people, the combination of activists and industry brings to mind images of protestors chanting while marching with signs and banners in front of a company’s store, headquarters or production facility. For others, it suggests the maneuverings of shareholder activists—equity stakeholders using their investments to pressure a company’s management into some form of policy change.

What it might not evoke is visions of support, cooperation or collaboration.

Activism: Fertile ground for market entry

Despite the classic story of activists being at odds with corporations, the success of many of today’s modern industries and markets was predicated on these political and social change agents’ efforts. For example, in parts of the U.S., early support for wind energy came from environmental activists, who laid much of the groundwork to develop the regulatory structures and social acceptance needed to support renewable energy proliferation. The first voter-approved renewable portfolio standard (RPS)—which mandates a specified percentage of electricity production from renewable sources—passed in 2004 in Colorado, largely due to the efforts of environmental activist organizations and renewable energy enthusiasts. That law, Amendment 37, was instrumental in creating a market for wind energy in the state.

More recently, environmental groups have thrown their support behind electric vehicles. In 2013, the Sierra Club launched a national campaign aimed at educating consumers and encouraging electric vehicle purchases.

On a local level in Detroit, the efforts of the Detroit Black Community Food Security Network (DBCFSN), along with other local community groups, have laid the groundwork for a growing market for sustainable, just and locally sourced food products in the city.

Strong values usually are the driving force behind this activism. When groups choose to back a new product or service, it is generally because they view it as alleviating a social and/or environmental problem. In the aforementioned cases, renewable energy offered a more environmentally sustainable alternative to fossil-fuel-based electricity production. Electric vehicles were the answer to pollution concerns tied to traditional combustion engine automobiles. And local, good food served as a more environmentally and socially just alternative to traditional agriculture and mass food production.

Because activists like these build the social support necessary for their championed products and services to flourish, their values are often embedded in the industries that emerge around them. Early entrants embed these values into who they are and what they do. These emergent industries often enjoy a “halo effect” whereby companies are perceived to share the same values as the activists, but later entrants to the industry may not fully enact these values.

Potential pitfalls of activist-supported markets

For many established companies and aspiring entrepreneurs, activist-supported industries and markets offer attractive investment opportunities. They often come with a passionate, engaged and vocal community of support, which can be both time-consuming and costly to develop organically.

But this activist support is not unconditional, and firm managers and entrepreneurs would be wise to avoid taking it for granted or underestimating its importance to a company’s success. Below are some tips for managers and entrepreneurs looking to enter activist-backed industries.

  • Understand the local non-market environment. Although an industry may be characterized as supported by a particular group of activists nationally, reality can differ greatly at the regional level. For example, wind energy’s success is often attributed to the work of environmental activists, as was the case in Colorado. But in Texas, consumer rights groups were important in securing legislative support for wind farms. At an even more micro level, the local food market in Detroit is closely tied to activism in the city’s black community, whereas Ann Arbor’s local food scene has tighter ties to environmentalism. Failing to understand the goals and values of a market’s activist backers can lead to strategic business choices that jeopardize their support.
  • Embrace and embody the industry’s values. For later entrants into an activist-backed industry, the decision to enter may be based more on economic potential than identification with the activist’s goals and values. When companies fail to sufficiently demonstrate their commitment to the underlying motivation that spurred the industry or market’s initial rise, they can find themselves the targets of the very activists that originally supported the industry. For example, in Palm Springs, Calif., in the 1980s, tax incentives led to a wind energy boom—with numerous investors entering the industry for the tax write-off. As a result, many of the area’s new wind farms featured shoddy construction, with some becoming a physical hazard. The local community revolted, and a local newspaper editorial called for the removal of companies that did not exhibit a “moral commitment” to solving U.S. energy problems. Failure to adhere to the values of an activist-supported market can prove disastrous for new entrants.
  • Partner with local actors to build credibility. Even after doing research, and embracing and embodying the market’s core values, the company may not be viewed as an authentic new entrant in some activist-backed markets. This may be especially true for new products or services that alleviate social issues linked to a specific group of people or community. In these cases, firms that are not founded by members of these groups run the risk of being labeled as “outsiders” that are not authentic and do not have the community’s best interests in mind. For example, several young University of Michigan graduates from Ann Arbor have started local food organizations in Detroit. For some in the Detroit local food community, these new ventures lack authenticity because the people who started them came from outside the city. The new organizations that have most successfully overcome this liability have invested in developing deep and genuine ties within the local community. For new entrants to similar activist-backed industries, one way of developing credibility is to partner with a local organization—but such partnerships must be substantive and fair. Anything less may be considered further evidence of inauthenticity.

Activists and industries can support each other in meaningful ways, but they need to evaluate each other’s goals and values. The best opportunities for cooperation will be found where interests genuinely intersect.

Inside the strange, uniform politics of today’s MBA programs—and what it says about America’s elites

By JOHN BENJAMIN  (Shared with permission of author)
May 14, 2018

Students in the country’s top MBA programs pride themselves on their open-mindedness. This is, after all, what they’ve been sold: American business schools market their ability to train the kinds of broadly competent, intellectually receptive people that will help solve the problems of a global economy.

But in truth, MBA programs are not the open forums advertised in admissions brochures. Behind this façade, they are ideological institutions committed to a strict blend of social liberalism and economic conservatism. Though this fusion may be the favorite of American elites—the kinds of people who might repeat that tired line “I’m socially liberal but fiscally conservative”—it takes a strange form in business school. Elite business schooling is tailored to

promote two types of solutions to the big problems that arise in society: either greater innovation or freer markets. Proposals other than what’s essentially more business are brushed aside, or else patched over with a type of liberal politics that’s heavy on rhetorical flair but light on relevance outside privileged circles.

It is in this closed ideological loop that we wannabe masters of the universe often struggle to think clearly about the common good or what it takes to achieve it. Today’s MBA programs, insofar as they churn out graduates riveted to this worldview, limit the vision of future leaders at a time when public dissatisfaction with business and its institutions makes our complacency a danger.

Read the full text of the article here.

This article, written by John Benjamin, was originally shared on The New Republic website on May 14, 2018.

Dr. Kaitlin Raimi
University of Michigan, Assistant Professor of Public Policy

Many sustainability initiatives rely on individual consumers being able to recognize more sustainable products and practices and being willing to choose sustainable options. Yet most consumers are not experts in sustainability, do not readily understand sustainability-related indices, and may even avoid sustainable options because they perceive them as running counter to their own identities. How can businesses convey sustainable options to consumers in ways that they can understand and that will appeal to them? This presentation will cover some of the best practices for how to communicate sustainability to consumers and how to avoid common pitfalls.

Learn More About the Speaker
Dr. Kaitlin Raimi is an assistant professor at the University of Michigan’s Gerald R. Ford School of Public Policy. She studies how social motivations promote or prevent sustainable behaviors, especially those related to climate change. She’s particularly interested in how people compare their own beliefs and behaviors to those of other people, how the desire to make a good impression can influence people to mitigate climate change, and how one adopting one sustainable behavior affects subsequent environmental decisions. She also has ongoing work on how different ways of framing climate change affect people’s attitudes to climate policy.

Dr. Daniel Vermeer
Duke, Executive Director – Center for Energy, Development, and the Global Environment and Associate Professor of the Practice of Energy and Environment

Wicked problems differ from conventional problems by virtue of their complexity, unboundedness, multiple stakeholders, and resistance to resolution. Wicked problems exist in many domains, including environmental degradation, global pandemics, inequality, and nuclear disarmament. Despite the world’s problems becoming increasingly wicked, we still rely heavily on frameworks and tools that were created to address more discrete challenges. In this session, Dr. Vermeer will discuss how methods of design thinking and scenario planning can be productively used to tackle perhaps the world’s most wicked problem: climate change.

Learn More About the Speaker
Dr. Daniel Vermeer directs Duke University’s Center for Energy, Development, and the Global Environment (EDGE), an initiative that harnesses the power of business to meet the global demand for energy, resources, and improved quality of life. His areas of expertise include water management, sustainable agriculture, value chain analysis, resource productivity, efficiency, product certification, and low-carbon development. He is the founder of the Global Water Challenge, co-author of the CEO Water Mandate, and lead contributor to policy documents issued through the World Economic Forum, World Business Council for Sustainable Development, and the United Nations Foundation.

Dr. Tima Bansal
Ivey Business School, Professor, General Management, Sustainability & Strategy

In this session, Dr. Tima Bansal outlines some of the key assumptions made in conventional business strategy, which is grounded in neoclassical economics. However, this worldview is being challenged across a number of fronts, including eroding firm profits. Business strategy is being disrupted by the principles that ground sustainable development. Dr. Bansal will describe the principles of sustainable development and their implications to business strategy, grounding the ideas in some leading business practices.

Learn More About the Speaker
Dr. Bansal is the Canada Research Chair in Business Sustainability at the Ivey Business School at Western University (Ontario). She directs Ivey’s research centre for Building Sustainable Value, and founded and continues to direct the Network for Business Sustainability. Both these organizations aim to strengthen research and its ties with practice. She was one of the inaugural “Clean50 for Clean Capitalism” (Delta Management Group in 2011).

Dr. Andrew Hoffman
University of Michigan, Holcim (US) Professor of Sustainable Enterprise at the University of Michigan

Business sustainability has come a long way. From the dawn of the modern environmental movement and the establishment of environmental regulations in the 1970s, it has now become a strategic concern driven by market forces. But problems such as climate change, water scarcity, species extinction, and many others continue to worsen. Sustainable business is reaching the limits of what it can accomplish in its present form. It is slowing the velocity at which we are approaching a crisis, but we are not changing course. Instead of tinkering around the edges of the market with new products and services, business must now transform it.

Learn More About the Speaker
Dr. Andrew Hoffman is the Holcim (US) Professor of Sustainable Enterprise at the University of Michigan; a position that holds joint appointments in the Stephen M. Ross School of Business and the School of Environment and Sustainability. Dr. Hoffman studies the ways that sustainability becomes an issue for business organizations. He has published over 100 articles/book chapters, as well as 15 books, which have been translated into five languages

Dr. Joe Arvai
University of Michigan, Director of the Erb Institute for Global Sustainable Enterprise at the University of Michigan

Decision-making in service of the “triple-bottom-line” (TBL) refers to choices made by individuals and groups that balance social, economic, and environmental objectives. On the one hand, we are often told the story that “people, planet, and prosperity” ought to be treated as equally important, and that we should actively seek win-win-win alternatives when making business decisions. On the other, people who claim to practice the TBL in business tend to point to decisions that they have made in the past, highlighting benefits that they say are in line with social, economic, and environmental goals. But, here’s the thing: Real-world TBL decisions can’t — and shouldn’t — treat social, economic, and environmental objectives equally. So, what are we to do if we want to proactively make decisions that serve the triple-bottom-line?

Learn More About the Speaker
Dr. Joe Arvai is the Max McGraw Professor of Sustainable Enterprise in the School of Natural Resources & Environment, and the Ross School of Business, at the University of Michigan. He also serves as Director of the Frederick A. and Barbara M. Erb Institute for Global Sustainable Enterprise. In addition to his position at the U of M, Dr. Arvai is a Senior Researcher at the Decision Science Research Institute in Eugene, OR, and an Adjunct Professor in Engineering and Public Policy at Carnegie Mellon University in Pittsburgh, PA. Dr. Arvai is an internationally recognized expert in the risk and decisions sciences. In addition to Dr. Arvai’s academic work, he is a former member of the U.S. Environmental Protection Agency’s Chartered Science Advisory Board, and is a member of the U.S. National Academy of Sciences’ Board on Environmental Change and Society.

Dr. Jeremiah Johnson
NC State, Associate Professor, Department of Civil, Construction, and Environmental Engineering

Improving environmental outcomes requires systems approaches that consider impacts that extend beyond a factory or company’s walls. By using life cycle assessment (LCA), companies can identify the best opportunities to reduce environmental impacts, informing decisions relating to material choice, supply chains, production processes, in-use impacts, and end of life management. Relying on new insights from LCA, companies can prioritize their efforts in meeting their sustainability goals and achieve meaningful change.

Learn More About the Speaker
Dr. Jeremiah Johnson is an associate professor at North Carolina State University’s Department of Civil, Construction, and Environmental Engineering and part of the Chancellor’s Faculty Excellence Program in Sustainable Energy Systems and Policy. His research uses systems methods to evaluate the environmental impacts of changes to the power system, including those driven by technology. He earned degrees in environmental engineering from Yale University (PhD, MS) and in chemical engineering from Clarkson University (BS).