How Do You Create a Sustainable Chain?
Collaboration within an organization is sometimes already complicated, let alone between multiple organizations. To really achieve sustainability, cooperation within the chain is essential. How do you get from a sustainability strategy on paper to a workable action plan?
The top of a railway company expresses the ambition to reduce the ecological footprint of the company by carrying out smarter maintenance. In this way, the railway infrastructure will last longer. But because the purchasing department still mainly looks at the lowest price in tenders, the contractor supplies cheaper, conventional switches; good quality, but not necessarily low maintenance. This further jeopardizes the strategic ambition to reduce emissions.
Many companies are indeed of good will when it comes to sustainability, notes change expert Jasper de Haan. “Customers and employees are increasingly asking for it. And the law also simply forces companies to become more sustainable."
Nevertheless, according to De Haan, many sustainability ambitions eventually fail due to the existing system. “Purchasing departments still often look primarily at the price. But also on the part of the contractor or supplier there is no incentive to supply low-maintenance, more sustainable and often more expensive products. After all, the variable costs for maintenance do not lie with them. Contractors and suppliers are tempted or forced to keep the price as low as possible.”
De Haan gives another example of a large project developer. "The cost of maintenance ultimately falls on the building owner or tenant. The project developer will therefore feel no incentive to equip a building with sustainable, low-maintenance lamps.”
"A partnership based on a shared sustainability ambition and shared interests could ultimately yield sustainable benefits for the climate and for the partners. But the current system, with contracts and tenders, still holds back such a different way of working together.”
According to De Haan, many companies are still trapped in the classic customer-supplier relationship. "And that is a shame, because most companies really want to get started with sustainability. Ideally, you grow towards a situation in which parties work together based on a shared interest. In which separate initiatives are brought together in one joint route, based on learning together and co-creation. And in which you work together towards a promising perspective, instead of just putting out fires.”
Actively build trust
That sounds great on paper, but getting there is quite a challenge in practice, admits De Haan. "To unleash chain power, it is important that you work on mutual cooperation at several levels at the same time. To get cooperation off the ground, you will have to work on connecting leadership and actively work on trust."
"In addition, it is important to formulate shared interests and ambitions that offer value to all parties. Finally, it is important to make agreements about the organization and to make good process agreements. What is the division of roles like, who is in charge, who pays?"
External process supervisor
Most companies want to become more sustainable, but the system is not yet rewarding them for this, De Haan emphasizes once again. "An external process supervisor is therefore indispensable. Precisely because the system still revolves around scoring individual assignments, you really cannot do without an intermediary who tries to get all interests on the table and who focuses on the problem."
"Moreover, communication often goes wrong because the parties involved simply have different corporate cultures. An external party can help the chain partners to understand each other, acting as the glue that holds everything together."
Get to know each other
According to De Haan, a number of joint sessions or a joint away day can be a first step towards closer chain cooperation. "Certainly in the construction world, trust is not always self-evident. Just think of the construction fraud at the beginning of this century, in which contractors made price agreements among themselves. It is therefore all the more important that you start by formulating joint ambitions and getting to know each other."
"Then it is important that you look at possible bottlenecks. Can you perhaps find a solution together or are these bottlenecks really obstructive? Again, it is advisable to appoint an independent process facilitator who is above the parties. Such an intermediary can help think about removing the obstacles that stand in the way of cooperation, from a neutral position."
"Have obstacles been removed as much as possible? And is there a joint sustainability ambition? Then get to work", continues De Haan. “As with any change, you will initially encounter skepticism and resistance. So set up a small-scale sustainability pilot and just show that it works. Embrace the experiment! Joint success then paves the way for further expansion of the partnership.”
As a chain partner, you must be prepared to invest money and people in a joint approach, emphasizes De Haan. “That is precisely why it is important to start small.”
"If you have proven success, you can then scale up. For example, by setting up a separate company with all chain partners, or by incorporating the developed collaboration into the line.”
"Other KPIs often come into play when collaborating more closely. If you are used to managing on team performance, it is important to put more emphasis on chain performance."
Collaboration in the chain
Finally, De Haan emphasises, to greatly increase the chance of success, it is important to work on the basis of equality. "Sustainability is one of those themes that you can only solve in the chain, simply because it affects the entire chain. Changing within an organization is already quite a challenge, let alone changing with multiple organizations at the same time. All the more important to approach chain cooperation in a structured way, based on a shared interest. Because only then will sustainability really be within reach."
How does this help the performance of your organization?
The insights in this article will help you shape a chain partnership aimed at sustainability. Making the chain more sustainable is one hell of a job. Formulating joint ambitions and interests, good process agreements and small-scale experimentation are crucial to really get sustainability off the ground.