Sections

Danone Serves Up a More Sustainable Future

Heather McIlvaine

Danone products delight millions of people every day. Fueled by a holistic commitment to sustainability, Danone is satisfying more than the world’s appetite for healthy foods. They are helping consumers make better choices as they become more sustainable, one container of yogurt, milk, and water at a time.

With 35,000 items that come from water, milk, fruits, and plants, it’s no wonder sustainability is in this €17 billion company’s DNA. They aim to deliver sustainable, healthy products that drive overall economic performance. In fact, the company’s executive board sees sustainability as a strategic priority. Explains Franck Riboud, Chairman and CEO, Danone, “My vision for Danone: a company that creates economic value while creating social value.”

Danone has adopted a measured approach to integrate sustainable business practices across its 160 plants on five continents in over 120 countries. They’ve established carbon reduction as a guiding principle, and have even appointed a “Vice President for Nature.” Senior management has elevated carbon reduction to coequal status with business targets, and tied bonuses for 1,400 global managers to their performance around environmental objectives. The company also works hard to optimize water usage, which is key to operations. Transparency to consumers and retailers, as well as support for new standards and legislation in the countries where it operates, are foundational to Danone’s growth strategy driven by sustainability.

Partnership with SAP

To help achieve this remarkable transformation, Danone has partnered with SAP to help make sustainability an integral part of how Danone does business every day. The two companies are united by a shared commitment to innovative IT strategies that will meet their promises to consumers and the challenges of today’s environment, as well as comply with changing country regulations.

 

In a resource-constrained world where consumers want to make better choices, both companies know sustainability is not only about conservation or recycling. Real change can only occur by taking a measured business approach to determine the cost of materials and products across the supply chain, from sourcing to production to delivery and beyond.

 

As a result, Danone implemented SAP BusinessObjects solutions to collect, measure, analyze, and reduce its carbon footprint across its entire 35,000 product line. Relying on SAP BusinessObjects Profitability and Cost ManagementSAP BusinessObjects Financial Information Management, and SAP BusinessObjects Data Services, the process captures highly detailed, monthly assessments of its product line by SKU across the entire lifecycle, from sourcing through productiontransportretail distributionconsumption, and end of cycle. Full integration with SAP ERP allows Danone to automatically retrieve information including bills of materials, production and delivery orders, and intercompany transportation. Danone can easily assess a range of product footprints, and incorporate allocation of emissions and costs generated by each process.

 

Employee Engagement

 

These SAP software solutions have fundamentally changed not only the way Danone does business, but also how employees think, work, and engage with the company. Employees have a deeper sense of pride in their work since every staff member is held accountable for the quality of carbon data in their business area. Specialists in lifecycle management collect and assess information from the supply chain, such as site-specific emission factors for components used during the raw-pack process. People with job titles like Carbon Master and Master Data Manager, along with users in manufacturing, purchasing, and transport units, provide additional input for things like emissions factors by transport types or energy consumption to complete the process. Teams perform calculations for insight and visibility into the carbon measurements at a product level via multi-dimensional modeling and analysis. Using SAP software reports and dashboards, employees can display the product carbon footprint intensity as grams of carbon dioxide equivalent (CO?e) per kilogram or liter of product, as well as in absolute terms of metric tons of CO?e emissions.

Towards a More Protected Future

Danone is well on its way to helping protect the world’s precious finite resources for future generations. It has reduced its carbon footprint by 22 percent, and is confident of reaching its target of 30 percent by the end of 2012.  Moving forward, they intend to simulate emissions when introducing a new material, or process into a product, brand, or country. This will improve and optimize design decisions, supplier choices, and investments, as well as support brand-related goals. Additionally, Danone recently selected the SAP Sustainability Performance Management solution to help holistically manage data collection, reporting and analytics across all social, environmental and economic initiatives. Danone is also working with suppliers so they can directly enter their data into SAP ERP, saving time and boosting information quality.

Future plans include enhanced reporting beyond SKU carbon footprint tracking. Danone will report emissions by product, factory, division, country, brand, customer, and time interval — then set benchmarks based on the intelligence. Executives envision a monthly “sustainability closing,” much like a financial closing, for greater transparency and stronger competitive advantage.

Consumers worldwide rely on Danone to bring them fresh, tasty dairy products and bottled water, as well as baby and medical nutrition products every day.  The company’s sustainability commitment is having an equally profound impact on the world in which all of us live.

Comments

Heather McIlvaine

About Heather McIlvaine

Heather McIlvaine is the Editor of SAP.info. Her specialties include writing, editing, journalism, online research and publishing.

Tags:

awareness

43 Facts On Purpose And Sustainability In The Digital Economy

Peter Johnson

Part 5 of the six-part blog series “Facts on the Future of Business

Innovation in the business world is accelerating exponentially, with new disruptive technologies and trends emerging that are fundamentally changing how businesses and the global economy operate. To adapt, thrive, and innovate, we all need to be aware of these evolutionary technologies and trends and understand the opportunities or threats they might present to our organizations, our careers, and society on a whole.

With this in mind, I recently had the opportunity to compile 99 Facts on the Future of Business in the Digital Economy. This presentation includes facts, predictions, and research findings on some of the most impactful technologies and trends that are driving the future of business in the digital economy.

To help simplify your ability to find facts for specific topics, I have grouped the facts into six subsets, and below is the fifth of these:

Earth

With the coming and going of ice ages over the last 400,000+ years, CO2 in the earth’s atmosphere fluctuated between 180 ppm and 300 ppm. However, CO2 levels have skyrocketed and now exceed 400 ppm for the first time in recorded history.

Source: “The Relentless Rise of Carbon Dioxide,” NASA Global Climate Change: Vital Signs of the Planet.

New digital technologies can enable a 20% reduction in global carbon emissions by 2030. This is equivalent to eliminating 100% of China’s CO2 emissions, plus another 1.5 billion tons.

Source: “SMARTer2030: Australian Opportunity for ICT Enabled Emission Reductions,” Telstra Corporation.

In the last two decades, 9.6% of the earth’s total wilderness areas has been lost, an estimated 3.3 million square kilometers.

Source: “Catastrophic Declines in Wilderness Areas Undermine Global Environment Targets,” Current Biology.

Many Latin American governments are turning to artificial intelligence to aid in their forest conservation efforts.

Source: “10 Innovations That Are Changing Conservation,” Cool Green Science.

Air pollution continues to rise at an alarming rate, and now 92% of the world population is exposed to air pollution above WHO air quality guidelines.

Source: “Ambient Air Pollution: A Global Assessment of Exposure and Burden of Disease,” World Health Organization.

Every year, nearly 600,000 children under the age of five die from diseases caused or exacerbated by the effects of air pollution.

Source: “Clear the Air for Children,” United Nations Children’s Fund (UNICEF).

Inequity

GDP per capita has increased roughly 1,000% since the 1970s.

Source: “GDP Per Capita,” The World Bank.

CEO pay has risen 1,000% over the past 40-plus years.

Source: “World Economic Forum Annual Meeting 2017: Responsive and Responsible Leadership,” World Economic Forum.

But average worker pay has increased just 11% since the 1970s, essentially stagnating over the past 40-plus years.

Source: “The Productivity–Pay Gap,” Economic Policy Institute.

If ordinary citizens don’t have incomes to buy products made by corporations, how can those corporations prosper? The IMF found countries with less inequality perform better.

Source: “Nobel Economist: One-Percenters, Pay Your Taxes,” CNN.

Although GDP growth is an indicator of progress, it has concealed growing inequality. Economies need a balanced scorecard that also assesses and prioritizes quality of life across the population.

Source: “An Economy for the 99%,” Oxfam International.

By broadly addressing gender equity at work and in society, the world could add $12 trillion to annual gross domestic product in 2025.

Source: “Realizing Gender Equality’s $12 Trillion Economic Opportunity,” McKinsey Global Institute.

The 43 public companies in the DiversityInc Top 50 were 24% more profitable than the S&P 500 average.

Source: “Cultural Diversity in the Workplace: How Diversity at Work Makes More Money for You,” The Balance.

Migrants make up just 3.4% of the world’s population, but they contribute nearly 10% of global GDP. Today, immigrants earn 20% to 30% less than native workers, but if countries narrow this wage gap by just five to 10%, they could generate an additional $1 trillion in global economic output.

Source: “Global Migration’s Impact and Opportunity,” McKinsey Global Institute.

Improving lives

In initial tests, a machine-learning algorithm created at Carnegie Mellon was able to predict heart attacks four hours in advance, with 80% accuracy.

Source: “Of Prediction and Policy,” The Economist.

Artificial intelligence can predict where epidemics will happen. AIME developed a platform with 87% accuracy in predicting dengue fever outbreaks three months in advance. Now they hope to similarly target other diseases, such as Ebola and Zika.

Source: “Artificial Intelligence Innovation Report,” Deloitte.

An estimated 45.8 million people are trapped in some form of slavery in 167 countries.

Source: “Global Findings,” Walk Free Foundation: The Global Slavery Index.

Advanced analytics and Big Data are enabling coordinated efforts to combat human trafficking networks and rapid responses when victims are located.

Source: “Tracing a Web of Destruction: Can Big Data Fight Human Trafficking?” HBS Digital Initiative.

Two billion individuals and 200 million small businesses in emerging economies lack access to basic financial services and credit. Broad adoption of mobile banking in developing nations could create 95 million new jobs and increase GDP by $3.7 trillion by 2025.

Source: “How Digital Finance Could Boost Growth in Emerging Economies,” McKinsey Global Institute.

Patients dying while waiting for an organ donor could soon be a thing of the past. By 2030, organs will be biologically 3D-printed on demand.

Source: “Healthcare in 2030: Goodbye Hospital, Hello Home-Spital,” World Economic Forum.

Resource management

On the edge of the Sahara, Morocco is building what will be the world’s largest solar power plant, capable of providing energy even after the sun sets.

Source: “Morocco Unveils A Massive Solar Power Plant in the Sahara,” NPR.

Morocco plans to generate 14% of its energy from solar by 2020, and hopes to eventually export solar energy to Europe.

Source: “The Colossal African Solar Farm That Could Power Europe,” BBC.

An extremely large city can lose as much as 500 billion liters of drinking water each year through leakage.

Source: “Water and Cities – Facts and Figures,” United Nations.

More than 300,000 billion liters of water could be saved globally by using new information and communications technologies to increase resource management efficiencies.

Source: “Quantifying the Opportunity,” Global e-Sustainability Initiative (GeSI).

Barcelona uses the IoT to optimize urban systems and enhance citizen services. To date, it has saved $95 million annually from reduced water and electricity consumption, increased parking revenues by $50 million a year, and generated 47,000 new jobs.

Source: “How Smart City Barcelona Brought the Internet of Things to Life,” Data-Smart City Solutions, Ash Center for Democratic Governance and Innovation at Harvard Kennedy School.

By 2019, 40% of local and regional governments will use the IoT to turn infrastructure such as roads, streetlights, and traffic signals into assets instead of liabilities.

Source: “IDC FutureScape: Worldwide Internet of Things (IoT) 2017 Predictions,” IDC Research Inc.

Global urban populations will add 2.5 billion people by 2050. This massive urban expansion will require as much as $70 trillion in infrastructure spending.

Source: “In a Fast-Changing World, Can Cities Be Built with Long-Term Perspective?” EY.

Global debt has more than doubled since the turn of the century to $152 trillion and now represents a record high 225% of global GDP. This creates a vicious feedback loop in which the debt overhang exacerbates the economic slowdown and lower economic growth hampers deleveraging.

Source: “The IMF Is Worried About the World’s $152 Trillion Debt Pile,” Bloomberg.

Trust and corruption

93% of CEOs believe it’s important to engender trust that their company “will do the right thing.”

Source: “Connecting the Dots: How Purpose Can Join Up Your Business,” PwC.

72% of people feel that companies have become more dishonest.

Source: “The State of the Debate on Purpose in Business,” EY Beacon Institute.

There is a growing level of distrust: only 15% of people believe that society’s institutional pillars (government, businesses, media) are working for the common person.

Source: “2017 Edelman Trust Barometer,” Edelman.

Leading up to the U.S. election, the top fake news stories on Facebook generated 20% more engagement than factual stories.

Source: “This Analysis Shows How Fake Election News Stories Outperformed Real News on Facebook,” BuzzFeed News.

Bribery reduces global GDP by $1.5 trillion to $2 trillion each year, as it drives suboptimal business decision making, corrupting economic performance.

Source: “Corruption: Costs and Mitigating Strategies,” International Monetary Fund.

To combat corruption and tax evasion in its cash economy (only 2.6% of its citizens pay taxes), the Indian government devalued 80% of its currency in three hours.

Source: “Demonetization | This Is a New Indian Sunrise,” DNA India.

India could eliminate the need for credit cards, debit cards, and ATMs in three years by switching to biometric payments, as nearly 1.1 billion citizens have already registered their biometric data.

Source: “First Cash, Now India Could Ditch Card Payments by 2020,” CNN.

Purpose

In a study of 100 variables, seeing purpose and value in work was the single most important factor that motivated employees. Yes, more than compensation.

Source: “Purpose Trumps Cash + Other New Research Findings,” LinkedIn.

75% of millennials would take a pay cut to work for a socially and environmentally responsible company.

Source: “2016 Cone Communications Millennial Employee Engagement Study,” Cone Communications.

Only 13% of employees worldwide are engaged, meaning that the other 87% are not involved in, enthusiastic about, and committed to their work and company.

Source: “The Worldwide Employee Engagement Crisis,” Gallup.

Companies with engaged employees outperform their peers by up to 202%.

Source: “The Importance of Employee Engagement,” Dale Carnegie Training.

How millennials want to work and live is a problem leaders need to take seriously. Just 40% of millennials feel strongly connected to their company’s mission.

Source: “Millennials Not Connecting With Their Company’s Mission,” Gallup.

During the next year, one in four millennials plans to leave his or her current employer, and by 2020, two in three millennials expect to have found a new employer.

Source: “The 2016 Deloitte Millennial Survey – Winning over the next generation of leaders,” Deloitte.

Organizations in which employees perceive meaning at work are 21% more profitable.

Source: “Meaning@Work, Leadership in times of digitization,” Future of Leadership Initiative.

87% of millennials say that they base their purchasing decisions on whether or not a company makes positive social efforts.

Source: “Why Millennials Care About Purpose-Driven Business,” D!gitalist Magazine.

To view all of the 99 Facts on the Future of Business in the Digital Economy, check out the Slideshare or other subsets below.

 

To see the rest of the series, check out our page Facts on the Future of Business,” every Thursday, and we will cover the six topics:

  • The value imperative to embrace the digital economy
  • Technologies driving the digital economy
  • Customer experience and marketing in digital economy
  • The future of work in the digital economy
  • Purpose and sustainability in the digital economy
  • Supply networks in the digital economy
Comments

Peter Johnson

About Peter Johnson

Peter Johnson is a Senior Director of Marketing Strategy and Thought Leadership at SAP, responsible for developing easy to understand corporate level and cross solution messaging. Peter has proven experience leading innovative programs to accelerate and scale Go-To-Market activities, and drive operational efficiencies at industry leading solution providers and global manufactures respectively.

SolarCoin: How Blockchain Is Incentivizing A 5,000 Gigawatt Quest To Save The Planet

Jacqueline Prause

A trip through the idyllic farmlands of Bavaria, in the south of Germany, is a testament to the enthusiasm here for solar energy, one of the many green technologies Germany is embracing as it undergoes a national Energy Transition to using 60% renewable energy sources by 2050.

Here, aging dairy barns are entirely covered with solar panels to capture the sun’s rays that come over the nearby Alpine peaks. Munching on meadow grasses, the bovine residents hardly seem perturbed by the barns’ hyper-modern solar installations – and the barn itself is thus doubly productive for the farmer.

Worldwide there are currently about 7 million solar installations already grid-connected, amounting to some 300 gigawatts (GW) of energy capacity, roughly the equivalent generation capacity of 500 nuclear reactors. Germany alone had a solar generation capacity of 41 GW in 2016, delivering more than six percent of its total energy consumption – impressive for a country that lies well outside the sun belt.

With climate change experts forecasting that global warming could possibly increase the earth’s temperature two degrees Celsius by mid-century, people are increasingly turning to low-carbon energy sources like solar, wind, and hydropower to mitigate the effects of global warming. According to the International Energy Agency (IEA), solar energy could become the largest source of electricity by 2050 – ahead of other energy sources like fossil fuels, wind, and hydro. Based on figures from the IEA, the solar community hopes to couple another 5,000 GW of solar power to the grid – that’s the equivalent of an additional 200 million households using solar power.

“We are the first generation to live global climate change in real-time and to feel it, but we are also the last generation to be able to do something about it,” Francois Sonnet, co-founder of ElectriCChain, an affiliate of the SolarCoin Foundation, recently told members of the European Parliament in a session on science and technology options (STOA). “The technology is there; the will and the money isn’t.”

We are the first generation to live climate change in real time but the last to be able to do something about it.

Incentivizing solar uptake

Rather than wait for more money to flow into the solar industry, the SolarCoin Foundation, based in Greenwich, Connecticut, is incentivizing solar production for participating households and businesses, one megawatt-hour at a time – and it’s using blockchain technology to do it.

Founded in 2014 by a group of solar experts and macro-economists, the SolarCoin Foundation is an international network of volunteers and community members whose job it is to oversee the distribution of SolarCoins (cryptoexchange symbol: SLR) – a blockchain-based digital currency that is distributed to solar producers at a rate of one coin per megawatt-hour of solar energy produced, based on verified meter readings. The organization maintains a public ledger that records each SolarCoin given out to solar electricity generators.

The SolarCoin is both an incentive and a reward for solar producers to participate in the solar economy. The program is often likened to air miles for frequent flyers in the airline industry. “Basically, you enable a prosumer to deliver to the grid and to use the infrastructure – or to set a whole new infrastructure, in the case of micro-grids in developing countries – and to bill energy to a neighbor. That’s the purpose of peer-to-peer energy,” explains Sonnet.

SolarCoin is active in 32 countries, with a network of affiliates and partners to serve different regions: Solar Change is active in South America, EMEA, and the United States; Solcrypto is the claims facilitator active in the Asia-Pacific region; and ElectriCChain, registered in Andorra, aims to record solar energy data for the purpose of the betterment of the solar tools as well as monitor human progress and academia.

SolarCoin is the first digital asset to be recognized at the supranational level by International Renewable Energy Agency (IRENA) as a source of financial support for the solar industry. Affiliate ElectricChain recently received high praise at the UN Climate Summit in Morocco, winning the “Homes” category for its groundbreaking nano-grid project. The recognition has served to provide legitimization to the organization as it promotes its work around the world. “Depending on the places we go to, some people don’t necessarily know the good story of solar energy,” says Sonnet. “Working with these big institutions, like the UN and IRENA, certainly helps.”

Harvesting SolarCoins at home

To manage the distribution of individual SolarCoins, the SolarCoin Foundation operates on its own blockchain, which is 200-300 times more carbon efficient than the limited processing capabilities of the Bitcoin blockchain (SolarCoin Blockchain explorer is available here). Plus, each SolarCoin has real value attached to it: one coin is the equivalent of one megawatt hour of solar power. By way of example, Sonnet explains how people can accumulate the SolarCoins: “Say five kilowatts of solar generation in Munich would produce six megawatt hours, so that would be six SolarCoins on a yearly basis.”

Approximately 420,000 SolarCoins have been granted to solar producers worldwide. There are currently USD$500 million of SolarCoins waiting to be claimed. The SolarCoin Foundation expects that its distribution program will last 40 years as it distributes the 97.5 billion SolarCoins, which represent 97,500 terawatt hours of solar electricity.

For individual owners, the coins are distributed once every six months through the platform to the owner. No equipment is necessary outside of a solar installation. A solar producer would harvest SolarCoins in two ways: 1. download the digital wallet from the SolarCoin web site; it will embed an API that enables you to claim SolarCoins directly from the blockchain; or 2. use a $10 piece of equipment called a Raspberry PI, which is a data logger that gathers information from the solar installation and publishes it to the blockchain. Currently, there are also discussions in progress to have some solar equipment providers embed SolarCoin in a more dynamic way onto solar equipment they sell, enabling granting down to the minute. Find out how to enroll with SolarCoin here.

Seeding the solar economy

What can you do with your SolarCoins? Most people will likely exchange the digital currency for euros or dollars on one of many cryptoexchanges. At the moment, the value of an individual SolarCoin is around $0.24. Perhaps a better idea might be to hold the coin until more people join the network. Like many blockchain-based ventures, the value of the network increases markedly as more people join, adding more nodes and producing more transactions. The larger the network, the greater its value. This video from SolarCoin founder Nick Gogerty explains the concept of currency valuation in the network.

The SolarCoin Foundation expects to have one million participants by the end of 2019. This would provide the uplift to bring the value of one coin to between $20 and $30 per megawatt hour. As noted in Scientific American, “For now, the handouts act as a reward – a little token of thanks – to the people who are already doing their part for the environment.”

The envisioned future for the currency is that prosumers will be able to use SolarCoins to directly pay for goods and services, seeding the solar economy, which might, for example, include battery storage and additional services. “To the extent that solar participants understand that, then it makes a compelling case for SolarCoin,” says Sonnet.

According to Sonnet, SolarCoin plans to onboard “a couple dozen thousand” solar installations in the medium-term. This will have the effect of triggering the next wave of installation owners to participate in the network, and for businesses to join the network too. “We’re at the very beginning of the value creation of SolarCoin,” says Sonnet. “It takes time obviously, but it’s like a spinning wheel: once the cogs are in place, it starts spinning by itself, and this will enable the Energy Transition.”

For more on blockchain’s role in connected cities, see Running Future Cities On Blockchain.

Comments

Jacqueline Prause

About Jacqueline Prause

Jacqueline Prause is the Senior Managing Editor of Media Channels at SAP. She writes, edits, and coordinates journalistic content for SAP.info, SAP's global online news magazine for customers, partners, and business influencers .

Running Future Cities on Blockchain

Dan Wellers , Raimund Gross and Ulrich Scholl

Building on the Blockchain Framework

Some experts say these seemingly far-future speculations about the possibilities of combining technologies using blockchain are actually both inevitable and imminent:


Democratizing design and manufacturing by enabling individuals and small businesses to buy, sell, share, and digitally remix products affordably while protecting intellectual property rights.
Decentralizing warehousing and logistics by combining autonomous vehicles, 3D printers, and smart contracts to optimize delivery of products and materials, and even to create them on site as needed.
Distributing commerce by mixing virtual reality, 3D scanning and printing, self-driving vehicles, and artificial intelligence into immersive, personalized, on-demand shopping experiences that still protect buyers’ personal and proprietary data.

The City of the Future

Imagine that every agency, building, office, residence, and piece of infrastructure has an entry on a blockchain used as a city’s digital ledger. This “digital twin” could transform the delivery of city services.

For example:

  • Property owners could easily monetize assets by renting rooms, selling solar power back to the grid, and more.
  • Utilities could use customer data and AIs to make energy-saving recommendations, and smart contracts to automatically adjust power usage for greater efficiency.
  • Embedded sensors could sense problems (like a water main break) and alert an AI to send a technician with the right parts, tools, and training.
  • Autonomous vehicles could route themselves to open parking spaces or charging stations, and pay for services safely and automatically.
  • Cities could improve traffic monitoring and routing, saving commuters’ time and fuel while increasing productivity.

Every interaction would be transparent and verifiable, providing more data to analyze for future improvements.


Welcome to the Next Industrial Revolution

When exponential technologies intersect and combine, transformation happens on a massive scale. It’s time to start thinking through outcomes in a disciplined, proactive way to prepare for a future we’re only just beginning to imagine.

Download the executive brief Running Future Cities on Blockchain.


Read the full article Pulling Cities Into The Future With Blockchain

Comments

Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Raimund Gross

About Raimund Gross

Raimund Gross is a solution architect and futurist at SAP Innovation Center Network, where he evaluates emerging technologies and trends to address the challenges of businesses arising from digitization. He is currently evaluating the impact of blockchain for SAP and our enterprise customers.

Ulrich Scholl

About Ulrich Scholl

Ulrich Scholl is Vice President of Industry Cloud and Custom Development at SAP. In this role, Ulrich discovers and implements best practices to help further the understanding and adoption of the SAP portfolio of industry cloud innovations.

Tags:

Culture: More Than Just An HR Thing

Shane Green

“Company culture shapes every minute of the workday and every decision that is made.” -Taylor Smith, CEO & Cofounder of Blueboard.

What is culture? I consider it the collective mindset and attitude of your employees about what they do, which manifests itself in how they do things—in other words, their actions and behaviors. These behaviors manifest themselves in their interactions with your company, your customers, and other associates or staff.

This mindset—the one your staff brings to work every day—determines how they will take care of your customers, how much effort they will put into their work, and whether or not they will stay with you long-term.

The mindset and attitude of your employees plays a significant role in how they will perform at work. How someone feels about coming to work affects his or her energy levels and cognitive abilities. The impact of a negative culture is tremendous. It can lead to poor customer interactions, high turnover, underperforming staff, and in turn, reduced profits. Depending on the size of your company, the cost could be thousands, millions, or even billions of dollars.

The research is clear across industries: When your employees are more positive, your company is more productive and profitable. According to a Gallup study from 2012, organizations with engaged employees are:

  • 10% more customer service-oriented
  • 21% more productive
  • 22% more profitable

When you consider the numbers, culture is the most important consideration in business today. And as a result, we should reconsider the position and idea that culture is only the responsibility of your human resources team. Culture must be the focus and responsibility of every executive, owner, and manager in your company.

I often hear owners, executives, and managers argue against investing in their staff. Here are a few of the arguments I hear most frequently:

  • We need to remain focused on our customers and their experience. After all, we are in the customer experience economy. While customers are important, I would argue that we are in the employee experience economy. The talent war is over—talent won, and as a result, if we do not take care of our best and brightest people, another company will. And if you take care of your employees and they feel good about who they work for and what they do, they will naturally take care of your customers anyway.
  • Employees (especially young ones) don’t work hard anyway, so why give them more? The reality is this generation, just like previous generations, have the capacity to work very hard; it’s just that the new generation of workers don’t see the value in investing in a business that doesn’t invest in them.
  • The employees will just leave anyway. To this I say: maybe they will, but if you want any chance to keep your best and brightest, you need to provide them a better employee experience than they received in the past.

If you are focused on profits and productivity (and let’s face it, who isn’t?), then you must be willing to deliver a better employee experience to positively impact the mindset and attitude of your people coming to work. Culture is the most important thing in business today, so every owner, executive, and manager must keep it front and center in everything they do.

Remember what author Stephen Covey said: “The main thing is to keep your main thing the main thing.” Make culture your main thing.

Additional resources

Photo Credit: Françoise Challard Flickr via Compfight cc

 

Comments