Ben Sawatzky is the founder and CEO of Spruceland Millworks, a softwood lumber remanufacturer in Spruceland, AB. Sawatzky is highly respected in the industry and his company has been ranked among Canada’s top employers.
I spoke with Sawatzky a couple of days ago and he recounted an interesting tale. He was giving a public presentation and an individual commented during the Q & A session how he benefited from having been rewarded as a top performer in his bank branch. This employee praised his employer who reward him with a hard-earned holiday as a result of reaching some performance milestones.
Sawatzky asked if anyone else from the bank branch went on the vacation with him. “No” was the reply. Sawatzky’s response was that this approach was entirely misguided. Why? Sawatzky gave a number of reasons why he didn’t agree with this approach. The net result was that only one individual is rewarded, and not a team. In addition, the person who wins the reward is often sacrificing a work-life balance in order to achieve that reward. This simply reinforces in the minds of the other employees that recognition in the company comes at too-high a personal cost. The rest of the employees, knowing that they are not in running for the baubles dangled by the company, simply put their head down and keep working at their usual pace.
By contrast, Sawatsky’s approach is to take his entire company on a vacation. They shut down the entire plant and go celebrate together. Sawatsky believes his approach has reaped great rewards in terms of employee commitment and engagement–and this surely explains why Spruceland is regularly ranked among Canada’s top employers. The great majority of Spruceland’s employees also contibute to charitable projects undertaken in various parts of the world.
There is a close link between social responsibility and employee engagement. Spruceland is a great example of how to engage employees from top to bottom in the activities of the company both when working in the shop and when doing good in various corners of the world.
[NOTE: This blog post is based on an interview by Rick Goossen of Richard Galanti, CFO, Costco on January 25, 2010 at Costco Headquarters in Issaquah, WA. Mr. Galanti's comments are in quotation marks and were reviewed by him for accuracy. Please note that the interview has been edited for brevity.]
GOOSSEN: What is Costco’s approach to social responsibility (CSR)? Is it an integral part of your competitive advantage and, if so, in which way? How does Costco practice CSR?
GALANTI: “[Another] thing about corporate [social] responsibility is that there is a new word…”sustainability.” The nice thing about sustainability is that it rhymes with profitability in many cases. One example is the old traditional gallon jug of milk that has a square footprint and two-thirds of the way up it angles to the spout. Over the last couple of years we now have a taller jug, so it’s a smaller footprint, and it doesn’t have a lot of extra empty space at the top part of the jug. But just by doing that, and by increasing the number of gallons that fit on a pallet, we have eliminated thousands of truckloads of transportation costs and eliminated hundreds of thousands of pallets being moved throughout the US and Canada.
Another example is the water bottle. There are water bottles that seem like they’d fall over if the cap’s not on them because they’re so thin and you can crush them easily. Then there are the others, like Gatorade, that are so thick you can’t even crush them. The trend is towards less use of resin in making the bottles. Last year, on our private label, standard half-liter of bottled water, we took out 12 grams of resin. This required our production department to put a few more ‘ribs’ in the bottle to make it structurally stronger; but it is still a thinner bottle. Just those 12 grams on that one item helped us eliminate 17 million pounds of resin.
A Gatorade Bottle
The good news is it’s such a small amount per bottle; so we’re actually saving the customer money and making a little more money. But it’s also environmentally responsible; so it’s nice when you have that. Even though not everything that’s socially responsible is profitable, we still do it. We recognize that we can’t be everything to everybody; we do what we think it right.
People would love to see us take a lot of plastic out of our packaging. One of the things is you buy something like the memory cards or electric razors in this blister pack it is in; that’s a hassle to open even when you get home. Well part of it is that we are self service. We sell a lot more volume if it’s there for the customer to simply pick up. If you sell more volume you can lower the price per unit because you are selling more stuff in that cube. All that makes us sell more. By having items in the blister pack that makes it hard to pilfer. So there is a trade-off. We can’t be everything to everybody. We do what we can and we are using plastics that are more biodegradable. We have a whole group of people that work on that now and we are clearly cognizant of it.”
[NOTE: This blog post is based on an interview by Rick Goossen of Richard Galanti, CFO, Costco on January 25, 2010 at Costco Headquarters in Issaquah, WA. Mr. Galanti's comments are in quotation marks and were reviewed by him for accuracy. Please note that the interview has been edited for brevity.]
GOOSSEN: What is Costco’s approach to corporate social responsibility? Is it an integral part of your competitive advantage and, if so, in which way? How does Costco practice CSR?
GALANTI: “I think that before CSR had a fancy name we were already doing a lot of those things. One example relates to how we treat our employees. The approach of Jim Sinegal [Costco co-founder and public face] came from his mentor, Sol Price, founder of the Price Club and president of Fed-Mart, who just died in his 90’s.
The basic premise was let’s start not with how little we pay our hourly employees, and 90% of our employees are hourly, but what is a living wage? What is affordable high quality health care? Let’s then figure out how to make the model work with that.
We don’t seek publicity for what we do. Whether it’s a local newspaper, a regional magazine, or even a national magazine that comes out with the most responsible companies in that area, we are often not on the list. It may be because we don’t fill out the forms. We don’t apply to the “beauty contest.” In addition, once you start touting your “accomplishments”, you are not going to make everybody happy. There is always going to be some other more extreme view that you are not doing enough.
We think we do a lot of things right! Starting with the basic things, we’ve always treated our employees well, we’ve promoted from within, we’ve treated our customers well by figuring out how we can improve the quality and lower the price–if we sell more we can do that. It’s always about being honest and up front.
We decided years ago that we would give away 1% of the prior year’s pre-tax earnings and, which is about $20 million a year now, on a $2 billion dollar pre-tax. About 30% of it goes to the United Ways in communities where we operate or a comparable organization in other countries. About 30% goes to Children’s Hospitals; about 70 Children’s Hospitals. About 30% goes to youth-related activities and education. Every warehouse adopts an elementary school, and it can’t be your kid’s private school, it has to be a school in need. They do a third or fourth grade backpack program filled with supplies. The encourage employees to tutor one hour a week. Not only is it the right thing to do but it feels good and it engages employees.
What Jim [Sinegal] doesn’t want to have is a big 20-person staff in community and development trying to spend half their time figuring out how to allocate money. I remember anecdotally something very silly. We were collecting canned goods for something in the US. All of a sudden we are having a contest to make the cutest pallet to collect the stuff in. Jim’s view is that’s nice and this is nothing necessarily bad about it. The fact is, first of all, we have a department that’s bigger than it needs to be . Then they’ve got to fund their existence; they’re coming up with ideas which take more time in the warehouse. We’re a low cost operation and we can’t do that.”
MakeGood is excited to be participating in the F5 Expo coming up on Wednesday, April 7th. See www.f5expo.com for more details. One big draw is headline speaker Malcolm Gladwell who is author of a series of well-received books such as The Tipping Point and Outliers.
F5 Expo is where you want to be if you want to learn all things social media and become that much more tech savvy. Not only is Malcolm Gladwell the keynote at this event, they have also stocked a very impressive list of speakers to enlighten you with information.
Where will it be located this year you ask?
While your at it…. check out Lindsay Smith’s blog, the Founder of F5 Expo and Massive Media. She certainly is quite the technolgy expert… always gracing us with her fun persona on the local news while informing the public about the trendiest tech gadgets on the market.
The International Internet Marketing Association started in 1998 to bring marketers, agencies and professionals together to discuss the capabilities and potential of Internet marketing. It’s been over 10 years since our first event and our association remains focused on its original mandate – education. Each year, IIMA delivers a series of networking and speaking events hosted by subject matter experts, thought leaders, experts and panels of marketing practitioners.
Advanced apologies! This month, due to strategic repositioning, we are unable to continue with the Monthly Survey until further notice. However, please continue to spread the word for these worthy causes (below post) and support them directly via their websites. Thanks!
Please help the MakeGood Community choose an organization to support for February 2010. There are some very worthy organizations on the board this month to vote for.
SAFE - assists survivors of domestic violence with the appropriate financial tools and resources needed to enable women to leave unhealthy situations (www.newsafestart.org)
Team Will- a community of cyclists of all skill levels and ages committed to raising public awareness and funds for childhood cancer research (www.team-will.org). Check out some of their video trailers.
AFSP - the American Foundation for suicide prevention is involved with research, educational campaigns, projects and policy work (www.afsp.org). Here are some warning signs of depression and suicide. MakeGood found these suicide facts and figures interesting with regards to AGE and GENDER.
Buy Goats for Africa- When disasters or conflicts occur, families are often forced to flee, leaving everything. Sometimes they live in camps for years. Once their land is safe again, CRWRC helps the family to return. Unfortunately, all too often the conflict or disaster that destroyed a family’s possessions also destroyed their livelihood. One of the most precious commodities can be livestock. Should MakeGood help buy some goats to help families resettle in their land? (www.goatforgold.com)
Think about how many times your company has a party, luncheon, catered team/department meetings in a year.
Now, think about how much uneaten food goes into the garbage afterwards.
I implore you all to think twice before you let all that delicious food go to waste!
Last week, MakeGood had a Team Meeting for the re-launch of our website and we had quite a bit of food leftover.
So what did we do? We hit the streets to hand deliver some meals to our less fortunate friends.
We fed about 12 people that day.
This man was really grateful for the MakeGood lunch platter.
Let’s make 2010 a good one… by being more mindful of the less fortunate. Whether they are in Haiti or in your local community - your help, large or small, can and will make a difference.
Ben Sawatzky is the founder and CEO of Spruceland Millworks, a softwood lumber remanufacturer in Spruceland, AB. Sawatzky is highly respected in the industry and his company has been ranked among Canada’s top employers.
Sawatzky asked if anyone else from the bank branch went on the vacation with him. “No” was the reply. Sawatzky’s response was that this approach was entirely misguided. Why? Sawatzky gave a number of reasons why he didn’t agree with this approach. The net result was that only one individual is rewarded, and not a team. In addition, the person who wins the reward is often sacrificing a work-life balance in order to achieve that reward. This simply reinforces in the minds of the other employees that recognition in the company comes at too-high a personal cost. The rest of the employees, knowing that they are not in running for the baubles dangled by the company, simply put their head down and keep working at their usual pace.
Another example is the water bottle. There are water bottles that seem like they’d fall over if the cap’s not on them because they’re so thin and you can crush them easily. Then there are the others, like Gatorade, that are so thick you can’t even crush them. The trend is towards less use of resin in making the bottles. Last year, on our private label, standard half-liter of bottled water, we took out 12 grams of resin. This required our production department to put a few more ‘ribs’ in the bottle to make it structurally stronger; but it is still a thinner bottle. Just those 12 grams on that one item helped us eliminate 17 million pounds of resin.
[NOTE: This blog post is based on an interview by Rick Goossen of Richard Galanti, CFO, Costco on January 25, 2010 at Costco Headquarters in Issaquah, WA. Mr. Galanti's comments are in quotation marks and were reviewed by him for accuracy. Please note that the interview has been edited for brevity.]
