Fish n’ Shoes

By Karen Morris

I intended to write this article about a passion of mine: algorithmic-based predictive modeling variances in global supply chains.

But, it is the sultry gloaming of summer in the city and my city is New York, home of “Sex and the City” so, if you don’t mind, I think I would rather write about the S-word. Yes, you’ve guessed it……shoes.

Shoes matter (this is a universal truth). They particularly matter to me. Remember when Sex and the City’s protagonist Carrie Bradshaw is mugged and exclaims: “Please sir, you can take my Fendi baguette, you can take my ring and my watch, but don’t take my Manolo Blahniks”.

She was speaking a language I understand.

Ask anyone who knows me. I have been fortunate, frazzled and frustrated to have traveled the world in my career – and my shoes came with me. When it comes to shoes, I laugh in the face of excess baggage charges.

You see, I believe that as we embrace the many changes through our multi-faceted, iterative careers, we need a change of shoes. As we grow personally and professionally, life urges us to put on new shoes, literally and metaphorically. As leaders and innovators, we need something more – a range of shoes. The celebrated shoe designer, Christian Laboutin , likens a girl’s first pair of high heels to the rite of passage from girl to woman. Remember the shoes you wore at your wedding, on your first day at work, when you ran a marathon? Shoes commemorate transition and change. They have something, to say about innovation strategy and management too.

Our beloved Monsieur Laboutin tells his rite of passage story for a reason. It makes shoes matter more; it imbues shoes, his product, with meaning. Crafting a strategic narrative uses the socializing power of storytelling to inject meaning, relevance and purpose into your strategy in a way that can be immediately understood by all your stakeholders. When Laboutin the businessman and innovator set out to make his name synonymous with sexy, exquisitely expensive shoes, he probably did not have medieval Popes on his mind. Nonetheless, an analogy obtains between Papal power reinforcement strategies and market place and brand power reinforcement strategies.

How did Laboutin become “the” designer shoe in a surprisingly crowded marketplace of thousand dollar plus shoes, inspiring an eponymous single composed by Jennifer Lopez, a “Laboutin Barbie” and a Disney short. Yes, his designs, raw materials, craftsmanship, distribution and premium pricing were outstanding. But so are Manolo Blahnik’s, Christian Dior’s and Jimmy Choo’s. These albeit indispensable, determinants of best in class will not put you in a class of your own.   He made the sole of the shoes, historically the unseen, least vital part, narrate his brand. He made the soles red.

This is innovation genius. The disruptive power of “just one change” lies in the inversion of conventional thinking about what matters and why. We typically classify product and service attributes, in this instance shoes, into those that matter from a utilitarian perspective……such as quality and durability….or , from an emotional perspective……design, elegance, fashion statement, unabashed sexiness. By going against the segment’s assumption that the sole is a utility and function play and making it instead the quintessential aspect of the offering, immense competitive thrust is delivered.

This, to adapt a culinary classic of my native Yorkshire, is Fish ‘N Shoes Thinking. Fish – because you swim upstream against the force of industry assumptions – and shoes, because, as already indubitably established, shoes are a better metaphor for strategic leadership than French fries. Fish ‘N Shoes Thinking abounds in businesses that demonstrate the “change one thing” strategy: Apple – put design above function. Whirlpool – it doesn’t have to be white, make the washing machine furniture. Macy’s – furniture “risk less” insurance, refund the insured their premium if no claim is made on the policy (“risk free” insurance oxymoronic to an insurer). Argyle Mines’ industrial grade brown diamonds, increase the price by a thousand per cent and create desire for the previously undesirable brown…now champagne, cognac, and hazel…rocks.

In these paradigms, the “one thing” becomes a great deal more than the sum of its sole part, which returns us conveniently to the red Laboutin   sole, affectionately termed “Sammy red-bottoms”……

The litigiously hard-won intellectual property right protection of exclusive rights to the use of that red bottom color code (Pantone 18-1663 TPX) on shoes cemented the commercial advantage of  Laboutin’s differentiator and created an impermeable barrier to entry.

The red soles then deliver value far beyond the aesthetic innovation; they go to work on brand promotion as “free” advertising. Marketing – I heard a Harvard business school professor quip – is the price you pay for not having a good enough product. We are accustomed to admiring utility brands whose functional excellence or brand ubiquity makes their brand inseparable from the product’s performance. Jacuzzi, Xerox, FedEx, Escalator, Hoover, Google, Kleenex.

In this case, the emotional ‘story’ of the luxury glamorous shoe renders the brand inseparable from the product and the product literally a walking promotion for the brand. The flashing red sole in turn becomes a unique value proposition to the consumer, a motive to purchase, a fashion and status statement, an advertisement of how expensive the shoes are. The historically unconsidered sole becomes the soul of the consumer experience (no more puns, I promise). And this is exquisitely commercial head over heels success, 3 years straight leading the Luxury Brand status Index, three years

Awarded Most Prestigious Women’ Shoes, and the “real” Carrie Bradshaw, fashion doyenne and trend setter par excellence Sarah Jessica Parker gets married in them. This is brand promotion money can buy, just not Laboutin Ltd.’s money since in a marketing Fish ‘n’ Shoes move contrary to luxury brand convention, Laboutin’s “ just one thing” is never to give his merchandise away for promotional gain…a practice the designer( disingenously ?) dismisses according to  British Vogue as ‘unimaginative”.

As mentioned, this kind of “fish ‘n shoes” thinking about differentiation in a crowded marketplace is not limited to $4000 shoes. But since we’re on the topic of shoes…….I promised no puns….but I still love shoes….let’s look at another shoe-led business model innovation Zappos.

A parallel pattern emerges in the components of the strategy:

  1. Question conventional assumptions.
  2. Change one thing.
  3. Build a platform (not an intentional pun) around the innovation.
  4. Socialize the strategic story.
  5. Make the “product” integral to the buyer experience.

The Zappos story also begins with an inversion of the “rules”. Conventional thinking about call centers obsesses about cost and efficiency with emphases on control and consistency. US-situs call centers have had notoriously high turnover rates. We have all had dispiriting experiences trapped between the tyranny of the technology (press 73 if you would like your blood pressure to reach dizzying heights in frustration) and the disembodied and disengaged script reader on the phone.

This constipated experience is the antithesis of storied, connected, empathetic customer experience. But that’s call centers for you….and unlike books and sundry hardware, some things just don’t fit the on-line model because fit is important, shoes for example.

Zappos founder Nick Swinmurn and CEO,  Tony Hsieh, did not conform to those assumptions. Swinmum’s vision to build a retail empire online began with the unlikely proposition of shoes. Like many bright ideas, it now seems obvious with 20/20 hindsight but on inception looked improbable, even to initial venture investor Hsieh. But if the shoe fits or is easily returnable, you can buy it on-line, and even  in 1999, $400 million dollars’ worth of shoes were being ordered from mail order catalogues and that was a mere sliver of a then $40 billion dollar US market.

In this case, there was no actual change of shoes. Zappos shoe inventory replicates other online and physical store retailers. Zappos did not change the  what but the how of its model. Product-centricity was supplanted by people-centricity. In its brief occasionally tumultuous ten year history before hitting over a billion dollars in sales and being acquired by the Goliath Amazon, Zappos had a number of Fish and Shoe moments, such as its decision to walk away from drop shipping, representing 25% of revenues and sorely needed cash-flow because control of customer experience necessitated control of inventory.

But the bold,  transformational “change one thing” that excites me in this people matter as much as product story was their reinvention of the call center. Through a dramatic salmon  upstream leap of faith and imagination, Zappos effectively repurposed the call center from servant of the organization’s efficiency and expense management to servant of customer experience.

Of course, for the one changed thing to have resonant and sustainable business impact the organizational ecosystem must be redesigned around it.  Operationally and culturally, Zappos built the platform around its core idea. Thus it became a business in the business of exceptional, memorable customer experience. The then prototypical accoutrements of the call center – scripts, time restrictions, de minimis discretionary decision rights, hourly fungible impersonal staffing, key stroke counts, command and control – were booted out in favor of intensive training, trust and empowerment. The first step to customer centricity is often misunderstood as customer focus. I would like to stiletto that notion. The quintessential first focus if we seek differentiation in customer experience must be on the employee.

Recruitment training and retention methods and tools were reinvented to support the preeminence of customer experience. New recruits were paid during intensive training programs building skills to communicate with customers empathetically and authentically. All new hires to the company at every level and brooking no exceptions whatsoever were inducted into the customer-centric culture by working for an initial period in the call center. The story goes of a newly-appointed senior executive officer who was disinclined towards the immersive call center experience. The company was disinclined to continue the relationship.

The organization made cultural fit and shared values the defining characteristics of employees and created and sustained employee engagement as the sine qua non of the delivery of customer experience. Making the grade technically is irrelevant if the cultural dimension is lacking.  After training, new hires are offered a 3,000 dollar “bonus” to quit.

Moreover, employees enjoy the benefits of the people-centric culture that they are accountable for sustaining quite literally as well as socially. Zappos offers free health care, lunches and vending machines and a library. However these are positioned as cultural rather than economic benefits.

Constant storytelling and exchange, and “goofing around” underscore the unique values and positioning of the company which publishes unedited its annual “Culture Book” an anthology of employee descriptions of the company’s culture. These are not ubiquitous traits of service center environments but as tony hsieh puts it they business of selling goods online but in the business of “Delivering Happiness” and their reputation suggests that they do.

So this fish ‘n shoe combination is an invitation to think differently and make the inquiries:

  1. What conventional assumptions can we invert?
  2. What one thing can we change?
  3. What platform can be built upon this innovation?
  4. How can we socialize our strategic story?
  5. How do we make our product the soul of the customer experience? (I may have broken the no-pun promise)

Finally, if cynicism still has you under its heel, remember Golda Meir’s advice about confrontation. Before you race to dispute someone with a different perspective than yours, walk a mile in their shoes. Then, if the dispute should materialize, you are a mile away and you have their shoes. And if you are really blessed, they will be your size and have red soles.

Karen A. Morris is a strategic advisor to national and multinational companies. She is formerly Chief Innovation Officer of Chartis Insurance, one of the world’s largest general insurance companies, Karen specializes in all aspects of innovation strategy and execution. She has over 25 years’ experience in law, management, underwriting and multinational business. This rich and diverse international background inspires her insight on product, service and business model innovation. She is a frequent speaker and writer on innovation and leadership at global forums and conferences around the world. Karen is co-founder and President of The Institute for Insurance Innovation launching in 2012.  Karen is also an adjunct professor at Fordham University in New York teaching Innovation as part of the MBA program. She has spoken on innovation at the world’s foremost executive MBA program. You may contact Karen at karen.morris2@yahoo.com.

The 3S Scorecard — A Valuable Tool for Promoting Socially Responsible Sourcing

S. Jimmy Gandhi, Ph.D., California State University, Northridge ( sjg07646@yahoo.com)

Christine Bullen, Ph.D., Stevens Institute of Technology (cbullen@stevens.edu)

Wanda Lopuch, Ph.D., MDA Associates (wanda@lopuch.com)

Abstract

Global Sourcing continues to grow as a strategic business tool worldwide. Sustainability has increasingly become a key aspect of global sourcing, addressing the social, environmental and economic aspects of sourcing agreements. It is important to remember that sustainability is truly feasible when all three aspects are considered equally. However, despite this, the economic and environmental aspects have received greater attention than the social aspect. This could be because the social aspect of sustainable global sourcing is complex as it requires looking at the impacts on the individuals, families, communities and culture, and universal metrics have not been devised to take these aspects into consideration.

In order to deal with these challenges, The Global Sourcing Council is working on developing a new tool for measuring socially responsible sourcing, the 3S Scorecard. This tool can be used by clients, providers, advisors, governmental entities and professional organizations involved in global sourcing to promote and emphasize corporate social responsibility in the sourcing supply chain.

Introduction

In the early 1990s, the Green Journal was launched, and a handful of niche companies such as Ben & Jerry’s and Timberland were integrating the social consciences of their founders into the capitalist model of business, by incorporating sustainable practices into their strategies. But these companies were the exception rather than the rule for American corporate culture. In most sectors, driven by short term profit demanded by Wall Street, there has been a resistance in the corporate world to the adoption of sustainable business practices.  This has persisted for decades and reflects their complexity and the initial investment that is required. However, some businesses started to recognize consumer preferences for environmental and social values, which drove their purchasing decisions. Gap, Inc. was an early example of an enterprise that was boycotted by consumers who disapproved of the lack of socially responsible business practices th, 2011). Gap realized that consumers would not take kindly to their not being socially responsible, which resulted in management making several changes to their corporate policy on sustainability and social responsibility. This transformed Gap into a socially responsible, well respected organization. Furthermore, as consumers voted with their wallets, other big business, including those in the IT and financial sectors, started to listen. In the first decade of the 21st century, large businesses such as Citigroup, NewsCorp and IBM committed billions of dollars to sustainable business practices.  Since sustainability has been given close attention only in the last few years, it is still a major issue for corporate America and is thought of as the major corporate challenge of the 21st century ( 2007).

Bringing sustainable and socially responsible practices into the supply chain, specifically into global sourcing, is an additional corporate challenge. Awareness about sustainability is growing exponentially and sustainability measures will take on broader impacts throughout the supply chains, which will also increase transparency. More companies will “walk the talk” by matching sustainable brand images with internal company behavior. It is clear that sustainability is becoming increasingly important in the 21st century and organizations should pay careful attention to measuring all aspects of sustainability of their projects.

Sustainability in Sourcing – Solving the Paradox

In today’s globalized economy, global sourcing is a business strategy and business practice that most major businesses are involved in, either directly or indirectly. The roots of global sourcing are a need to drive cost reduction and support competitive positioning to bring greater profitability to an enterprise.  Although over the years of globalization, the focus of sourcing has shifted to include wider goals such as better quality, increased efficiency and improved flexibility, the “success” of sourcing projects is still often measured in the dollar contribution to the bottom line. Organizations can use global sourcing to achieve economic benefits as well as sustainable growth by balancing short term gains with the model of long term growth. This balance can be achieved by incorporating sustainable practices into the organization’s overall global sourcing strategy. However, this is not an easy task and the inclusion of sustainable practices in sourcing is becoming of increasing concern in the 21st century. Business Process Outsourcing (BPO) and Information Technology Outsourcing (ITO) sectors are under pressure in their organizations to reduce costs. Therefore, while the initial adoption of sustainability, particularly social sustainability, principles may increase the cost of doing business in the short term, the forward looking executives in these industries seek a long-term solution.

The major aspects of sustainability in sourcing address the social, environmental and the economic aspects, as shown in Exhibit 1 in The University of Michigan’s sustainability model, (University of Michigan, 2002). We can see that the area where sustainability is truly feasible is when all the three aspects are considered equally. Only considering any two out of the three aspects of sustainability will not work in the long run. For example, if we merely consider the social and environmental aspect of sustainability for a project, it is merely bearable, i.e., it is possible but only in the short term as organizations will not be inclined to undertake the proposition if it did not make economic sense. Similarly, if only the economic and social aspect of sustainability is considered, it would be equitable, but would not be sustainable for the long term, considering the current focus on cost reduction.

Exhibit 1. Three Aspects of Sustainability (Adopted from the 2002 University of Michigan Sustainability Assessment)

3S

However, despite this identification of the need for equal importance being given to all three aspects of sustainability, the economic and environmental aspects have received greater attention than the social aspect. There is no set definition of what constitutes a socially responsible business and it may vary by country and cultural norms.  It requires looking at the impacts on the individual, families, communities (local and national) and culture. Measuring these impacts also requires a longer time horizon than the economic and environmental factors.

All enterprises are focused on the creation of shareholder value by embracing opportunities and managing risks. The concept of sustainability involves harnessing the market’s potential for sustainable products and services while at the same time employing sustainable practices to reduce costs and risks.  In order to recognize this, the Dow Jones Sustainability Index (DJSI) was established to offer a quantification of a business’ sustainability strategy and their management of sustainable opportunities, risks and costs (DJSI, 2010). The most viable and profitable businesses in DJSI are those that implement sustainability into their overall strategy. In fact, the DJSI (North America) covers the leading 20% of the companies in terms of sustainability of the 600 biggest North American companies in the Dow Jones Global Total Stock Market Index. These “best of breed” companies are evaluated on two major measures: economic performance and sustainability measures.  It is seen that there is a correlation between these two factors and that companies which embrace sustainability are the ones that have good economic growth. This correlation or trend is not surprising since companies realize that new consumers of their products and services, although price sensitive, are increasingly looking beyond price itself when it comes to making purchasing decisions. HP piloted the green PC recycling program not only because it was socially desirable, but also because it produced economic gains. Similarly, the incremental expenses by Walmart in implementing its global sustainability program and monitoring suppliers are not viewed as additional costs that will lower their short term gains, but are thought of as a strategic investment in the brand value and acquisition of new customers, which will produce sound profits.

Importance of Metrics in Sourcing

Technical and economic performance metrics have been developed and implemented over time through the use of Service Level agreements in global sourcing engagements. However social sustainability metrics are complex and have not been widely implemented. Despite these challenges, businesses worldwide have realized that consumers are becoming increasing well informed and will not support their business if they do not take the social aspect of sourcing into consideration. Thus sustainability and social responsibility programs are being adopted by both public and private companies, not solely based on becoming politically correct, but because these programs make economic sense in the long run. It is for this reason that companies such as Walmart have started developing scorecards to evaluate the extent to which their providers are using sustainable practices. This effort started in 2009.

The UN Global Compact (United Nations, 2010) is a practical framework for companies that are committed to sustainability and responsible business practices. It seeks to align business operations and strategies everywhere with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption. The Ecolabel (Wikipedia, 2010), is a labeling system for food and consumer products. Ecolabels are a form of sustainability measurement directed at consumers, intended to make it easy to take environmental concerns into account when shopping. Ecolabeling is often voluntary, but green stickers are mandated by law in North America for major appliances and automobiles.  There is even an application developed for the iPhone, which enables the user to measure the environmental impact of the product by reading its bar code (Ecosalon, 2009). These efforts demonstrate that organizations and government entities are beginning to recognize the customer interest in the life-cycle impacts of the products and services they consume.

Challenges Faced While Establishing Metrics for Socially Responsible Sourcing

Sustainability is a value judgment that will inherently mean different things to different people. This is particularly true in the case of social sustainability as social values vary from culture to culture.

Moreover, socially responsible sourcing is a relatively new field. However, to guide sustainability action, here are guiding principles of social sustainability, which include the following:

  • Equity: When individuals have access to sufficient resources to participate fully in their community and have opportunities for personal development and advancement and there is a fair distribution of resources among communities to facilitate full participation and collaboration.
  • Social Inclusion and Interaction:  This includes both the right and the opportunity to participate in and enjoy all aspects of community life and interact with other community members.
  • Security: This entails individuals and communities having economic security and having confidence that they live in a safe, supportive and healthy environment.
  • Adaptability: This aspect includes resiliency for both individuals and communities and the ability to respond appropriately and creatively to change. Adaptability is a process of building upon what already exists, and learning from and building upon experiences from both within and outside the community.

As societies are modernizing, particularly in the last decade, the social sustainability themes and domains are shifting from traditional themes such as housing, education, employment and human rights to more emerging themes such as empowerment of people, involvement in strategic decisions, health, safety and overall quality of life. This complicates the process of establishing valid metrics to quantify socially responsible sourcing. Global sourcing increasingly involves the management of several providers introducing more complexity in collecting data and in recognizing differing social structures based on regions, countries, and cultures. When the entire life cycle of a product is considered, many organizations are involved to understand the “womb to tomb” context, and it is hard to predict whether the providers will adopt the practices of social responsibility. For example, at a large organization such as Walmart, there are several layers of providers in the supply chain. This creates increased complexity and difficulty in quantifying the intangible benefits of socially responsible sourcing, such as quality of life and empowerment of people over time.

Most global sourcing projects have at least three major stakeholders, namely, the company that outsources the work (client), the company that is going to perform the outsourced work (provider) and the end user who uses the product or is a beneficiary of the service. Since these stakeholders could have varying business interests, it is extremely challenging to be able to come up with a set of uniform metrics that would work from the perspective of all three stakeholders involved.

The Global Sourcing Council (GSC) and the 3S Scorecard

The Global Sourcing Council (GSC) is a non-profit organization which was founded to focus on helping organizations from all sectors involved in global sourcing. The GSC works with both the client and the provider and tries to help them achieve their economic goals without sacrificing sustainability. One way the GSC is working to achieve this goal is by developing a new tool for measuring socially responsible sourcing called the 3S Scorecard. Several other organizations involved in the sourcing field have also expressed the need and interest to develop scorecards that enable companies to integrate sustainability into their strategy. One of the scorecards being currently developed is the Responsive Business Scorecard (RBS) (Woerd, 2004) which tries to enable companies to score on “profit, people and planet” and at the same time helps them to integrate stakeholder demands into programs to improve performance.

The focus of the GSC is on the full range of sustainable practices as they can be used in the global sourcing marketplace. This includes the environment, employment practices, legal practices, ethical standards, cultural and community impacts and more.  “The 3S Scorecard” is a measurement tool for sustainable and socially responsible sourcing practices that can be used by stakeholders involved in global sourcing to promote and emphasize corporate social responsibility in the sourcing supply chain. For a client of sourcing services, the 3S Scorecard would serve as a tool to evaluate and compare service providers on their compatibility with the client’s own corporate sustainability directives. For service providers, the 3S Scorecard could be used as a tool to emphasize the 3S focus and, therefore, serve as a competitive advantage over those providers who do not embrace the 3S principles.

3S Scorecard Metrics for Social Sustainability

Scorecards are an effective way of evaluating and then maximizing partner performance. The purpose of the 3S Scorecard is for the client or external evaluators to be able to evaluate the extent of implementation of social sustainability initiatives by the service providers. In order to be able to do this, the 3S scorecard development team is implementing several metrics such as:

  • Employee Satisfaction
  • Employee involvement in decision making
  • Working conditions & employee safety
  • Working hours
  • Paid vacation
  • Health of employees
  • Diversity of employees
  • Transparency
  • Conflict Resolution
  • Employee rights
  • Reduction of “us” versus “them” mentality between management and employees
  • Salary scale capped at certain level between the lowest and highest paid positions
  • Impacts on local culture and attitudes toward the global sourcing work.

Each of the above metrics can be evaluated from two perspectives:

  • Each metric can be evaluated regarding the extent to which it is implemented by the supplier and
  • The perceived importance of the actual implementation of that metric could be gauged.

Both perspectives would be scored on a scale of 1-10, by the involved employees. Then the product of the two ratings would be calculated in order to come up with a total “social sustainability score”. However, the challenge facing the developers of the 3S scorecard is that the scoring of these metrics (from both perspectives) could vary a great deal from country to country, or even from region to region in global sourcing destinations such as India and China. Sustainability in general is a subjective term and social sustainability is particularly vulnerable to this subjectivity and differing interpretation as people have different social values and what might be acceptable in one culture might not be tolerable in another.

Benefits of the 3S Scorecard

Despite the challenges caused by the cultural aspect of social sustainability, the 3S scorecard will be designed to provide benefits to various stakeholders involved in the sourcing process. Some of the primary benefits are:

  1. For a client of sourcing services, the 3S scorecard will serve as a tool to differentiate among service providers based on principles of sustainable and socially responsible sourcing practices.
  2. For service providers, the 3S scorecard will be used as a tool to strengthen and emphasize their sustainability focus allowing them to use this focus as a competitive differentiator. An additional benefit of the scorecard is to provide a roadmap for further organizational development.
  3. An independent tool, the 3S Scorecard will allow both clients and providers to align their practices to support their working toward compatible sustainable practices.
  4. Other stakeholders in the sourcing process, such as advisors, consultants, government bodies, or professional organizations, such as the GSC, will use the 3S scorecard to evaluate the stakeholders, promote sustainable practices and recognize leadership in the field of sustainable and socially responsible sourcing. For example, the Global Sourcing Council established its 3S award in 2008 and continues to solicit applications from provider candidates based on short video submissions. More information on the upcoming 3SAward competition can be found at http://www.gsc3sawards.com.

Conclusion

The 3S scorecard is a work in progress by the GSC and involves evaluating and further developing current scorecards that are being used by organizations involved in global sourcing. The current provider scorecards evaluate social sustainability only to the extent of checking if it is being implemented or not, that is a simple “yes/no” approach that organizations are able to use in evaluating social sustainability. The 3S scorecard intends to measure the extent to which these social sustainability metrics are being implemented by service providers and come up with a “social sustainability score”. The 3S Scorecard will provide the clients with a tool to evaluate the various service provider options and go with the ones whose social sustainability values align with their own.

Establishing metrics for sustainable and socially responsible sourcing is a daunting task for most organizations. The challenge is to establish a fair and uniform way to evaluate organizations from across the globe, regardless of their location or local practices. This task is made more complex by the use of multiple providers associated with one product or service.  One of the most difficult tasks is establishing metrics that can be applied across national boundaries, across a variety of cultures and under many different legal systems. Since this is not possible considering the large number of sourcing markets that the US deals with, in Phase 1 of the development process, the 3S scorecard will be designed specifically for the largest global sourcing marketplaces on a national level. Phase 2 will involve the national level scorecards being fine-tuned to be applicable at regional levels. This would be beneficial for large outsourcing markets such as India and China where the organizational culture could vary significantly from one part of the country to another.

 

References

DJSI (2010). Corporate Sustainability, http://www.sustainability-index.com/07_htmle/sustainability/corpsustainability.html (Accessed on August 31, 2010)

University_of_Michigan (2002). Sustainability Assessment and Reporting, University of Michigan

Woerd, F. v. d. and T. v. d. Brink (2004). “Feasibility of a responsive business scorecard — a pilot study” Journal of Business Ethics, 55:173-186.

 

Wanda Lopuch passionately advocates sustainable global development, and oversees many strategic initiatives focused on promoting best practices in socially responsible sourcing. She is the President of MDA Associates, Inc., a consulting organization focusing on “greening” the global operations and their supply chains while improving economic outcomes of businesses in the life sciences, IT, and financial sectors. With 20 years of experience in the pharmaceutical and telecommunication sectors spanning across the United States, Europe, and East Asia, Dr. Lopuch guided international teams for maximizing performance in multinational, multicultural and multi-functional projects. Prior to establishing MDA Associates Inc., Dr. Lopuch was the president of Medical Data Management Inc., the company she founded and grew into a multi-million dollar business with locations in 7 countries. Dr. Lopuch holds a Ph.D. in Administration and Supervision from Marquette University, Milwaukee, WI, and an MS in Computer Sciences from the Wroclaw University of Technology in Wroclaw, Poland. She lectures on various aspects of sustainable and socially responsible business.

Christine V. Bullen is a faculty member at the Howe School of Management, Stevens Institute of Technology where she is the coordinator of the four-course concentration/major on global sourcing in the MSIS and MBA programs. She is currently conducting research on an IT workforce deployment model, looking at the impact of sourcing strategy on the in house needs for IT skills. She earned her MS from MIT and her Ph.D. from Stevens. She is also the former chair, president and board member of the Global Sourcing Council.  You may reach Christine at Christine.bullen@gscouncil.org

From the President

By Diana d’Ambra

As we celebrate the fiftieth anniversary of Dr. Martin Luther King’s “I have a dream speech”, many commentators have stepped back and observed how far we have come as well as how far we have to go.  But I would like to focus on how a society changes.  How do we change our values?  How do we change what is important or acceptable?  Fifty years ago, it was acceptable to not serve Blacks in a restaurant. Or refer to Blacks by a commonly used derogatory word that can no longer be written or spoken in public, now referred to as the “n” word.   How did that change occur?

Another example here is smoking.  Twenty years ago, people smoked at their office desks.  Now they are barely permitted to smoke outside the office building.  The number of smokers has decreased dramatically over time.  The social acceptability of smoking has waned.  Many personal ads specify “no smokers” in a way that other traits would not be so distinctly omitted.   This change did not occur overnight, nor was it linear, but it did occur and change the way we think about smoking.

Some of the change reflects new laws, but legality is often a laggard in social movements, catching up with the movement, not leading it although both bounce off of each other.  The media reports on it and with the rise of the Internet, IM’ing, Facebook and social media in general, this is an increasingly important factor.

So, how do we as a society or as a person determine whether it is acceptable to us to buy, especially as consumers?

The news has been abuzz with all aspects of sustainable and responsible sourcing, although sometimes not broached as such.  But it is having an impact on how people think about buying and sourcing.

The fallout from the Bangladeshi factory fire continues although at a slower cadence.  The ability of Bangladesh to respond effectively through legislation as well as the concurrent cultural and financial change is still being followed and reported on.  There is increased emphasis and push for sustainable sourcing, which not only may improve firm’s bottom lines but provide a market differentiator to consumers increasingly aware of the power of their purchase.  And as the media more consistently reports on sustainability and sourcing issues, reputation is of importance too.

Recently, the role of corporate responsibility towards the environment has expanded to not just safe working conditions but fair and equitable pay..  Note, this is not necessarily “legal” boundaries but ethical and moral ones.  Just in the past few weeks, in the United States, hundreds of fast food workers across the country are walking off their jobs to demand higher wages.

But the complexity of these issues as well as their interaction can hardly be understated.  A firm can have a stellar record or reputation in one field, such as sustainable supply chain sourcing, while it is under pressure for hiring at and paying lower, but legally permitted wages.

As we as a society gathers more information and change our behavior accordingly, what will we purchase?  What will be acceptable?  How will we judge it?  What will we be willing to pay for it?  What is our personal and moral judgment?

Diana d’Ambra, President of the Global Sourcing Council, is a consultant at Cortelyou Consulting. She may be contacted at diana.dambra@gmail.com