Environmental Sweet Spot

What do manufacturers, registrars, and consumers all have in common?

Published: Monday, December 5, 2011 - 12:49

A plant manager, an ISO auditor, and a soccer mom all walk into a bar. The bartender asks the manager, “What’s your No. 1 priority?” Much to the bartender’s surprise, the manager answers, “The environment.” The bartender turns to the auditor, asks the same question, and gets the same answer. Next he asks the soccer mom, “I suppose the environment is your top priority, too?” The soccer mom smiles, “Yep.” The bartender squints at the trio and says, “What is this, some kinda joke?”

Lots of jokes go like that, but the rift between those three groups isn’t funny at all. We usually hear about the divisions between manufacturing, standards auditors, and consumer groups. I’d like to point out that, when push comes to shove, we all share environmental concern equally. By finding and defining the common ground of environmental interest, we can easily envision these groups helping each other to reach their individual goals.

The Sweet Spot

Fig 1: The overlapping concern of “Clean Environment” is the Sweet Spot.

The environmental sweet spot (ESS) in figure 1 above shows three separate groups with their top priority listed at the outside of their bubble and their environmental concern at the inside, where it overlaps with the others’. That overlapping concern is the “sweet spot” where all parties share a common concern. Note that there is no separate “environmental” group in figure 1. Although it may seem obvious that consumers and auditors fall into the environmental group, we shall see that manufacturers do, too—it’s just that some of them don’t know it yet.

Certainly each group desires clean air to breath, safe water to drink, and a planet in decent shape for their kids and grand kids, but sometimes their top priority may not seem in line with those concerns. A number of years ago, while doing marketing research, I came across Theodore Levitt’s famous quote, “People don't want a quarter-inch drill; they want a quarter-inch hole.” That quote often prompts me to examine folks’ motives from a slightly skewed angle. With it in mind, I propose that the most efficient way for each group to fulfill its individual goal is to fulfill the goals of the other groups.

Let’s start with an evaluation of the consumer group’s top priority and see what tool it looks for to achieve a desired result.

Consumer Priority

Valuable product. Much has been written about the meaning of value to a consumer. In a nutshell, the juxtaposition of quality and retail cost results in perceived value. Consumers’ desire for environmentally friendly products has added a “green” twist to their perception of value.

Many customers look to standards certification to assure them a certain product meets their criteria for green-ness: think Energy Star, Green Seal, and Dolphin Safe.

As early as 2008, surveys such as The GfK Roper Yale Survey on Environmental Issues (pg. 4) showed that consumers “...are willing to purchase environmentally-friendly products, but other considerations such as price and quality often take priority.” This same survey found that consumers “...want additional information about environmental impacts on product labels. Large majorities say that it is either important or essential to have eco-labels that describe the environmental impacts caused by product manufacture (73%), use (73%), and disposal (79%).”

According to National Geographic’s Greendex 2010 (pg. 3), “The survey results show that environmentally friendly consumer behavior, as measured by the Greendex, has now increased from 2008 levels in all but one of the 14 countries polled in both 2008 and 2010.”

It seems that there is a growing trend for consumers to pay more attention to the eco-friendliness of the products they purchase, and increasingly look toward certification to help them make purchasing decisions.

“An increasing number of consumers are choosing safe and environmentally friendly products when making a purchase decision,” says the Intertek Group, a registration body that offers green and environmental auditing, among other services. “They are looking for third-party green certification marks or labels on products to validate health and environmental claims. Consumers want proof that products really are free of toxic materials and were produced in an environmentally conscious way.”

Although what people really want are environmentally friendly products, what they look for are environmental certification labels.

Registrar Priority

Conformance to standards. This might seem obvious until we apply the “quarter-inch drill” quote.

The U.S. Department of Commerce’s (DOC) stated mission is “to help make American businesses more innovative at home and more competitive abroad.” Although that may be the DOC’s main objective, it adheres to the mandates of the Code of Federal Regulations (CFR), which specifies governmental action for everything from floraculture to “specially designed implements of torture” (CFR 774.2 oA983). Somewhere in the middle of the CFR’s purview rests the responsibility of “dolphin safe” tuna certification. This certification was in direct response to public pressure. The dolphin-safe issue is just one example of consumer and regulatory interests overlapping.

Although regulatory agencies don’t answer directly to the public, the politicians who appoint heads of agencies do. Elected officials are well aware that if the public perceives an agency is not working in the public’s best interest, the elected representatives will be the ones to hear about it.

What politicians want are votes, but what they look for is public sentiment that the regulatory agencies are serving the public’s interest.

Lloyd's Register Quality Assurance (LRQA), a business-to-business corporation providing global business assurance, works to help improve its manufacturing clients’ quality, safety, environmental, and business performance as well as make a profit for its shareholders. One of the standards LRQA covers is ISO 50001:2011—“Energy Management.” In helping manufacturers become ISO 50001-certified, LRQA also helps consumers see which companies have gone the extra mile to operate in a more environmentally sound manner. Companies seek this certification, in large measure, in response to consumer interest.

What certifying bodies want is for businesses to purchase their services, but what they look for is the consumer interest that drives businesses to do so.

Manufacturer Priority

Reliable customer base. Northwestern tire tycoon Les Schwab admonished his employees to “Treat your customer the same as you would your mother.” The late self-made multimillionaire knew the importance of repeat customers. Earn their trust, and you will have a ready and reliable customer base that translates into increased long-term profits.

As the aforementioned studies indicate, many of today’s customers are actively seeking companies they can trust to provide quality products while employing ecologically sound practices. We live in a time when manufacturers of goods and service providers can, and are, increasing their market share by conforming to the standards required for various eco-certifications. It may seem to some businesses that the certification process is all for naught, but when that certification helps to create an atmosphere of trust that their product or service is in line with their customers’ environmental concerns, the return on investment can be immeasurable.

Although a manufacturer wants a reliable customer base, it should be looking to gain the certification that can help build just that.

It’s All About Communication

While pondering the need for communication between consumers, manufacturers, and certification bodies, I couldn’t help thinking about the “Occupy Wall Street” movement. My conversations with participants of local Occupy events left me with more questions than answers. Yes, they’re unhappy with “Wall Street,” but what do they want? I can just see corporate boards in closed-door meetings, chairman with hands turned palms-up.

“I get that they’re mad, but what do they want us to do?”

If the occupiers made specific demands, perhaps they could get some results. Likewise, consumers must be vocal and specific in their demands to manufacturers. If they want product created in an ecologically sound manner, they must communicate with their dollars. Consumers cannot vocalize a desire for green products while purchases are based solely on their wallet. It sends a confusing message that manufacturers are left to interpret on their own.

Manufacturers, for their part, must do a better job of educating the consumer as to what the true cost of low-priced product is. If unethically cheap labor is a production requirement for $35 sneakers, the manufacturer would do well to bring that to the forefront of public perception. If raw materials must be obtained from “less than green” suppliers to bring us $100 lawn mowers, manufacturers could use that fact in conversations with their customers.

Certification bodies should voluntarily take up the role of liaison between consumer and manufacturer. These groups stand in an advantageous position that enables them to serve as mediators, bringing each party closer to understanding how certification links the two parties in the interest of ecology.

Sound environmental practices benefit all mankind. Consumers are asking for it, manufacturers can increase profits from it, and standards certification can help facilitate it. When all three groups learn to effectively communicate their common interest in green processes, they will find that environmental sweet spot.

About The Author

Ryan E. Day

Ryan E. Day is Quality Digest’s project manager and senior editor for solution-based reporting, which brings together those seeking business improvement solutions and solution providers. Day has spent the last decade researching and interviewing top business leaders and continuous improvement experts at companies like Sakor, Ford, Merchandize Liquidators, Olympus, 3D Systems, Hexagon, Intertek, InfinityQS, Johnson Controls, FARO, and Eckel Industries. Most of his reporting is done with the help of his 20 lb tabby cat at his side.