Sustainable Solutions Plan

Abstract

There are many definitions for sustainability and depending on how the term is understood will depend on the context from which word is being used. The context that sustainability will be used in this paper will be on the impact sustainability has on a company’s financial, social, and environmental associations. The paper will review what is happening in the publishing industry today and how a single enterprise is experiencing the challenges from an environmental, social and financial aspect. The paper will focus on the economic feasibility and business justifications for implanting sustainability efforts, what the return on investment could look like, and the measures and impacts of such efforts.

Sustainable Solutions Plan

The Center for Sustainable Enterprise (2010) defines sustainability as a way of doing business that creates profit while avoiding harm to people and the planet (Hult, 2011). This definition fits the cradle to cradle approach, whereas the cradle to grave approach, systemic in business models today, is outdated and might as well be an industrial age relic whose story is told in historical museums. What is required in business today are innovative ideas that help organizations apply new learning, new operating procedures, and new methodologies that are designed to help achieve this goal of sustainability.  Consumers are much more empowered today and have developed a sophisticated voice through today’s social media channels. These channels tap their collective interest and responses from around the globe.  This results is awareness where good sustainable organizations that behave well are a prerequisite for customers to be interested in the products and services a company produces, whereas the green washing effect, where good products are produced from bad sustainable organizations, is not necessarily sufficient in the eyes of the consumer (Hult, 2011). This is a highly important consideration as, “corporate and social responsibilities (CSR) activities have the potential to create stronger relationships between firms and stakeholders” (Hult, 2011).

Price Media, Inc. (here after referred to as the Company) is a family owned and operated publishing business headquartered in Seattle, WA.  The Company will be a 25 year old firm in 2013. The Company publishes three owned titles and another for a client. The three titles owned are Outdoors NW, NW Cyclist, and NW Snowsports; all three feature editorial on outdoor recreational sports and travel that engage readers with content for the individual recreationalist to find outdoor adventures in the Pacific Northwest. The Pacific Northwest is a national magnet for outdoor adventure seekers wishing to support their love of the outdoors (Price Media, 2013).

Price Media, Inc, does not have a formal sustainability action plan, nor does the Company have personnel devoted to the development of sustainable measures. Though there are a number of sustainability efforts that are conducted without requiring a specific person to conduct oversight.  Some projects that have been pursued are:

  1. Replacing incandescent light bulbs with CFL light bulbs and disposing of them properly,
  2. Installing a high energy efficiency furnace and water heater,
  3. Providing recycling boxes under each desk for each employee,
  4. Recycling toner when the cartridges are used,
  5. Recycling computer monitors when upgrades or replacements are necessary.

These are simple measures that can add up to big savings for the company and a ‘feel good’ measure for the employee.  But these measures do not address the monumental changes and trends coming in the publishing industry.

Industry Changes

The rapid advancements occurring in technology are creating tremendous opportunity for entrepreneurs while being tumulus for existing organizations.  Within the media industry, many of the changes have to do with channel fragmentation.  Consumers are finding new ways to receive information and entrepreneurs are taking advantage of the new technology to break into the marketplace opening up these new channels.  The shift from print business models to models that deliver content through new digital formats are the driving changes for in the industry.  Even though Price Media has incorporated many of these digital channels into its overall business strategy, the technical knowledge required to ensure competitive delivery is what make this shift especially challenging (Milliot, 2010).

Complexities

These new channels are complex, require a strong understanding of technology and they change constantly. What is more, margins on the print side of the business are tightening and the digital revenues are too low to fully offset the balance sheet inequalities. And now with climate and environmental considerations making their way into the business decisions, publishers are finding that the expense of recycled fiber or Forest Service Council (FSC) paper stock make the decision to go environmentally friendly difficult (Milliot, 2010). Two paths are becoming clear: learn these new channels of delivery or leave publishing to the upcoming entrepreneur.

Change Leadership

As a small company, Price Media employees have a large amount of autonomy and decision making within their domain.  This allows employees to feel that they are managing themselves and their department, which is helpful to give independence to the individual which improves overall morale.  However, the changes the company needs to make to ensure competitiveness and be a viable player in the media industry will be structural. These are decisions employees cannot make, but they certainly can be a part of the solution. There are many leadership approaches to guide the Company into sustainable profitability; the transformational approach will be looked at in this paper.

Within this approach, it is actually broken down into two styles of leadership, transactional and transformational.  The transactional leadership style is one that doesn’t offer much in the way of change, but is a simply a system to offer rewards for a job performed.  This style is fine when the organization is not in a process of change management.  Transformational leadership, on the other hand, is a style of leadership that would be a better approach to lead toward sustainable change management.

As a leadership style, transformational leadership has gained popularity over the years due to its emphasis on intrinsic motivation and follower development. The leadership style looks at the motivations of the company employees, it satisfies their intrinsic needs for autonomy and helps them to accomplish more than what is expected of them. The leadership approach incorporates charismatic and visionary leadership styles (Northouse, 2010).

To lead using the transformation leadership approach, it will be necessary to look at the qualities in the Company’s current management team and identify individual strengths and weaknesses. As mentioned, the leadership style contains the charisma and vision characteristics (Northouse, 2010). The Company’s leadership team is split between charisma and vision. One has vision and the other has charisma.  The charisma leader holds the majority share of the business and holds qualities associate with charisma, the deficit lies in understanding technology. Even still, the Company has survived for 25 years but the coming challenges may be very difficult for this individual to fully comprehend. This leader knows the business world is changing, but the difficulty lies in vision and not fully understanding which way to take the company. The minority shareholder has vision and has built many of the existing technological channels that exist in the business.  The weakness that this individual has is advanced technical knowledge to take the company where it needs to go.

Employees in the company have identified a couple of areas where the company can improve what it does organizationally, but so far no tactical measures have been mapped out to lead the Company down any chosen path. However, once the necessity to change is understood, the outcomes will require more than intuition; a new vision and mission will be necessary to set the Company on a path toward a new sustainable direction.  But getting to this place will take time and time is becoming a luxury the company has little room remaining.

Organizational sustainability

Looking closer at the separate components of the current business model from a view point of internal and external drivers, the following is a list of identified challenges in the three considerations of financial, social and environmental categories.

Financial considerations

Advertising Revenue

  1. CPM
    1. Marketers use a financial metric call CPM (Cost per Thousand) as a tool to measure the cost of reaching targeted consumers. This metric is useful in major media such as print, television and radio.  It has even been converted to use in the digital spectrum of products such as web banners, E-newsletters, and social media channels.  However, as traditional use and measures of media are changing, companies are looking hard at the “rate base, which has taken heat as not only an archaic media metric, but one that hinders efficiency at the newsstand”  (Mickey, 2008, p. 1).
    2. Digital metrics are changing the face of CPM and it is becoming a challenge for traditional media organizations to meet their own financial obligations. The challenge is in the metric itself. CPM measures how many thousands of consumers are reached and the metric doesn’t discriminate between intended and unintended audiences.  Whereas digital metrics are much clearer and far more targeted enabling those individuals who are sophisticated and knowledgeable about such metrics to be much better at using information to manage efficiency  (Mickey, 2008, p. 1)

Paper stock

  1. Forest Service Council
    1. As a small business publisher, the factors involved in the Company’s carbon footprint are determined by many, but the primary ones are print run, frequency, type of paper the carbon footprint of that print supplier, and the Company’s distribution profile. There is one often overlooked factor, and that is the ‘fate stage’ when greenhouse gasses are emitted as the magazine decomposes in the landfill (Lukovitz, (2009).
    2. Should the Company change paper from its current stock to a FSC paper stock, it would increase printing costs by approximately 20 percent (Price Media, Inc., 2013). Today, the Company prints eight times per year, 40,000 copies per edition on paper stock that is a coated magazine-grade paper; 38# – #5 glossy stock. This is an affordable paper stock using the current printer’s specifications. The manufacturing process the Company’s printer provides is heatset, which gives the magazine’s finished product a higher quality feel where the ink does not easily rub off (Journal Graphics, 2012).

Environmental

  1. Green washing
    1. The principle idea with green washing is where appearance becomes more important than substance (Elford, 2009). The challenge for the Company with green washing is readership perception. Because the Company’s editorial coverage is focused on activities centered on the natural surroundings of the Pacific Northwest, readers may believe that we are a green magazine and conscious of the environment. They may believe that the Company is taking the necessary actions of a responsible, outdoor focused, business to lower the impact of C02 emissions. The fear is that once readers become further engaged in the knowledge of sustainability and the ultimate impact that it will have on their lives, they may take a look at Price Media’s titles and decide that the Company is green washing.
  2. Carbon footprint
    1. Presently forests cover 30 percent of the earth’s global land area ad terrestrial animals and plants that live in the earth’s forests is approximately 70 percent (Milliot, 2010).
    2. The world’s forests store 283 billion tons of carbon in their biomass with logging and manufacturing of paper being the greatest contributor to the industry’s carbon footprint (Milliot, 2010).
    3. The Company’s current carbon footprint can be estimated. To calculate this, it is estimated that a single magazine copy typically weighs one-quarter pound (0.25lb) and would have a lifecycle C02-eq emission of about .75 lbs. To calculate the entire singe edition press run of 40,000 copies, the total weight is 10,000 pounds (5 tons) which equates to 7,500 pounds (3.25 tons) of C02-eq emissions per print run. This is then multiplied eightfold as the Company prints eight times during the year: 7,500 pounds x eight (8) editions = 60,000 pounds (30 tons) of C02-eq (Transcontinental, 2009).
    4. Compare this to the below measurements of other equipment, and the impact is put into perspective:
      1. A typical passenger car’s annual emissions of 12,100 pounds (6.050 tons) of C02-eq (Transcontinental, 2009).
      2. A two-person household’s annual electricity emissions of 16,290 pounds (8.14 tons) of C02-eq (Transcontinental, 2009).
  • A gasoline-powered lawnmower’s annual emissions of 100 pounds of C02-eq (Transcontinental, 2009).
  1. While a footprint analysis can certainly be valuable in helping a company focus its efforts, having the numbers alone will not get the job of reducing or offsetting the carbon emissions necessary to reduce the footprint necessary to become a sustainable organization (Lukovitz, 2009).

Social

  1. Stewardship Policy
    1. A stewardship policy is helpful to ensure that all employees fully understand what the company’s policies are, who is responsible for what and the goals associated with each department while communicating to external partners (Folio, 2008, p. 32). The reach into the company’s external partners allows them to participate in the formulation of the Company’s stewardship policies as well. The more the external vendors understand your business model, goals, vision and mission, the more likely they will also find opportunities in their spheres of influence and pass the information along for the greater good of the overall vision and mission. Employees who wish to embark on a companywide sustainability effort may be received with open arms by management and thus, would be invited to either join the team or become the team lead.  The struggle with such a direction is that for those who wish to promote sustainable and social responsible practices in an organization will often face resistant leaders. These leaders who may not fully understand the drivers of sustainable change will usually need to be presented with a convincing business case that demonstrates a clear ROI (Schramm, 2011).
      1. Sustainability initiatives serve as a positive influence on employees in relation to how they do their job. What was found though a survey was that:
        1. 55 percent cited improved employee morale
        2. 43 percent cited improved business process efficiency
        3. 43 percent cited strong public image
        4. 38 percent cited increase employee loyalty (Schramm, 2011).
      2. As the initiatives move forward, it will be important to develop benchmarks and identify these as key mileposts to determine if the Company is on track with its sustainability vs. revenue goals (Milliot, 2010). The additional advantage that this has is that it will allow leadership to view the revenue goals in terms of sustainability and the two may positively correlate.
    2. Distribution

 

  1. Redesign the Company’s distribution structure and delivery mode to a more digital strategy than paper format. Because of the many channels available to reach consumers today, the marketing landscape is heavily fragmented. Today, even though print advertising revenues still drive the Company’s bottom line, the Company is adjusting to the digital delivery model. The problem is that digital revenues have not yet reached a level that would sustain even the smallest of staff, and at very low pay.
  1. Common Sense Measures
    1. Lukovitz (2009) comments in his research that, “I don’t think I know of any individual or company that couldn’t do more to reduce its carbon foot print by implementing all of the common sense measures available. Once all these measures are completed, maybe then it’s time to hire a consultant to determine the Company’s true carbon footprint” (p. 31).

Sustainable Solutions Plan

 

Financial

Action Approach Measures Metrics

Resources required

Advertising sales revenue

 

Establish new pricing models

 

1.

Find established pricing models for other publishers Maintain integrity of pricing mechanisms Excel spreadsheet knowledge

 

Understanding of current CPM models

 

Paper Stock Review printer capabilities Accumulate statistical data on printers, C02, recycled paper stocks, FSC paper stocks Pricing

C02 comparisons

Excel spreadsheet knowledge

 

Data compilation

 

 

Environmental

Action Approach Measures Metrics

Resources required

Carbon Footprint

 

Work within the parameters of the Stewardship Policy team (defined below)

2.

C02 Develop today’s C02 benchmark and create percentage adjustments for future reductions. Time

Organization

Dedicated team members

Communication

Project management

Green washing Ensure our position with our readership (stakeholders) gain awareness of our ‘true’ development towards CSR Absolute sustainability measures vs. green washing measures Social media monitoring Communication loops

 

Social

Action Approach Measures Metrics

Resources required

Stewardship Policy

 

Identify sustainability determinants in the Company

3.

Monthly meetings to develop identified deliverables Benchmarks and baseline numbers to use as mileposts against future targets Time

Organization

Dedicated team members

Communication

Project management

Change Circulation delivery methods Adjust from using in-house deliveries to Outsourced delivery methods.

4.

Number of locations delivered and returns per location   Returns report for analysis
Common Sense Sustainability List all easy to identify measures. Example: Paper Towel

5.

Monitor paper purchases Identify C02 for typical paper towel products Time

Internet

Spreadsheet

 

Impacts

As a for-profit-business, the Company’s mission has been in business to create wealth for the shareholders. When looking at the life-cycle of a business that has been in business for 25 years, the Company has witnessed numerous cycles in terms of economics, competitions employee setbacks, and the like. To stay in business, investment is a requirement. Today, the investment required in the business is to learn how to increase the efficiency of our digital business while at the same time manage the decrease in margins seen in the print business. The investment here is significant in the short-term, but the long term impact, based on viewed trends in the industry, will be sustainable.

 

Impacts

Investment

 

ROI Measures Metrics Short-term

Long-term

Education

 

 

Knowledge Capital Increase in Sales Ad pages sold ü ü
Carbon Footprint

 

Industry goodwill Decrease in carbon footprint

 

Tons of C02 ü ü
Stewardship Policy Employee Morale Employment longevity Equity in employee revenue generation ü ü

 

Conclusion

With all the turmoil occurring in the industry and impending changes going on in the industry, Price Media leadership hasn’t been able to stay in business for 25 without having faced challenges along the way and overcoming them. The challenges facing the company today are no different than challenges facing any company in nearly any industry. By breaking down the goals, the vision will unfold and present itself. This isn’t to say that the vision will become an intuitive sense of how change will occur, but the leaders of the organization must understand that working hard and working smart are not two sides of the same coin. With experience, the outcomes for working smart will far outweigh the outcome of working hard.

 

 

 

References

Elford, J. (2009). Going green–or greenwash? Bookseller, (5406), 25-26.

Forest Service Council, (2012) http://www.fsc.org/

Hult, G. G. (2011). Market-focused sustainability: market orientation plus! Journal of the academy of marketing science, 39(1), 1-6. doi:10.1007/s11747-010-0223-4

Journal Graphics, (2012, August 22). The green letter. Retrieved from www.JournalGraphics.com website: http://www.journalgraphics.com/green.php

Lukovitz, K. (2009). Common Sense Sustainability. Audience Development, 24(7), 30-36.

Mickey, B. (2008). Efficiency-and sustainability- at the newsstand. Folio: The magazine for magazine management, 37(10), 36.

Milliot, J. (2010). Sustaining Sustainability. Publishers Weekly, 257(46), 20-23.

Northouse, P. G. (2004). Leadership: theory and practice. Thousand Oaks, Calif: Sage.

Price Media, Inc. (2013). Advertise. Retrieved from http://outdoorsnw.com/advertise/

Schramm, J. (2011). Promoting sustainability. HR magazine, 56(3), 88.

The Importance of Stewardship in Sustainability. (2008). Folio: The magazine for magazine management, 37(10), 32.

Transcontinental (2009). Reducing the carbon footprint of magazines. Retrieved from http://www.unisourcegreen.com/pdf/wp_carbon_footprint.pdf

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