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Sustainability

The Big Pivot: Supply Chain Sustainability

by Kate Pavao

May 2015

Green business strategist Andrew Winston’s message to supply chain managers: in order to succeed in an increasingly unpredictable world, executives must create resilient and responsible supply chains. We asked Winston, author of The Big Pivot (Harvard Business Review Press, 2014), what executives need to change now about their thinking, and the steps they need to take to protect their businesses—and the Earth. To read the full interview, visit onforb.es/1A0JbGR.

Profit: What supply chain challenges are executives facing?

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Winston: The supply chain carries enormous risk of disruption for companies, and that’s happened increasingly in sectors that are reliant on particular parts of the world. For example, think about what happened in Thailand. After the flooding in 2011, a bunch of companies discovered they depended on one area for hard drives and car production. This is not the most resilient strategy when areas can now get knocked off the grid or demolished quickly. This stuff is happening more and more. Company leaders need to be thinking about the volatility in their supply chain and managing for it—and mitigating for these risks as well. But we can’t adapt to everything. We actually have to try to keep climate change from getting worse.

Profit: What is The Big Pivot?

Winston: The Big Pivot is about switching what business leaders think is the core purpose of business. Executives should tackle these big, shared challenges that threaten our own existence, instead of facing them when we feel like it, or when there’s a hurdle, or when there’s enough pressure from outsiders. And they can use tools they already have—capitalism, markets, and competition—to do it most profitably.

Profit: How do executives pivot?

Winston: Efficiency is not a bad place to start. Executives have massive opportunities to cut back their energy and water use and reduce their waste production without necessarily redefining the terms of capitalism. And they need the data and systems to find those opportunities, manage them, and measure their impact.

But here’s the larger picture: If you look at the products in the world, the majority of the footprint generally sits in the supply chain. When most companies look at their own impact, especially a big consumer products company, their own factories and operations might be 4 or 5 percent of energy use, of carbon, of water. But upstream, there’s a long supply chain that goes all the way back to raw materials.

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