How to have a sustainable manufacturing mindset

Sustainable manufacturing as a mindset

Over a virtual coffee, we caught up with Terry Paule who is helping start-ups that are taking great ideas through the commercialization and corporatization process to create sustainable and impactful businesses.

Who better to answer these questions that so many manufacturers are asking right now about how to take the next step in their journey towards sustainability?

In this interview, Terry shares how to have a sustainable manufacturing mindset.

How would you describe your purpose in the work you do?

I’m Chairman and Co-founder of Findex. I get to see what I call the big end of town. We spend most of our time in what we call ‘start-up land’, helping people with innovative ideas grow their businesses. Commercialise them. Corporatize them. And finally, potentially exit from them – whatever that looks like.

Part of that is guiding each business’ board of directors and senior management to work at their best. My approach requires a high level of transparency, ethical standards, sustainability credentials and corporate governance to ensure all stakeholder and shareholder obligations and interests are known and met, even exceeded.

One of the sustainable manufacturing businesses is Botanical Water Technologies – as you know, we’re partnering with Fujitsu on our journey.

But really, our purpose makes for an interesting work life, fuelled by my conviction that businesses - especially manufacturers - can be a powerful catalyst for a more sustainable world.

There’s a lot of talk about ‘sustainable manufacturing’. Some senior managers don’t believe it’s relevant to the business they’re in. Others see it as a new opportunity. What would you say to them?

Sustainability is a concept remarkably similar to what digital was 30 years ago. I’m old enough to have lived in a pre-digital world and in a digital one. It was a revolutionary change. From the fax machine to the computer, the internet to the smart phone, digital, and then smart technologies are now becoming embedded and are transforming the way we think, live, talk, work and grow.

Now sustainability will inspire and compel us to do the same again.

Of course, years ago ‘sustainability’ was all about manufacturers ensuring their businesses did not harm, first to the environment, then second, people. But today, sustainability is about more than this: it’s about the good that businesses can do.

Becoming a more sustainable manufacturer is essential if your business is going to survive. But if you want your business to truly thrive, you should consider how you can restart it, or start one up, with a sustainable business model at its core.

Because today, ‘doing good’ is also ‘good business’.

This isn’t theory or hype. It isn’t sci-fi or even a futurist’s vision. It’s a mindset - whether you’re a big or small manufacturer; whether you’re the market leader, a challenger, or a follower.

And it’s a mindset that will drive a revolution as game-changing as the digital revolution – and the industrial revolution before that.

In fact, if manufacturers use digital, smart, and other technologies to accelerate their journey towards sustainability in an inclusive, imaginative, and innovative way, the sustainable manufacturing revolution won’t take 30 years, it will be much quicker.

It will have as much impact as the industrial revolution. But, unlike that revolution, it will be process-driven, freeing people to create the kinds of value only human beings can through empathy, imagination, design and human-centred decisioning.

You mentioned that ‘sustainable manufacturing’ is a mindset. That’s very interesting. Can you elaborate?

I believe that at its most fundamental, a ‘sustainable manufacturing’ mindset moves away from shareholder-based decisioning to stakeholder-based decisioning.

It is a mindset that shifts from driving profit for shareholders at a cost to people and the planet, to driving value for not only our shareholders, but all the other people our business serves. Our staff, our management, our suppliers, our customers, and our communities.

Because a manufacturing business, like any other, cannot sustain its current performance – or sustain its own growth - if it doesn’t help to sustain the people – and the environment, infrastructure, and economy – on which it depends on to drive value.

Inspiration and barriers for sustainable manufacturers

Which sustainable manufacturing companies do you look to for inspiration?

I’m not sure there is an exemplar yet of the ‘sustainable manufacturer’ – a manufacturer that is totally sustainable end-to-end, while also having a sustainable business model at its heart.

But there are a lot of inspiring examples of manufacturers on their own journeys to becoming just that.

They tend to be younger, emerging manufacturing businesses, because they haven’t had to transition from a legacy way of doing business but have been invented with sustainability in mind from the inside out. Older, established manufacturing businesses often need to go through some level of change management to rethink older structures, facilities, technologies, and skills.

But again, it comes back to mindset: if we can change our minds, we can change our businesses and our trajectories of relevance, value generation and growth.

There are a lot of manufacturers with sustainability stories to inspire.

Beyond Meats, Just Eggs and Impossible Burgers are start-ups disrupting the food sector – they’re all start-ups I admire. But then again, in the automotive sector, I’m just as inspired by Mercedes Benz, as I am by Tesla. Each has a mindset focused on adopting sustainable changes, each with their own levels of risk and cost but born from a commitment to making more than just their products, with a focus on creating a more sustainable world.

For manufacturers, what are the most common barriers to developing a sustainable mindset and how can they overcome them to drive sustainable action?

Look, I understand that changing our mindset is one of the most difficult things to do. Firstly, we must do our homework, understand what it is we’re perhaps afraid of and then work our way through that fear through discovery and learning until we get to the point where we understand that ‘change’ is valuable, even critical, and we’re happy to make a start. That’s the toughest step: making a start.

But if we do nothing, I believe we’ll perish. The other day I was asked about a once well-known manufacturer that dominated its market: Kodak. 80% of their profit was in film. They weren’t prepared to disrupt their own business models and make the changes necessary. Ask an 18-year-old if they’ve heard of them now?

As manufacturers, we need to embrace sustainability and commit to a process of change. It needn’t be a radical change. It can be done in a systematic way. First mentally. Then systematically through the business.

First, start with a materiality audit. Discover what the carbon footprint of the business currently is, not only emissions, but the way we use energy, water, and other natural resources as well as the provenance of raw materials and the ESG credentials of our supply chain.

Then culturally, look at hiring and firing policies, diversity among employees, inclusivity in management, transparency in their processes.

Financially too – look at equality in salary grades, payment of the living wage and payment policies, especially to SMEs (small and medium-sized enterprises).

Bigger manufacturers have an advantage, of course, because they can afford strategic and sustainability teams, which focus on identifying and implementing changes in each of these areas and can be incentivised to drive results against steep targets.

But SMEs can – and must - transition too – either by researching, planning, and managing the changes, one by one, themselves; or outsourcing to an external agent, like a financial advisor, or an accountant or a sustainability consultant, who they trust to bolster the management team and guide them through the process in an informed, balanced and commercially savvy way.

Remember what these businesses lack in size, they can make up for in agility, speed, and passion – and potentially pivot before the established leader in their market. This is how challengers are made, even if not born.

People, partnerships and superpowers

Do you believe that people are key to unlocking a manufacturing businesses potential to be sustainable?

It’s one of those ‘motherhood’ statements: I believe it requires a combination of culture, people, and process. In a lot of the businesses we invest in, we talk about sustainable change requiring ‘Mind, Body and Soul’. It’s a very philosophical view but it’s embedded in our culture.

The Culture, the way people interact to think, problem-solve, make decisions, and act, is the Mind. The People, engaging with the technologies, practices, and processes in the facility to manufacture, distribute, market, and dispose of or recycle the goods, are the Body. And the Spirit, that drives each employee as they lead themselves and each other, is the Soul.

To understand how to harness a manufacturing business’ Mind, Body, and Soul to do good business by doing good, leaders, managers and employees alike must understand their ‘Why?’ – as Simon Sinek says. Why are we in business?

For example, as a manufacturer, Fujitsu has done the work to understand its ‘Why?’ You’ve captured it in the concept of ‘Uvance’ – universal advancement. This is not just about being the technology business to create profit for shareholders selling how smart you can be, but about creating value for all stakeholders by solving global problems. It’s clarity of your ‘Why?’ that enables Fujitsu to harness their ‘Mind, Body and Soul’ to be the most sustainable business they can be.

What is technology’s role in helping manufacturers become more sustainable? And what technologies are having the most impact on the journey to Net Zero?

Technology is just a tool to deliver an outcome. The real value is in the value they’re being employed to deliver. Again, back to a business’ ‘Why?’

Once you have a clear purpose, technology can give your people what Fujitsu is calling ‘superpowers’.

Let me explain how technology has superpowered the sustainability story of Botanical Water Technologies.

A very novel idea was invented by a chemical engineer out of the wine industry: he saved the fluids disposed of when concentrating grapes and turned it into purified water. In effect, he had discovered an alternative water source: the global food industry.

Globally, 3 trillion litres of reusable water is disposed of by the food industry. That’s enough to fill 1.2 million Olympic sized swimming pools each year. And this in a world where after carbon emissions, water scarcity and contamination will be the next big crisis we face.

Take, for example, India. They have 525 sugar mills in India that each dispose of 2 million litres of water a day. And that’s in a country where one and a half million children a year die from water and sanitation related diseases.

I fell in love with this as a business idea and we set about developing it into a business. We patented our technologies. We designed and engineered a piece of equipment that sits in a 40-foot shipping container, is portable and can be delivered and installed at any manufacturer’s site to take in evaporative condensate and turn out the purified water I’m drinking now.

But - and there was a but – what was keeping me up at night was: How do we scale this business so we can commercialise and corporatize this business?

We found our answer by inviting Fujitsu into our ecosystem and partnering with them to develop a blockchain-based solution. Put simply, it’s a digital platform that connects manufacturers who need to buy water with manufacturers who have water to sell and can prove the sustainable credentials of every drop of that water on the journey from one manufacturing process to the next.

In short, working with Fujitsu, we’ve been able to give our business the superpowers it needed to scale: like visibility, transparency, traceability, immutability and tradability.

As a manufacturer, what is the critical factors in choosing a digital technology partner for your business?

Like-mindedness.

Within the first 30-minutes of a two-week pilot test with Fujitsu, Frederik and I called our partnership, ‘a meeting of minds’.

We realised, each independently, that BWT and Fujitsu were a perfect match from the start.

Now, halfway through the build of our blockchain-enabled water trading platform, our teams have proven to be the kind of partnership that sustainable manufacturers need if we’re going to do good business – by doing good!