Small Wins and Wal-Mart’s Sustainability Efforts

As I mentioned in an earlier post, we had conference earlier this week at Stanford this week on sustainability, which was hosted by our d.school class Clicks-n-bricks: Creating Mass Market Experiences.  After Debra Dunn set the stage, we had a great presentation by IDEO’s Bob Adams on the challenges of designing for sustainability, and then we had CEO of Wal-Mart.com Carter Cast and Wal-Mart’s Vice-President for Strategy and Sustainability Andrew Ruben do a presentation about Wal-Mart’s Sustainability efforts and goals.  I was taken by how much progress Wal-Mart was making and the apparent seriousness of the effort (Andrew was quite open in admitting that is started as a PR effort, but once they started looking into it, they were completely hooked as they saw how serious he global warming problem was and the opportunities to save so much money in so many ways). 

When the conference was over, I was talking to one of my colleagues about how impressed I was with the small successes that they have achieved, and what seemed to be a continuing strategy that sounds much like Karl Weick’s  classic article: "Small Wins: Redefining the Scale of Social Problems," which was published in the American Psychologist in January, 1984. Weick argued that when people start thinking about solving a massive problem like sustainability, that they can seem so difficult to solve and so upsetting, that “People often define social problems in ways that overwhelm their ability to do anything about them.”  Weick proposed that a constructive alternative is “To recast larger problems into smaller, less arousing problems, [so] people can identify a series of smaller controllable opportunities of modest size that produce visible results.”  Weick went on to argue that this strategy of “small wins” can often generate more action and more complete solutions to major problems because it is a path that enables people to make slow, steady progress, rather than to be frozen in their tracks by a seemingly unsolvable problem.

In fact, some of the most impressive things Wal-Mart has accomplished are what they call “Quick Wins.” Andrew Ruben gave us numerous examples; consider just two. First, is something called an auxiliary power unit (APU) in Wal-Mart trucks. It turns out that when drivers stop their trucks, they often still leave their  engines running so that the heat or air conditioning stays on; APUs provide power so that they can shut-off the engine – and it turns out that many trucks out there still don’t use APUs. Wal-Mart installed APUs in 100% of its trucks during the past couple years, saving them 25 million a year in fuel costs and reducing carbon output from their trucks by 100,000 cubic feet per year.

Or to take another example, they are working with suppliers to reduce the size of the boxes that their products are placed in – for everything from laundry soap to boxes for toys pictured below. Ruben explain that the difference between these two boxes don’t look like much, but when you load up thousands of shipping containers a year with your product, small changes have a huge impact on how many ships and trucks are needed to transport products to the 6500 Wal-Mart stores in the world.

I've always loved Weick’s article and it strikes me that Wal-Mart’s early successes are a perfect example.  I am also impressed by how they are using their market power to do everything from pressing suppliers to make more condensed laundry detergent to making power supplies for laptop computers that cut energy usage by substantial amounts – and in the process making some “green” technologies that were not economically viable before Wal-Mart ordered them, instantly viable for every company as a result of new economies of scale -– which is exactly what happened with the energy efficient LED lights that they ordered for the refrigerator display cases.

My colleague, however, made an interesting counter argument that has left my wondering if I am overly enamored of Wal-Mart’s small wins, or quick wins as they call them, as a route to solving the sustainability crisis. She said that she liked the wonderful examples, but also wondered if a more systematic approach wasn’t also required, as they needed to think more systematically about how the pieces of the system fit together, and the hidden trade-offs associated with what seemed like clear wins.

I guess that this discussion is just a special case of the long running argument about whether central planning is possible, or if even if it is possible, whether trial and error approaches yield superior approaches to a central plan – an old debate in economics and organizational strategy.  I don’t know the answer, but my strong opinion at the moment is that Weick is right, and if Wal-Mart executives had framed the problem as huge and overwhelming, rather than breaking it into smaller problems that they could tackle, then they would not have accomplished so much so fast.  But this is a strong opinion that is weakly held, and I wonder what the limits of a small wins approach are in this case -- not just for our students who are trying to help Wal-Mart a bit with this challenge, but also for Wal-Mart as a whole, and for every other company that wants to tackle the sustainability problem. I am of course especially curious to see how our students respond to this challenge, and if they accept – or challenge – the small wins approach.  And I am equally curious to know what others who have thought about and tried to tackle sustainability problems –and other seemingly overwhelming problems – think of the small wins approach versus the importance of developing an overarching strategy that fits all the pieces together.  I suppose one answer is you need both, but if you read Weick and some of his followers, you can see that some people take a very strong stance against overall strategy, and argue, instead, that it is usually just a pretty story that people make after they string together a series of small wins (or small loses) to explain what happened in retrospect.

Comments

[Edward Vielmetti]

Thanks Bob - I have been collecting small examples of the "small wins" idea & note yours here:

http://vielmetti.typepad.com/vacuum/2007/04/small_wins_a_se.html

[JohnC]

Both views are very important.

The "Grand Strategy" is key to *understanding* the problem as a whole -- but typically, the 10,000 mile high view is pretty useless when you are trying to figure out specifically what to do with ToyXYZ made by Large Overseas VendorCo.

Likewise, the "Microscope" view -- is also key to actually *Fixing* the problem. Without taking a close look at the real causes of your problems, you will never get them fixed.

In the packaging example -- your "Microscope" may find that Vendor A makes packaging to YOUR specification -- that it "Fill Up" a shelf a certain way..... and without changes to specifications from one of YOUR departments, cannot change the packaging.

[Ash]

Coming from an oil company which emphasizes a lot on sustainable development, I personally find the discussion hard to assimilate.

Would we pursue the sustainability agenda out of our own good hearts or would we go for sustainability because there is profit in it?
In the Walmart example above, it is interesting to note that implementing the APUs in the truck was environmentally great, but it also brought about a good cash saving (though I am not sure if it was enough to pay for the cost of the APUs, but i am assuming that it is the case)
In the oil business, everyone is talking about CO2 sequestration, but this is driven by two reasons
1) CO2 credits / tax breaks in some companies
2) Injecting CO2 provides higher oil recoveries, which is economical at higher oil prices.

So the fundamental question that I pose is, are we really sustainable or is this drive driven by the external environment, where the increase in profits drive this behaviour? Are there several examples out there, where companies have pursued the path to sustainability at an expense to them?

Ash