Two Cultural Pillars in Dow Chemical’s Sustainability Strategy

Dow Chemical has been on a clear sustainability journey since the early 90s. However, in 2006 they set sustainability goals for year 2015 that became game-changers for the entire company. While all of the goals are impressive, two in particular stand out. Dow committed to the daring goal of achieving at least three breakthroughs that will significantly help solve world challenges in areas such as energy and climate change, water, food, housing and health. Secondly, they vowed to contribute to community success and to achieve individual community acceptance ratings at 100% of the sites where they have a significant presence. All of the seven goals are bold.  To ensure success in achieving them, Dow must make certain that their organizational culture will enable their efforts. Two interrelated cultural pillars emerge as essential:  Collaboration and Trust.

Collaboration

Increasingly the global landscape is a web of relationships and associations.  Corporations live in this integrated space along with many and varied stakeholders. The boundaries between who is ‘inside’ and who is ‘outside’ of any given organization have blurred.  Dow understands this model of an open, collaborative community characterized by people and organizations coming together to create shared value. It is all about collaboration, according to Mark Weick, Director, Sustainability Programs and Enterprise Risk Management for Dow.  “For years we have prided ourselves on being a safety and science-based culture. Now we are more focused on the human side of chemistry.   Science is important, but we won’t succeed unless people believe in the science.” They understand that that the most important element isn’t on the periodic table; rather, it is the human element.

Stakeholder engagement is not new for Dow. For example, Dow’s Sustainability External Advisory Council (SEAC) has brought diverse outside-in perspectives on environment, health and safety, and sustainability issues for the company since its formation in 1992.  The SEAC has had a major influence on Dow’s approach to climate change, and has played a critical role in developing the 2015 Sustainability Goals. The Council is currently composed of thought leaders from around the world and is chaired by a senior Dow executive.

When the SEAC challenged them to ‘think bigger’ and put themselves in the shoes of a seventh-generation child, a porpoise, and the poorest woman on the planet in crafting their goals, Dow stepped up to the challenge.   They asked themselves what they would have to do to earn the trust of the ‘person on the street’.   “We realized that we aren’t just a science-based company.  We are a company that looks for solutions.  And the world needs big solutions,” contends Weick.

Recently Dow started a 5-year collaboration with The Nature Conservancy (TNC) to help them incorporate nature into their business goals, decisions and strategies.  In announcing the partnership, CEO, Andrew Liveris stated, “This collaboration is designed to help us initiate new approaches to critical world challenges while demonstrating that environmental conservation is not just good for nature – it is good for business.”   This collaboration will deepen the significance of relationship-building in the interest of sustainability and sound business practices in the Dow corporate culture.

The timing of this partnership also coincided with the launch of the International Year of Chemistry (IYC), designated by the United Nations as a worldwide celebration of the achievements and future of chemistry to take place around the globe throughout 2011. Fostering and celebrating international and cross-industry collaboration to solve complex global issues is one of the basic tenets of IYC, and this is a perfect example of collaboration in action.

Trust

Of course, any long-term collaborative relationship is built on trust. Companies that support transparent interactions with stakeholders can achieve the kind of trust which builds cooperation, loyalty and mutual respect. Trust is rooted in beliefs that the parties in relationship are competent, open, concerned and reliable.  Recently Accenture released a white paper entitled Trust:  Managing the Scarcest Commodity of All. The report claims that “Nothing is more fundamental to a healthy business than the belief by consumers, the public, investors, regulators, suppliers and stakeholders that they are doing business with a trustworthy organization.

And, Dow ‘gets it’.  Dow emphasizes trust-based collaborations as critical to their ‘social license to operate’ – a phrase that refers to stakeholders’ acceptance and on-going approval of a company’s operations in their communities.   Weick stated that many companies still don’t get it.  “If they have not yet been confronted with resistance from stakeholders, they may still underestimate the significance of relationships and trust to their ability to succeed as a company.”  To reach their goal of achieving individual community acceptance ratings for 100% of their significant sites, Dow will continue to drive towards a triple bottom line, balancing the company, society and the environment.

The culture that Dow is cultivating is one in which ‘sustainable’ becomes an adjective, not an initiative.  For example, they refer to sustainable operations, sustainable chemistry, and sustainable science.  They are taking actions to ensure that protecting the planet- one of their stated values- is built into all of their processes.

Embracing the hunt for ‘the big solutions’ as well as committing to the creation of stronger, safer and sustainable communities are significant steps in Dow’s decades-long sustainability journey.  To succeed, Dow leaders realize that they must attend tenaciously to the organizational culture that they wish to create. As with any transformational change, the direction is clear but the destination is murky and the path to reaching it is not fully charted.  “Some people feel paralyzed by this lack of clarity,” Mark Weick said.   “It is like the gazelle in the zoo. They stand immobile in front of a three-foot high wall that separates them from their food even though they could easily step over it.  If they can’t see where their feet will land, they won’t take the step.”  Leaders must enable employees to step over their own proverbial walls by sending the right signals.

“Culture is fragile,” according to Weick. “Change requires constant vigilance and nurturing.  Leaders can send the wrong signals more easily than the right ones. And it takes time for people to wrap their minds around how to attack these world-changing goals.”  Nevertheless, it seems that the hard work is paying off.  Their fourth quarter 2010 Sustainability Goals Update indicates that they are on track for  reaching their 2015 targets.

Is it worth the effort?  Mark Weick returns to his opening comment in response to this question.  “We are a company that finds solutions and the world needs big solutions!”

Dr. Kathleen Miller Perkins is a psychologist and is the CEO and owner of Miller Consultants , a firm specializing in organizational development, executive coaching and change management  founded in 1980.  In addition to managing the company, she continues to remain active in assisting client organizations in assessing and addressing the organizational culture and leadership requirements for executing sustainability strategy.  She has delivered services to over 100 public and private sector companies. Dr. Miller’s client list includes organizations such as IBM, Toyota, BC Hydro, Brown -Forman, General Electric, Ashland Chemical, Ernst and Young, Bristol Myers Squibb and Kindred Health Care.