789465514Russ Gaskin is Managing Director of CoCreative, a U.S. consultancy that designs and facilitates multi stakeholder “innovation networks” to develop new solutions to complex sustainability and supply chain challenges. The CoCreative team currently facilitates ten major networks working on challenges from eliminating exposures to toxic chemicals in electronics plants, growing the supply of non-GMO food and feed, and improving community health outcomes in several major U.S. cities. Prior to launching CoCreative, Russ served as the chief business officer of Green America, a pioneer in leveraging economic strategies to advance social equity and environmental sustainability; served as managing director of US SIF, the trade association for impact investing firms; and founded the Green Business Network, the first network of triple-bottom line businesses in the U.S.

Christopher P. Skroupa: How is the landscape of stakeholder engagement shifting for companies today?

Russ Gaskin: We’re seeing three primary forces that are driving companies to engage in deeper forms of collaboration with their external stakeholders: the increasing transparency and analysis of companies’ impacts, the emerging risk of supply chain disruptions, and the growing recognition that in order to solve the most complex challenges, Many diverse approaches and solutions are required; there’s no silver bullet.

One result of these forces is the increased willingness to collaborate more openly with competitors. In the past, collaboration among competitors was strictly regimented and orchestrated, and attorneys scrutinized any potential engagement. Now, companies realize that in order to find solutions to their biggest challenges, they need to engage dynamically with a complete set of stakeholders—including their competitors—and leverage the perspectives, resources, and commitments of everyone.

The real constraint to effective engagement, however, is the design of the actual engagement process itself; this mechanism needs to be redesigned, and more leaders are realizing this. They’ve begun to dip their toes in the water, implementing strategies for in-depth collaboration across the whole system, and co-creating agendas that go far beyond their own companies’ direct interests. They’ve found that it’s not as risky as they thought, it pays real dividends, and it’s actually a terrific driver of innovation. Some of these companies have also found that collaborating with external stakeholders made their own leaders better at working across the internal enterprise too. As a result, they’re investing in collaboration capability. They are more ready, and more equipped to do this kind of collaboration; they need partners who are ready and able to work in the same way.

Skroupa: With these new relationships developing to solve sustainability challenges, what are the implications involved with these alliances that are being forged?

Gaskin: While effective stakeholder collaboration requires real company resources, it can actually be more efficient and strategic for companies to collaborate than work on their own. Remodeling a supply chain to be more equitable and sustainable is complex, and suppliers aren’t always on board with either the goals or the means. When companies with a shared interest join together, they can not only drive greater interest and engagement among suppliers, but they can co-develop net-new solutions together and drive greater efficiency overall.

It’s also interesting to see how the “appetites” of people in our networks tend to grow over time. They tend to start out with smaller agendas and, one or two years in, they’re ready to transform their industries. For example, in one network we’re supporting at the Green America Center for Sustainability Solutions, a number of brand owners and their stakeholders came together with a common goal to sustain demand for non-genetically modified (GMO) food and feed supplies. Two years in, these stakeholders are now working on new “regenerative” agricultural production systems that are not just non-GMO but have improved climate, water quality and soil health outcomes; and deliver a better deal to farmers. When that network first formed, they would never have embraced outcomes like those.

We’re also seeing more willingness for firms to work in the pre-competitive space and transition supply chains together, all at once. This not only helps to solve for scale, but it also increases efficiency such as full utilization of grains, meat, and dairy components, which brings down overall cost. For example, if Ben and Jerry’s primarily needs cream, and Chobani primarily uses the other milk components, they can work together to utilize the whole profile and maximize efficiencies.

Collaboration allows companies to overcome other sticky challenges in supply chain transitions by combining their collective scale and influence. In our Clean Electronics network at the Center, brand owners and other stakeholders are working on strategies to reduce workers’ exposures to toxic chemicals, particularly solvents and bonding agents. That’s important because even a company the size of Apple doesn’t represent a majority of a given supplier’s business. By joining together with other brand owners, they dramatically increase their collective influence on suppliers’ policies and practices.