How day-old Danish pastries turned a Norwegian supermarket philosophy on its head
This is the story of how Martin Beyer helped change the direction and purpose of one of Norway’s largest supermarket chains. I met Martin when I was promoting my book CORE with Pure Consulting in Oslo last month.
Quite simply – while working in the supermarket’s bakery department – Martin couldn’t help noticing that every day a lot of not-quite-fresh food, such as loaves of bread, buns and Danish pastries, was thrown away.
This bothered Martin quite a lot. Not just the environmental or even the social implications – but the sheer financial cost of it. It was a bit like throwing money away. Martin discussed it with his colleagues and they agreed. Surely there was a way to be less wasteful?
Heroes and villains
It’s at this point that I’m tempted to compare Martin to ‘Saint Paul’ – aka Paul Polman – who is something of a hero, not just of mine, but of many of us camping within the big sustainability tent.
Polman – as CEO of Unilever – met initial opposition when he tried to persuade Unilever’s board and shareholders that their huge organization could only sustain long-term growth by reducing its environmental footprint while improving its social impact. “The more our products meet social needs and help people live sustainably,” he argued, “the more popular our brands become and the more we will grow.”
Martin Beyer instinctively held the same conviction. To him, selling the not-so-fresh baked goods at a reduced price would meet a social need. Meanwhile throwing away perfectly edible food was a poor use of the planet’s resources, and bad for profits.
Yet when Martin tried to argue his case he ran into obdurate opposition from the supermarket’s management team who continually regurgitated the same old arguments:
- That selling cheap, older food would cut into the sales of fresh, more expensive food; and therefore the supermarket would lose money.
- That theirs was a high-end supermarket whose brand would be damaged by the sale of sub-standard products. That definitely wasn’t the purpose of their business.
Getting past the philosophy
Eventually, and with the same courage Paul Polman has exhibited, Martin made his breakthrough by getting the management to set aside the philosophical arguments around the purpose of the business and focus instead on the cold hard cash.
He established that Argument 1 wasn’t actually based on facts, but on untested assumptions. Maybe, just maybe, they could run a trial? Head office finally gave in. And after a three-month test the results were clear:
- The customers who bought fresh food weren’t interested in buying cheaper, less fresh food but they liked the concept and said nice things about it. Sales from this segment didn’t decline.
- Meanwhile a new, more price-oriented customer segment was attracted into the supermarket. They bought the cheaper goods, and while they were there, also, naturally, bought other things. Far from diminishing the brand, the customer base grew, as did sales and profits.
Big oak trees from small acorns grow. The idea of discounting rather than dumping less-fresh products was adopted across the whole supermarket chain. Moreover, the practice of special displays and discounts for about-to-expire products is growing both in Norway and other countries. Similar initiatives are popping up everywhere with increasing frequency.
But here’s my point.
Martin’s organization had a purpose – and a good one at that: to serve its customers and look after its suppliers and shareholders. But funnily enough, for a long time this laudable purpose got in the way of doing a good thing. It actually took eight years for Martin and his colleagues to change the system.
I would argue that if only his organization had had a Single Organizing Idea (SOI®) it would not have taken nearly so long. Because the genius of an SOI is that it mobilises an organization’s purpose. An SOI takes ‘purpose’ and turns ideals into realities straight away. Which is what organizations need if they’re to get on with making the changes that are now urgently required.
In conclusion, thank you to Martin for sharing his story.
Martin Beyer starts a new job soon for the Municipality of Drammen as a Digitization Advisor. Once there he expects to help “change the organization (4.500 employees serving over 60.000 people) to work in new and smarter ways to make the public sector smarter, efficient and better.” I’m sure he will.
Neil Gaught is a strategic advisor and author of CORE: How a Single Organizing Idea can Change Business for Good published by Routledge.
Why should we decide 31 years ahead of time what will happen in 2050?
Last week the UK government rejected all 18 of the recommendations put to it by a committee established to investigate, amongst other concerns, the negative impacts of the world’s second largest polluter - fast fashion. Meanwhile in Brussels the European Union was incapable of uniting to set a net-zero carbon emissions target by 2050 and over in Canada the Prime Minister, Justin Trudeau, gave the go-ahead for the completion of a controversial oil pipeline that will help ensure the survival of our world’s first-placed polluter.
Despite all the evidence, despite all the activism and their own mealy-mouthed rhetoric, why is it that policymakers are prepared to make such astonishing decisions?
It’s sad, but simple. In the same way that big businesses are the feeders of a system that only values the creation of wealth, policymakers are the status quo champions of another, not unrelated system, that only values success at the ballot box—whatever the societal or environmental cost. According to media reports, the Czech prime minister, Andrej Babiš, quipped on his arrival at the EU summit: “Why should we decide 31 years ahead of time what will happen in 2050?”
These systems and the self-serving, one-eyed, short-term deny-and-delay jockeys who gain from their existence are the problem.
We need a radically different approach and an alternative that will always, always, always (yes, three times), put the long-term well-being of people and the planet first. It can be done. This month New Zealand showed the way by publishing the world’s first “well-being budget,” broadening the measure of a nation’s success from GDP to an increase in the happiness of its people, with non-core spending oriented to a set of “well-being” measures.
I believe that NZ’s lead will eventually be followed and leaders will reach the right conclusions, as indicated by Latvia’s prime minister, Krišjānis Kariņš when he said: “We have come to the conclusion that this is a hell of an opportunity.” But how long can people and the planet wait?
The businesses we work for, invest in, and buy our goods from have the power to act now. More importantly, they can act where it actually matters.
But to achieve this we need a hell of a lot more business leaders prepared to prioritize understanding why sustainability and well-being have to be at the core of their businesses. The first practical step to achieving that is being prepared to consign 1990’s business school thinking to the history books. The second step is to invest in a human collaborative approach that will define what is possible. And the third is getting all the functions of the business organized around an idea that will make the promise of that possibility real.
Change is not without its challenges, but the benefits are immediate and tangible. The pursuit of such a goal will create more businesses that have the ability to go beyond policymakers' often compromised codes of compliance. It will embolden business leaders to question the clever sustainability reports that a cottage industry of third-party agencies create to hoodwink stakeholders into believing that achieving CSR standards is somehow a great feat of commercial success (see how investors are pushing back on this). It will give confidence to businesses to step out from behind their brands and demonstrate who they really are through actions, not words. And finally, it will give voice to and nurture a growing generation of activist CEOs prepared to call out the systems that are preventing them from focusing the talents of their people and resources on uniting the ecosystems that the future of their businesses depends upon.
It takes guts, but it can be done, and the admiration generated by pursuing such a course will deliver some surprisingly beneficial results for us all.
Want to know more? If you are serious about championing change in your business and want to learn more about how to identify, define, and align your business from the core with a Single Organizing Idea that goes beyond 'greenwashing,' mere compliance, or brand management-inspired purpose promises, we are running a short 90-minute introduction to our SOI®SparkLab program next month at Business Fights Poverty Oxford 2019: 11 July, Said Business School, University of Oxford.
Neil Gaught is the author of CORE: How a Single Organizing Idea Can Change Business for Good, published by Routledge. CORE is available at Amazon and other stores in paperback, audio, and Kindle.
CORE was a finalist at the 2018 Business Book Awards