"May you live in interesting times."
This ancient Chinese curse resonates with Walmart suppliers today -- many of whom have noted their relationships with the retailer growing more turbulent and unpredictable in the past few years. Walmart has shifted gears to focus more on store upgrades than expansions, to reinvigorate its private brands, and to get undeniably serious about sustainability.
Suppliers who feel this is a lot to handle, in addition to the everyday rigors of doing business with Walmart, are not alone. These challenges are not going away. However, Walmart is trimming the number of its suppliers and focusing on building "strategic relationships" with companies, large and small, who demonstrate leadership. Some companies supplying Walmart today may not be supplying Walmart tomorrow. Fortunately, there are numerous bright spots in the story -- with sustainability at the epicenter.
Having worked elbow-to-elbow with Walmart for several years to help that company create and roll out its sustainability strategy, we have witnessed firsthand the disruption that embedding sustainability into the core of a business can bring. We know that, for Walmart as well as suppliers, addressing sustainability for the first time can bring confusion, discomfort, and even fear. But it can also bring unforeseen avenues for growth -- from conversations you never imagined having to ideas you never dared thinking to opportunities you never knew existed.
This summer Walmart introduced its Supplier Sustainability Assessment. As our clients process the assessment and begin to understand how it will impact their organizations, certain recurring themes arise in the form of perceived barriers -- reasons suppliers give for not embracing sustainability. All of these are rooted in fair and realistic thinking, but may also lead to inaction. And Walmart is turning away from suppliers who offer excuses instead of innovation. The company would prefer to build strategic future relationships with suppliers who look at challenges like sustainability as an opportunity to improve their businesses, reduce costs, and bring "Save Money, Live Better" to life for the customer.
For suppliers who want to build strategic relationships and grow along with Walmart, here is the first in a series of articles in which we discuss the …
Top 10 Sustainability Myths in the Supplier Community
1. This too shall pass. I'll just hunker down and wait for this to blow over -- just like RFID (radio frequency ID tags), just like "Made in the USA." My buyer will change in a year or two anyway so even if they're excited about it now, I can out-wait them.
2. The green consumer doesn't exist. Who's going to really care about this? People say they want greener products but their behavior at the register seems much different-the evidence is shaky and they never pay more. I'd rather wait until I have solid proof that it really matters to the customer.
3. It's too complex. Sustainability is just too complicated and it seems to be changing by the minute. I don't have the information I need to take the right actions. How can I know I'm doing the right things in the right order?
4. We can't afford it. This will cost too much and I'm still getting hammered by my buyer on price … besides, if all this were really good business practice, my suppliers would already be doing it.
5. Going deep on sustainability is too extreme. We'll do some efficiency things because it's pretty easy to see the benefit. But we don't want to go farther than we have to … it might put us at a disadvantage. We're not ready to transform our company or anything. Maybe someday.
6. This won't look good in our financial reports. I'm evaluated based on our short-term performance, and can't wait for the long term to make progress. Our obligation is to our shareholders, and I'm under the gun to hit our immediate targets.
7. Mixed messages from Walmart are slowing me down. I hear different things about sustainability from Walmart's leaders than I hear from our buyers, and buyers aren't all engaged or sure what they want; therefore, until this confusion is resolved, I'm not going to do anything.
8. We shouldn't do anything until we know how Walmart will reward us. We're asked to do a lot of things but when will we be rewarded? It's hard to take this seriously unless we know what's in it for us. When and how will Walmart recognize us for the strides we make?
9. I am an island -- without the support I need. I'm committed to this, but I'm not sure my whole company is, and there's only so much I can do. I will do what I can, but am not sure if it will really make a difference.
10. Just paint me greener. We do care, and are doing some good things in some areas, but people don't know it. So we're already doing enough; we just need to tell our story in a better way.
Over the next few weeks, we will explore each of these myths and demonstrate that guidelines such as the Walmart Supplier Sustainability Assessment can help reduce costs and risk while improving operational efficiency, innovation capacity, employee productivity, brand loyalty and community relations.
Catherine Greener and Marc Major founded Cleargreen Advisors to bring their sustainable business expertise to companies in a variety of sectors. Cleargreen Advisors helps clients of all sizes to generate concrete value while embedding environmental and social sustainability into their business strategies and practices.
Image courtesy of Walmart.