Playing Jacks: The COO and CPO

In the fifth post of their 7-part series, John Elkington and Charmian Love look at how COOs are coping with the new wild cards dealt by environmental, social and governance challenges.

Lowest-ranked of the so-called 'face cards' is the Jack, or Knave. For us, the Jacks of today's C-Suites are the COOs, or Chief Operating Officers, and the CPOs, or Chief Procurement Officers. The latter—or their equivalents—have become increasingly important, as companies have had to learn how to knit together and operate complex supply global chains. Winning hands in today's markets critically depend on market-sensitive, well-connected and agile Jacks—able to juggle different priorities, deadlines and cultural sensitivities.

Their role has come to be seen as even more central in the wake of the supply chain nightmares that have hit companies like Shell, Nike and Mattel. Companies like Nike and the Gap have tried to get ahead of the agenda by publishing detailed mappings of their supply chains, unthinkable a few years ago. In parallel we have seen a boom in social and environmental auditing and other of supply chain transparency services, linked to the proliferation of ethical, social and environmental standards like AA1000, SA8000, ISO 14000 and 26000, and the welter of fair trade, organic, animal welfare and sustainability standards impacting such industries as forestry, mining and fisheries.

As the sustainability agenda has moved from the periphery to the mainstream, businesses of many types have woken up to the need to transform their operations—and, in some cases, their business models—to better integrate sustainability initiatives across the enterprise. When Accenture reviewed the relevant issues for COO, it identified the following key areas of interest: revenue growth from new products and services; cost reduction and efficiency improvements; better risk management; and brand and reputation enhancement.

Ultimately, Accenture concluded, "sustainability is an engine that can drive high performance. Further, the building blocks of high performance—market focus and position, distinctive capabilities and performance anatomy—can be used to create business opportunities and lasting value, for your stakeholders and for society at large."

The COO and CPO agenda can only become more interesting as big box retailers like Wal-Mart Stores energetically rattle their supply chains, which creates a de facto form of private sector regulation, and as new apps emerge that enable consumers, customers and investors to peer back through supply chains. One of the most interesting indicators of where all of this may be headed is GoodGuide, which provides information on products and producers via cell-phones fitted with barcode scanners. When we asked the 'for-benefit' firm's founder, Dara O'Rourke, how things are going, he reported, "With zero marketing or PR, we have had over 4 million people use GoodGuide to help make purchasing decisions. Our iPhone app is already being used by over 250,000 people in the US."

And what about any interest from corporates? "We have also had an amazing response from large companies, small green and healthy product companies, mainstream retailers, and institutional purchasers in the US," O'Rourke said. "We are now building a number of tools for companies to make use of our data. We see huge opportunities in helping companies better analyze products, supply chains, and consumer responses to sustainability practices."

The big issue for retailers—who operate as the critical market gatekeepers—will be whether they simply allow this to happen and suffer the consequences, or whether they catch the wave and build this sort of transparency into their shopping carts?

Meanwhile, despite the fact that their work takes them to where the corporate rubber hits the societal road, very few COOs or CPOs are also Chief Sustainability Officers. In fact, the only example of a combined COO/CSO role we have come across is Bonnie Meck of FesslerUSA, a company that provides private label design and production services to the apparel industry.

As COO, Meck oversees the vertical production (knitting, cutting, sewing), post-production services (dyeing, screening, embroidery, packaging) and distribution of the company's private label knitwear, shipping 3 million to 4 million fashion garments annually. As CSO, she drives the implementation of the company's comprehensive sustainability program, which includes actions focused on caring for employees, serving the community and minimizing environmental impact.

In this case, Meck has an unusual communication channel to the Chairman and CEO. They have been married for around 30 years. Most COOs, however, will still need to pursue more traditional routes to the top of the corporate hierarchy.

Meanwhile, one area that interests us is how the new wave of social and environmental enterprises will bring in the sort of COO help they need to go mainstream. An example of the necessary pairing of social innovator with a steady-pair-of-hands COO is that of Facebook founder Mark Zuckerburg with Sheryl Sandberg, as COO. Their aim, as she put it recently, is to "bring people together, to share information and make the world more connected, and have people have a deeper understanding of themselves, others, the communities of which they want to be a part and can be a part."

This ambition is likely to make the working lives of conventionally minded COOs and CPOs that little bit more challenging. It will help build what we dub the 'Transparent Economy'—featured in a new report we will launch at the Global Reporting Initiative annual conference in May.

Being a COO or CPO in a world of radically greater market transparency, with supplier relationships stretched across regions and markets with very different priorities in terms of accountability and sustainability, will be the sort of challenge that makes or breaks C-Suite contenders. Happily, however, even if COOs aren't CSOs themselves, growing numbers can now turn to a new breed of C-Suite professionals whose brief it is to track this wider world.

Series: John Elkington on the New C-Suite

John Elkington is co-founder and executive chairman of Volans Ventures and co-founder and director SustainAbility. His most recent book was The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World (Harvard Business School Press, 2008). Charmian Love is Chief Executive of Volans.

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  • jeannie christensen

    Just talked to the Manager of Sustainability Programs at California Academy of Sciences about this subject. He went into an explanation of how his organization uses LEEDS certification rankings to source and procure; also how they're working with Coupa to try and automate this ranking. Inspiring...Here's the podcast http://bit.ly/avmlw2