The story of how the European carpet and sports surfaces manufacturing company, Desso decided to embark on the tough journey of remodelling the business according to Cradle to Cradle® design is now the subject of a new Case Study at London Business School - DESSO [A] TAKING ON THE SUSTAINABILITY CHALLENGE.
This Case Study (Part A) focuses on the decision to move the business to Cradle to Cradle® design. Subsequently, London Business School will publish a second part (B) highlighting what Desso has done to date to implement the change.
The Case Study, written by corporate sustainability expert Ioannis Ioannou, Assistant Professor of Strategy and Entrepreneurship at London Business School and Amandine Ody-Brasier, a PhD graduate student in her final year at London Business School, tracks the decision back to 2007 when Stef Kranendijk first took over as CEO. Then the company needed a new strategy to move forward1.
"The DESSO case is not only a wonderful learning opportunity for executives but, more importantly, a great example of a modern corporation walking the talk when it comes to sustainability, and doing so strategically," says Professor Ioannou.
"Under Stef's leadership, DESSO is building the foundations of a profitable, innovative and sustainable business model while having a fundamentally positive footprint on our planet. There is no doubt that this will be the biggest challenge for the world's leading corporations in the years ahead and DESSO is surely taking critical steps in the right direction"
Having made the decision to reinvent the business model through Cradle to Cradle® design (in which all goods would be made in such a way that they could be endlessly recycled), Kranendijk had to win the hearts and minds of shareholders, staff, management, suppliers and customers as to why this was the right move.
Coming at the time of the worst financial crisis for 60 years,
this was a major challenge.
Some sixty senior executives from around the world heard about the Desso Cradle to Cradle® story taught for the first time as a case in going beyond sustainability in the prestigious Special Executive Programme (SEP) on September 23, 2011.
From then, the Case will continue to be taught at London Business School and will also be posted on the European Case Clearing House (ECCH2), making it widely available for executive learning.
"It is always my hope that the Desso story will inspire other business leaders and entrepreneurs to follow the same Cradle to Cradle® route," says Stef Kranendijk, CEO of Desso, who will participate in the discussions at London Business School on September 23rd. "For this reason, I am thrilled to have been given the opportunity to discuss the story in person in this highly prestigious class."
Stef Kranendijk will also feature in Business Strategy Review, London Business School's magazine3.
As an executive formerly with Stanley Works and P&G, Kranendijk was used to dealing with major strategic change and had already developed a strong belief in the need to create companies that go beyond sustainability. Now, he was in the position of being able to effect change and prove that a business could be refashioned in this way, capable of being both profitable and fully sustainable.
"We know this works. Our earnings (EBIT) have gone up nine-fold between 2007 and 2010" says Stef Kranendijk. "Our customers are very impressed by the products we offer that are Cradle to Cradle® certified. It is fantastic to see how our whole approach is enabling us to be cutting edge both in design and functionality as well as lay the basis for complete sustainability in the use of materials, water and energy."
The preparatory phase (2008 to 2015) of Desso's Cradle to
Cradle® plans aimed to:
• Eliminate all chemicals that were not acceptable by EPEA4 standards;
• Switch 50% of the energy used to renewable sources;
• Begin the construction of a take-back system designed to collect carpets at the end of their lifecycle and recycle them according to the Cradle to Cradle® principle of continuous reuse in the production cycle.
In the implementation phase (2015 to 2020) Desso aims to make 80% of the company's products from post-consumer material. All carpets will be certified as Cradle to Cradle® by EPEA and 100% of the energy consumed will be provided by renewable sources.
1 Mr. Gus Romano, a sustainability expert and
distinguished London Business School alumnus, will be joining
Professor Ioannou in teaching the Desso Case.
2 To visit ECCH online go to: http://www.ecch.cranfield.ac.uk).
4 The Environmental Protection and Encouragement Agency is an organization founded by Cradle to Cradle® pioneer Professor Michael Braungart).