Organizational Change
Moving Pieces:
UNC's Big-Business Approach to Sustainability Consulting

At the University of North Carolina, sustainability consulting projects have an unique way of taking shape.

A marketplace type of approach to teaming up with industry partners has helped UNC’s Center for Sustainable Enterprise take aim at large-scale projects with multiple clients.

In one of the more memorable engagements, the Center’s faculty director, Professor Albert Segars, and a doctoral student spent a year-and-a-half consulting with Disney and the Atlanta Braves on product lifecycle management. Both partners had been interested in exploring the lifecycle of water bottles sold at their respective venues (Disney’s amusement parks and the Braves’ ballpark).

UNC’s Kenan-Flagler Business School was one of the first to offer a sustainability concentration when it established the Center for Sustainable Enterprise in 1999. The school consistently earns top rankings, including No. 7 in Sustainability in Businessweek and No. 7 in Best Green MBA by The Princeton Review last year.

“Universities have changed,” Segars said. “We’re not the same university that a lot of executives attended 20, 25 years ago. We’ve readjusted our focus towards solving real-world problems.”

The Center’s 30-plus corporate partners include Bank of America, Time Warner Cable, Cisco and Burt’s Bees, as well as nonprofits and startups abroad.

“They could’ve gone to consulting firms. They could’ve gone anywhere,” said Segars, referring to the Center’s multinational corporate clients. “They knew that we would be scientific, rather than trying to sell more to them.”

The Kaleidoscope Effect

Segars uses the term “kaleidoscope effect” to describe the Center’s method of conceiving research topics for client engagements.

He says faculty members constantly observe the business world and “turn the kaleidoscope” to find patterns and opportunities. When the pieces fall into place, they are transformed into research topics.

The process starts with a strategy session among faculty members and staff. Each brainstorming meeting typically generates about 30 research ideas, Segars says. The team lets the ideas percolate for a few days. Then they identify commonalities and establish compelling project ideas.

Segars sends out the project ideas to the partners. Shopping them around invites the possibility of multi-client projects, like the lifecycle management project with Disney and the Braves. In those cases, industry partners split the cost of the consulting fee.

Once an idea gains traction, the game plan starts to take shape. Interested partners might refine the concept further to suit their needs. And in return, the Center explores the capabilities it can offer, including the expertise of UNC faculty members or research centers outside the business school. In past projects, they’ve brought on faculty members from the School of Global Public Health and the College of Arts and Sciences.

Systemic Thinking in the Financial Services Industry

Several years ago, the Center for Sustainable Enterprise and the Kenan Institute of Private Enterprise at the business school teamed up with the Institute for the Environment at UNC in a major study with Bank of America, measuring its North American carbon footprint.

The Institute had a working group with statistical models measuring the impact of businesses on the environment. Meanwhile, the business school had the capability to determine how environmental impacts affected business.

The study on Bank of America’s carbon footprint was initially developed as a case study for the financial services industry. As the 2008 report states, the dialogue about the environmental impacts of business typically focuses on manufacturing and industrial operations. However the project found financial institutions also have significant impact on the environment simply as a result of their size. Bank of America had 5,700 retail banking centers in North America at the start of the project in 2006.

In 2006, Lisa Shpritz was an environmental risk and sustainability executive at Bank of America, working on environmental compliance and the integration of sustainability into the workplace. At the time, she said, the environmental impacts from all of Bank of America’s buildings weren’t easy to identify or quantify.

“We didn’t know where to start, so we did this study to give us a roadmap,” Shpritz said.

Ultimately, students found that electricity generation was the largest contributor to greenhouse gas emissions, accounting for 40.27 percent of Bank of America’s total emissions.

Switching to energy-efficient lighting and LCD desktop monitors required upfront investments. But the report determined the switch would result in long-term cost savings and major reductions in greenhouse gas emissions.

Seven years after students completed the report, the findings continue to prove useful for Bank of America.

“I literally have a chart from that study printed out on my desk,” said Shpritz, now an environmental operations executive in the Global Environmental Group at Bank of America. She is responsible for the bank’s public environmental goals, as well as tracking and reporting environmental impacts from Bank of America’s operations in more than 40 countries.

Shpritz explained that her team is close to wrapping up the 2015 environmental goals and had recently started working on the 2020 goals. She revisited the data from the study, particularly the list of categories contributing to the bank’s greenhouse gas emissions.

“Environmental work is never complete,” said Shpritz, who is also an MBA alumnus from Kenan-Flagler. “We are still working our way through the list created by the students.”

Among the deliverables, students also provided Bank of America with an assessment tool to model benefits and challenges of a dozen potential environmental initiatives. For example, adding satellite offices would decrease the environmental impacts of long employee commutes, but it would also impact the environment through increased energy usage, building and materials. The students used Bank of America’s expansion plans to calculate the impacts city by city.

Client Engagement Trumps Project Fees

Depending on the scope, the Center’s project fees range from $20,000 to $1 million. However, the majority of consulting engagements fall under $30,000, according to Segars. The fees, which are gifted to the university, cover travel expenses and the time needed to collect and analyze data.

Faculty members stress that the university places a much higher priority on client engagement over project fees.

“We make it clear up front that we’re going to count on the clients to be strong partners by giving us access,” said Carol Hee, who is director of the Center for Sustainable Enterprise and Assistant Professor of Strategy and Entrepreneurship. “We want to co-create solutions that will work for their different stakeholders.”

During a typical semester-long project, clients participate in five meetings with students and the faculty member, which require anywhere from 20 to 40 hours of time from the client. Hee said industry partners understand that they benefit directly from interacting with the student teams. The deeper level of exchange allows the students to apply long-term, systems thinking. And as a result produce more robust deliverables, according to Hee.

About one-third of the Center’s projects are with repeat clients. It’s also common for one project to lead to another project based on the findings, Segars said.

“I’ve turned down very lucrative projects for other projects that gave us a deeper level of engagement,” he explained. If the client isn’t willing to provide access to their data or their executives, the school isn’t likely to take on the project.

Partners for the Long Haul

While the Center does take small scale, one-off projects on occasion, the long-term partnerships tend to produce the most impactful results.

Lisa Jones Christensen, Assistant Professor of Strategy and Entrepreneurship, heads the Sustainability Leadership Capstone course, which assigns students to solve business problems in Eastern Africa and Eastern North Carolina. In order to address global problems, the course is designed to have students compare and contrast regional domestic poverty with international poverty.

In a recent consulting project in Ethiopia with solar company d.light, MBA students worked through the company’s distribution challenges in rural communities.

Christensen said her students check for soft and hard metrics on ongoing projects every year, which helps produce lasting results.

“It’s not a typical way you think of consultants — landing, changing everything, then disappearing,” she said.

Because the Capstone projects work with clients in developing countries, Christensen’s students are required to deliver more than the typical report, PowerPoint presentation and data spreadsheets. Students will often go beyond the initial scope and provide training to help the client’s staff carry out their recommendations. In past projects, students also have provided basic business and accounting lessons, she said.

Other Capstone-project partners have included Procter & Gamble and Cherokee, a private equity firm that invests in brownfield redevelopment.

Mainstreaming Sustainability

One of the goals for the Center for Sustainable Enterprise, one of seven institutes in Kenan-Flagler, is to mainstream sustainability in the business school — both through the curriculum and the consulting engagements.

Concepts such as materiality assessments, stakeholder management and integrated reporting are already covered in the required MBA core classes and electives in the undergraduate and masters of accounting programs. They’re not labeled as “sustainability courses,” Hee said.

Individual professors throughout the business school are also increasingly covering these topics in their courses.

“Sustainability is a broad lens that makes you think beyond a narrow focus,” Hee said. “The goal is both to increase the number of sustainability-focused projects as well as to increase the inclusion of the sustainability lens into more projects where it makes sense for the client.”

This year, four out of 32 consulting projects in the business school, are focused on sustainability issues: renewable energy, water pollution, economic development and alternative transportation solutions.

The next project is a big one, Hee says. She and her team — two students from a Hong Kong university, two full-time MBA students from UNC and two executive MBA students from UNC — will investigate which industries will be the most effective to work with to reduce water pollution in China.

You can view the whole sponsored Academic Engagement article series here


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