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Engagement, Sustainability and Innovation: How Dow Chemical Connects the Dots

By Kathy Miller on April 11th, 2014

 

Dow Chemical, a multinational corporation headquartered in Midland, Michigan, USA, takes sustainability seriously!  The dilemma of meeting customers’ needs in sustainable ways is a challenge that they welcome these days.  However, they haven’t always looked at sustainability through the deep and broad lens that guides their decisions currently.  By increasing the engagement of a wide variety of stakeholders in their efforts, Dow has moved the company from what started as chiefly an environmental, health and safety initiative to the integration of sustainability into the core of their business strategy.

A Short History

 As far back as1992 they engaged with a group of thought leaders from around the world and established the Corporate Environmental Advisory Council (CEAC), renamed to Sustainability External Advisory Council (SEAC) in 2008.  The group includes former government officials, heads of nongovernmental organizations, and leaders from academia and the business community. By engaging in discussions with Dow employees, this group has brought diverse, outside-in perspectives on sustainability, environment, and health and safety issues.  Members do not represent any particular organization, but share their knowledge, experience, and points of view.[1]

While Dow Chemical has been dedicated to innovation ever since its inception, the greatest change for the company over the last few years has been its use of innovation to reinforce its commitment to sustainability. Based on input from its own employees as well as from the SEAC, the company drafted its first set of sustainability goals in 1996.  The company set very high goals intentionally to promote innovation.  Dow’s success in meeting these first 10-year goals led them to develop a second set of substantially more ambitious ten-year goals in 2005.  This time Dow moved from viewing sustainability from a more narrow environmental, health and safety perspective to approaching it within the framework of business opportunity. The second set of goals aimed to ensure the viability of the company for the next 50 years, while, at the same time, contributing to the well being of people and the planet – a concept referred to as “the triple bottom line.” 

Move from Internal Expertise Only to External Collaboration

According to Dawn Shiang, Dow’s Associate Director of Sustainable Technology, these goals, with their emphasis on helping their customers’ find solutions to world challenges, created a major shift in how Dow does business.   Instead of relying mainly on their own internal expertise, as was the practice in the past, they now seek out ways to collaborate with customers, suppliers, universities and others more often in pursuit of solutions to the world’s problems.  For example, through innovation workshops, Dow joins their own employees with their strategic customers to engage in conversations pertaining to new products in the development pipeline.  They often use a published tool called The Dow Chemical Sustainability Footprint Tool© that helps them and their customers systematically examine together potential products from a variety of perspectives pertaining to impact on people and the planet.  The tool enables them to work together with their customers to identify opportunities for innovation that will contribute to a more sustainable world.   They report that these discussions affect how they develop products and technologies in their pipeline.

Dow’s Customer Innovation Center in Shanghai, China serves as evidence of the company’s commitment to collaborating with customers for innovation.  The company’s stated purpose for creating the facility is to enable Dow employees to work alongside customers to turn market opportunities and new ideas into profitable solutions.[2] The center enables scientists to develop innovations that lead to more energy efficient buildings, improved safety and fuel consumption in automobiles, broader access to clean water, and the newest breakthroughs in electronics and appliances.

In 2009, Dow Chemical held its first innovation workshop at the Center with the Haier Group, a leading multinational home appliances and consumer electronics company with headquarters located in Qingdao, Shandong Province, China. Subsequent to the workshop, Dow and Haier signed an agreement in 2010 to conduct joint R&D projects.  Their collaboration has resulted in several initiatives which have led to commercial products. For example, Haier adopted Dow’s patented PASCALTM insulation technology for producing energy-saving household refrigerators and freezers.  Together they introduced the breakthrough Magic-Pallets Washing technology for significant reduction of water and detergent consumption. In late 2011, the two companies signed an agreement to establish the Haier-Dow Global Joint Innovation Laboratory. Located in the Haier Group Technique R&D Center in Qingdao, China, the joint lab aims to accelerate innovation collaboration between the two companies, managing and performing their joint research and development projects.[3]

Creating a Culture That Enables Strategy Execution

 

Recently Dow took a look at how their company culture is positioned to carry out their sustainability strategies.  As part of this exploration, they administered the SCALA™,an assessment tool that identifies the organizational dimensions that differentiate sustainability leaders from others.  They chose a global random sample of their employees to complete the assessment.  Out of the 600 plus employees that responded, close to half indicated that they believe the company’s performance and commitment to sustainability are key factors to the company’s ability to attract and retain talent.  And close to half indicated that most employees feel a stronger sense of pride and loyalty towards the company due to its commitment to sustainability.  This assessment data reassured Dow that overall the organizational culture is strong in those dimensions that will continue to make a difference in their ability to execute expansive sustainability strategies.  Nevertheless, they did find some significant differences among the various parts of the organization indicating that under the umbrella of Dow’s dominant culture live several subcultures.  The data has enabled Dow to take a more granular approach to moving the company as a whole forward in the execution of their sustainability strategies.  Of course the breadth of their commitment means that they need an excited and engaged workforce.   

According to research by Harvard professor Theresa Amabile and her colleague Steve Kramer, the most significant determinant to feeling engaged on the job is making progress on significant work.  They tell us, “As long as workers experience their labor as meaningful, progress is often followed by joy and excitement about the work.”  And is there any doubt that companies benefit from engaged employees?  Amabile and Kramer’s research shows that a positive inner work life experience drives performance. They say “Inner work life has a profound impact on workers’ creativity, productivity, commitment, and collegiality.” When people are happy about their work, they put more effort into it, including extra time and brainpower.

 Dawn Shiang suggests that the Dow workforce  responds to the opportunities to engage in significant work.  When asked to reflect on why sustainability seems to capture the imagination and engagement of Dow employees, she said that she suspects the connection of their work to sustainability enables employees to experience their efforts as more tangible and real.  “When you can translate how you contribute to world solutions, your work doesn’t feel so esoteric.”

So how does Dow enable the development of an organizational culture that supports their implementation of aggressive sustainability goals?  One answer to this question is that they have engaged their workforce in the company commitment.  People get excited about enhancing, pressing forward, making things better.  Secondly, they have connected innovation with sustainability. People are energized also by work they perceive as meaningful. Employees will do the work for the love of it when they believe that their contribution is valued and is producing value for others.

Summary

Over the years, Dow Chemical has moved towards a broad and strategic commitment to sustainability.  They have increased the company’s engagement with stakeholders – both internal and external.  They have provided the opportunities for their employees to become engaged with significant work that is aimed at solving world problems.

  


[1] K. M. Perkins, R.G. Eccles and M. Weick.  Sustainability at Dow Chemical.  Journal of Applied Corporate Finance, Volume 24, Number 2, Spring 2012, pg. 34-40.

[2] http://www.energyasia.com/public-stories/china-dow-chemical-sets-up-global-business-and-innovation-hub-in-shanghai

[3] Dow and Haire Group Sign Agreement to Open Joint Innovation Lab, October 9th, 2011.  http://www.dow.com/news/corporate/2011/20111009a.htm

[4] T. Amibile and S.J. Kramer. “Do Happier People Work Harder?”  New York Times,  September 04, 2011

[5] T. Amabile and S. J. Kramer. Inner Work Life.  Harvard Business Review, May, 2007.