SpruceRoots - Transcript No.4
November 5, 2003

Business Innovation and the Environment

Good evening, my name is John Broadhead and I’m with the Gowgaia Institute. I’d like to welcome everybody here tonight in the fourth event of the Gowgaia Institute Speakers’ Series. I’d like to say as ever, howa, to everybody at Gwaii Haanas for making this beautiful building available; to the Haida Gwaii Museum at Qay’llnagaay for the loan of this wonderful podium, which was built by Charles Gladstone for the first church in Skidegate; to Michelle Patterson from the Word Wildlife Fund in Prince Rupert for helping to arrange to bring our guest speaker here tonight and to Bonnie Olsen and the crew of wonderful women at hanging by a fibre for the refreshments.

This Speakers’ Series as many of you know is all about change, it’s about recognizing the changes that are occurring and affecting our lives on Haida Gwaii. It’s about understanding the causes and context of that change and also about looking at the options and the opportunities that emerge whenever change is afoot.

So our intention in holding this series is to bring people together to hear well informed perspectives on the issues, spend some time talking about them and hopefully as a result we’ll go back out into our lives and our communities and be better equipped as a community to deal with change.

His Excellency John Ralston Saul began the series about a year ago now with a talk about Leadership and the Environment and he offered that the next chapter in Canada’s evolution as a democracy may well be in the process of being written here on Haida Gwaii.

He was followed by Terri-Lynn Williams-Davidson and Louise Mandell who are on the legal team for the Haida Nation and they explained the legal foundations of Aboriginal Title and the Haida Title case as well as the high court rulings regarding the duty of the province and tenure holders, such as Weyerhaeuser, to accommodate Haida interests and concerns at all levels of planning.

Miles Richardson then spoke about Making Treaties and New Relationships and how the treaty process is working around the province and how it relates to the title issue here on Haida Gwaii.

So leadership, environment, First Nations, changing relationships—our guest this evening is more than a little familiar with these things and also knows a thing or two about harnessing the forces of economic opportunity to build solutions in land use issues. We’re very fortunate to be joined tonight by Linda Coady, who, just about a year ago today or close to it, astonished a lot of people by announcing that she was leaving a twenty-year career in the forest industry as a vice-president at MacMillan Bloedel and Weyerhaeuser to become a vice-president for the Pacific Region at World Wildlife Fund Canada.

Linda is a twenty-year veteran of the BC coastal forest industry and a passionate advocate for the role of business innovation in biodiversity conservation and has pioneered a series of initiatives that have helped reduce conflict over forest and land use issues on the BC coast.

In Clayoquot Sound, on the west coast of Vancouver Island, she was a driving force behind the establishment of the Iisaac Forest Corporation, which is a partnership controlled by the Nuu-chah-nulth First Nation and is the first forestry operation in British Columbia to be certified by the Forest Stewardship Council.

Across Hecate Strait on the central and north coast where First Nations, market interests, environmentalists, government and industry are engaged in thinking big and devising innovative approaches to land use issues Linda has been at the table and in the board rooms bringing people together to create things like the Joint Solutions Project, the Coast Information Team and the Conservation Investment Incentives Initiative, all of which touch on affairs here in Haida Gwaii with the land use planning process that is now underway.

For her work Linda has been recognized with awards from the Forest Products Association of Canada, the Ecological Society of America and in 2001 she received a BC Ethics in Action Award for leadership in corporate social responsibility.

The format tonight is going to be the same as always, we’re going to hear from Linda for about half an hour and then we’re going to have some back and forth dialogue. John Farrell is going to field the questions and that will be followed by time to hang out around the refreshment table at the back. Please join me in welcoming Linda Coady.

Linda Coady, Vice-president Pacific Region,
World Wildlife Fund Canada

Thank you very much. I was very pleased to receive the invitation to speak tonight. I have been following this series through SpruceRoots and other publications and I read the lecture that John Ralston Saul gave. I’m delighted to be here on Haida Gwaii because in a twenty-year career in the coastal forest industry I never made it this far up the coast so I am very pleased to be here tonight.

John asked me to speak tonight about how large, economically focused organizations deal with change and how they try to innovate around change. I worked ten years for the Council of Forest Industries of British Columbia, seven for MacMillan Bloedel and three for Weyerhaeuser, so that is how the twenty years breaks down.

The ten that I worked for MacMillan Bloedel and Weyerhaeuser were focused on environmental issues and the conflict over old growth forests on the coast. It began for me in Clayoquot Sound and the conflicts there and then over the course of a ten-year period working through the central coast and into the market place.

The comments I am going to make tonight are not about any specific issue that I worked on in that ten year period, they are a compellation of some important concepts that thread between all of them in terms of the characteristics of change in a corporate environment or how change occurs in a corporate environment. What are the drivers? What ignites the change? What sustains it and what can undermine it once it’s underway within a big organization?

Of coarse, I am talking mainly about change that will support sustainability and new approaches to conservation because that really was the file that I worked on for the company. I’m not going to lecture tonight, I don’t have a powerpoint presentation, I’m just going to speak from my personal experience. I’m going to tell you a couple of stories tonight, some of them may sound disconnected but they are stories from the ten years in my life where I worked in this organization that was a profit maximizer and it had to deal with very profound challenges around social and environmental issues on the BC coast. How did it do it and what were the qualities and the characteristics that started to happen? What were the things, the dynamics inside the company that started to drive the change and shape it? I’m not sure that this story has a single point or any one significant insight. It’s a collection of observations that struck me as important factors that affect the behaviour of companies when they’re dealing with change. In case any of you are from Weyerhaeuser or the forest industry don’t worry the names have been changed to protect the innocent.

I’m not going to generalize about the significance of these factors. They’re very simple. As a matter of fact, thinking about them and writing them for tonight, I realized how simple they were. They’re almost self evident. I can’t believe that we, at the company, struggled with them. They seem so very basic right now and yet at the time they seemed so revolutionary—so difficult to comes to grips with and so different. So that says to me how quickly change happened, how quickly this is moving around coastal forests in BC. I’m going to leave you to be the judge as to the application of these observations to any of the situations you have here, or that any of you are dealing with in your work lives. These things happened to me and this is what I observed in the company as we moved through it.

I had a very unusual role with the company. It was a job that was once described to me by a friend of mine as a “wonderful, awful job.” In the beginning it was dealing with environmental conflict, and in the end, it was trying to take the strategies for dealing with the conflict and integrate them into a business strategy for the company. Then it became a little more economic and business opportunities driven.

In the beginning I was just dealing with environmental conflict and in the early 1990s MacMillan Bloedel was a lightning rod for it. It was a very hot time for the company, so it was a wonderful and awful job. I think on balance, looking back now that I have been out of it for several months, I think I loved it more than I hated it.

I was very fortunate in my role to have worked with some truly amazing people, both within the company, First Nations, government, the environmental movement and with customers, investors and board members of the company. I by no means saw myself a leader of any of this stuff. My role in the company, even though I had the role of vice-president on my card and could use the company helicopter, I wasn’t really that senior a person in the company. I had a middle level position, I certainly was not a senior vice-president. And so the challenge for me is perhaps a common one for people in large organizations, which is trying to get some leadership happening at the middle of the organization and connecting that with what is going on at the top and then what is going on at the ground. I lived in that middle bar of the organization.

Those of you who know big organizations know—I don’t care if they’re for profit or not, or they’re governments, I think it is as true for Weyerhaeuser as it is for the World Wildlife Fund, as it is for the BC government—the normal stance for all big organizations was best summed up to me when I read a book that Jack Welch wrote. Welch is a former CEO of General Electric and in the late 1990s a big business guru in the United States. So he wrote this book and I didn’t think it was a very good book but there was one great line that totally described all big organizations that I’ve either been in or worked with. It said the normal stance of most organizations is head in, focused internally and ass out to the world. I think that’s true, certainly in my experience that’s true. There is so much going on in a big organization—there are constant meetings, there is constant internal email and so much happening internally—that the face of the organization is always turned inwards. This is what Jack Welch was saying. To make it turn outwards to the world, to make it face the world instead of facing itself and trying to derive it’s power from itself requires a fundamental shift of thinking in the organization. It requires a fundamental change in stance in a big organization.

For MacMillan Bloedel that shock came in early 1993 at Clayoquot Sound on Vancouver Island—it had been building for a while. I’m aware that there was controversy over South Moresby, Meares Island and other places in the province but for MacMillan Bloedel the cataclysmic event that suddenly made the head jerk up from looking inward and think about what’s going on out there, were the conflicts in Clayoquot Sound—the 800 arrests in the summer of 1993 and the market campaigns launched against the company after that.

The company tried to deal with that shock to its system using, of coarse, all the traditional measures. First of all it went to its foresters and urged them to go to more meetings and produce more slide shows and then it produced videos and brochures that told the story. Then it hired more scientists. MacMillan Bloedel always did have a lot of scientists, it had quite a large research and technology division, it invested heavily in intellectual capital as a company, which I think helped it a great deal once it started to make some changes. Then of coarse it also litigated, it went to court.

But none of those things worked, or at least that is what the president of the company told me when he offered me the job. The “wonderful, awful job” as vice-president of environment for MB at the height of the Clayoquot controversy. Others may not have seen this as a great career opportunity and I think I was too naïve to know the difference. But none of their ideas worked, so they decided to try a different approach and the approach was to ask me to actually talk to the environmental groups and First Nations in Clayoquot. Believe it or not the company had not done that before the blockades or even up to a year after the blockades—that had not occurred. So, it didn’t seem like a revolutionary approach but it was not tried until all of those other things had failed.

The first observation I would offer you about change in large organizations, particularly ones that are profit maximizers, is that it doesn’t come until people have exhausted all other options. I wish I could tell you it wasn’t true, but I think it is fundamentally true. What’s the old saying? At some point the definition of insanity clicks in. People realize they can’t keep doing what they’re doing and expecting things to change. That realization doesn’t come easily in big organizations, there are a lot of big shocks to the system that have to occur. In my case the thing that MacMillan Bloedel wanted to change was the conflict over old growth harvesting on the coast. The company had reached the point where it was prepared to take some of the risks associated with non-traditional strategies in the hope that the risks associated with these strategies would be less than the risks they were already experiencing with the traditional strategy.

In many respects it was classic Business Management 101—a cost benefit analysis. I’ve got this much risk with the status-quo, and it’s here. I don’t know how much risk is behind trying something different but the status-quo has reached the point where I’m beginning to find it intolerable so I’ll take my chances. But I’ll try and manage this new risk so that whatever we start to do doesn’t become uncontrollable. That is my first observation about change dynamics in big organizations.

The second thing, and I hate to sound like Oprah Winfrey or Dr. Phil but change, even in a big organization, is not that different from the human beings that make it up. It doesn’t come until the company accepts responsibility for the situation. I’m sure you know from your own experience that forestry issues are complex in this province and there are lots of legal and policy issues around that and there are a lot of different players and perspectives—there are a lot of different types of entitlements and expectations and accountabilities. If you want to play the politics of blame on forestry in this province fill your boots, in this province you could never stop playing the politics of blame, there are so many different groups you can blame—it’s endless really. Of coarse for a company, the very favorite group to blame, even though the environmental groups thought it was them, is government. In this case there is a legal argument. The government handed out the tenures and it certainly was MacMillan Bloedel’s view that any problem that anybody had with the company should be raised with the BC government because they were the ones that set the rules for what the company was doing. So, as long as the company’s view was, ‘If you don’t like what we’re doing go talk to Victoria,’ change didn’t happen in the company.

Do you know the old saying from the Pogo comic strip ? I remember a bunch of us used to have it above our desks, it said, ‘We have seen the enemy and it is us.’ After a couple of years of dealing with polarized conflict, a lot of individuals in the company began to think maybe it’s not the government. I mean we don’t like the government and you should never think that MacMillan Bloedel ever really got along with the Harcourt government or any other government, although it may look like that from the outside. But as long as the government was the scapegoat the company never really did seriously start to address its own behaviour. It was individuals that started to think maybe it’s us. That was re-enforced in coastal logging communities where MB employees lived and worked and where their kids would come home from school—this was at the height of the ‘War of the Woods’ and MB was being vilified as a Darth Vader—they would come home from school really embarrassed about what their parents did as a living and the parents would feel badly about it and take it to the work place.

So there was this beginning a couple of years after Clayoquot, that the company began to think, ‘Maybe it’s us and maybe we have to do something. Maybe we have to actually change our behavior in a way that isn’t prescribed by government. Maybe government doesn’t have the answer.’

Much has been written about the market campaigns and the influence they had on the company and it definitely was a stick that was instrumental in changing the compan’s way of thinking. But the most instrumental thing wasn’t, from my perspective, the canceling of contracts, there weren’t actually many of those cancelled, it was more the internal play between the company and the customer. It was where the customer, seeing the market campaign and the environmental groups that were putting pressure on them not to buy MacMillan Bloedel products, would then approach MacMillan Bloedel and say, ‘I don’t like this problem, you make it go away, because it’s your problem, it’s not my problem. I buy your products, I don’t expect this problem to come with your products. You solve it.’

I really think, in retrospect, it was the customers shaking the company by the head that made the change. But the company would say, ‘Oh, it’s not really our problem because really it’s the government and we’re just following what the government says and actually the environmental groups are wrong…’

Then the customers would say, ‘We don’t care about that stuff, we don’t buy from the BC government, we don’t buy from the environmental groups, we buy from you and you solve it because it’s your problem.’

So it was the customers telling the company that was a pivotal factor in the company taking ownership of the problem. That’s an important dynamic in today’s market place because I think we have moved from being in a supply and demand situation to a demand and supply situation—the market place is much more important.

When I first started my career in the coastal forest industry, marketing guys were order takers. There was no marketing, you simply went out cut down a lot of trees and then you put it on the market and people would buy it and then you’d go cut down more trees. It’s very different now, it’s really changing in the forest products market place to the point where in many places in Europe and here companies won’t log unless they have an order file. That didn’t exist a few years ago.

But things didn’t change until the company owned the problem and began to, not completely give up on the politics of blame, but understand that it had to do something about the problem and to change.

Another critical factor on the pathway to change with large organizations is diversity. It was very important as the company began to open up and recognize it was part of the problem, and that it had to make some fundamental changes in the way it organized its business. The company was exposed to a lot of different opinions about which way to go. My role in the company was to invite groups in or go outside the company to talk to them and bring their ideas back and try to explain them to the company. To be a translator as things opened up and to think about how the company might incorporate different views in a business strategy. That element of diversity was very important and having someone to bridge that and do that translation was important and, as I say, that was my role.

One of the most powerful affirmations I ever had of the importance of that role came from an employee focus group. We did a focus group around our forest policy because we were getting criticism from not just environmental groups but from all kinds of British Columbians and employees. At this point people were thinking something had to change. Maybe it’s us, maybe we’re the ones that have to change.

So we were doing focus groups and employee testing and I remember this young women who worked at the Canadian White Pine Mill in New Westminster—we asked the facilitator to really go at the employees pretty hard in this focus group—we wanted to know, ‘Who do you believe?’ At that point there really was a crisis of credibility in the company. There was a fight going on that a lot of British Columbians were kind of in a ‘plague on all your houses’ view about forest issues. They didn’t trust the government, they didn’t trust the company, they didn’t trust environmental groups, and they hardly trusted anybody at the UBC Faculty of Forestry. There was a reaction to the ‘War of the Woods’ and everybody was saying, ‘I don’t know who to believe anymore.’ I remember at the focus group this young women, after repeatedly being asked by the facilitator, ‘Well, who do you believe really, who do you believe?’ She finally burst out in frustration, ‘I would believe anything the company and the environmental groups could agree on, I don’t think it would necessarily be the truth but I think it would have more credibility than anything either of them said separately.’ So armed with that one piece of information we started looking outside the box and of coarse then it became more apparent to those of us working in the company that in fact not only were we part of the problem, we certainly didn’t have the solution.

As we started to analyze that it occurred to us that actually nobody had the solution, the solution wasn’t in the box. Then we came to believe that actually the solution lay in the interaction between the parties. No one party had it. It was in the intensity of the interaction that lay the solution.

Clayoquot was the mother of all conflicts, it produced a lot of important children—the Clayoquot Scientific Panel, concepts around ecosystem-based management, a biosphere reserve, an idea of local-based joint ventures and eco-based forestry. All of these things were the product of interaction between parties involved in that conflict. I think at the beginning of the conflict if you asked any of those parties, ‘What’s the solution?’ None of them would have come up with those things but over a period of several years those were the things that emerged.

A fourth point, in terms of drivers for change is leadership. Leadership is critical. A leader in my experience has to be capable. The leader doesn’t have to have the answer because often the answer doesn’t exist in the organization it exists outside and can be a product of interaction. But the leader has to be able to cast a direction in a big organization that excites people and to create images and challenges that excite people. We had a change in leadership at MacMillan Bloedel about the time all of this was happening. We had a new president who came in because the company was not performing across a number of factors, it wasn’t just environmental, much of it was economic, it was financial, it was labour it was a lot of things.

So a new president came in. He was a charismatic leader, he was able to create images that excited people in the company. He presented some organizing concepts that allowed the technical people in the company to start thinking in different ways. He said to people at MacMillan Bloedel, ‘I want to create a company that can be capable of having popular support for it’s forest practices and make money.’ What a concept! To that point the company was only able to make money by pissing people off. To have the leader stand up in front of all the employees and say, ‘Yes I want you to make money, but I don’t want you to piss everybody off while we’re making money.’ This was a new concept in the company. That leader made it okay to take some of the ideas that were coming out of Clayoquot—probably coming out of here—and talk about these ideas without being made to feel foolish. At that point there were organizing concepts coming into fashion and vogue around sustainable development and corporate social responsibility. Reports were being written and whole departments of the United Nations were being set up around these things—it was okay to start talking about them.

The fifth point is talent, raw talent. The devil is in the details, in change especially, if you are trying to accomplish business innovations that move against social and environmental goals because there are inherent tensions between some of those objectives. You have to have smart, committed, talented people working on this stuff and they need resources to work on it. It’s one thing to have an exciting idea but to make it happen, to land it on the ground, to actually get projects and new types of products or businesses working is another thing entirely. An exciting idea, in my experience, translates into at least three telephone books—technical detail that you’ve got to be able to produce—and then address the issues, and then move to the really hard part which is the on-the-ground implementation. That takes a whole different area of expertise, that takes people who can actually train workers, who can actually make things happen at that level.
Making the business case for a new model, managing the risks, taking it to the board and building employee support, those are tremendous challenges that come up when you are moving through a period of change and they certainly came up for us.

During this time it was very important to go to the board and get approval. I can remember five-hour meetings with the board where you had eight to ten of us with the ‘phone books’ backing up directions and risks we wanted to take. It was very important then that the external conflict be reduced because the conflict within the organization was getting very high. In fact the organization didn’t have the where-with-all to deal with internal and external conflict at the same time—people need some time to think and adjust to new perspectives and challenges.

The other point is that conflict is very expensive. I think the conflict in Clayoquot probably cost the BC government and MacMillan Bloedel at least 50 million dollars. But in my experience solutions are even more expensive, and if you spend all your capital on the conflict you won’t have any left for the solution. You will under capitalize the new model because you have spent all your money managing the conflict and then the new business model will fail because it doesn’t have enough access to those talented people and resources. So, don’t spend all your capital on conflict.

I think there is a new forestry business model emerging here on the coast, that’s my concluding line. It takes years to evolve. It has taken years to get to this point and I think it is going to take it a couple more and millions of dollars. In my experience another hallmark of change in big organizations is that change is frequently pronounced dead. I don’t know how many meetings I’ve been to where different things you are working on are deemed not workable and pronounced dead, ‘No way this is possible, it can’t be done.’ With some of these models you have to have the persistence to sit through all of those declarations.

This is the final point that I want to make. In change, failure is okay, and it’s also inevitable. It’s going to happen. If you’re smart and you’ve got talented people working with you, you can minimize failure and hopefully not cause the whole thing to collapse, you should build it into your plan. I know we did in the different models that I worked on. On the central coast, it’s up for grabs whether the planning will work, but I can think of at least three times I was convinced it was totally and utterly over and that there was no hope of any kind of negotiated solution. Yet somewhere in the interaction of those parties, somebody moved, something changed, a different idea emerged and we went back at it again. Failure is inevitable, but keep at it is what I’m saying.

In conclusion I think we’re probably all here tonight because we believe a new model for conservation and sustainable management of coastal forests is being created on the BC coast—right now. It’s not born yet, but I think it is at the stage where if you take an ultrasound you can actually pick up sharp features. I think it is being driven by factors here on Haida Gwaii but it’s also being driven by factors outside of here—by the global environment that all businesses and societies live in. This is a highly networked world and the shift from supply-and-demand in forest products to demand-and-supply will actually support, I think, the emergence of new models here on the BC coast.

In my experience, the final form of it will be driven by a convergence of those global and local factors. My hope is that at the point of convergence we will see global forces and capacity meeting local autonomy and authority here in British Columbia. I think that kind of convergence will provide everyone here with both a values base and new tools that they need to reconcile all the differences that exist around forest and environmental issues. Thank you.

Linda Coady
Vice-president Pacific Region
World Wildlife Fund Canada