Getting competitors to work together can be a hard sell, but can also yield rich rewards, writes Jason Kibbey
theguardian.com, Tuesday 20 August 2013 22.13 BST
In business, it’s every company for itself, right? This might appear especially true in the fast-paced apparel sector, where “fast fashion” companies produce runway-inspired clothes just weeks after they debut on the catwalks. But the maxim isn’t always true. In fact, it’s collaboration, not competition, that’s defining the future of global apparel production.
Let me tell you a story about the Sustainable Apparel Coalition (SAC), a garment-industry effort to try to improve the way clothes are made to support sustainable practices and workers’ rights. We’re measuring what had never before been measured; the environmental and social performance of apparel and footwear via something called the Higg Index, which rates factories, products and brands.
On a beautiful day in San Francisco last year, a group of companies met to develop the Higg Index, which launched in July 2012. Instead of meeting in a glamorous boardroom of a fashion house in New York or Paris, the SAC working group met in the community room inside a member company’s retail store. But the room was air conditioned down to 4C. Participants from all over the world hadn’t packed for meetings in what felt like a vegetable storage locker.
First, we had to warm up. So a dozen executives scoured the retail racks like teenagers, borrowing parkas, hats, scarves and even gloves from our host store to start working together over the course of the three-day meeting.
But how were we going to improve the sustainability infrastructure of our entire industry when we couldn’t get the carbon-spewing HVAC system to work properly for a single meeting in one little room? Adding layers of clothes seemed to be the perfect metaphor for end-of-pipe solutions that don’t address the real underlying issues.
To make matters worse, the chill extended to the group itself. The assembled companies simply did not agree on how to measure the facilities that produce the world’s supply of clothing and footwear.
Looking back, that day marked the uncomfortable beginning typical of any good collaboration.
The SAC brings together the entire apparel and footwear value chain including retailers, brands, factories, materials providers and the stakeholders that hold it accountable. Building the Higg Index was no easy task as it measures the performance of a brand, the facilities where products are made and the products themselves. To create the Higg Index, the whole value chain has to agree on its form and function as well as its structure, contents and process for awarding points.
After three days of discussing everything – how fast retailers could move, suppliers’ capacity to make significant environmental change and how to score a company-owned waste water treatment facility, to name just a few of the topics – the group decided to wrap up the negotiations.
The SAC culture requires that anyone who has concerns, but “can still live with it,” should defer to the group and allow it to build on even a reluctant consensus. Sometimes we have “principled and paramount objectives” that force a re-start, but fortunately, the group decided to proceed.
Yet there was considerable concern about our facilities assessment tool: were we being aspirational, unrealistic, or not going far enough? Those who thought we were being unrealistic predicted not only confusion, but also a wholesale rebellion from facilities that would have to conduct the Higg’s assessment.
One retailer said it would go along with the assessment for the industry, but would not implement it itself. Another was already planning to rapidly assess its entire supply chain. Disaster was predicted. As a new executive director trying to align the supply chain, I saw this headache getting worse and potentially even threatening our platform of collaboration.
During the following months, this disharmony continued. The retailer that wanted to move fast, moved very fast and released the assessment to thousands of suppliers. A competing retailer was deeply concerned that this was going to confuse the supply chain (and especially their shared suppliers) before it was ready.
I found myself spending a good deal of my life on the phone trying to make peace. But while my personal mediation efforts made some difference, it was the numerous conversations between competitors that turned the tide. As one retailer went through its Higg Index experiment with thousands of suppliers, another explored its pilot with dozens – and then they shared results. They discussed what worked, what didn’t and what could be improved, all without leaking any competitive information or needing facilitation.
As we prepared for the annual release of the upgraded Higg Index this year, I expected that the same sort of disagreement would stall, or even threaten, the new release. To my astonishment, all of the companies who had expressed the greatest misgivings about our facility assessment had now become the strongest proponents. These companies were now applying the assessment to their supply chains and didn’t want to slow down.
Why were the reluctant companies now embracing the assessment? Because their peers and competitors had proven it was possible and had shared their experiences. Neither the first nor the last to make change paid a price for their pace of transformation.
While collaboration is now a common buzzword, my experience shows that it’s the only route to solving many of the great challenges facing the planet and its inhabitants. But collaboration itself is not always what one might expect.
The SAC’s work shows that it requires competitors both to race to the top and to help their peers up when they get there. Impactful brands and retailers know that gains in sustainability don’t come from being marginally cleaner or greener than their competitors and winning a few additional values consumers. They understand that the greatest impact and rewards in sustainability come from transforming the entire value chain.
Jason Kibbey is the executive director of the Sustainable Apparel Coalition.