Strategy interview with Heiko Stötzel (SSI Schäfer) Anna-Lena Mayer (IR.on) and Fabian Kirchmann (IR.on)
If you have a vision, you have to follow it up with action.
SSI Schaefer has set big goals for itself in 2021 and set its vision last year: As a technology leader, they want to enable the sustainable supply of goods to an urbanized society.
Of course, this is only possible if you also work on acting sustainably yourself.
Individual measures have long since ceased to be sufficient. To really make a positive difference, you need a well thought-out sustainability strategy that is deeply rooted in the corporate strategy.
But how does it work? How do you get managers and employees on board? Which parts of the company are affected and is sustainability actually understood in the same way all over the world?
We have recorded a new podcast episode with Heiko Stötzel, Global Head Group Social Responsibility at SSI Schäfer and Anna-Lena Mayer, and Fabian Kirchmann from IR.on. For guidance on how to create your own sustainability strategy and roll it out across your organization to make a real impact, and why you may soon be forced to do so by law, check out our new episode, Hope is not a Strategy.
SHOWNOTES:
Christian Underwood https://www.linkedin.com/in/christianunderwood/
Heiko Stötzel https://www.linkedin.com/in/heiko-st%C3%B6tzel-676aa685/
Fabian Kirchmann https://www.linkedin.com/in/fabian-kirchmann-iron01/
Anna-Lena Mayer https://www.linkedin.com/in/anna-lena-mayer-1b4baba5/
SSI Schaefer Group https://www.ssi-schaefer.com/de-de
Sustainability Report SSI Schaefer Group: https://www.ssi-schaefer.com/de-de/unternehmen/nachhaltige-loesungen/nachhaltigkeitsbericht-2021
IR.on AG https://ir-on.com/
Underwood Ltd. https://www. underwood.de/
Hope is not a strategy https://www.hoffnungistkeinestrategie.de/
HIKS Podcast episode with Steffen Bersch https://www.underwood.de/podcastfolgen/14-strategieinterview-strategieprozess-ist-lernprozess-fuer-alle
Pre-order the book Hope is not a strategy here https://www.underwood.de/shop/buch-hoffnung-ist-keine-strategie
Detailed episode description:
Table of Contents
- Global Head Group Social Responsibility and HSE Heiko Stötzel - Personal information
- Topic Sustainability at SSI Schaefer
- Why companies should finally address the issue of sustainability
- Creating awareness for sustainable action
- First steps in the sustainability process
- First steps in the process at SSI Schäfer
- Involvement of employees
- Regional differences in interpretations of sustainability
- Different definitions of sustainability within Germany
- The further procedure at SSI Schäfer
- Classic stumbling blocks
- Sustainability only works together
- The period until all sites are integrated
- The current situation in German SMEs
- The decisive success factor for success by Anna-Lena Mayer
- The decisive success factor for success by Heiko Stötzel
- The decisive success factor for success by Fabian Kirchmann
- Shownotes
In today's strategy interview, Christian Underwood talks to three experts. The guest is Heiko Stötzel, Global Head Group Social Responsibility and HSE at SSI Schaefer Group. The SSI Schaefer Group is the world's leading supplier of products and systems for internal material flow, so-called intralogistics. The group, headquartered in Neunkirchen, North Rhine-Westphalia, employs around 10,000 people in around seventy operating companies at seven production sites worldwide. A classic hidden champion.
The experts for investor relations sustainability and ESG from the agency IR.on from Cologne will also be guests. They are Anna-Lena Mayer, Head of Sustainability and ESG, who has been with IR.on for seven years, and founder Fabian Kirchmann, CEO for 22 years.
An absolute premiere with so many guests in one episode, but it's also about a really big topic that can't be tackled alone. That is the topic of sustainability or also called ESG. In the following, we will explain in more detail what this is all about. Since such a big topic cannot be simply solved in the company on its own, we also want to shed light on different perspectives - the company perspective and the consulting perspective.
There is also more from SSI Schaefer in the podcast episode with Steffen Bersch, CEO of the SSI Schaefer Group, from January of this year. This is also linked again in the show notes.
Global Head Group Social Responsibility and HSE Heiko Stötzel - Personal Information
Before the episode starts in terms of content, Heiko Stötzel is introduced. Mr. Stötzel holds a diploma from the University of Siegen in hydraulic engineering - so he is an absolute expert! He is also a project manager, safety engineer and CSA manager. He has now been dealing with the topic of sustainability and HSE for about 13 years. Before SSI Schäfer, he was HSE Manager at ALPINE Bau GmbH, MAN and KHS GmbH. At KHS in particular, he was jointly responsible for the topic of sustainability on a global scale, and for around one and a half years he has now also been driving the topic forward globally at SSI Schäfer.
Topic Sustainability at SSI Schaefer
The pressure to act more sustainably comes from two dimensions - the internal and the external, with the external relating in particular to customers. In intralogistics, for example in the e-commerce sector, every kilowatt hour that can be saved on products is an important kilowatt hour. Naturally, the company tries to be very far ahead with its own products and to develop them accordingly in the area of sustainability. However, the internal area is just as important. This means that the pressure is also growing in terms of intrinsic motivation. Employees are now much more aware that sustainability is no longer just a trend, but a never-ending journey. It can be observed on a daily basis, also in the area of current global conflicts, that savings have to be made - in energy and in gas. In this respect, the employees also expect an action plan from the company. For about one and a half years now, SSI Schäfer has been systematically working through this and placing it more and more in the focus of the company's actions.
Why companies should finally address the issue of sustainability
Some time ago, the IR.on agency, as an investor relations consultancy, deliberately put the topic of ESG on its agenda. There are different ways in which customers approach IR.on. The agency has many clients who are financed via the capital market. These are usually inevitably a bit more advanced on the topic of sustainability, as they have either been subject to the CSR reporting obligation since 2017 or they are subject to general pressure from investors, who often want companies to report more strongly on their sustainability activities. If companies then decide not to explicitly focus on sustainability, this can have very painful consequences, among other things, as an example of an IR.on customer illustrates. Its share price plummeted massively from one day to the next last year. At first, no one really knew where this development had come from. So what had happened? A major international rating agency had published a negative ESG rating. As a result, a number of Anglo-Saxon investors had withdrawn from the stock, or actually had to do so. The Board of Management was very surprised by this and then very quickly put the issue on the agenda. This clearly shows the influence that sustainability has on the capital market. In the case of non-listed medium-sized companies, however, companies such as SSI Schäfer with a high focus on sustainability are still the exception.
Creating awareness for sustainable action
In less sustainability-oriented companies, the first thing that is needed is an awareness that something has to change. The legal obligation alone is not sufficient here; above all, awareness must also be intrinsically motivated and reach people's minds. The company should become aware that integrating sustainability into the corporate strategy will make the organization as a whole more resilient and competitive. This relates, for example, to dependencies in the supply chain, but also to the issue of attractiveness as an employer or access to new financing opportunities, such as via green bonds. So there are a variety of benefits that have to get into people's heads, so that this triggers the driver for the topic of sustainability.
First steps in the sustainability process
In order to make one's own company more sustainable and to implement the topic of ESG well, the first step should be to identify a responsible person. Often, new positions even have to be created here, as the topic of sustainability is too comprehensive and important for one person to master in addition to their everyday tasks. It definitely cannot be declared as a part-time job and a lot of work has to be invested. At this point, however, the actual effort is often underestimated. It is also important to approach the topic strategically. Many companies emphasize that they, too, are already paying attention to the area of sustainability. There are often good projects being implemented there as well, but the strategic background and structured orientation are often lacking.
IR.on therefore starts with its customers in the development of a sustainability strategy, which usually begins with an analysis of the environment. This initially focuses on the peer group and the status quo. The next step involves a management workshop in which the internal and external demands are compared, what the starting position is, where the target is, and how one's own aspirations are defined. Do you want to be a pioneer and invest a lot of work, or is it enough to meet the requirements and not attract negative attention? Once this basis has been laid, the right strategy development can begin. At this stage, stakeholders can also be involved, for example through interviews or online surveys. This is followed by a materiality analysis, and once the key issues have been identified, the fields of action, goals and measures are defined.
First steps in the process at SSI Schäfer
Mr. Stötzel has been working for SSI Schäfer for about one and a half years. Almost at the same time, the new corporate strategy, thus also the new mission statement of the group, was announced.
> Für alle, die an diesem Prozess genauer interessiert sind, verweisen wir gerne noch mal den Podcast mit Steffen Bersch. < Bei SSI Schäfer wurde Nachhaltigkeit bereits im Leitbild, der Vision und den strategischen Prioritäten verankert und befindet sich damit mitten im Herzen der neuen Gruppenstrategie. Für Herrn Stötzel erwies sich diese Ausgangssituation als ungemein hilfreich, weshalb sich dies auch als Startpunkt empfiehlt.
In order to define how to proceed with the topic of sustainability, a management workshop was held at C-level at the beginning. This was followed, with the help of IR.on, by the stakeholder analysis, in which interested parties were surveyed through interviews and questionnaires. The feedback was used to form the materiality matrix, i.e. a materiality analysis, which up to this point had been two-dimensional. In order to make this three-dimensional, it is passed on to the C-Level and, with an examination of the business relevance, concrete topic areas and fields of action are worked out. These developed fields of action are then categorized and included in the respective core functions in the company, such as HSE, compliance, purchasing, research and development, and the like. A roadmap is then drawn up, defining what each area can contribute to the topic of sustainability, who is responsible, and what the timings are.
Involving employees
The pressure on companies to act more sustainably is also increasing on the part of employees. Therefore, after the analyses and the definition of the roadmap, in addition to the top-down decisions made up to that point, a good mix must be found to get the employees on board and properly involved.
Mr. Stötzel has carried out the process so far in a top-down approach, in secret. Of course, there were occasional local projects that were noticed, but the focus was more on generating input for the employees and thus being able to tell a story. After the content work is completed, it is important that the areas go into the communities with the respective approach and involve the employees.
For this purpose, a pilot project took place in one of SSI Schaefer's plants in Simpang/Malaysia. Together with the employees, their local microcosm strategy in the area of sustainability was developed and all local, relevant functions were considered. Goals were set and significant topics in Malaysia and Simpang on the topic of sustainability were identified. In addition, it was first necessary to clarify what sustainability means in this context in Malaysia, as the situation here differs significantly from that in Germany or Europe. After working through the sequence of steps, there is now also an action plan there with corresponding measures and deadlines. If the project is successful, which is assumed to be the case, it will be continued at other locations and the pilot will be communicated at meetings, among other things, so that employees at the grassroots level are aware that something is changing in the company.
Regional differences in interpretations of sustainability
One example of the different interpretations of sustainability in Malaysia particularly stuck in Mr. Stötzel's mind was in the area of palm oil. The country invests very heavily in this area, as it is one of the most important export goods. Whole stretches of the country are planted exclusively with palm trees for palm oil production. Mr. Stötzel then asked his regional colleagues whether this monoculture was a problem for them in any way. There he was answered with relative incomprehension. In Malaysia, for example, the issue of monoculture plays a relatively small, insignificant role. The regional understanding is simply different. This makes it all the more important to first investigate and discuss with people what sustainability means to them individually. When it comes to saving energy, for example, the views from Malaysia and Europe are similar. The social pillar of sustainability also plays a key role there. So it was also possible to quickly identify common denominators, so that you can enter into a very good dialog with each other.
Similar experiences regarding regional differences in the definition of sustainability were also made by Fabian Kirchmann and Christian Underwood in China, mainly in the areas of CO2 avoidance and green electricity. So you always have to decide individually in the regional context and find acceptance in the cultural environment.
Different definitions of sustainability within Germany
Even within Germany, it is sometimes difficult to find a uniform definition from company to company. Significant differences can also be seen within the industry and in the size of the companies. Then, above all, the decisive factor is where the company's locations are. For companies with a strong focus on Europe or the German market, the challenge to find a common denominator and to pick up all employees is smaller, because the understanding is similar. For a company like SSI Schäfer with 70 locations, on the other hand, this is much more difficult. You really have to go into detail there in order to get everyone on board.
The further procedure at SSI Schäfer
Back to the pilot project in Malaysia: After the successful launch of such a project, it is not possible to simply roll out the pilot to all sites one after the other. Consideration must always be given to the organization and an individual decision made as to how ready it is for this. So the first step is to complete the pilot, track the measures and document the results. Then the community model is gradually rolled out per site. Alongside this, of course, many other things are happening, such as addressing the company's own emissions within the plants or other local measures that run independently of the community model. It is also about intervening in the processes within the company and establishing sustainability there. After all, it is only possible to speak of excellence if sustainability is already thought of in the processes. In this case, sustainability is already an integral part of corporate activities and no longer a "special job". For SSI Schäfer, this represents the way forward. A major challenge that still lies ahead is the establishment of a global database. The current sustainability report initially refers to the 18 largest units of SSI Schäfer. In a further step, the goal must of course be to roll this out globally, for which this database is necessary.
The sustainability report of SSI Schäfer is linked in the show notes after publication. Here you can get an impression of what such a result looks like in the end, because reporting alone is already a reason for many companies to initiate this process.
Classic stumbling blocks
When a medium-sized or even small company embarks on such a process, there are always classic stumbling blocks.
The entire process involves an enormous amount of time due to strategy development and implementation. This is often underestimated by the company at the beginning. At IR.on, a certain expectation management is therefore carried out directly with the customers at the beginning and it is communicated that this time expenditure and also the personnel resources are necessary.
One example is the involvement of stakeholders. Many managers are of the opinion that they already know their stakeholders intensively. The sales department regularly talks to customers and potential customers, and employees are also consulted in staff meetings. This anticipates that everything that customers, banks, and other stakeholders want is known, but without ever having talked about the topic of sustainability in a structured way. Of course, there are perennial issues in every industry, such as the carbon footprint. But one experiences time and again that many new insights and aspects come to light through a structured and intensive stakeholder survey. This valuable information can be used to underpin the strategy and generate added value within the company. The management level usually focuses particularly on the topic of sustainability. This is understandable, since the topic is currently on everyone's lips. However, people often have the impression that ESG consists of only one letter and that only the E (environment) level is referred to. However, in exchanges with stakeholders, one often notices that social requirements are also particularly important - on the one hand within the company, but also in the supply chain. In medium-sized companies, the data situation is simply not yet sufficiently mature; here, depending on the standard being pursued, you have to go quite a bit deeper. The keyword data collection is another stumbling block for many companies. When setting up data collection, many questions should be asked and thought about. This data base that is created there and the system for it must be able to last for years to come. It must be fed and expanded and, ideally, automated. The best case scenario is to get rid of the Excel tables and implement the whole thing on the IT side. However, this then also means that the IT systems must be revised and addressed so that the collection of sustainability KPIs is possible. The time factor is often underestimated here as well. Resources are therefore an essential aspect that must be considered - not only in time, but also in employees.
Sustainability only works together
There is never just one person responsible for sustainability in the company. Mr. Stötzel has made it one of his main tasks to communicate to the employees that ESG concerns everyone. There may be a staff unit that brings together and filters the currents within the company, but sustainability per se should not be projected onto him as a person. Everyone together must face up to the responsibility of acting sustainably. In particular, processes must be designed to be sustainable and only then can excellence in this area be achieved. Automated processes, established in a corporate culture ensure that sustainability is taken into account in all decisions from the outset.
The period until all sites are integrated
To get all countries and locations of SSI Schäfer on board, Heiko Stötzel currently expects a period of about 3 - 5 years. This is also the period until the cultural development is so far that sustainability can be established everywhere. After all, not only a story should be told, but words should also be followed by sustainable actions.
The current situation in the German SME sector
In German medium-sized companies, the scope of the topic of sustainability has often not yet been truly recognized by company leaders. As Fabian Kirchmann reports from conversations with entrepreneurs, many are of the opinion that they are already doing enough in this direction. Often, however, this only refers to individual measures. These are quite good, really laudable and important, but they are not enough. At the latest when the new CSR reporting obligation comes into force and the sustainability report becomes part of the management report, companies will have to rethink. Auditors will then ask why this or that sustainability measure has been implemented in the company or why the topic of sustainability has not yet been sufficiently taken into account in product development, and it must be possible to justify this. In other words, there needs to be a systematic approach to sustainability within the company. Stakeholders must be involved, a development of the strategy should be driven forward, and concrete goals and KPIs must be defined so that the progress made can also be measured and tracked. This is the absolutely crucial thing and must get into people's heads. But there is still a long way to go before this happens.
The decisive success factor for the success of Anna-Lena Mayer
Above all, it is enormously important to realistically assess the human and time resources. For the development of the strategy, until the goals are clearly defined, a time horizon of 6 - 8 months must be planned before implementation can begin. The first sustainability report will then also require another 4 - 6 months. Data must be collected and compiled, texts written, and employee interviews conducted. Those who have not yet tackled this in a structured manner should start today in order to be really well prepared when the reporting obligation actually comes about.
The decisive success factor for success by Heiko Stötzel
Sustainability is an incredibly interdisciplinary function. On the one hand, the topic should not be projected onto one person, and on the other hand, the organization should be ready for the start. The person in charge or even the function must have access to other functions. Data is needed, but also the will to contribute. The organization must be prepared, which can be achieved, for example, through a lot of communication and workshops. If there is a compliance officer, he or she needs to know that he or she will be contacted. Purchasing represents another important interface. There is a lot of potential here in the supply chain area. A data situation must also be created that makes the company measurable in a sustainable manner. But sustainability itself must also be sustainable. So if you move too quickly and overburden the organization, you take a step backwards again in the area of sustainability in the social pillar and overburden the stakeholders. In this respect, preparation is an important point to start with today rather than tomorrow. You simply have to get to grips with it.
The decisive success factor for success by Fabian Kirchmann
In addition to the other advice, it is also very important that management is really on board. The C-level should really exemplify their own strategy, values, mission statement and also the topic of sustainability in the company, so that they can also communicate authentically and credibly, not only externally, but also within the organization. That's why the company's management must also be integrated into the process right from the start. You start with the management workshop, build the roadmap, and that is crucial.