A few months ago, the UK largest crisp (or 'chips' if you’re reading in the USA) manufacturer, Walkers, was in the press because an environmental pressure group (38 Degrees) was encouraging people to send its used crisp packets back via the postal system. Walkers hold 57% of the UK market, so it has significance in terms of the impact it has in the country.
I paid little attention to the story, as PepsiCo (the parent company of Walkers) stepped in and was in talks about what solutions could be found. Royal Mail was complaining saying that its processes couldn’t cope with the high volume of packets being sent back.
I have a reasonably high level of scepticism when it comes to grand ethical announcements by big brands. I figured PepsiCo just wanted the story to go away quickly, hence their involvement. I tend to think companies care more about publicity than the environmentalism they proport to be about. Similar to other ethical issues such as LGBT, woman’s empowerment, and child slavery, you often see some sort of positive media about it. Yet, when you look at the data, the changes companies have made are often minimal at best.
Previously, PepsiCo had shifted its position and reached out to the protestors, however the protesters subsequently had continued to put pressure on the company. I assumed that this meant the protest wouldn’t result in changes. The company would make promises to calm the situation and ultimately not deliver. However, Walkers' response hints at a growing trend of consumer-driven changes in ethical responsibility and changes to values streams.
New recycling scheme leads to a new value stream
In a turn of events, Walkers has re-evaluated the situation and introduced its own system of collecting used crisp packets, bypassing the mail system in order to get the waste to a recycling service. This was detailed in a news article around the time this article was written, although it isn’t yet clear on the manufacturer’s own website.
This got me thinking: Is the value stream disrupted as a result? It appears so, as not only has the value stream been extended, the consumer is now playing a new and additional role.
Crisp manufacturing extended value stream
In the above diagram , the traditional value stream that Walkers would have adopted is circled in purple. However, in red we can see a collaboration between Walkers and the recycling firm Terracycle. Walkers has taken on new responsibilities and has effectively extended the value stream that it is involved with. In addition, the consumer (circled in black) has also taken on a new and critical role. There is no suggestion of the consumer being paid. The assumption here is that ethical values are a motivating factor rather than financial. This is preceded by a regular value stream for Terracycles processes, albeit with a crossover with Walkers and Terracycle. The two organisations have joined forces within an extended value stream in order to obtain materials required in the production of furniture and other goods from the used crisp packets to Terracycles manufacturing processes.
Shifting motivating factors for change
In the past there have been forced efforts from the UK Government in the recycling space. For example, the regulations related to batteries and charging for plastic carrier bags, etc. The Walkers case is different due to external pressure from an environmental group to take action, but no governmental body is enforcing any change. This change has come as a result of an internal decision within Walkers (or possibly instruction from PepsiCo).
In a recent article, I describe the ‘DxVxF-R change model’. Somewhere in the Walkers strategic narrative there has been a change. This change has come about as a result of dissatisfaction with the current status of millions of unrecycled used crisp packets going to landfill and polluting our environment. There has been a vision for something different and the first steps towards something better. Previously, there might have been discussions around the issue of recycling and the damaging effects of the product they produced, but resistance arguments within the organisation were asking about who is actually responsible for the waste once the product has been sold, as well as economic arguments about financial viability.
Walkers does not own the used crisp packets, nor do the distributors or retail centres. It is the consumer that owns them. For Walkers to have packets recycled, it must retake responsibility and build an extended value stream. In addition, Walkers has to rely on the consumer to take an ethical position and responsibility in order to make the value stream work.
Walkers needs to model scenarios in order to understand the proportion of consumers who will be willing to accept the responsibility and conform to the Walkers & Terracycle processes. Will half of all consumers recycle? 10%? 1%? These numbers will have an impact on the commercial viability of the scheme. Too few crisp packets, and Terracycle will need to source materials from elsewhere. Too much, and Terracycle will need to increase output or redirect the used crisp packets to landfill.
Has ethical responsibility reached a tipping point?
What I think is interesting in this story is the extended value stream, the shift in responsibilities across all parties, the acceptance of that shift without any regulatory force and the acceptance on behalf of Walkers to take on additional costs in order to get the used crisp packets to Terracycle.
I am left wondering, has the messages related to environmentalism combined with shifts in attitude reached a tipping point in ethical responsibility for organisations? If so, this tipping point has significant implications on the value stream of organisations related to wider ecosystems, corporate responsibility and in terms of systems based diagnostic activities within our work. The role of the organisation designer may now demand awareness of systemic relationships wider than just the traditional internal boundaries of the organisation.
What are your experiences and thoughts related to these issues? Have we reached the beginning of an ethical environmental tipping point within organisations?
Stuart Wigham is a Content Manager and Consultant at ON THE MARK. OTM’s experience and passion for collaborative business transformation that’s supported by pragmatism, systems thinking, and a belief in people is unparalleled. OTM has been in business for 29 years and is a global leader in organization design consulting.
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