In episode 8, we’re pleased to welcome another guest to the podcast – Stanley Black & Decker’s Product Sustainability Senior Director Dan Fitzgerald.

If you don't know about Stanley Black & Decker, it is the largest tool company in the world with over 100 manufacturing facilities worldwide. In his role, Dan leads the ‘innovate with purpose’ pillar under the corporate social responsibility strategy, which includes goals focusing on addressing unmet societal needs, circular design, and sustainable supply chain.

In this episode, Dan, Neil and Jim discuss the problems product managers have in embedding sustainability into products, recycling quotas and design requirements and the growing demand for a ‘greener’ approach.

In this episode

Shelley - Dan, could you start by telling us what you think is hindering product managers from embedding sustainability into products? [01:09 ]

• Dan - It's not that product managers don't want to. I just think the nature of the job has been so granularly focused on the details of the product itself in operation. How much does it weigh for a tool? How much power does it have? Does it rest nicely on my belt hook, right? We're talking personal preferences on how you use a product and gathering those requirements of what is going to make a winning product. [01:22 ]


• It's not that end users don't care about sustainability. I think there's an assumption from an end user that things of that nature, such as following the laws, and minimizing impact when you create things that companies are doing that already. And it's not on them to tell product managers, even if they know how to communicate that in the first place, because sometimes if you're not in that space, you just don't know the details.


• What I think misses a little bit is that the follow up because the end-user is not saying anything about it [sustainability]. So, it doesn't get placed in a high priority in the product specification because the end user isn't directly saying it. But we all know it is needed at some point to either pass through a regulatory requirement or even the customer. And in our case, our customers are retailers because we don't sell directly to the end user. So, a customer may have a requirement because they're focused on sustainability that we need to meet such that the end user has an option to buy it in that store.

Neil - Dan, could you clarify that a bit? Because I think that's unique to the other conversations we've had. You have two customers, and I think that's not obvious to everyone. [03:03 ]

Dan - We maybe even have more behind the contractor. The person that hires the contractor could also have requirements. I think this idea of the expanding end user and seeing it more of a worldview about everything you have to hit to get a product out the door, that's when sustainability starts making it into the doc. [03:11 ]

• Neil - There was a study done by McKinsey, I think back in 2019, where they asked exactly this question because they were wondering, why is it that we don't see sustainability in requirements from customer surveys? And what they found was customers expected brands to take care of this. I think it was a pretty significant number. [03:31 ]


• That said, we're assuming the brands we buy from are not engaging in unsustainable practices. I think in the past, if there was something bad happening in the supply chain, you didn't need to tell anyone about it. But this has become very different especially and regulations in Europe are forcing this. In one of these podcasts, I mentioned what Europe is doing is, and what regulation does in general is it makes you live in a glass house. And people live very differently when they're in a glass house. And that's, imagine a company living in a glass house. That's what the regulations are doing in Europe around transparency.


• It's important to ensure the company takes care of this and not rely on the fact that customers are not explicitly asking for sustainability. And I think just to elaborate on the two kinds of customers, you guys sell to retailers and then retailers sell to customers. And the needs and requirements that each of them has can be different for direct to customer businesses. I think this is slightly different, but I think for you guys, this is a significant detail when thinking about sustainability strategies.


• Dan - It is for sure. What I think it helps with is that while the end user may not be saying it, the customer gives the cue we need to be focusing on this and our regulatory department as well. But the big thing I found is if it's legally required or there's an official framework (e.g., truth in advertising, safety code), all that stuff in our product development - we handle it not through the end user saying, hey, I don't want that thing to shock me. But we have functions along the way in the product development process that check in and say, oh you want to say this? Do you have data for that? [05:15 ]


• Really, the sweet spot of how do you crack this nut of how far do you go more voluntarily on sustainability? How much recycled content? If the threshold is 10% from New Jersey in packaging and you want to go 50% to get ahead of the game, where does that come into the design process to do that, if not the end user or a customer or government? And so, I think that's really the place to focus on. [05:58 ]


• If you want to go over and above and by how much, you almost need to build that into that product spec spot. Because to me, that's the spot where you're not prescribed by some law somewhere to do something like truth and advertising. What does the customer want? [06:32 ]


• You can do whatever you want there hoping that it matches what they need and that same opportunity is there for the voluntary sustainability stuff at that point in time. Which is why I think it's critical to be in that document because no other function along the way is going to be checking in because it's not a formal law requirement yet. [06:46 ]

Neil - I'm curious about that very example that you mentioned. Let's say there's a law that says you need to hit a 10% recycling quota. Somehow this needs to be plugged into the development process. Whether it's now 15 or 50 or 100%, it would have already been in the development process. The same thing with you should not shock people. There's no obvious requirement that says please don't shock people. So, I'm very curious about how these kinds of non explicit requirements make their way into the design requirements. [07:07 ]

• Dan - I think a core of all business ethics is to follow laws. So first and foremost, you're going to say we follow laws. If the law is there, we're not going to not abide by it. But I think over and above, within the backdrop of the safety topic, you also have the civil court system, which you cannot follow the law, go through your criminal penalties, but then on top of that, if an injury has occurred due to that, you also have a potential financial risk associated with that. I don't know how it evolved, but obviously if you're a startup company and you're putting out unsafe stuff and you're being sued and losing a lot of money, you're not going to be in business very long. So, its a negative cost avoidance on top of following the law there as well, that I think helps drive it. [07:42 ]

Jim - Dan, I saw you post recently on LinkedIn - I'm not sure I got the exact wording - but your feeling is that companies are going to have to embed sustainability innovation because the customers or the end users are demanding it or regulations will require it. And I thought that was right on, and the issue that has to be dealt with is what has to happen to enable the customer and the end user to reach a level that the product managers are all responding (or the regulations have reached a level) and it's a must in every innovation. There's a timing kind of thing that I wonder if you could speak to on how to accelerate that; what your vision is of what you articulated. [08:30 ]

• Dan - That question was really around what needs to happen and how I envision it is you've got a starting point - the very front end of going all sustainable, 100%, that I'm a super leader because it's the right thing – to, I'm not doing it till a regulation tells me I have to. And companies are all over that spectrum between being the front end best and just barely keeping up with regulation and some even fall behind and get in trouble. [09:32 ]


• The point is, they were asking, how do you move that? What drives that is from a traditional marketing supply demand perspective - you've got people out there demanding it, paying for it. You see the sale is happening, so you say, this is what our customer wants, and I don't care what the regulation says. So, it's on those customers to enact change by buying better. Then on the regulatory side, again, it's to the people because it's who you vote for and what policies you'd like them to enact. Because the government essentially can direct where the innovation of capitalism goes to make sure it continues pointing in the right direction, and that making money on its own doesn't necessarily imply good. So, you need to be able to vote for people that can say capitalism is good in the sense that it opens up this innovation machine, but it needs to be pointed to the right things we want as a society, or else we'll get things out of that machine that we don't love. My thought on that is that the power is in the people's hands by either how you buy or vote. And those things d