The Business Of Sustainable Leadership
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This episode examines sustainable business models and a prevalent issue in global supply chains — modern slavery
It’s estimated more than 40 million people worldwide are trapped in conditions that constitute modern slavery. 71 percent of them are women, and many work within the global supply chains we rely on for everyday purchases, such as coffee and clothing.
In this episode of the AGSM 'Business Of ...' leadership podcast, we explore the business of sustainable leadership. We uncover how business leaders can comply with national legislation and take responsibility for assessing and addressing their supply chains to ensure practices, processes and policies are ethical and sustainable.
Joining host Emma Lo Russo is Dr. David Cooke, departing Chairman and Managing Director at Konica Minolta Australia and chair of the inaugural Australian Human Rights Institute advisory committee at the University of New South Wales. David’s work to instill ethical and sustainable business practices within Konica Minolta has left a lasting impression, on a global scale.
We also hear from Professor Justine Nolan, UNSW Faculty of Law and co-author of the book Addressing Modern Slavery. Justine shares key insights from her research into the pervasiveness of modern slavery in global supply chains and what business leaders need to know about the end-to-end activities of their organisations.
Our final guest is James Bartle, CEO and Founder of Outland Denim. The Australian fashion brand is challenging traditional business models by offering sustainable employment and training opportunities to women who have experienced exploitation. James shares with Emma his approach to sustainable leadership, and what other business leaders can learn from his experience.
- Emma Lo Russo, (AGSM MBA Executive 2013), CEO and Co-founder of Digivizer
- Dr. David Cooke, (AGSM MBA Executive, 2000), departing Chairman and Managing Director at Konica Minolta Australia
- Professor Justine Nolan, UNSW Professor of Law and co-author of the book Addressing Modern Slavery
- James Bartle, CEO and Founder of Outland Denim.
Emma Lo Russo: Hello. I’m your host Emma Lo Russo, and this leadership podcast is brought to you by the Australian Graduate School of Management at the University of New South Wales Business School.
In this episode we’ll examine the role business leaders – CEOs, boards, and their direct reports – have in creating organisations that are sustainable, not only in financial terms but sustainable in how they operate within their broader communities.
For a large number of companies, this means the entire globe. And it’s that global context that can create new opportunities, as well as new challenges.
One of the most-important issues, one that is much more prevalent than you might think, is in our global supply chains, and it’s modern slavery.
You might now be aware, on the first on January 2019, The Commonwealth Modern Slavery Act was introduced in Australia, requiring organisations here with an annual consolidated revenue of at least 100 million dollars to report annually on how they address modern slavery risks in their global operations and supply chains.
In this episode we’ll be talking to three leaders who have gone well beyond the regulatory minimum – to ensure their practices, processes and policies are ethical and sustainable, balancing profit with purpose.
First, I talk to Professor Justine Nolan, UNSW Faculty of Law and co-author of the book Addressing Modern Slavery.
Then I speak to Dr David Cooke, Chairman and Managing Director at Konica Minolta Australia, and chair of the inaugural Australian Human Rights Institute advisory committee at the University of New South Wales.
And finally, as a wonderful example to business leaders everywhere, we talk to James Bartle, the CEO and Founder of Outland Denim.
First, let’s hear from Professor Justine Nolan.
So welcome Justine.
Justine Nolan: Thank you, Emma.
Emma Lo Russo: So what is modern slavery?
Justine Nolan: Modern slavery is used to describe situations of exploitation where there’s coercion or threats or deception that are basically used to exploit people and undermine and deprive their freedom. It will include examples like forced labour, where workers are working under the threat of a penalty. It might include debt bondage, so workers might have paid large recruitment fees to get the job and then they’re indebted to that employer. It would include human trafficking, slavery in its traditional form, and can also include child labour, domestic servitude, and forced marriage. So it’s something that is describing situations of serious exploitation, but it makes sense to think about modern slavery on a continuum of exploitation. There might be bad, very poor substandard working conditions that may not by themselves amount to modern slavery, but if left unchecked, this may then lead to conditions that worsen over time and lead to serious exploitation.
Emma Lo Russo: I’m not sure I’m going to like the answer to this question, but what are the latest top level facts and figures? How real is this and prevalent is modern slavery in today’s supply chain?
Justine Nolan: There’s an estimated to be more than 40 million people around the world who are trapped in modern slavery and 71 per cent of these are women.
To put it in context, if you think about during the 300 years of the transatlantic slave trade, there were about 12 and a half million people in the Americas who were considered slaves. Now today, we have more than 40 million people around the world so the problem is increasing, not decreasing.
Just in global supply chains themselves, there’s about 25 million people. So these are people who are generally working at the bottom of the supply chain. They’re producing, catching the fish that we eat, picking the coffee and chocolate, getting the raw material often for cotton and things like electronics, our laptops and phones.
Emma Lo Russo: You’ve researched this for some time. What do you think are the most confronting or surprising moments when you’ve been sharing your research findings with those businesses and in that broader community?
Justine Nolan: I think probably the most common reaction is that just slavery still exists. People tend to think of slavery as that people in chains and the transatlantic slave trade. Sadly, that physical captivity still does exist in some parts of the world and in some global supply chains. We’ve seen fishermen tied up on fishing boats off the Thailand coast, but it also comes in many other forms of exploitation and that business are really part of that problem.
I think the second thing is that often follows that is that modern slavery can happen in places like Australia. We tend to think of it as a problem “over there.” Australia is not exempt from this. There’s estimated to be about 15,000 people in Australia who are trapped in modern slavery. Agriculture, in nail bars, massage parlours, in abattoirs, in commercial cleaning industry, in security, operations, all of these areas of high risk in Australia, particularly commercial cleaning. You’ve got workers most at risk now and the conditions that they’re working under. There is evidence of that in Australia, of workers being trapped in exploited conditions that would amount to modern slavery.
So it’s those sort of elements that people tend to think of it as something, “Far away, doesn’t really relate to me, and there’s nothing I can do about it yet,” yet our daily lives are really wrapped up in this notion of consumerism and globalisation are wrapped up and linked with modern slavery.
Emma Lo Russo: To what extent are businesses and consumers aware of this and is it influencing the decisions that they’re making?
Justine Nolan: It’s an area of really increasing interest and relevance to business, to consumers, and to governments. Particularly here in Australia, it’s getting increasing prominence. In 2018, Australia adopted something called the Modern Slavery Act. This requires companies who have more than a hundred million dollars in revenue to report on the risks of modern slavery in their operations and their supply chains and to discuss what they’re doing about it. They have to have an annual report on this. The Australian law follows a similar law in the United Kingdom and in California and other countries like France, the Netherlands, and the EU more broadly are also legislating around issues around supply chains and working conditions and reporting on those.
Alongside companies, consumers are also increasingly interested in these issues, partly because of these laws, but partly also because there is this connection that’s becoming more apparent about modern slavery to our daily lives. If you think about sort of a day in the life of most of us, we might get up in the morning and have a shower. The soap that you use may have palm oil in it. The majority of the world’s palm oil is coming from Malaysia and Indonesia, where forced labour is rife in that industry. You might then think about having a coffee. It’s very likely that the coffee beans are coming from Ghana or Côte d’Ivoire where, again, there’s a high degree of forced labour in those global supply chains. It might be in the clothes you wear, the phone you use, there’s forced labour in the raw materials that are gathered for your phone, also in the factory production related to that. All of us in our daily lives are connected to modern slavery and consumers are starting to become more aware of this.
However, there is often overemphasis, I think, put on consumers, that consumers can fix this problem. In this area, there’s something called the myth of the ethical consumer. So if we’re asked in a survey, would we pay more for a particular product to avoid workers being exploited, usually our answer is yes, but when we come to use our purchasing power and decide how our dollars are spent, we don’t always take the action that would follow through into our beliefs.
Emma Lo Russo: What have you seen or what’s the impact of economic challenges? For instance, COVID-19 now in terms of the impact on modern slavery.
Justine Nolan: Yeah, it’s a good question. I mean, the COVID-19 pandemic has basically thrown up unbelievable challenges for the world’s global supply chains. Modern slavery already captures the world’s most vulnerable workers and the economic fallout from this pandemic is basically going to hit them more harshly and make them even more vulnerable. It’s possible that they will be then moving from the formal economy into the informal economy as jobs disappear. So we’re seeing numbers of more than 400 million people around the world already losing jobs, half a billion people being pushed into poverty. In Bangladesh, for example, there’s estimates of already 1 million garment workers who’ve lost their job.
So what we’re likely to see is people who are already vulnerable and working in situations that may be veering on exploitation or are exploitation, moving into worse jobs, if you like. There’s many essential workers in industries like hospitality, retail, food production, who are now considered very much essential services and are working under conditions that are not ideal and not necessarily safe for their health.
We’ve seen particularly migrant workers around the world and also in Australia fall outside any government protection. In Australia, for example, our Job Keeper scheme doesn’t include those on temporary visas. So there’s this real question I think we have for our time is whether issues that businesses think about like human rights and sustainability, do we only care about them when it’s easy and convenient or are we going to tackle those in sort of both the hard times and the good times?
Emma Lo Russo: What should businesses do so that we can bring attention to this and particularly given that vulnerability right now, what are the steps that business leaders can take?
Justine Nolan: The first thing that business needs to do is really understand their impact, understand how their model, their operational model is working and impacting workers. To do this, the logical thing they need to do is have visibility over their supply chain. They need to understand that the risks their business poses to people, not just in their first tier of suppliers but as that operational model moves down into less direct tiers of the supply chain. They have to evaluate their business models. Are they contributing to or facilitating the problem? It might be by imposing short lead times, changing production requirements, or not paying the true cost of the product. To understand this problem and to get more visibility on the supply chain, they really need to prize collaboration with people often outside their organisation — so with experts in civil society, with unions, with workers to really understand the impact of their business.
The next thing they need to do is really develop a plan. How do they integrate human rights and sustainability concerns as part of their business as usual operations, not as an afterthought. Procurement staff need to be aligned with sustainability staff to make sure that there’s operational coherence across the business.
Finally, they need to have a plan for how they’re going to respond when they find a problem. If they look hard enough, they will find modern slavery in their supply chain. How will they support the workers who have been exploited? How will they engage and collaborate with their suppliers to reform their process? So essentially, what they’ve got to do is really understand their impact that their business model is having.
Emma Lo Russo: What’s the role of the investment community in modern slavery? I’d like to extend that to boards as well. You know, the mandate that organisations have been given.
Justine Nolan: What modern slavery is doing is sort of trying to bring home this broader sense of responsibility. Investors have a really interesting role, an important role to play here because they have the leverage to influence business practises. It might be in several ways. One might be ensuring that the reports that companies issue under the Modern Slavery Act are actually substantial and that they’re engaging with these issues and the investors talk to the businesses about those reports and use them when they’re making investment decisions. It would also be when companies are evaluating, when making an investment, ask them what they’re doing about these issues. How are they monitoring their supply chain? What sort of due diligence are they undertaking in relation to it? Boards also in relation to the Modern Slavery Act, the statement that companies issue has to be signed by the board. Boards can no longer sort of sit back and say, “That was something that we weren’t aware of.” They have to understand the risks the business is posing and be prepared to sign off on the statement which assesses the risks, identifies the problem, and notes what they’re going to do about it.
Emma Lo Russo: I’m going to ask you, for anyone who’s listening, what could their role be in their organisation to help bring about that change in awareness? What can people do?
Justine Nolan: I think the first thing to do, which I think is very easy, is to ask questions. It’s to ask questions of, say you’re within a company or if you’re acting as a consumer. What you want to do is try and encourage companies to take sort of this investigative role, if you’d like. We’re not asking them to trek over to Asia and start investigating a supply chain, but figure out who they should be talking to and how do we get better visibility and understanding of our impact. If you’re within a company, you should be asking up through the chain of management of your company, “What are we doing to respond to this new law? What actions are we undertaking? How are we protecting workers beyond our immediate company and in our supply chain?”
Emma Lo Russo: For the businesses that you researched where they have made these changes, how has that impacted those businesses?
Justine Nolan: There’s no business that sort of makes the change and then tends to regret it and there’s lots of stages of making changes. There are many companies around the world that have taken steps to address this. It might be that they’re trying to figure out, trying to get that greater visibility on their supply chain. It might be that they’re making consumers more aware of what they do. If you look at someone like Marks and Spencer or Nike, 10 years ago, if you went on their website, you couldn’t have found out where a product was. Now you can basically trace where their factories are that they’re using around the world. There’s other companies sort of at the very end of the spectrum like Outland Denim, which is a Queensland company, which is aligning its purpose in basically helping victims of trafficking and slavery, using them in the production process so they’re aligning profit with purpose. There’s a Dutch company, Tony Chocolonely, which does that as well, but they’re rarer. That purpose and profit model is a very niche group, but there are many companies and the bulk of the world’s multinationals who need to make more substantive changes and address their business model.
It is one step at a time but the numbers of modern slavery are increasing, not decreasing. Companies can’t be forever on this human rights journey which doesn’t have an end. They have to set goals, they have to figure out what they’re doing, and they have to figure out who they work with in order to get trying to achieve some of those goals.
It’s clear from Professor Justine Nolan’s comments that the solution starts with business leaders. It’s up to business leaders to address the misplaced responsibility put on consumers to find ways to address modern slavery.
We’re about to hear from a business leader who’s made great strides when it comes to balancing profit with positive social impact.
Doctor David Cooke is the departing Chairman and Managing Director at Konica Minolta Australia and chair of the inaugural Australian Human Rights Institute advisory committee at the University of New South Wales.
Hi David, thank you very much for joining us on The Business Of.
David Cooke: Thank you very much Emma, it’s an absolute pleasure to be here with you.
Emma Lo Russo: David, you started back in 2005 and have overseen amazing transformation in that time. Can you tell me about your role and your journey since then?
David Cooke: Well, it was my first role as a managing director and chair of a company. So, there was a lot of learning from my perspective. But I think I embraced it fully, I’ve really loved it over the last seven years. I work with a fantastic group of people. And I think over that time, we’ve really developed the company with intent. What I mean by that, is that we’ve been very clear on the sort of organisation we wanted to build. We had some great people there already, but some change has been necessary. And also, we wanted to grow, and that has taken place. And those people that we have recruited, we’ve recruited against really a framework of the organisation that we wanted to build. And that’s been a very successful model for us. So, it’s enabled us, I think, to end up with a very strong and to some degree consistent culture running throughout the organisation.
Emma Lo Russo: So, it’s interesting you touched on culture while you’re also overseeing change.. How important is that culture in setting that for your organisation, and can you elaborate what that means to you?
David Cooke: Yeah, I think culture’s vitally important in any organisation. Without a definable culture, you have the right to ask the question who is this company? Who are they, what do they stand for? And I think the important thing about culture is that, what I’ve learned, is that it’s not just a top down process. Albeit, I came into the role with certain ideas in mind of my own. But it also needs to percolate up. So, the people at more senior executive levels making decisions across the organisation also need to be listening constantly to their team members. You need to be consulting, and there needs to be a two way flow of traffic.
And literally on day one, I could say within a minute of an announcement being made that I was the managing director, which was at an annual conference, and very senior people from Tokyo had flown out to make that announcement. And it was a shock to everybody, because I was the first non Japanese managing director in the company’s 40 year history in Australia. And I walked up on stage, I hadn’t prepared a speech, oddly enough. But I turned around to everybody and I simply said to them, “I want us all to work together to build a company that cares. That cares about the people that work here, that cares about our customers, and cares about our community.” And that has been an enduring framework that we’ve all made our decisions through ever since.
Emma Lo Russo: What does having the moral courage mean to you, or to your team, so that they can make decisions against that type of framework?
David Cooke: I think the concept of moral courage is very, very pertinent when you’re having to make difficult decisions, particularly difficult decisions in challenging times. And moral courage to me, really it comes down to being prepared to do the right thing, even when it’s really hard to. And being prepared to do the right thing, even when you know that there may well be some unintended consequences, maybe consequences for you personally, if moral courage involves speaking out for instance. And it reminds me a little bit of a definition I heard of integrity sometime ago, which was, integrity is doing the right thing when nobody’s watching. So, in other words, you’re just anchored in a certain conviction and you don’t let whatever storms are passing over at that time sway you from that conviction. And the opposite of moral courage, I think, can be summed up as situational morality. That is, that you can be a moral person making moral decisions when the sun’s shining. When the storm clouds come over and things get a bit tough, then you can shift your standards and lower the bar. And then maybe when things are good again, you can go back to the higher standard. That’s situational morality.
And I think you’ve got to be very careful of that, because you can end up on a very slippery slope. It’s far better to know what direction your north star is pointing, navigate against that, to use the parlance of old sailing ship captains, and just stay true to that at all times.
Emma Lo Russo: So David, Konica Minolta was recognised with the Australian Human Rights Commission Business Award in 2018, for advocating work against modern slavery. So this plays into this lovely ethical framework. Can you tell me about this work, and what decision, what was the award recognising?
David Cooke: Yeah, so as you say, in December of 2018 the Australian Human Rights Commission awarded Konica Minolta its business award that year. One company is awarded that accolade each year, from a group of five finalists that are chosen. And we were very fortunate to receive that award. It was for a range of things, but I think the most notable probably was our very strong public advocacy for an Australian Modern Slavery Act, which subsequently was passed into legislation and is now law in Australia.
And through a set of circumstances, we’d became aware of that fact that this concept of modern slavery was very prevalent in the world today. I was quite shocked. But we had a conference in Cambodia and our keynote speaker was a woman, her name was Somaly Mam, and she had been rescuing young girls from sexual slavery for 20 years. A couple of years later, we had another conference and it was in Thailand, and we were on an old clipper ship, an old sailing ship one night for a dinner. And there was a speech from the cruise director, and we were able to ask questions. And one of the first questions was, “We’re out here in the middle of the ocean and it’s pitch black, but we can see lights dotted around on the ocean, all around us. What is that?” And she said, “Well they’re Thai fishing vessels.” And she said, “It’s interesting you should ask, because just last week we jumped in a little dingy and went out to one, and said to the Thai fishing captain, we’re from the cruise ship and we have to do talks about Thai culture and cuisine and cooking and so on every week to a new group that comes through, could we come onboard and talk to you about the types of fish you catch and so on?” And he said, “Yes, of course.”
And the cruise director stepped onboard, and the first thing she saw was a man sitting on the deck of the boat with a collar around his neck and a chain attached to it, and the chain was attached to the deck of the boat. And with great horror, she said, “Who’s that?” And the captain replied, he looked down and he said, “Oh, it’s a slave.” So, notice the dehumanising language. Not he’s a slave, but it’s a slave. It was a commodity to him. And she said, “But you can’t have slaves!” And with the sweet of his arm, indicating all the other fishing boats around him, he said, “Most of us have slaves.” And then she said, “But why is he chained up?” And the captain said, “Oh, because this one’s a trouble maker. But not for much longer, it’ll be fish food soon.” So they were planning to murder him by throwing him overboard in the middle of the ocean.
Then the captain said, “If you’re really worried about it, then you can buy it off me if you want to.” And they negotiated a price, she went back to the ship, brought back the money which was 700 US dollars, and she bought that human being to take him ashore and set him free. She would have been completely unaware at the time that she paid an extremely high price, because there are slave markets today operating which you can buy a human being for $100. But she had done the right thing.
So, there’s an expression the world of human rights, which is, once you know you can’t un-know. And once you’ve seen, you can’t un-see, you can’t take it back. So, we had been exposed to slavery now on two occasions. And when I came back to Australia, I just felt duty bound that Konica Minolta should do everything within its power to make sure that we don’t have slaves anywhere in our operation, anywhere in the world, and that we don’t buy goods to consume, we don’t buy uniforms or garments or office furniture, or anything else, that might be made off the back of human misery. And we took it a step further, and we started to become very vocal, and tried to get as much press as we could, and I went to Canberra half a dozen times and met with very senior public servants, and we agitated the legislation on business, to compel businesses to look, go and look. And it was counterintuitive, because most businesses want less legislation. And Konica Minolta wanted more legislation.
Emma Lo Russo: And how does taking a stand like that impact your organisation in terms of flowing that through and ensuring your supply chain is as clean as it can be?
David Cooke: It does have quite a strong impact on the business actually, it’s quite interesting. It’s not why we’ve done any of those things, but somehow there’s kind of a... I don’t know what it is, a law of nature, or maybe it’s a law of business, that when you do good, your business will do well. And if you’re a responsible business, your business will do well. And I think one of the problems with it, a lot of business thinking these days, is short-termism. It’s chasing irrespective of the greater costs, that month’s result, or that quarter’s result. But we’ve always taken a long view of our business, and the role that we play in society. And in a declining market, our business has grown every year since the global financial crisis.
And one of the reasons it has, is because great people in our organisation love the position we take on societal issues. And that we stick up for vulnerable people. We’ve done some really good work around ending domestic violence, for instance, and put some very progressive policies in place in the company. Our staff really like these things, so the really good ones stay. And people are coming to us all the time wanting to work in our organisation. I’ve had recruitment companies ring me up and say, “Look, I’ve got a great candidate,” and I know it’s going to cost tens of thousands of dollars for them to introduce me to the candidate, but I don’t need ever to engage with firms like that. I just say, “Look, I’m terribly sorry, you’ve wasted a phone call.” We just have a lot of wonderful, wonderful people that want to work here.
But I think, probably the most powerful example for me that I’ve experienced in my seven years of the benefits of being a good corporate citizen benefiting you as an organisation, would be as a result of a dinner that I held in Sydney, and I invited everybody that had worked in the organisation for 25 years or more to come to that dinner. And there were just about a dozen people, and they were mostly our service engineers that go into people’s offices and organisations and fix their equipment. And just a tiny bit of background to that story, after we’d become aware of the incidents of modern slavery around the world,, when we became aware of some of the terrible things happening in Cambodia with the trafficking of young women into sexual slavery, we began to support an organisation over there financially and with some management expertise. And having our staff visit the organisation, and so on.
So, we had this dinner. And at the end of the dinner, one man who hadn’t spoken all evening said to me, “May I say something, please?” And we were just in a public restaurant, in the middle of the restaurant. And he stood up, and he made what I would imagine was the first speech he’d ever made in his life. He was a very quiet, very shy man. He spoke very slowly, and he said, “For 25 years I’ve never told anybody where I worked. I just didn’t see the point. Konica Minolta was just a company that I came to, and I did a fair day’s work for a fair day’s pay. And that’s how I fed my family. Now however, I tell every single person I meet that I work for Konica Minolta. And why do I do that? I do that because I feel so proud to work for an organisation that would care about young women on the other side of the world, who’ve been trafficked into a life of sexual slavery.”
Anybody that has ever managed people I think would probably agree with me that one of the holy grails that you strive for in management is to have an engaged team that you work with. Everybody pulling together, everybody on the same page. But it’s very hard to achieve. But here we have an example of us doing something in another country, unrelated to the commercial aspects of our business, and this man’s engagement dial moved from disengaged to fully engaged, and in fact the dial kept going to the point where he became a vocal, public advocate for our organisation. And to be honest, after my seven years of being a managing director, I really don’t know of any more powerful way to engage a team of people than to go out, treat them well and respectfully, internally within your organisation, and then outside the organisation, to make a contribution to society that makes them proud of the company that they work for. It’s very, very powerful. And once you have that engaged workforce, the strong financial results follow very closely behind.
Emma Lo Russo: David, that’s an amazing story, I love... You said it simply too, you can do good and do well. And really engage your employees and your customers in ways you couldn’t before, so a good challenge to other business leaders to do that. So, I understand you’ve announced your retirement. What’s next for you, and what do you see your leaving legacy is? And what would you say to other business leaders that can look back at their career like you have there, and made such great and sustainable change?
David Cooke: Yes, as you say, I have resigned from Konica Minolta. And my reason for leaving was that, we run a three year global strategic plan, and we’re just starting a new three year plan. And I honestly felt, as good as the contribution hopefully that I’ve made has been, and as strong as the platform that I’ve built is, I honestly believed it was time to hand over to somebody else with a fresh set of eyes, and they can come in and take it to the next level. And what I want to do, is I’ve found for me that the magic really happens at the intersection of business and civil society. At the charitable sector, at the non-government organisational sector, the NGOs. They each have their own unique skillsets, with wonderful people in both sectors. But they’re very different. But it’s at that intersection point that amazing things can happen, it’s when you bring heart and mind together. And I think I’ve been living those two sectors. There’s sort of been the two halves to me, if you like. And now, I just want to work at that intersection point and bring the skills from the business world more into the NGO world.
And I have no idea what that role looks like, and I’m not nervous about not knowing. In fact, it will be quite exciting. But that’s what I’d like to move on and do. And the second half of your question, as regards what advice might I give to others, I think the formula that I’ve learnt as a managing director and dealing with people, and seeking to grow an organisation, is just that at all times, seek to be clear with people. Seek to be consistent in your decision making, and seek to be courageous.
Emma Lo Russo: Well thank you David, I think the other beautiful part that you shared with us was that sense of purpose, and having that moral conviction to stand out there on those issues that you stood for, and set us a great example for other businesses to follow and other business leaders. It’s been a pleasure talking to you, I’ve really enjoyed learning from you today.
David Cooke: And a pleasure talking to you too, Emma. Thank you very much indeed.
Emma Lo Russo: Wow. It was moving to hear David’s story of the employee who had found great pride in the organisation because of its commitment to corporate social responsibility.
It’s encouraging to hear how an organisation of Konica Minolta’s size is forging the inroads to combat modern slavery in it’s supply chains, and taking what I think, is a very assertive, accountable and ethical approach to this.
What a great legacy for David to leave.
My next guest is James Bartle, CEO of Outland Denim, the fashion company he founded on principles of sustainability, and one committed to promoting responsible supply chains.
So James, amazing organisation, Outland Denim. I’d love to hear your story. What drove you to create that organisation, and what’s your mission?
James Bartle: Yeah. Well, thanks Emma, for inviting me to be here. Look, it’s been a long journey for us. It was well over 10 years ago that my wife and I actually went to the movies to watch the Liam Neeson film Taken. And it was after watching that movie that I was, I guess, made aware that human trafficking was still a real issue. And a couple of years later I was given an opportunity to travel with the rescue agency through Southeast Asia and it was on that trip that I saw a young girl that was for sale. And it was a life changing moment for me, I can still picture the fear and intimidation that that girl had in her eyes. And I just knew straight away that I wanted to be a part of the solution.
And so that took us on a journey of discovering what the root cause of this problem was making so many people around the world, millions of people around the world, vulnerable to human trafficking and exploitation and different human rights violations. And so that journey led us to understanding that it was an economic problem. That it was poor people that were made the most vulnerable to being stolen, sold, tricked, exploited in one way or another. And so we knew that if we wanted to combat this problem, we had to come at it from an angle that addressed poverty. And that comes back to equipping people with the skills and the opportunities that they need, the learnings, the education that they need to be able to be successful on their own.
And so we set about creating this business model and it took us about six and a half years of development and improving and watching and employing people to see the impact that this model would have on their life. And when we knew that it would change somebody’s life and that they could get themselves out of poverty as a result of it and their families, we knew that it was time to launch our brand, and that was nearly four years ago that we launched the Outland Denim brand.
Emma Lo Russo: So, tell me about that business model and the mission that drives that. What makes you different? How do you still manufacture denim with that in mind?
James Bartle: I mean, denim is one of the worst contributors to the environmental degradation that follows the fashion industry and just destroying ecosystems because of the way it’s created. But then also on a social level, it’s also quite guilty of exploitation because of cheap labour. And the difference with our business is that we have a social and environmental impact, which creates an economic impact. And so our business model has really been built to address these three things. It’s been built to address firstly, the social injustices that are happening around the world, where people are stolen and sold, where they’re tricked and sold, where there held literally as hostages in garment factories, on fishing vessels, in brothels.
And our job is to be able to give people who have had the misfortune of finding themselves in these positions a new opportunity. And so when they come in to work with us, that means that they may have no skills, but from the moment they start with this new opportunity, they are now paid a living wage, which means that they get to enjoy lifestyle like you and I get to enjoy where we can afford to have healthcare or savings, send our children to be educated, maybe go out for dinner on the weekend.
So that’s the basic wage where people start and then it’s a training process, so then over about three years, we train them into the process of making a pair of jeans, being one of the hardest garments in fashion to produce. And when they can make these jeans, they become really valuable to our business. And at that point, where they’re really moving up the ladder with skills, their pay is going up, we’re getting feedback, where dignity has been reinstilled in their lives as a result of the past that they found themselves in. And they’re now the breadwinner, the income earner for the family, and the family are now able to find their way out of poverty from this person who’s worked so hard and developed these new skills.
But then there’s an educational component. And the educational component is really important because that’s where we’re able to find the learning gaps that they might have. And they might be earning more money than they’ve ever before, so it’s our job now to give them some education around finance and household budgeting and planning for the future and being wise with the money that you have. It could be women’s health issues or learning a language like English, or finding the areas that they need to fill a gap with the learning that they haven’t had before, maybe because they were brought up in a poor country.
And if we can give them all of these things, what we’ve seen happen is that they themselves get themselves out of poverty, get their families a much brighter future as a result of it. And then the impact can then go out and flow into their community. And so it’s really quite a profound impact that making a product can have. And I guess that then becomes the ultimate product because just by buying a product, a beautiful pair of jeans that I love and want, I know that I’ve changed somebody’s life.
Emma Lo Russo: So, James, you talked about that multifaceted sustainable business practise. What advice would you give to other business leaders if they were looking to seek or implement sustainable business practises?
James Bartle: We’re hearing in the media today, how important sustainability is. I mean, here in Australia, we’ve got the modern slavery act so, if we talk about the social sustainability elements, as well as the environmental sustainability elements, it becomes quite daunting. You look at this mountain in front of you and you think, “Okay, it’s going to cost me more to be able to produce the product. It’s going to be way more time consuming. It’s much harder. I don’t understand the space.” So it feels overwhelming.
I guess the advice I would give anybody that’s approaching this issue within their business is that it’s just step by step. My approach to this would be that, hey, none of us are perfect. We are all a part of the problem. And really it’s going to come down to the heart of the leadership within any business to go, do I really care about this? Do I value the humans within my supply chain or not? Because I mean, unfortunately, and this is really quite hard hitting, that is the reality. So my advice is just take the next step.
Emma Lo Russo: You connected right at the beginning that there was economic sustainability in this, but I think in challenging times, leaders sometimes get confused with cost pressure, because it’s a real pressure for them. How or what advice do you give to them based on your own experience, if that was the factor that might be delaying their decision?
James Bartle: Look, I think it is the factor that delays most decisions for most CEOs to make the hard call and say, “We can’t produce that way any longer.” It is easier for us because we started to address the issue from the very beginning, that’s why we started our business. So it wouldn’t be fair for me to come on here and say, slap everybody on their hand and say, you just have to do better. It’s not black or white like that. It’s actually, again, it’s just taking the next step. It is cost pressure that prevents people from doing it because we’ve been measuring one thing, and in fact, we’ve been taught to measure one thing.
We have had a really big focus on economic sustainability being profitable, that bottom line, and that’s how we get our business to successful or not and that’s the measure.
I guess what I’m suggesting is that there are so many businesses and even probably the biggest businesses that we see today, if we were to measure them across those three measures of social, environmental, and economic sustainability, we’d probably find that some of the most successful companies we know wouldn’t even be sustainable. So I just think that we’re in a very exciting time in history, where we are able to make some changes where the general public are really interested in the way that we produce our products. And so we have this great opportunity to be able to educate people along the journey, be open and transparent because I think that generally, consumers are quite ... that they’re full of grace to the brands that they love, if we’re open and honest with them.
Emma Lo Russo: And yet you are successful. So you have found that interested customer base and been able to build your business. How do you keep this passion for doing well and doing good and setting that as the core values to create that care?
James Bartle: Well, I think it’s a slow process. I think we’ve been conditioned by high street by fast fashion, if we speak about the fashion industry for a moment, where we were told and that we need more, we need it cheaper. And in fact, over time we believe this, and it’s just not a reality. The reality is that we need good quality and we need to know that everybody was treated the way they should be, that the planet hasn’t been destroyed as a part of the process of producing our products. So I just think that’s time, I think it’s continuing to talk about it. So that people actually stopped to think about, we live really fast paced lives, but COVID-19 has been amazing in the sense that as devastating as it’s been and horrible, there has been some good things.
We’ve slowed down, we’ve thought about these things. We can see the sky in cities that we haven’t seen the sky in four years, but now as a result of slowing down, we can see. We can see through water we couldn’t see through before, families are out walking on the streets with the kids or the dogs as a family, so many good things have happened by slowing down. And I think as a result of this, we have had more opportunity to think about the way we’re producing our products and the fact that we do want to be a part of a solution, not a part of the problem.
And so for any business out there, that’s thinking about, is this a real opportunity for us or not? Can I afford to move into this space or not? I guess my message would be, you can’t afford not to move into this space. If you don’t move into this space, economically you will suffer as time goes on. Sure, not everybody’s going to move across to wanting to know how their products were made just after this pandemic, but another big part of the percentage or population will, and that’s only growing in momentum. I mean the search rate for sustainable denim alone over the past 12 months is, I think about 190 per cent up on the year before, it’s increasing rapidly. People are really interested to know how their products are made and I think that goes down to services as well. I think that’s offshore services, tech services, all those kinds of things need to be focused on all three elements of sustainability.
Emma Lo Russo: So, I mean, there’s lots of good. As you said, perhaps in the way we’re reflecting as a society. What has it meant for you, this COVID-19 for your business?
James Bartle: Yeah. Look, I mean, anyone would be lying to say that this wasn’t challenging, this wasn’t scary, it hasn’t been devastating to some level. I mean, we can’t stop and forget the people that have suffered during this, the people that have lost their lives, lost loved ones due to this horrible disease. And the economic impact on businesses, probably losing businesses, I mean, I know of businesses that have had to shut the doors, people have lost jobs. It has been horrifying for so many people. Thankfully, our business wasn’t 100 per cent reliant upon retail or the wholesale market. It was ... we have a customer base of people who shop on our online stores, which we have in a few different regions through the world. And we’ve only experienced our sales to grow during this time. We also did an equity raise during this time, we went to the public to raise equity, it was really successful.
So for a brand, I would say there is a good high level case study for anyone wondering, does having a strong, clear sustainability, social and environmental message work for you? I would say, well, we’re selling $200 jeans and we’re in the middle of a pandemic, the worst economic crisis potentially that we will ever face in our lifetime, and our sales increased online. I think that’s a really clear example that yes, people are ready for this and it’s time to shift because all of us really do. If we were to search our heart, go, “Yeah, I want to be a part of it. I want to be a part of the solution rather than a problem.”
Emma Lo Russo: And has that flowed through to your team, seeing that? Because it would have put pressure economically there too when you’re looking at it, perhaps the suppliers that you’ve been talking to.
James Bartle: We’ve got amazing suppliers and an even more amazing team. I will say one of the greatest things, well, one of the hardest things as a boss is to go and have the conversation with your team members that there’s no longer a job here, where you’ve got to put them back in hours or whatever it is. And so it was a scary prospect to go and speak to our team members. But every team member from our headquarters here in Australia, Their first response was their work colleagues, those in Cambodia, it wasn’t themselves. It was just incredible to see how selfless they are.
And I think that goes back to, when you’re choosing a team, you can’t just choose people based on skills alone, it’s got to be on character as well. And so you find yourself in the middle of a pandemic and you’ve got a team full of people with the highest level of integrity and character, honesty, they’re hard working. And it’s because of them that we’ve come through this time strong, we’ve come through to the other side of this as being able to be proud of our team for what they’ve achieved.
Emma Lo Russo: Yeah. That strong sense of purpose and passion you can see from day one and it looks like it’s sustained you. Do you mind just sharing, in your journey and going through this COVID-19 or period of crisis, what have you most learned about leadership and what would you share for businesses who are thinking of this, or might be somewhere on that journey or about to start that journey? What have you learned? What would you share?
James Bartle: I’ve still got so much to learn in this space, but the one thing that I hold really, I hold a lot of value in is honesty and integrity. And that if you are a leader or a boss that is willing to be honest with your staff so they know where they stand, and you’re going to have integrity with every account.
And it was only this morning that I was just going, I was saying to my wife, I said, “I’m just so proud of our team because every department, I sit in on meetings and I virtually don’t have to say anything.” I feel intimidated at the end of it because I’m like, “They’re so much smarter than I am. They know what they’re doing. They don’t even need me.” And I think that’s what we want to aim for. We want to get to that place where we’re not needed, because then that’s a sign of a good, healthy business that’s thriving.
Emma Lo Russo: It’s amazing. Look, I’m incredibly inspired by your story. And I’m going to ask more questions of my own business, and I’m sure so will the listeners. What’s next for you and your business?
James Bartle: There’s so many things, there’s so many areas that excite me, but if I talk about the fashion industry, I think it’s manufacturing for new brands. It’s brands that go, “Hey, I want to be a part of this movement. I want to be a part of the solution, too. How do I do it?” We can now help you, we can work with you, we can produce your clothing and you can be as much a part of this impact as we can.
Emma Lo Russo: James, that’s amazing. Thank you for joining us today on The Business Of.
James Bartle: Emma, thank you so much for having me.
Emma Lo Russo: I know I feel inspired. All of our guests have shone new light on some of the realities faced by people around the world, in their interactions with companies.
Their insights describe the scale of modern slavery in global supply chains, and also offer practical advice for business leaders on how organisations can “do well and do good” by examining their supply chain, and by ensuring that their business models are sustainable and ethical.
For David, it was having the courage as a leader to take a stand on an important issue that got the ball rolling at Konica Minolta.
His desire to build a ‘culture of care’ has permeated through the global organisation. His leadership has paid financial and reputational dividends, winning the respect of executives and hundreds of employees who have found new meaning in their work.
And as James told us: when it comes to teamwork, character matters just as much as skills.
Talk to you next time on, The Business Of.