CEO Power & Light: Transcendent Leadership for a Sustainable World

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Introduction

A Strategic Advantage

I have one goal in writing CEO Power & Light—inspire chief executive officers to embrace sustainability for its strategic value. Pure and simple. Those who do, I believe, will compete more successfully in the twenty-first century and make the world a better place at the same time.

There are more than enough books on green best practices for architects and engineers, educators and policymakers, as well as environmentalists and consumers. But no book on sustainability focuses on the one segment of our population that can make the biggest and quickest impact. Until now.

This book is written for CEOs because, individually, you have the authority to make sustainability a top priority and long-term commitment in your companies. And when multiplied by thousands of your peers, collectively, you have the revolutionary power to transform the United States and her global neighbors.

Its message of empowerment is also for those in the C-suite and upper management ranks who may one day be called to serve as CEOs. And by extension, this book is for fast-track managers and MBA students looking for their own competitive advantage—not to mention one for their companies and country.

In our post-Great Recession era, sustainability has become a prerequisite to survivability. It’s also becoming a necessary platform for future growth and success.

CEOs, therefore, would do well to integrate its increasingly self-evident principles in everything from their vision and mission to their culture and values. Sustainability can no longer be just a token motto on a company website, a single staff person managing office recycling, or a feel-good Earth Day event.

CEO Power & Light offers a unique perspective on what is truly at stake—every company’s future profits, as well as our national and global economy, security, and the environment. This book also serves as a primer on transcendent leadership and explains why CEOs need to embrace this new and higher level of service.

Before getting too idealistic for the average left-brain, ROI-fixated executive though, let me say the following based on my nearly thirty-year career as a business owner: Sustainability should be a primal instinct of every CEO for the compelling reason that it will make his or her business stronger and healthier.

How is that?

First, sustainability encourages your workforce to drive out waste like never before. By reducing materials, labor, energy, water, and overhead waste streams, you will increase efficiency and profits. Operating managers refer to this process as lean manufacturing, Six Sigma quality, and other jargon. The name isn’t important, but the results are. And those results are showing that more and more companies worldwide are reaping the benefits.

Toyota is one of them. Its penchant for continuous improvement processes is legendary. And it’s a key reason the company is the largest manufacturer in one of the largest industries in the world.

Second, sustainability sends your employees a powerful message that goes beyond efficiency and profits. It tells them that integrity and respect for future generations are fundamental to the company’s purpose and culture. This, in turn, attracts and retains more committed and engaged employees because they want to be part of something bigger than themselves.

Google is a destination employer for some of the best talent in the world because of this. The company’s commitment to culture is so strong that it consistently ranks as one of the Best Places to Work—anywhere.

Third, it sends your customers a similarly powerful message that you care about them as more than the other half of a business transaction. This attracts and retains customers for the same reason it does employees.

Starbucks is famous for making you feel good about getting your caffeine fix every morning. It’s why you see a line of customers at almost every store. No wonder Starbucks has become one of the top restaurant chains in the world—selling coffee.

Yes, you need to provide great products and services; that’s as important as always. But companies that go beyond and make sustainability integral to their brand can earn heightened respect, loyalty, and even devotion from the market.

Apple, the most valuable company in the world, is a perfect example. Its commitment to use clean energy and be part of the solution to global environmental challenges is just one reason the company has become a social icon.

More than profit

Average CEOs have a single-minded obsession with making their companies more profitable. Great CEOs go beyond. They are reflective enough to ask themselves soul-searching questions: Am I serving as an upstanding corporate citizen for my country and the world? How can I further leverage my talents, influence, and resources to make a bigger difference? Will my legacy endure after I am gone in a way that will make my children, community, and industry proud?

Never have the answers to those questions been more important. As the world’s population grows from 7 billion to nearly 10 billion by 2050,¹ sustainability-related best practices will no longer be optional but absolutely necessary. And with rapidly developing countries such as China and India bringing billions of people closer to our standard of living, the United States will be challenged like never before.

For example, American workers will face unprecedented levels of competition as productivity grows in those countries. That will be good for some global companies, but a huge risk for the U.S. economy as a whole. Fewer and lower-paying jobs are not a prescription for prosperity. Sustainability will better ensure we provide products and services of great value—and earn invaluable respect within the workplace and marketplace.

Population growth and increased living standards will affect our national security as well. Growing demand for resources around the world puts power in the hands of those who control these resources by virtue of geography—whether they are stable, democratic states or unfriendly, authoritarian despots.

Business as usual will continue to force us into risky entanglements in dangerous parts of the world and put our—and our allies’—standard of living at the mercy of people who wish us ill. Think of our dependence on Middle Eastern oil, or the European Union’s dependence on Russian natural gas. Sustainability is an opportunity for our allies and us to become more self-sufficient with the resources we have.

And then there’s our one and only planet Earth, and something called our environment. As companies devour ever-greater amounts of energy, water, and limited natural resources, many ecosystems around the globe will become stressed to the point of possible extinction.

In fact, air, land, and water pollution can be a greater long-term threat to our health and security than tyrants and terrorists against whom we are willing to justify spending hundreds of billions of dollars.

Unfortunately, experience tells us that government is likely to be too dysfunctional to solve these large-scale problems. Politicians only seem to work together when there is an imminent threat such as terrorism. So what are successful business leaders to do?

I contend that CEOs can and should step up to these challenges. Their leadership, influence, and resources—when multiplied by thousands of get-it-done business executives—can make a transformative and winning difference.

The United States was founded by inspired people—farmers, merchants, lawyers, inventors, renaissance men—whose common mission, individual genius, financial sacrifice, military service, and noble pursuit of a better world for future generations made a great country possible.

We need more of these traits today. The attitude of too many Americans is that someone else should solve the world’s problems for us. And the costs should be borne by others as well. What would our forefathers think of such complacency today?

If you know history and believe in Providence, as I do, America was no accident. Our rise from colonial backwater to global superpower and our triumph over tyranny in the Civil War, World War I, World War II and the Cold War provide us with a unique perspective on the power of principled leadership—not to mention the good it can bring the entire world.

I believe the obligations to our fellow Americans and the world at large are no less important today, and embracing sustainability is one of them. Our country, sadly, is not currently leading the world in this crucial endeavor and we are weaker as a result. CEOs, in particular, are called to respond in a way that is commensurate with their God-given abilities.

Yes, the job of CEOs is to make their companies profitable. But the point of CEO Power & Light is to show that leaders can make their companies even more successful by making a full-fledged commitment to sustainability.

Employees will reward them; customers will reward them; and investors will reward them. Moreover, by fulfilling their civic duty as American and world citizens—and improving our economy, security, and environment—CEOs will further fulfill their fiduciary responsibility to shareholders. What goes around comes around.

Why should you listen to me?

Who am I to challenge CEOs so boldly, and what qualifies me to write this book?

Undoubtedly, some of you are leading large, multinational businesses with more workers than my energy solutions company could ever hope to employ. And others of you have developed expertise that puts you in a league of your own.

What I offer is nearly three decades of proven leadership and results in the field of sustainability—in the heart of the conservative Midwest where change comes hard. My experience allows me to share perspectives ranging from being a manager in a large public company to becoming an entrepreneur to building an innovative medium-size business.

Sustainability, more than any other strategy, program, or initiative, has given my company the opportunity to thrive and become successful beyond my wildest hopes and expectations.

My paternal grandparents immigrated to the United States from Italy and what is now Slovenia. My mother grew up on a farm in central Ohio, and my father worked in the iron ore mines of northern Minnesota while enduring the Great Depression.

Dad became a bridge engineer in Patton’s Third Army during WWII, and with his company built a pontoon bridge over the Rhine so American tanks and soldiers could pour into Nazi Germany. My parents met after the war and had nine children. Each of us went to college and beyond to pursue the American Dream of a better life.

In 1987, I founded Melink Corporation, which has since become a pioneer and leader in energy efficiency and renewable energy solutions for the commercial building industry. We are based in Cincinnati, Ohio, and now have four separate businesses.

Melink T&B provides heating, ventilation, and air conditioning (HVAC) testing and balancing services; Intelli-Hood manufactures energy-saving controls for commercial kitchen ventilation systems; Melink Solar develops solar photovoltaic (PV) projects; and Melink Geo finances and commissions geothermal HVAC systems.

During the past 28 years, our company has had the privilege of working with some of the largest and most successful organizations in the world. Our client roster includes Apple, Google, Walmart, Microsoft, Procter & Gamble, Verizon, the U.S. Army, U.S. Navy, Department of Veterans Affairs, Yum! Brands, McDonald’s, Starbucks, Target, Whole Foods, Publix, Hyatt, Hilton, Marriott, Honeywell, Johnson Controls, Siemens, Harvard, Ohio State University, the University of California, and Indianapolis Power & Light, among myriad others.

Our corporate headquarters is LEED Platinum certified, Energy Star rated with 99 of 100 points, and has achieved Net-Zero Energy status, which means we generate more electricity than we consume over the course of the year. We also have a fleet of hybrid and electric cars, as well as charging stations, in our parking lot.

This book includes my personal story of inspiration and growth. My journey started after attending a green building conference in 2004 and experiencing an epiphany of sorts. I decided our company would help lead the sustainability movement, and instinctively believed this would make us a better and stronger company.

When we built our super-green headquarters in 2005, I was surprised to find people wanting to visit us from all across the Midwest to learn about the costs and benefits of our green experiment. This motivated me to keep pushing the envelope—and motivated visitors to keep returning. We have never looked back.

Owning and operating a Net-Zero Energy building clearly offers significant energy savings compared to a conventional building. But I learned this savings is small compared to the HR and PR benefits of attracting and retaining more professional and passionate employees—and earning additional respect and loyalty in the marketplace.

The upshot is our company now has a more powerful mission, a more highly engaged workforce, exponentially growing sales and profits, marquee customers that many companies would die for, and a culture of integrity and service that makes it truthful to say TGIM on Monday mornings.

Having been a CEO and business owner for as long as I have, I understand and appreciate the pressures and demands most of you face every day. It’s extremely difficult to create new growth opportunities and mitigate risks at the same time.

The good news is sustainability does both. And there are many CEOs more successful than I making this case. Apple’s Tim Cook, Google’s Larry Page, Berkshire Hathaway’s Warren Buffett, Starbucks’ Howard Schultz, Whole Foods’ John Mackey, Walmart’s Doug McMillon, and Tesla’s Elon Musk are some of them.

I hope this book inspires many CEOs, including you. I also hope it will lead to authentic change within your organization—and ultimately across America. The world desperately needs great leaders. You should be one of them.

PART 1

Great Is The Need, So Is The Cause

Chapter 1:

Integrity Is Everything

Chapter 2:

It’s The Economy, Smarty

Chapter 3:

No, It’s Our National Security

Chapter 4:

Our Children Say It’s The Environment

Chapter 1

Integrity Is Everything

Before discussing sustainability, we need to talk about integrity. Why? Because integrity is the foundation of every successful human relationship. And without successful human relationships, organizations are doomed to fail.

Without integrity, in other words, companies are not sustainable. No CEO’s charisma, financial savvy, or technical expertise can make up for the production, teamwork, and innovation that are inevitably lost when there is a lack of honesty, respect, and fairness in the workplace.

A company without integrity may stay in business for a period of time. But make no mistake—a flawed culture and its leadership will eventually be exposed and the company kept from realizing its potential.

Consider a 2015 Gallup survey that shows only 31 percent of American employees are engaged in their work.² Such a low number should shake every CEO to the core. Think how this negatively impacts our productivity, quality, turnover, absenteeism—and profitability!

In fact, Gallup estimates low engagement costs the United States $450 billion to $550 billion per year.³ Talk about a lost opportunity in the Land of Opportunity. If this is not an indictment on us as leaders, I don’t know what is. Imagine how much more successful our employees and companies would be—not to mention our national economy—if we could double engagement to 60 percent.

What does this have to do with integrity? Everything.

To a large degree, employees are not engaged because they feel used and underappreciated. They are often treated like subjects, given directives without being asked their opinion, told things that are purposely vague if not sometimes untrue, communicated to via impersonal emails, and expected to work evenings and weekends at the expense of personal time. And then they get laid off, more often due to poor leadership and management than their own mistakes. Then the cycle repeats itself.

Let’s face it—most workers feel rightfully jaded by their experience in corporate America. And, undoubtedly, we have personally witnessed these demotivating if not dysfunctional behaviors, and know the harm they can do to individual and team morale.

So, now that we are captains of our companies’ culture, it is time we change this. The sooner we hold everyone accountable—especially ourselves—to a higher level of integrity-based behavior, the sooner we will see increased employee engagement.

For treating everyone with honesty, respect, and fairness from the top down is the best—and perhaps only—way to ensure a safe and healthy work environment where positive intentions and great work can flourish.

Salaries and wages are the single largest line-item expense on the P&L for most companies. Very often, they represent 50 percent or more of total sales. This means companies that increase employee productivity by, say, 10 percent through increased engagement can potentially increase their profitability by millions.

We will talk later about the opportunity to save energy. But an even greater opportunity is tapping into human energy—a far more valuable commodity. After all, most employees truly yearn to become a more productive and valuable asset for their companies.

Integrity, more than financial, marketing, or technological prowess, makes this possible. Technology can boost productivity to a degree, but it cannot force great communication, collaborative teamwork, and a strong work ethic. Being honest, respectful, and fair toward employees elicit these behaviors naturally.

In the early days of industrialization, large companies could exploit their workers through sheer market power. But in our more socially connected—and socially conscious—world that is no longer possible.

With transparency increasing, CEOs have to be accountable to all stakeholders—not just shareholders. In fact, the fastest growing companies are succeeding by winning the public’s hearts and minds, not by taking advantage of employees and customers.

The point is, integrity sells. Doing the least bad is no longer a respectable—not to mention inspiring—business strategy in the twenty-first century. Doing the most good is.

Apple is the most valuable company in the world for a lot of reasons. One is that it takes a most-good versus least-bad approach to business. For example, its decision to invest in solar power and minimize its reliance on fossil fuel-based electricity may cost the company more in the short run.

But principled decisions like this allow Apple to attract highly talented, engaged, and passionate employees. This, in turn, allows it to design and manufacture insanely great products that attract tens of millions of customers.

Many other companies purposely incur higher costs—and lower revenue—to do the right thing too. Whole Foods weans suppliers using pesticides and fertilizers; Starbucks requires its coffee beans come from ethical sources; Chick-fil-A closes its stores on Sundays in keeping with its religious beliefs; and CVS stopped selling cigarettes to be more consistent with its health-based mission.

We all know that most truly successful businesspeople go out of their way to ensure a great customer experience. Is it because great service is cheaper? Of course not. It is because integrity—and all its variants, including honesty, respect, and fairness—almost always increases sales and profits in the end.

Therefore, I believe one of the greatest opportunities of the twenty-first century is for American-style capitalism to continue its evolution from exploitation and greed to integrity and service. The sooner we CEOs embrace the notion that the quality of our profits is more important than the quantity of our profits, the quicker and larger our advantage and success will be.

Some CEOs believe that integrity is necessarily at odds with capitalism. But capitalism does not dictate they be unfair, dishonest, and disrespectful toward others. Nor does it say they must embrace greed. In fact, CEOs who do jeopardize their reputations and sometimes even the livelihoods and lives of others.

Capitalism is—or should be—about competition, not greed. The difference might be subtle but critical. This is because competition connotes and breeds positive, constructive behaviors, while greed connotes and breeds negative, destructive ones.

High-profile collapses of companies like Enron, WorldCom, and Lehman Brothers, as well as people such as Dennis Kozlowski, Bernie Madoff, and Martha Stewart, are just a few reminders of the devastation greed can leave in its wake. But I am also reminded of companies engaged in less egregious but just as insidious behaviors.

Examples include CEOs of oil and natural gas companies who refuse to disclose the potentially dangerous chemicals they use for hydraulic fracturing (fracking). And CEOs who set up shell operations overseas to avoid U.S. corporate taxes, as well as CEOs who pay themselves hundreds of times more than the average line worker.

Yes, great leadership involves more than living a life of integrity. Communicating a compelling vision and mission, innovating new products and services, and recruiting and developing future talent are also important.

But if we are not honest, respectful, and fair with everyone in our sphere of influence, we are operating on a slippery slope. Our cultures will be wrong, the type of people we attract to our organizations will be wrong, and ultimately the value propositions to our customers will be wrong.

At its core, integrity is about respecting others—and thereby making us and our companies open to the possibility of earning it. Giving respect is so fundamental to developing successful relationships that it’s amazing many adults—not to mention CEOs—are still struggling to acquire this basic skill set.

Thus, if you do not give and earn respect in the workplace and marketplace, you will more than likely not earn long-term success either. The correlation becomes nearly perfect over time. That’s why companies including Walmart and McDonald’s raised their store worker wages in 2015. Paying the minimum wage was proving to be detrimental to both their top and bottom line.

In fact, in this