New Balance

...

of strategic business driver with measurable benefits

• Management felt that they were limited in ways to identify potential business risks and opportunities

• Impressive CSR initiatives implemented on the production level were rarely aligned and upper management was often unaware. It was discovered that these initiatives were often the result of personal passion and interested rather than top-level policies or mandates

• Ultimately a “lack of focus” and leadership was identified as the company’s major hurdle in developing an integrated CSR strategy

Products and Services

• There was a lack of understanding of the company could better utilize its existing environmental and social initiatives to generate business benefits

• New Balance was unique in that it already had a plan to reduce its carbon and toxicity footprint, was proactively including recycled content and environmentally preferable materials into its footwear, and eliminating harmful products such as PVC for its products

• Despite a higher upfront cost, New Balance’s retail group implemented a “green” store design that appealed to the ever-growing number of environmentally conscious consumers

• The company lacked a system to assess the life-cycle impacts of its products and the impact of practices such as the utilization of rail versus trucks for shipping were never measured or communicated

Operations

• Operational integration of CSR was one area that New Balance was particularly strong in

• Most of the initiatives demonstrated a clear business value in terms of savings, reduced costs, increased productivity, improved worker safety and morale

• The company was in compliance with the EU’s REACH regulation which limited the potential for fines, market exclusion or damaged reputation

• Reduction in suppliers allowed for increased control, cost reduction and increased efficiency

• Established partnerships with organizations such as the British Leather Group, which provided the benefit of third-party certification when it came to selecting suppliers with good environmental and safety standards.

• Adoption and enforcement of a maximum 60 hour workweek for employees of Chinese suppliers – a reduction of 10+ hours

• Implementation multiple environmental initiatives such as green cleaners on all US factories, installing energy efficient lighting and recycling 99% of all waste

• Challenges remained for its non-footwear related operations due to a majority of its apparel being produced via licensees who produced orders in small batches and did not have the same relationship with suppliers

Community Support

• Community support and involvement through volunteering was very strong and found to be an important factor in employee retention/satisfaction

• Despite the large number of employees who participated in community involvement there was a sense that the company did not get the recognition it deserved for all of the great work that had been done

To summarize the findings, it is evident that New Balance management understands the importance of corporate social responsibility but lacks the understanding of what is actually entailed in implementing the strategies. Additionally, it is evident that the stakeholders were concerned with the lack of communication that the company had with them. As a result of these findings, New Balance published its first Responsible Leadership in 2010 as an exploration of its history and a blueprint for its future. (“Responsible Leadership,” 2015) This report is an in-depth analysis of the company’s CSR performance and a strategic outline of its 10-year CSR strategy plan. New Balance states that its primary goal for publishing the RL report is to be open and transparent with what they have achieved and learned about themselves; then to seek feedback on how the company can do better. (“Responsible Leadership,” 2015)

As stated in the introduction, New Balance is in a unique position to be a leader in their industry and to influence the CSR strategies of their competitors. It is evident that New Balance’s owners have learned from their failures to communicate with their stakeholders and their propensity to tackle industry challenges on their own. By improving dialogue across all channels and aggressively working on its RL metrics and systems, New Balance is positioning itself to benefit from increased innovation that will not only help the company succeed but act as a powerful catalyst for social change.

References

New Balance Mission. (2015). Retrieved from http%3A%2F%2Fwww.newbalancefoundation.org%2Ffoundation%2Fnb_corporate.htm

Responsible Leadership. (2015). Retrieved from http://www.newbalance.com/about-new-balance-content-assets/inside-nb-resleadership.html

Veleva V., “New Balance: Developing an Integrated CSR Strategy”, Case 9B10M011W, Richard Ivey School of Business, The University of Western Ontario, Canada,