Case Study 2: Jib Ellison (Environmentalist) and Lee Scott (Former CEO, Wal-

Mart): Sustainability Saves Money and the Environment

This case study explores the collaboration between Jib Ellison, an environmentalist, and Lee

Scott, a former CEO of Wal-Mart, to develop successful environmentally-friendly business

practices. Readers are asked to assess the effectiveness of Jib Ellison as a leader, outside of

Wal-Mart's organizational boundaries.

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Pulitzer Prize winner Edward Humes's book on Wal-Mart is called Force of Nature: The

Unlikely Story of Wal-Mart's Green Revolution (2011). As the title suggests, many

environmentalists thought it would be unlikely that Wal-Mart would support the green

revolution. At one time, environmentalists would be more likely to protest Wal-Mart with

picket signs rather than praise Wal-Mart.

But environmental advocate Jib Ellison took another route. He invited Wal-Mart executives

and environmental activists to take a white-water rafting trip. They would have to paddle

together or sink. The trip also let the Wal-Mart executives see what the environmentalists

were trying to savethe beauty and majesty of nature. The team-building experience

worked and the two groups began engaging in earnest conversations about how Wal-Mart

could go green. Lee Scott worked with Jib Ellison to find a quick and easy ecological and cost

saving project that would demonstrate that going green is good for both customers and

Wal-Mart.

They started with a toy: a car and truck set for toddlers. The truck set came in display boxes

that were several inches larger than necessary. A simple change, shrinking the box size,

produced big dividends. Smaller boxes meant more boxes per shipping container, more

boxes per foot of store shelf (a huge factor in retail), and less cardboard packaging that had

to be paid for. The results: Wal-Mart saved US$2.4 million per year, 4,000 fewer trees were

used for cardboard, and roughly a million gallons of fuel oil was saved. Going green was a

win all the way around. And this was just for a single productthe potential savings across

the hundreds of thousands of items Wal-Mart sold were huge.

Soon, Wal-Mart was requiring its suppliers to reduce waste in packaging for a large number

of products. Wal-Mart is the world's largest retailer by a large margin. When Wal-Mart

speaks, other companies listen. Wal-Mart's sustainability requirements hit the world's

manufacturers like a force of naturean irresistible wave promoting efficiency in packaging

and shipping.

Scott allocated a half-billion dollar annual budget to researching ways Wal-Mart could

become more sustainablean unparalleled budget for going green. Scott also devoted a

considerable amount of his own time to the green initiatives. Sustainability became a part of

every employee's missionit was not something relegated to an obscure and unimportant

department. Because of Wal-Mart's size, even small changes could produce big savings.

Vending machines are often lit up like Las Vegasafter all, the vending machine companies

do not pay for the electricity they use. Just turning off the lights in the vending machines in

employee break rooms saved Wal-Mart US$1.5 million in electricity costs. Wal-Mart also

discovered that many store counter display lights stayed on regardless of whether

customers were nearbyinstalling motion detectors that activated the lights saved Wal-

Mart money.

More accomplishments listed in the text included Wal-Mart having an overall 16% decrease

in carbon emissions per US$1 million in sales (compared to 2008); increasing the efficiency

of its trucks by 60% in terms of miles per case delivered it delivered 77 million more cases,

yet drove 100 million fewer miles compared to 2005; and increasing its recycling rate to 64%

of its garbage.

Questions

1. Why do you think Jib was successful in motivating Wal-Mart to become more

sustainable when many other environmental activists were unsuccessful?

2. Which works better: protests or cooperation?

3. Manufacturers saved money by using smaller packages for their products. How

important do you think Lee Scott and Wal-Mart's leadership was in motivating the

manufacturers to save money while supporting the environment?

4. Jib started exerting leadership over Wal-Mart while he was still an outsider, and Lee

Scott exerted leadership over many companies besides Wal-Mart. How often does

leadership take place outside of organizational boundaries?