CSO Pär Larshans: Holding Tight to Core Values Catapults Burger Chain
Being a leader requires going beyond people’s expectations. Being a brave leader often means choosing the more difficult course of action that despite being the right one, might have more opposition. Perhaps it is easier if you are in control of your organization but how can an employee do brave things within it? What kind of courage does she or he need to be successful?
“I try to expand the core values to a much broader audience – from promoting environmental actions to taking global responsibility.” - Larshans
Max Hamburger Restaurants, the number one burger chain in Sweden, is a prime example of innovative leadership in the food production sector. Since 2006, reducing the company’s environmental footprint has become an organizational priority. Max installed energy-efficient grass roofs in new restaurants, cut energy consumption by 20% company-wide and the chain buys only wind power.
But Max is most known for being the first restaurant chain to publish the carbon footprint of its menu items. "One of the problems being a burger business is, of course, the beef," says Max's former Chief Sustainability Officer, Pär Larshans, noting that the meat industry is responsible for about 18% of global greenhouse-gas emissions. “As a restaurant we are part of the problem but we want to be part of the solution. We want to be a role model for our industry.”
Margareta Barchan talked to Pär Larshans in busy Stockholm, where the Nobel Prize Award ceremony was being hosted the same day.
Margareta Barchan: In any Max Hamburger restaurant you can see a picture on the wall about how many CO2 emissions were produced in order to make a hamburger. Were you behind that idea?
Pär Larshans: Yes and no. The owner of Max asked me, “Pär, you live on a farm – you know a lot about the environment. Can’t you come up with ideas of what we can do about the climate and be responsible for that?” That was really the question.
And after seven months of trying to understand what we should do, investigate the possibilities, I understood in 2006-2007 that the beef – 80% of our emissions come from one product, and that is 90% of what we are selling. I understood that this would be a big problem for us in the future.
It’s been well over 10 years that I’ve been aware of the huge impact of beef on the environment. Currently, Max is responsible for the emission of 29 000 tons of carbon dioxide equivalents (CO2e) each year. That’s how I came up with the idea of a carbon label. I saw the importance of being transparent, and reducing our emissions. I could see that it would be beneficial even from an economical perspective if we could reduce our fossil fuels, because I knew that the cost of fossil fuel use would become more costly and unsustainable in the future. As a result of our sustainability communication on our due diligence process and carbon footprint, we were given the Green Award in 2009 in London for best sustainable marketing.
One of the things I have seen over the years is that, if I can combine societal challenges with good solutions at the same time as it helps society, I can create a win-win situation. And if I also can create a positive thing for consumers at the same time, it will be a triple win, and I can’t fail.
Carbon labeling is really what the science people are looking for – actions that are creating a motion, that are creating a change. And of course it’s brave to stand there in front of 3,500 people from scientific backgrounds and say that OK, you see a problem but I see a solution. And I think that is really what’s needed – not say we are perfect, but we are ready – and that we can bring one thing that, in the long term, will make a change.
Barchan: How did the competition react and how did the client react?
Larshans: In 2008, nobody knew about this. And the director of Marketing – he launched a campaign in order to help the market to understand this. Nobody understood anything about CO2e emissions – what this is – because our burgers are labeled both in price, with health perspective – how much fat they contain – but also with the carbon labeling – and nobody knew what that was.
After three months, the director of Marketing came back to me and said that we have a problem. “There is not a chance in the world that we will be able to have our customers understand what we’re doing. And I won’t pay a single penny marketing anymore about this, because I’ll need to have my budget to do other things.”
Max customers have now started eating more non-beef burgers, causing sales of the low-carbon alternatives to jump by 16%. Such sustainability campaigns illustrate how taking responsibility and being transparent about environmental impacts increases customer support and ultimately profits. There was a 27% customer increase between 2007 and 2009.
Today, Max is one of the most profitable fast food companies in the world. We are growing much faster than our competitors. We know that we have filled a gap in the market. We have achieved this through a combination of a company doing good – serving great products but also doing something different. The big difference here is the responsibility issue – we have been able to have middle restaurant managers take initiative and become stewards of good business but also helping society.
Barchan: Can you give an example?
Larshans: Yes, I would like to highlight the way we hired people with disabilities. I think it’s important, when you implement new policies – especially when you work within one organization – that you take into consideration the core values of the company. Culture eats strategy for breakfast, so you need to address the culture before you enforce changes. The company itself is owned by Mr. Curt Bergfors. He holds approximately 88% of the shares. When it comes to culture and acceptance of change, I need to start by telling you that he’s hospitalized in a wheelchair and has been that way for more than 27 years, but still has been able to lead the company as working chairman. So therefore, when I launched the concept of hiring people with disabilities in the early 2000s, the idea was well received by Mr. Bergfors, and his older son Richard Bergfors.
But of course, as a good entrepreneur who understands the need to make a profit, Richard Bergfors also said that it’s very important this new hiring policy be cost neutral. That meant our focus from the start had to be to find people with potential that other companies didn’t see.
The result has been pretty amazing. In the majority of the restaurants, we see that this is giving better service to the customer and reducing employee turnover. As a result, Max Hamburger’s reputation has improved significantly as a responsible employer. We’ve also been recognized both by the European parliament and the UN for our actions of hiring people with disabilities as well as refugees.
Barchan: In a way, how brave is that action you took? You were supported more or less from the beginning.
Larshans: You are right. The brave thing was not going against the owners’ opinion since they supported me. What I saw as more daring on my part was that I’ve used crises and social justice issues to kick off new projects. You see, if I am correct in my risk assessment, I already have a solution to the crisis. But it still takes energy, money and persistence to pursue that solution. That means that I need to have different pilot programs already operating, that have already been proven to work.
Otherwise, I would say that it also requires good communication skills to be able to convince others of what needs to happen, whether it be in society, in politics or in a company, because you need to always be alert. And if you are at the right spot at the right time, then you will be able to then take the next step and implement new norms or take the next action.
Barchan: You didn’t have to go against the founders’ will since they approved of your ideas. Were you worried however that your ideas wouldn’t succeed?
Larshans: I think that success is more easily attained if your company’s values are aligned with your personal values. I believe that it is also what we see more often today-- that more people make their purchase based on values. And what I mean by that is when you know that you are in an area where the core values are aligned with what the company wants, you will have more leeway and a bigger possibility of succeeding. So I think that alignment of an organization’s and employees’ values is the starting point for a lot of actions and progress in terms of the way that we see leadership’s role, what methods we use to educate our managers, etc.
It’s having the ability to see possibilities where others see just problems that has been really my success – and then focus to create results. If you’re going to do things, you need to be prepared and have good timing.
Barchan: Tell me, as a brave leader, have you faced dilemmas where you had to make a choice?
Larshans: Yes, of course – there’s the choice regarding if I should use my power or if I should try to have others understand and to create trust because, if you use power, people can feel silenced. But the problem is, when you want to impose new ideas, people won’t listen to you because they feel that you will run over them or you’ll drive over them with this “tank”. So therefore it’s very important that you understand timing for everything.
Barchan: You now have done things that are so far away from selling hamburgers. What would you say is really the signpost of being a future brave leader?
Larshans: You’re open to sharing with others and learning from their expertise. Only then can you truly be a brave leader. But a brave leader is also someone that is pragmatic and knows that there are no shortcuts. I don’t think you can have good results with shortcuts. This mindset usually starts in the family setting as the values you are brought up with will influence your future decisions.
But in the end, of course, if you work in a company – and it doesn’t allow you to seize such opportunities – maybe you should consider changing companies– or maybe create a company of your own. What we're seeing now is that many will be able to create their own businesses. So I think it’s very interesting to see how can you create an environment with brave entrepreneurs. And that will be a big challenge but a big opportunity for the large corporations. If they can do that, they will be stronger. They will create an atmosphere that is more innovative and it will lead to higher sales in a sustainable way.
Barchan: What if people don’t believe in your ideas?
Larshans: I think many leaders strive to have everybody on board. And you can’t have everybody on board. If you want change to happen, you need to focus on the top 10%, the top 15%. And then they will create a movement that the others will eventually follow.
In January 2016, Max Burgers launched the vegetarian line offering one vegan and four vegetarian products. The CEO Mr Richard Bergfors recently stated that there is greater public awareness around the environmental problems with beef and people are willing to change. The trust and the reputation that Max has gained through its sustainability programs that went public in 2008 by putting CO2 emissions on the agenda has truly paid off.
Mission completed for Pär Larshans. He has now left the company and acclaims the sustainability leaders that remain at Max such as the owner, the product development manager and the purchase manager. Pär is now with Ragn-Sells and focuses most on the circular economy. He also taught, on behalf of the foreign ministry department of Sweden/Swedish Institute, leaders from China, Russia and other countries from the Eastern and Northern hemispheres about sustainable leadership in business.