Alliance Online - July 2008

It seems to be working …
Interview with Alan Gegenschatz

Alan Gegenschatz is Country General Manager of TNT Argentina. Staff turnover is 4 per cent as opposed to 10 per cent for the company worldwide and annual growth is in double digits. How is this possible when so much of his time seems to be taken up with TNT’s global CSR programmes, country programmes in areas such as hunger, diversity and recycling, and meeting global certification standards, including the Global Compact. Everything he’s doing is 100 per cent aligned with the corporate strategy, he tells Alliance.

What is your primary goal as CEO of TNT in Argentina?

My primary goal is to achieve continuous improvement in our financial results while creating a workplace where people are happy and have the tools to perform properly – which comes back to financial improvement, plus taking account of our environmental impact, the social context in which we work, and all the stakeholders of the business.

That’s quite broad. Is that your official goal or is that how you see it for yourself?

I would say that the company as a whole has goals that are related to financial results and customer satisfaction – we need to deliver on time and in perfect condition. I have been at TNT for almost nine years and in the last two or three years we have engaged ourselves increasingly with care for the environment and for the health of our stakeholders and our staff as well as with all matters related to profits and customer satisfaction.

One of our global goals is related to CSR. We’ve worked to certificate norms like ISO9001 on processes, ISO14001 on the environment, OHSAS18001 on health and safety for employees and company assets, and, last but not least, SA8000 – Social Accountability 8000. This has to do with improving labour conditions – controlling your supply chain to see that they are doing the right things in terms of paying staff, environmental care, and not employing child force, among others things.

As a country CEO of a global company, how free are you to determine how you fulfil your CSR responsibilities?

The freedom I have as a country manager is huge. The company has its global programmes, but it also gives me the opportunity to really develop local initiatives.

There is a global company CSR strategy to support the World Food Programme (WFP). We have a fundraising programme and programmes for transferring know-how in accounting and auditing and skills relating to warehousing material. We support WFP in emergencies with our express capabilities because, as one of the best distribution-logistics companies in the world, we understand that hunger is not a matter of quantity of food but of how it is distributed, and we put all our skills into helping WFP. TNT’S mission, among other things, states that TNT seeks to share responsibility for the world in which it operates.

This is a worldwide programme but it operates differently in each country. We are involved in Gambia, Cambodia, Tanzania, Malawi and Central America, particularly Nicaragua, because WFP has designated those countries as key hot spots, where every five seconds a child dies of hunger.

In the last few years, we have fed 60,000 children a year, which is an outstanding result for us. We cannot solve the child hunger problem ourselves, but as business leaders we can show the community there are ways to partner with social organizations to put our skills in their hands to help them meet their challenges and support the fight for a better world.

Another corporate programme called ‘Planet Me’ has been launched this year – the transport industry is one of the largest producers of CO2 emissions. The programme has two parts, Code Orange and Choose Orange. Code Orange relates to reducing emissions from our fleet and from our business travel and to reducing the consumption of electricity and heating in our buildings, waste of paper, and all these things.

Choose Orange encourages our staff to have their own ideas and projects to work on themselves, even at home, in order to reduce their environmental impact. The third part of this programme is creating awareness and measuring what we generate, because we cannot fix what we are not measuring. So these are the two key global progammes, together with the certification programmes.

What about your local activities?

The company allows us to do local things, and what we do depends on each country manager. In Argentina we have implemented quite a lot of initiatives locally that support the global CSR strategy but they also have local impact and gain us recognition as leaders in CSR. After all, Peter Bakker, our CEO, leads the World Economic Forum. Over here, I lead the Chamber of Express Companies and I’m promoting industrial social responsibility too.

It’s good to work for a company where we have a global policy but can also do local things. It’s OK to work with the World Food Programme, but if you live in a southern country like Argentina, you also need to look at what’s around the corner from your office. That’s what our employees see, so it’s key for us as business leaders to take into account the local reality – that’s the way to engage our employees. They can see that what they do affects people across the street.

So do you have locally based programmes relating to hunger?

Not only hunger, we have local programmes relating to diversity and we are working with companies and NGOs to increase the number of disabled people we employ. We also work with the Global Compact. We signed up to it five years ago as TNT Argentina so there is a Global Compact board and we work together, share best practices, and figure out the best way to work in each of the ten principles of the Compact.

We also have projects with local NGOs for recycling paper and we are working internally on recycling and refilling toner cartridges in order to reduce our impact. We do the same with the consumption of water; we are measuring our CO2 emissions and we’re shifting our fleet from diesel to compressed natural gas. We give employees five days off a year so they can work on our voluntary local programmes.

We also have programmes for our employees. For instance, we have special provisions for maternity and paternity leave, which go beyond the law. If the law says paternity leave is two days, we give five; if maternity leave is 90 days, we give 100. Moreover, we give the day off for everyone’s birthday and we have extra life insurance, over and above what the law stipulates. So there are initiatives related to the wellbeing of our staff, our community and our environment.

I know it’s not running yet, but could you tell us something about your Secure Routes programme?

This project is inspired by the North Star Foundation model. The North Star Foundation was initially suggested and part-funded by TNT and the UN World Food Programme (WFP) and supported by UNAIDS to create new ways to fight HIV/AIDS in Africa (www.northstarfoundation.org).

TNT is in the transport business and we have drivers going from one country to another. We helped to set up North Star for the benefit of our drivers and for all other drivers stopping at those borders, and for the communities through which they pass, including sex workers. They have set up healthcare centres where people in the community can get free attention, as can the drivers who are passing through; the aim is that they become aware of the risks of casual sex and of how to take care in order to prevent infection. We provide everything from condoms to information to prevent the spread of HIV/AIDS and other sexually transmitted infections.

North Star is not just supported by transport companies but also by healthcare companies, for instance those that are working on medicine related to sexually transmitted infections or AIDS vaccines. Foundations may also be donors for this kind of project.

I have had a few meetings with the Red Cross Argentina and with UNAIDS and they are very excited about setting up such a project on the border of Argentina, Brazil and Paraguay – the triple frontier. We are in the process of thinking this out and will probably do it next year. It represents a big challenge for us.

Will the North Star Foundation be running the programme in your border region?

No. The implementers of our project will be the Red Cross and TNT and some other partners, probably from the government, the private sector and the NGO sector. But North Star is more than happy to share their experience with us and to support local projects that adapt their architecture and methodologies to regional needs.

It sounds like you spend a lot of time on CSR. How does that leave you time to do the rest of your job?

I have a great team, and I use a lot of my spare time as well as my working time. But all this networking, all these meetings, all the time invested in developing new initiatives with partners – it’s always related to business. If I’m thinking of a fair trade campaign to ship fair trade products, it’s because I believe it’s good for fair trade producers, which is good for developing markets. But it’s also good for the company because for every single product I’m shipping, I’m making some profit also. The brand image needs to be built from different places.

So CSR is part of my daily work because it’s part of my company’s strategy, all of which supports and contributes to delivering better results. If you ensure your suppliers are doing the right thing, you reduce the risk to your business because you cannot be sued or hit financially by something they are doing wrong. If your staff are happy, they will be more committed and they will surely produce more, and that makes a virtuous circle – when you feel good doing something, it works better. It’s not only me, but all the leaders of the company, who see CSR as a way to motivate staff and to engage them with the company.

We believe that there won’t be any business success in failing societies, so the challenge is to reconcile the short-term map with the long-term view. That’s the tension that we try to deal with every single day.

So you don’t have any questions within the company about the amount of time you give to CSR?

I am fully supported by my boss. He understands that what I’m doing is 100 per cent aligned with the corporate strategy and adds great value to the company, since it is associated with our worldwide corporate strategy as well as with our specifically South American developing plans.

So the bottom line is that your results are improving?

Yes. The company is seeing double-digit growth in revenues every year. We want to be leaders in developing countries such as India, China and Brazil, so Latin America is a key opportunity for us. So we need to have a breadth of activity in our strategy, not only looking at the day-to-day business but also complementing it with the kinds of initiatives that affect our dealings with unions, with governments, with customs officials – there are a lot of stakeholders we need to engage more effectively if we want to be successful. And we have a key role as business leaders to show new ways to help produce more sustainable growth for all of us.

Obviously the ultimate measure of your success in the CSR programmes is that your staff are happy and the business is growing. Do you carry out any other sort of measurement of the impact of your programmes?

We have engagement surveys and satisfaction surveys for our staff. These are not related directly to economic results but they are particularly important in countries like Argentina where high inflation is a huge concern.

And there are other indicators such as staff turnover: we have a 4 per cent turnover, which is very low. TNT worldwide has a10 per cent turnover, as do most other companies. This is also a measure of success because if you are happy doing your work, you stay in the job. High staff turnover is expensive for the company: if you leave, I need to spend money hiring and training new people.

Then there’s the recognition that we as a company are getting from different stakeholders – from the government, customs, the unions, the third sector, foundations – who want us to show how we have done it. For instance, I have been invited to a conference in Uruguay to talk about our model. We must be doing the right things, otherwise we wouldn’t be getting this acknowledgement.

Alan Gegenschatz is Country General Manager of TNT Argentina. Email alan.gegenschatz@tnt.com

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