A decade ago SBN CEO Summit speaker Mike Bennetts was on course for a senior role at BP. Instead, he became CEO of Z in 2010 and is now recognised as a leader in sustainable business.
Last Wednesday Mike Bennetts spoke at the SBN CEO Summit hosted by NZI in Auckland. He opened up about how Z is driven, and how you can make positive change in any sector.
A company owning more than 200 fuel stations might seem an unlikely sustainability hero. Z was formed in 2010, when New Zealand company Infratil Limited and the Guardians of New Zealand Superannuation acquired Shell New Zealand’s downstream fuel business. The company went public with an IPO in 2013. It completed a second major acquisition in 2015, acquiring Chevron subsidiary Caltex for NZ$785 million.
But Z stands out in the way it is decoupling its fortunes from the troubled big oil producers that currently supply the fuel. The company’s leadership has set this course by placing sustainability at the very core of the company’s DNA. This starts from an open acknowledgement of its role in the climate change challenge for New Zealand.
“We sell around 45% of NZ’s transport fuels,” said Mike. “That means I have to go to bed each night knowing that I am responsible for 8% of New Zealand’s greenhouse gas emissions.”
With this in mind, Z publicly cites ‘reducing the reliance on fossil fuels’ among the four key areas of sustainability the company is focused on.
“That sounds crazy,” said Mike. “Sell less fuel? Surely we’ll go broke?”
Yes, the company currently has a vested interest in selling fossil fuel. But Z doesn’t make the stuff. It is taking advantage of its freedom to think outside the oil barrel. This means the company is just as happy, if not happier, selling biofuels or electrons instead of fossil fuel.
Being a low margin business, fuel retail doesn’t leave a lot of wiggle room. But Mike asks, what if Z can increase that margin by a little bit while reducing customers’ fuel use by a lot? That would benefit Z and its customers.
The company has installed seven ChargeNet NZ rapid charging stations around the country. Z is also on the cusp of opening New Zealand’s first commercial-scale biofuel plant. Built in Wiri Auckland it will convert tallow from the meat industry into a high quality ‘drop in’ fuel. This will be used in a 5% biodiesel blend at Z pumps in the Auckland/Waikato regions.
CEOs at the Summit were treated to an inside view on how Mike and his team were able to get the whole company behind this way of doing things, from the board to the forecourt attendant.
Mike quoted the work of management export Gary Hamel: “Top management’s job is to design context rather than invent content.”
For Z the context was that the company is right in the middle of the problem, but that means it can be right at the heart of the solution. Mike also cited Michael Henderson’s work on Leading Through Values. This argues commitment comes when a company’s employees have a high level of clarity about the company’s values and a high level of clarity about their personal values.
“At Z our method was to get clear on people’s personal values and then to derive company’s values from that,” said Mike. “Because the company culture will be a reflection of the personal values of those making the decisions. If what the company believes in aligns with the personal drivers of the employees, then they will go that extra mile.”
Z is also a very open and transparent company. It acknowledges when it doesn’t know how to do something, and asks for help. It is also honest and open when things don’t go as planned. This openness clearly comes from the top, as those at the Summit saw for themselves.
CEO interested in attending the next Summit this Spring? Contact firstname.lastname@example.org