Sustainable Business, Better Profit with Dave Rouse - Episode 6 of Better Business, Better Life
Updated: Feb 17
3 Top Tips from Dave
1) Team Alignment
It's imperative to have team alignment and make the arrows point in the same direction towards the common objectives.
2) Bring in an independent view
Hire a service to have an outside look and a fresh perspective on your business. Get someone to help you see things for what it is.
3) Hearing the voice of the customer
Actually listening to customers and taking notes is so crucial to make a note of what people's pain points are and how you can address them. Improvement Opportunities = New Opportunities.
Full Transcript here:
Debra Chantry-Taylor 0:07
Welcome to another episode of better business better life. And today I'm here with Dave Rouse, who's a very good friend of mine. We've known each other for a number of years now, we first met through at EO, I believe but we've known about for a while before that. Welcome. So Dave is the CEO of Carbon Click, and according to the website, they connect businesses and individuals to projects that fight climate change. So Dave, would you mind explain a bit more about what that really means?
Dave Rouse 0:32
Yeah, yeah. And I apologise for my croaky voice today, too much partying. I've been yelling at the kids all day yesterday trying to teach them sailing. So yeah, carbon click is about helping to power up a business or an individual's sustainability goals through offsetting what they can't reduce. And, and what that means is, you know, you've got a carbon footprint, we've all got a carbon footprint. And we've got this massive problem in the world that our carbon footprint far exceeds the planet's capability to deal with it in it's spiralling out of control. Climate change is one of many negative impacts from it. So we all need to reduce our carbon footprint. But there's only so much technology and only so many options at the moment that allow us to move quick enough. But what we can do is we can offset the balance. And that's what where Carbon Click steps in. And as for individuals, you can offset the carbon footprint of your life. And for businesses, they can either offset the products or the residual footprint of their products. So the carbon neutral, or carbon offset. And for businesses wanting to offer this to their customers, they can also implement an option where the customer can click to offset while they're purchasing something. The classic example everybody knows is with the airlines, you go and book your flight, or you might remember booking your flight.
Debra Chantry-Taylor 2:05
It seems like such a long time ago now.
Dave Rouse 2:07
Yeah, I know. We're all desperate to explore the world again and reconnect with friends overseas. It's a tough time. But when you do get that opportunity, again, to book your flights, you'll you'll notice the carbon offset button or checkbox on on a lot of airlines. Yeah.
Debra Chantry-Taylor 2:23
And if I'm right, because I mean, that was where you originally headed right? In the when we were going to the incubator, that was what the home business model was. And of course, you were really only just starting to take off and COVID hit. So how was 2020 for you? And what did that mean for your business?
Dave Rouse 2:37
Yeah, 2020 was was just as rough. For us as it was for many we you know, we were looking for the noose, and trying to figure out, you know, whether there was a way through this at all, what what we tried was the next part of our business plan, which were always anticipated scaling into the wider e commerce space. So we'd gone from having airlines and airports that that we had already signed up, who cancelled those contracts, we were gone from that to setting up the business to trade e commerce. So when you're buying your handbag online, or whatever it is that you're buying, or your pair of earbuds, you can immediately just click a button, or click a checkbox to offsets the emissions of that product. Or even if you don't know the emissions of that product, you know that we've got a problem that's big. And that gives you an opportunity to do something about it. And the big thing that cabin click has changed is the trust and transparency of carbon offsetting. So in the past, especially with the airlines, people had lost lost a lot of trust that that money actually went to a good place. So does it actually result in trees being planted or protected? Does it actually result in positive change for the climate? And they just they just don't trust the airlines or the or any business enough to know that it's just not another money making scheme or helping them to comply? So tick box, yeah, or a tick box exercise. So what we do is we actually provide a track and trace receipt just like a track and trace on a courier which shows you exactly where your might be $2 has gone. Yeah. Right down to the cabin certificates on the government registries like the emissions trading scheme registry for New Zealand.
Debra Chantry-Taylor 4:34
Yep, that's come along way since I saw that on the incubator That's awesome. So I understand you so it started off as a pretty let's say shit year, you turn itself around. You've had a good year coming out of that obviously ecommerce have been booming you about 15 staff now is that right? Have you been locally?
Dave Rouse 4:49
Yeah, we've got 12 in New Zealand and three overseas. Yeah. Awesome. And a lot of that is research and development still because we need to like with any tech startup we need to continually stay well ahead of the curve. As we're scaling. Yeah, fair enough.
Debra Chantry-Taylor 5:07
Now, I know that you're really passionate about sustainability. But that's not your only business. Right. So you've got other businesses that you currently own? And am I right in saying you've had 12 businesses over the last 20 years?
Dave Rouse 5:18
Yeah, that's right. Most of them I have, you know, maybe for three years or so enough to get in there learn learn the industry and and conquer a challenge. Yep. And, and then exit again and be able to take a bit of time out. But but some of them have have been longer periods, some of them have been much shorter periods.
Debra Chantry-Taylor 5:39
Sure. So what's your proudest moments?
Dave Rouse 5:42
Throughout all that probably was a in business, a 25 year old company that we bought a bricks and mortar engineering, business, New Zealand based. And that was a bit of a management buyout, where I was called in as an external party. I'd done some auditing and background work for that company in the past, just to help them out. And so I was a little bit familiar with the backend processes behind it. So we were able to get an restructure that business for triple bottom line profitability.
Debra Chantry-Taylor 6:22
So explain that. For the people who are listening in what do you mean by triple?
Dave Rouse 6:28
Yes, so so what we look for with triple bottom line profitability is they've got to be sustainable financially. They've got to be sustainable from a social perspective, and together known as socio economic responsibility. And then the third one is environmental sustainability. So is that a circular economy business? Or are you having a net deficit effect on the planet? And if you are, what are you doing to make up the balance because, you know, our kids and their kids will run out of land and landfills. At some point in time, we, these are issues we have to address. So when I look at a business, I look at the opportunities for that business to turn it into a more sustainable business all around. I wouldn't do it if I couldn't get better social outcomes, environmental outcomes, and financial outcomes. All three have to tick the box.
Debra Chantry-Taylor 7:24
Fantastic. Okay. And I know on a personal level, you know, this sustainability is a big passion of yours. And you were involved in sea cleaners. Don't tell us a little bit about that.
Dave Rouse 7:32
Yeah. So this was coming out of, you know, my passion for the environment. I grew up out in the bush. You know, we we didn't have gladwrap on our sandwiches or anything like that. In fact, we're lucky if we choose to go to school. No, and you walk 10 miles in the snow? No, there was no it was no event it was just our parents couldn't force us to wear them, you know, preferred bare feet. We're just, you know, we loved it. And then we moved closer to town and and I started to see you know, less sustainable ways and, and, you know, if we had rubbish in the bush, we didn't have a regular rubbish collection, you know, we had to take it somewhere and deal with it. So you're very cognizant of making sure that you didn't create much rubbish. Because it was another hassel here, it's just so easy, because it doesn't matter you don't think about it, everything just goes into a bin and disappears in because it does appears out of sight out of mind, you don't know that it's a problem. But see cleaners was one of those opportunities to educate on single use plastics. It also came from my love of diving and fishing and spending time on the water. And in New Zealand, increasingly, I was seeing you know, as I'm swimming, I'm seeing plastic things floating past me and straws and simple things. Plastic bags are terrible. And and, you know, I was reading stories from Kelly Taltons and other marine biologists about the number of turtles that were dwindling in population and generally speaking, it's because they're eating plastic bags because jellyfish is a big part of their diet. So Sea Cleaners was really founded to educate in trying to risk be the ambulance at the top of the cliff, but having impact by being the ambulance at the bottom of the cliff, so we took groups of corporates and school kids out to islands or coastlines around New Zealand to begin with, to actually do the cleanup. So we use the wind in the in the tides as our net, you know, high tide all the plastics gets deposited. And then when the sea breeze comes in the late afternoons and the tide changes that carries back across the harbour again, so so you're able to predict where the rubbish buildups will be. You can click that before it passes back through the harbour again, yeah, it's quite an efficient way of doing it and and that education really sinks in. When you're giving the talks, and then people are actually saying, you know, we've seen Kiwi skeletons with party balloons in their ingestion. So they've obviously thought that balloon just looks like a worm or something. I don't know what the kiwi thinks, but all we do know is that all of those plastics that we just take for granted have an impact sometime downstream. And and that was the idea is, is to prevent more of that impact. And, and we quickly got good corporate sponsorship and local government sponsorship to expand in fact, right now see cleaners is doing all the America's Cup,
Debra Chantry-Taylor 10:41
I actually saw a truck out on Sunday was out walking the dogs and it reminded me of you, but you're not involved in that anymore are you?
Dave Rouse 10:46
I had to I had to pull back in the middle of last year, because mainly because carbon click had grown so much faster. And with COVID happening, there was so much change going on that I just needed to be fully committed with all hands on deck was Carbon Click, we're talking 80 hour weeks for probably nine months. I just didn't have the bandwidth to carry on with it. And it broke my heart having to you know, leave it after building, you know, with others. Yep. building it up to such a good position. But we've got to pick our battles, right. Yeah, absolutely.
Debra Chantry-Taylor 11:22
It was all hands on deck and COVID hits, that's for sure. Yeah, I just wanted to ask you. So you've had these these varying businesses and you're sort of modus operandi is to go in there and look about how you can, you know, make the business more profitable, while still maintaining sustainability and the other important things, a lot of people think that introducing sustainability comes with a cost, and therefore, it's going to erode your profits. Can you tell me how you approach these businesses and what you do to, you know, to focus them? And what effect that has?
Dave Rouse 11:49
Yeah, I mean, it's, it does come at a cost. But that cost is like any cost of improving a business. You know, if, if you want a new machine that operates twice as fast and uses half the fuel, it's going to cost you money, it's all an investment. And those investments might pay off, or they might be for the right reason. And for me, it was a non negotiable that we have to be a sustainable operator. And it's about standards more than investments. But in saying that, more often than not, if you take a big picture approach, all of the sustainability efforts that we've put into a business have resulted in helping to make that business, give it a social licence to operate, and give it a better exit opportunity, because you're taking a lot more boxes for investors and investors these days. And directors, they want to see sustainability is an important part of their portfolio too. And the financial returns normally come from over time, improving your brand image. And if you've got a better brand image that might be what gets you a client's over your competitor who just doesn't care about this, or is not far enough on the journey yet. Yeah. So from from my perspective, yeah, I could have potentially made a little bit more money if I'd not cared about it. But I certainly made plenty by doing the right thing.
Debra Chantry-Taylor 13:23
Sure. And when you've taken a lot of businesses that have been very reliant on the business owner, and then worked with that, to remove that reliance on the on the business owner, first of all, why is that important? And secondly, what does that do to the business in terms of value at the end of the day?
Dave Rouse 13:39
Yeah, so I mean, probably the majority of businesses in New Zealand, at least in globally, have been founded by a good idea and a great person, and they've brought another partner or another team, or maybe it's a husband and wife to to build this business. And that businesses their nest egg, it's their retirement plan. It's, it's everything. They never ever anticipate selling that business. Then something happens or they have a heart attack or something, you know, they realise life's life's short, and they've built more like a jail around them. And they can't get out because every system and process because they're so clever, usually, they're able to plug holes much easier than training somebody else or fixing a process, which takes far longer. Yes, but it's it's so much easier just to plug the hole yourself and keep going and eventually you run out of fingers and toes and think Crikey, we're still growing and there's more holes appearing and because there's more holes appearing. All I'm going to do is take my finger out of that hole and put it into this hole and and you start to lose scalability hit your glass ceiling. And a lot of businesses that I've looked at that I've wanted to purchase have been in that situation where they've plateaued on growth and plateaued on profitability. Because of the business owner, so then the business owner decides one day they want to sell. And or maybe they have a marriage breakup and they have to sell or something circumstances change. That's, that's one thing we know for sure. Yep. And because there's been no planning for an exit in the businesses and not ever going to be exit ready in their current business model, they have to sell the business for market value, which is significantly lower than what it could be worth if they've just got those systems and processes sorted out so that the business can rely on them as a business owner. And, and often have gone into businesses where they've gone into a lost territory without the business owner, because they've had an epiphany or, you know, found love and just gone overseas and let the business come crashing down, or for whatever reason they've had to duck out of the business or decided to. And that businesses now, making a loss and potentially worth next to nothing. Perfectly good business. And that's they've, before that time, they've spent years building this thing up, and they've wasted all of that energy for very little returns, business owners usually earn very, very little minimum wage, minimum wage, if you're lucky, sometimes Yeah, I know I've been there. And, and so all of that effort, you don't want it to be for nothing, you want to try and have your business really to be able to capitalise at any point in time that you need to.
Debra Chantry-Taylor 16:33
So that's all about letting go as you were hitting the ceiling. And really the only way to get past that hitting the ceiling. And it happens to us all at different levels, individual departmental organisational, the only way you can really move past that and keep growing as opposed to just completely plateauing or worse, still failing is to actually learn how to let go, how do you how do you do that? Because it's tough right?
Dave Rouse 16:54
That's a really hard one. It's like, yeah, you know, living your baby go, whatever parents can probably relate. When you leaving a baby with a babysitter, or sending them away on holiday, or whatever, yeah. It's, it's just something you have to do, you have to be able to separate yourself from the business, you are not the business. If you are the business, it's, it's not a business, it's a job, right.
Debra Chantry-Taylor 17:22
So what would be the kind of the steps that you would talk to people about taking in terms of, you know, making sure the business isn't built around them?
Dave Rouse 17:29
Generally speaking, you need to be able to prove resilience through making sure that I would test it on a small scale, first, reduce your hours to four day work week, and all those kind of things. And see how the business fears see where the cracks are. But it's, it's really getting external eyes on the business as far as systems and processes, which is really important. So having an independent director having a good mentor, to be able to map out systems and processes. And down to a detailed level, depending on the size of the business. For larger businesses, for example, we would put in place in the manufacturing business, 25 year old engineering company, we're in our heads of engineering through lean manufacturing courses, so that they could learn the end to end processes learn where they were creating waste, learn where they could improve profitability and turnaround of, of everything that they were doing, instead of a business owner having to come and point out on the same things on a daily kind of basis. So depending how big you are getting those systems and processes mapped out in an independent person to help you with that is probably the first and most important step I would take. And then empowering your staff to actually recognise continuous improvement cycles around that. And and, and incentivizing your staff to do so
Debra Chantry-Taylor 19:00
We were chatting about this before we came on the podcast, you said that often businesses don't incentivise, incentivise around the end goal. And so they might be incentivizing for productivity, where in actual fact, the business is looking for something different than that. So give me an example of Yeah, how to incentivise to get best results.
Dave Rouse 19:17
Yes, absolutely. So I've been in businesses where they've had, you know, they've produced something or a service and they've sold something. So they got sales teams, and they've got teams that do the work. Those teams that do the work don't have any incentive against their pay for producing more. Yeah. So they've got nothing to strive for. They've got no ongoing training to help them achieve higher targets. And you really want them to be able to better themselves as a result of working for you then, you know, they're not just a machine they've, they've got to advance and it's easy to get that in place. It's same with some sales people I've been in organisations where there's no commission, or financial reward and their pay that directly attributes to better quality sales and in better sales volumes. So it's just making sure that all of those the KPIs are all aligned to the business goals for the right people, and often there's a team KPI component as well missing where if the business does better, everybody does, you know, has a bonus attached to that. So I've generally gone in with a package approach.
Debra Chantry-Taylor 20:33
Because it's all about the same page. If a company doesn't have everyone in the company doesn't know what is going on and where we're headed. How do they work towards getting there? So I suppose
Dave Rouse 20:41
Yeah, the the arrows have all got to be pointing in the same direction. Yeah. And from from the employment contracts right through. So the staff motivational talks through so the sharing the, you know, business strategy and an annual, at least basis, and working down to management teams, depending on size of the business to make sure that their teams are also empowered in the same way. So the best way to get them to listen is to get them to teach. Yeah, and that's, that seems to have worked really well. From my experience.
Debra Chantry-Taylor 21:15
Fantastic. Okay. So if we took guys, the listeners and three points they can walk away with here today, in terms of what they can start to do at least to get on that journey of your triple bottom line, bottom line, profitability, what would that be?
Dave Rouse 21:28
Yes, so the most important thing there is to Team alignment, by far and large, making sure those arrows are pointing in the right direction. So have a good HR person review, and potentially help you to restructure. If people are set in their ways you might have to cut the umbilical cord. You know,
Debra Chantry-Taylor 21:47
Tony talked about that a few weeks ago. Yeah, sometimes you gotta let those people go.
Dave Rouse 21:50
Yeah, yeah. So best thing for them a fresh start, and in the best thing for your business to bring some fresh life in
Debra Chantry-Taylor 21:57
All on the same page. Right people? Right seats? Yeah, yeah, yes. And incentivising to achieve the results.
Dave Rouse 22:03
Yeah, that's, that's right. So sorting out that team alignment. Number one, incentivization. Number two would be bringing an independent view.
Debra Chantry-Taylor 22:12
Yep. So why do you say that? Because you mentioned that earlier? What do you want? Why isn't it independent?
Dave Rouse 22:16
Because we all have a rose tinted view of our own theories.
Debra Chantry-Taylor 22:22
Yes. So when you Google something, right, yeah, we look for the answers that you want to read,
Dave Rouse 22:26
Only going to pay attention, really, to the data that supports our theory, because we always want to be right, that's a human nature, whether we're proving it to ourselves or anybody else, to the detriment of the business. So what you need is somebody independently to see, you know, you need to be taking independent surveys, and that sort of thing, which is the third thing I'll talk about, but you need somebody independent, that can look at the data, look at your market validation, and see whether that makes sense against your strategy and focus. So that would be the second thing, independence director or business mentor that can help you see, see the data for what it is, like, of course, of course. And then the third thing is having the voice of the customer, so you need to make sure that you're listening, because that's where opportunities come from improvement opportunities, new opportunities. In so that's, that can be as simple as net promoter scores, or it can be as complex as customer interviews. But you want to make sure that you really understand why your customers are buying from you what your customers want from you, and and whether there's a gap and expectations that leaves you exposed to a competitor coming in and doing a better job.
Debra Chantry-Taylor 23:51
Yeah. Fantastic. And I suppose finally, just in terms of sustainability, what were the one sort of key tip around building a sustainable business? What are the things that you've learned in your 12 businesses?
Dave Rouse 24:02
Yeah, so from a sustainability perspective, again, getting a quick a quick and dirty I call it independent audit from a sustainability consultant. It can cost very little and give you a few ideas which you can prioritise where you your biggest opportunities to improve and and start with those but there are lots of eliminating wastage is probably the best results I've had out of all businesses, cutting back their wastage, automating systems and processes so that you know your lights aren't on where they don't need to be. If I use that as an analogy for for all processes in the business, yeah.
Debra Chantry-Taylor 24:47
Nice to start fantastic. Hey, look, always a pleasure to have you on here. If people are interested in carbon click and think it might be for their business. How would they get in contact with you?
Dave Rouse 24:56
You can just inquire and there's a chat on the website, carbon clipboard. Come, you can connect with any of our team on LinkedIn. Just look up carbon click, we're all there. So you can go straight to the right person. And similarly on the website, we're on first name basis at carbonclick.com. We have a policy of not employing two people with the same name.
Debra Chantry-Taylor 25:18
Okay, no more Daves then, right. I Dave, look, as always, I love I love chatting to you. I could talk for hours, but we don't have hours, unfortunately. But I appreciate you coming on sharing your experience and we'll look forward to seeing you again.
Dave Rouse 25:31
Debra Chantry-Taylor 25:31
Thanks very much. Cheers.