Ranjay Gulati:
One of the great challenges in confronting global climate change is the massive amount of energy used to grow food and the greenhouse gases produced by the agricultural sector. That problem is pretty familiar. What's less obvious is the tremendous environmental impact that comes from the food supply chain beyond the farm. That's where a tremendous amount of energy is consumed and waste is produced to get food to our tables. A recent study found that the processing, packaging, transport, and consumption of food are pushing the supply chain to the top of the economic sectors that emit greenhouse gases. My guest this time leads a Swiss-based multi-national technology manufacturer that is taking on the sustainability problems and challenging its customers to do the same.

Hi, everyone. Welcome to Deep Purpose, a podcast about courage and commitment in turbulent times. I'm Ranjay Gulati, a professor of business administration at the Harvard Business School. Stefan Scheiber is the CEO of Bühler Group. Bühler makes high-end food processing equipment as well as machinery for the automobile industry and other sectors. You may not have heard of Bühler, but this family-owned company dates back to 1860 and it plays a big role in the global food supply chain. The machines that Bühler makes are used by food companies across the globe from Barilla Pasta to Lindt Chocolates.

In the summer of 2022, Bühler brought together a 1,000-plus leaders in the fields of food, mobility and animal nutrition to talk about responses to climate change aimed at creating a sustainable future. They called this unusual meeting "Networking Days." I was honored to address the group on how to maintain clarity of purpose in their quest for an ambitious set of goals: improved energy and food security, reduced waste and water usage, lower CO2 emissions, improved biodiversity, new perspectives on mobility, and more equitable wealth distribution. When I sat down with Bühler Group CEO, Stefan Scheiber, I asked him to describe his work at the company and how his sense of purpose and courage guide his leadership.

Now, one thing you've done as CEO of Bühler is really make sustainability an important part and a pillar of Bühler. Now, in the world of greenwashing and companies doing all this posturing out there, you have tried to really make this a central piece of your story. Now, when you began this journey, you had customers pushing back saying some pretty harsh things to you. How did you process that? A: why are you doing sustainability? What's your motive company-wide and personally, and how do you deal with kind of direct, pointed criticism from some important customers?

Stefan Scheiber:
Well, to the first point, we have currently eight billion people on this planet, and every child, every woman and every man on the planet needs one thing every day, which is access to good and healthy food. This is not the reality. Hundreds of millions of people are suffering from malnutrition every day. And then in other societies, we have the problem of obesity and both problems are unbearable, really. And then we have a situation that a very large part of water energy, land usage is actually being used to produce food. And then 30% of all of this food is being wasted before it even goes to the consumers. And the projections, Ranjay, are that we are going to see billions of people more on this planet over the next decades.

So in other words, the question of how we produce food in a sustainable way for more people [so] that we generate a good living for the generations in the future is ethically, but societally, but also technologically one of the key questions of the planet. And to be able to play a role there, even a tiny little one, I believe is very fulfilling. And also, to bring people together from science, academia, processors, the NGOs, and suppliers into these value chains and together try to find solutions that... How can we tackle that? And how can industry rather than be[ing] seen as the problem in the society actually be seen as the solution with the technical solutions and the advancement and innovations going forward? That, I believe, is a very important aspect of this sustainability strategy, which we have because it addresses a necessity and an issue, which is one of the largest ones which we have on our planet. That's one part of the answer.

And the second part is that if you expose yourself, if you come up with a strategy, if you address these topics, of course you are going to be criticized. And I believe it's important that we are ready and embrace the criticism. Of course, I not necessarily need to agree to everything, but it's important that we allow on these platforms to have different opinions and have good and strong and robust debate about what might be the solution of the future. And clearly not everyone has the same opinion or is on the same level of being exposed to these problems because the discussion is totally a different one if you are living in Japan or Russia or United States or Switzerland or Sudan of all places. So we need to be able, I believe, to bring different opinions together and then still try to aim at rallying behind certain scientifical facts and then do address them in a way. And it's important to take all people along, also those people who have a different opinion.

Ranjay Gulati:
What do you say to somebody who says to you, "Stefan, this social impact, sustainability and financial returns, they can't go together. You're telling me to pay more for sustainability. I don't want to pay more. I can't afford it. Maybe, in Switzerland you guys can do it, but in my market, in my economic circumstances, I need to deliver returns quarter-on-quarter, year-on-year for my family, for my employees. I'm sorry, this is too farfetched for me"?

Stefan Scheiber:
Well, that's a good point. And of course here, the economist in me comes out, and I give a purely economically-driven argumentation. It is very clear that over time the costs which are currently not part of these value chains will be internalized. The costs for land, for energy, for water and gas, for not using side streams, et cetera, et cetera. These costs over the next decades will actually go up and will be part of every business line in [the] future. And the moment that is going to be happening, and we see that happening already today in this current inflationary situation or in energy shortage situations, then this becomes a very economical line of argumentation because then you need solutions to address that. Then you need to have technical solutions, innovation, digitalization, the best of the physical and digital world such that you can do things much more productive and much more sustainable. And I think those are the argumentations I would use. And then it is not a nice to have thing, but then it becomes a bare necessity and a driver for business, and that is what I'm convinced of in the long run.

Ranjay Gulati:
Courage is an essential quality in a successful leader, and I subscribe to the belief put forward by the great South African leader, Nelson Mandela, that courage is not the absence of fear, but the strength to take action in the face of fear. I asked Stefan Scheiber about courageous leaders he looks to for inspiration.

Stefan Scheiber:
Well, I would perhaps make the link to one of my personal heroes and also the link to my time when I lived in South Africa as a still relatively young man in the times when the political system in South Africa changed - 1994, '95 - when President Mandela came into power after 26 years on Robben Island. That courage Mr. Mandela showed when he became the president and when he sort of tried to embrace everybody in the country and still stick to his principles of one man, one vote, and of course bring Apartheid behind them. That was very, very impressive for me.

Ranjay Gulati:
What was impressive? I mean, is it this idea that he had the courage to forgive or was it the courage to face off opposition? What specifically did Mandela do that leads you to believe that was courage?

Stefan Scheiber:
It was his ability to be consistent in what he experienced and what he stood for and what he absolutely wanted to change in the country and with the people, but at the same time try to reach out to the other parts of the people, to his, say, opponents, and to somehow create a pathway for them to have a successful future too and have a perspective too. I believe that that was so much more courageous than just to remain one-sided and actually drive the one message home, which is to basically now give the indigenous population much more power and that would actually then result in the other part of the society to have to go or to go into violent situations, et cetera. The way he embraced the society played an important role there, the way many symbolic acts played an important role, but then also the committees through discussions to overcome the history and such, they could actually leave it somehow behind it and shape a future together. That, I believe, was so courageous and it changed a whole society and it was also then a role model for many other people.

Ranjay Gulati:
I'd love to ask you, can you think of other examples personally you've encountered in work or outside work where you saw somebody taking action in the face of fear?

Stefan Scheiber:
Yes, of course, the pandemic created situations, many situations for me personally as leader of a company, but then also for many people in societies, but also in our organization, which we never were confronted in the past and which was very, very stressful I wanted to say. And remember, two years ago we had a situation in India where really people got ill by the hundreds and thousands and thousands and thousands of people passed away. It was very critical in India at the time, in the big cities and in rural areas at the same time.

And our leader of Bühler India in Bangalore, he actually was inspired and passionate about trying to save as many people he could possibly do. He was trying to organize test kits, he organized vaccinations, and he organized that for the whole of the company, then the whole of the families of the company. And he invited customers and suppliers to come to our place outside of Bangalore and actually get access to vaccinations. That was such a display of courage because he exposed himself, he did something. He literally changed many lives in and around him. So, it was very difficult and he did a great job there.

Ranjay Gulati:
Tell me about a time when you personally have experienced fear at work. Maybe it was a project. Maybe it was a big decision. Maybe it was a mistake you had made and you had to undo that mistake. Think about a time when you actually had to confront what looked like a scary situation.

Stefan Scheiber:
I remember there was one particular year in my career where I was promoted to a new position, and at the same time I was still in charge of the old position. And physically/geographically, these were two separate sites, so I had to somehow try to do too many things at the same time. That was, I think, the essence of the issue. And I realized that on the one hand side, I would not be on top of my job, a new function, and not doing the right things there and not be performing there. And at the same time, I was not close enough to my old function. And there I felt that I would be in a lose-lose situation on both sides. And that was a learning for me ever since.

I was afraid that I would perhaps also lose my job or lose my people, lose my credibility. I was afraid that they would actually make certain mistakes then. And it was a very important learning for me because I learned that I needed to really set focus and pre-plan things much better and that I needed to also plan successions much better because that was my responsibility and I did not do that right. And that created that situation in the first place. And that was a learning I will never forget for the rest of my life as a professional.

Ranjay Gulati:
How did you deal with the fear? In the moment, like you're feeling scared that you might screw up, you might lose your job, this is going really not well, how do you... Fear can hijack us, right? Sometimes fear can immobilize us.

Stefan Scheiber:
Yes.

Ranjay Gulati:
It can also make us very emotionally charged. How do you kind of take control of your emotions rather than the emotions taking control of you and then apply some calm thinking to it? How do you do that? How do you compartmentalize that fear?

Stefan Scheiber:
To things there, Ranjay. I believe my wife helped me quite a lot because she radiated stability for me and I could vent off certain frustrations with her. I remember that she was a stabilization factor for me. And the second part, I also remember that I was starting to do marathon running at the same time, and this running and the time exercising physically taught me or gave me a way to sort of channel the energies and recreate energy. And ever since I have been running, and that's an interesting observation and learning.

Ranjay Gulati:
Let me ask you, have there been any moments where you observed courage and that has transformed you as a person, whether it's the Mandela story or the India story or any other story where you felt really... Or it's something you read about?

Stefan Scheiber:
Well, if I may, Ranjay, my heroes, I adore them, but they are big personalities, and many people know them. But I am fascinated by the smaller stories of ordinary people, not being mega stars or so, doing things. I was recently in Sudan, and I met a customer of ours in Sudan and he taught me about his program to train women, mothers in Sudan, how to bake good bread and how to prepare a good dough in the situation these people live, right? Sudan is a very harsh situation for people. And to see these faces of these women and with that creating food for their families and do that in a proper way... That, for instance, I thought was a fantastic display of courage and of doing a good thing, which helps to change and improve people's lives in a very practical way. And I found this entrepreneur in Sudan touched my heart and soul with that in a place where I not necessarily expected it.

Ranjay Gulati:
How is that going to change you going forward?

Stefan Scheiber:
I think it's this aspect of whilst we are all having big ambitions and CEOs have big egos and companies have big targets, et cetera, I think it is really teaching me the lesson, it's the topic of which one life did you influence in a positive way? Which one practical thing did you do and contribute that something developed in a better way than it used to be set for? So it learns me to do things in small changes, but do it rather than aim for a big picture and then get stuck somewhere. So my learning is that whatever I do, at the end of the day, it's not about what we say and what we aim for, but what we actually do and which personal lives or which businesses we actually influence and change. And there one small step is in many cases, much more than a big ambition.

Ranjay Gulati:
Big ambition is a major part of the long history at Bühler. In 2011, the company set out to make a real impact in addressing climate change. Bühler engineered new food processing technologies to reduce the energy and water used across the food supply chain. It also targeted food waste. And Bühler set an ambitious goal of 50% reduction in these areas by 2025. Some customers pushed back, but Stefan Scheiber and Bühler stayed the course. I asked him about the role of courage in this kind of tough business innovation.

Stefan Scheiber:
It reminds me of a decision we had to take a couple of years ago when really the automotive situation was in a downward trend already and then Corona hit and investments were basically imploding. And we needed to still decide whether in one business line which is linked to this automotive business, we would be still going to invest into a new technology, which we saw somehow coming. But it was a very weird situation because business was imploding, costs were increasing, margins were low, but then it helped to have a little bit of a more longer-term view. And I was reminded by our owner who always said, "You can do everything in your business, but you should not reduce the rate of innovation."

So I still applied this learning, and we decided we would invest large amounts of money into these new technologies. And now in the current situation, it represents more than 50% of the sales we are doing in that segment. And that taught me that there are times when, as an entrepreneur, you need to take decisions. And I must admit, it could also have gone sour. But I think when you want to be really innovative, then you have to also deal with failures, and that's very important and that needs a certain courage. Also, courage to accept failure and then learn out of it, but move on.

Ranjay Gulati:
You also have talked about change is not possible without courage, and it requires challenging [the] status quo. How have you embraced courage to make changes in your organization that maybe otherwise were not so easy to think about? Give us an example of something you had to change pretty dramatically in your organization and really... you weren't sure it's going to work.

Stefan Scheiber:
Well, I give you one example is that we actually came to the conclusion that we needed products which are designed in emerging markets for emerging markets... in order to be more cost competitive and in order to be having products which would meet local demands in these markets, which are totally different than demands which we see in more the Western world. And that for us was a very challenging decision to make because, of course, it somehow also challenged the success stories of the past, which were more geared up to good quality, high-tech, top products and services.

But now there were different drivers, different decision-making points there, and it was very difficult then to convince the engineers in Switzerland and the Western part of the world that we would actually do that and that would be still supporting their business and not take it away from them, not take simply the know-how away and the future away. And we were not really sure whether that outcome would actually be so good, and whether this would be a win-win or a lose-lose situation. But we still did it and we are very glad in hindsight that we did it, that we now have products also for markets which have different decision-making criteria like for India, for Africa, some parts of Asia.

Ranjay Gulati:
Wasn't it scary that you were going to cannibalize possibly your own European product lines?

Stefan Scheiber:
Absolutely, absolutely. But we then came to the conclusion then, if this cannibalization happens, then it will happen with or without us. And if this thesis is correct, then we rather do it ourselves than we allow it our competitors to do. And hence we did it. And you know what? At the end of the day, we won market share in the emerging markets, and we actually won market share in the high-end markets too, because it forced us to really think even harder of the value propositions of the high-end applications because now the blur was taken away. It was very clear where we needed to play. So in hindsight, it was a very good decision.

Ranjay Gulati:
A third definition of yours that I discovered that you have used in your speaking and talking about the word "courage" is you've talked about courage as having a clear vision, pursuing it consistently and not shying away from taking bold steps. Give me an example of that.

Stefan Scheiber:
Yes. Well, that example I just described was a very bold step for us because it changed the way we were set up. We grew, and that was very important. Another one which comes to my mind was that we had a situation whereby we were given the possibility to acquire another family company a couple of years ago. And because of them being a family company, they said, "We know you, you know us. It would be right for our future to be in your hands and in your family and in your business setup because we believe we will have a stronger future in your ecosystem. Would you be ready to acquire us?"

But they actually said, "You got to be fast, and you are not allowed to make a detailed due diligence. You know that our company had been around for more than 100 years and we have our values and we were profitable, so you cannot come and actually assess our company for a full year and everybody is unsecure, et cetera. So you have to make up your mind, do it or don't and come to a conclusion." And we came to a conclusion. I was very happy that our board supported us in that decision. Our chairman was very helpful there and the whole board, and we did it, and the outcome was very, very positive. In hindsight, it was actually, I would actually say rather courageous, but it was a calculable risk given that we knew the culture of this company. And in that sense it was very, very positive that we did it.

Ranjay Gulati:
In many instances you've talked about having a long-term vision for Bühler. Do you think being privately owned, a family-owned business allows you the luxury to take a long view on business? Or do you feel that you also have to deliver short-term results while keeping an eye on the long-term? How does that change your perspective?

Stefan Scheiber:
I think it is as much a responsibility and can be also a burden that you have this sort of heritage of 162 years. Then it is also a wonderful encouragement, a motivator and shaper of the future. What I mean is, of course, we don't have the pressure of the stock exchanges where you actually measure the value of your shares every day, every second of the day. And where you have an immediate sort of pressure valve, which is an indicator of your performance. As family companies everywhere in the world, we need to create this ambition internally.

But on the other hand, I think it's important because if we want to be sustainably successful, we need to generate the profits to secure the future of our business. We need to basically earn the money we need to innovate and to spend in projects for the future by ourselves. So we also have to be ambitious. And I think there are advantages and disadvantages in both situations, but I must say this combination of having strong purpose, strong values, and a long-term view on things... At the same time, having the ambition to be performing as an organization is a very cool combination, which I like very much and which I believe is a very good model, not only for Bühler, but for thousands of our customers in our field. So I believe in that model, and I'm very happy to live in this world.

Ranjay Gulati:
In the years I've spent studying and writing about purpose and courage in organizations, I've highlighted the need for really effective leaders to have a deep sense of personal purpose. Many of the top executives I've met have a clear inner compass. Their personal mission is completely their own, but it can also be a powerful tool in helping define, articulate, and deliver on a company's deep purpose and core values.

Let's turn back to you, Stefan. What are your personal sources of strength? You have a lot of demands on you, your time, your attention, conflicting advice, making tough decisions. This is a hard, demanding job. What is it in either your family or your past, your childhood, your community, your belief system, what are your pillars of strength? Where do you draw your strength from to come back every day and do what you need to do?

Stefan Scheiber:
Well, of course, my family is, and my friends, particularly my family, are most important to me as a source of stability and value set by and large. That's, of course, the basis of everything. But if I take it to the next level, it is two things, I think, which create lots of energy for me. One is the interaction with people. With people from within Bühler, we have fantastic people, young people, more experienced people, experts in certain fields. And I learn every day, and I'm so inspired by their passion of what they are doing, and that's super cool. But also by some of our suppliers or many of our customers whom we have been in exchange for generations. And it's so cool to see what they are doing and how they are finding solutions to create a good future for their businesses. So, I'm a people person. I draw a lot of energy out of that.

And another aspect is, by education, I'm an economist, and I must say I still have no clue why I chose economics because I'm fascinated by technology, by engineering, by automation, by software. And the reason why I, despite on being an economist, did not go into consulting or banking or insurance, et cetera, which Switzerland is very famous for, but actually into a machine-building company, was that it was so cool to see that we would be building assets which last and produce something and which produce for decades and create food for people. And that food is actually so essential for not only wellbeing, but also education. Because without food, you cannot learn, et cetera. It also creates workplaces because our customers have a lot of employees. And again, that is a workplace for many families, et cetera.

So that, say, tangible part, the physical part of it, to build something which lasts, which you can see and touch and change over time, that was always very, very fascinating. It gives me a lot of energy. It's interesting to see actually our assets all over the world is installed and working and producing good product. And that gives me, it's a simple thing, but actually it's very passionate. I'm a proud economist, but I'm actually fascinated about technology.

Ranjay Gulati:
So, Stefan, you've talked about purpose a lot. For Bühler, you've really embedded purpose into the organization. What is your purpose?

Stefan Scheiber:
Wow, that's now a very, very difficult question. I think it's important that I am consistent and true to my own values as a person per se. And I would like to also see myself courageous enough to implement or sort of keep values high in businesses like in our business. And hopefully also, and that's the next thing, be able to contribute with that to a larger scheme, in our case now, for instance, to the food value chain, and make it better. Because, look, at the end of the day, we all know that we don't own this planet. And to be able to now hopefully bring people together to generate a better world for the future is something which drives me a lot. So that is a little bit my purpose. And even when I'm not going to be the CEO anymore, that part is going to definitely still be around. And these are things which I'm going to invest in the future personally as well. So, that's my purpose.

Ranjay Gulati:
Stefan, one day you're going to step down and go off into the sunset, leaving your job as CEO.

Stefan Scheiber:
Yes.

Ranjay Gulati:
If there was one word you would hope people would use to describe you, what word would you hope they would use for you? What do you hope they would say about you?

Stefan Scheiber:
Oh, I hope words like "integrity," "a people man," also "a certain consistency." Hopefully "good leadership," "good with people." I think that is very important to me. If they say that, I'm very happy. And I must also say something else. Yes, every career comes to a certain end, but I believe in that context it is not so important to ask the question, what do you end? But what do you start anew? And which new perspectives am I creating for myself, but also for the people around me? And perhaps that is also a notion, which I would actually say that would be cool if people would remember that.

Ranjay Gulati:
Stefan Scheiber is CEO of the Swiss-based Bühler Group. Bühler Technologies contributes to making the food we eat, the vehicles we drive, and a wide variety of other applications.

For more of my conversations with leaders in the business world navigating the 21st century business environment, visit my Deep Purpose website. While you're there, you can also find out about my book titled Deep Purpose. Companies that are serious about establishing and working towards a deep purpose find that it delivers game-changing results for the workers, the shareholders, and the larger society. So visit with me at deeppurpose.net. This podcast is produced by David Shin and Stephen Smith with help from Jen Daniels and Craig McDonald. The theme music is by Gary Meister. I'm Ranjay Gulati. Thanks for listening.