How Vik Bansal Used the Four Building Blocks of Transforming a Business to Take Cleanaway from Good to Great
If you are a business leader, you are probably hyper-aware of the fact that the world has been changing at an increasingly rapid pace. From new industrial platforms, geopolitical shifts, global competition, to changing consumer habits, the demands that are required of a business in order to be successful are in constant flux. You need to be a profitable innovator, to seize opportunities, to lead and dominate your industry, to attract highly committed talent, all while also carving out a socially responsible role in which your organization can make a difference. If these ideas are not something that is constantly on your radar, your business may reach a point of stagnation as old practices, structures, technologies, and cultural habits that used to serve you now hold your company back. It will be in need of transformation, a major shift in an organization’s capabilities and identity so that it can deliver valuable results, relevant to its purpose, that it was unable to master before. In doing so, your business can develop an ongoing mastery of change, in which adaptability feels natural to leaders and employees. But this is much easier said than done.
In a comprehensive research and synthesis project performed by Strategy+Business magazine in 2018, they found that although the cases varied widely by region, industry, circumstance, and personality, each example of a successful transformation made use of four pivotal building blocks: creating a strategic identity, designing for trust, mastering the pivot from sprint to scale, and treating your legacy as an asset. According to the publication, these four components consistently helped companies shake free of their self-imposed shackles, adopt dynamic new business models, and raise their game in a swiftly changing world, and required a cultural shift and highly engaged leader who can take control of the organization’s future.
In looking at the work Vik Bansal has done with the Australian waste management company Cleanaway, it is clear that his transformation of the company involved each of these aforementioned building blocks. In 2015, the company was struggling with unsatisfied investors who were troubled by the company’s growing debt burden and a lack of strong leadership that saw the company go through four executive officers in three years. Then operating under the name Transpacific, its strategy lacked cohesion and was failing to recognize the growing role that waste management had the potential to play in the scope of sustainability and a circular economy. Today it has risen over 120 places on the ASX market index and market capitalization has grown from less than $1 billion to over $5 billion, and much of the company’s success has been attributed to Bansal and his strategy for transforming the company. He showed a foresight for the changes in the industry that – in combination with building a strong foundation for the business – allowed it to gain a crucial edge over competitors, and solidifying its position as a thought leader in the waste management sector. Below, we explore the four building blocks in further detail, and look at how each was used by Bansal to turn Cleanaway into the largest waste management company in the country.
Treat your legacy as an asset
After a successful stint as the chief operating officer of a manufacturing company based in the United States, Bansal sought to return to his home country of Australia. He was considering a position at a trio of companies, and found that of the three Cleanaway was in the worst shape. However, although the company was struggling and management turnover was high, he has said that he decided to accept the job because in his time researching the company he found that the people who worked there were truly the core of the company, and they inspired him to see the business’ potential. He knew that the company had a great deal of value, otherwise it would not have survived for over 40 years.
When it comes to transforming a business, invariably some elements of the organization will not fit your new identity and operating model, and must be left behind as a company moves on. However, it is also important to recognize that there were parts of the business that worked, and creatively yet dispassionately determine which elements must be jettisoned and which are a crucial core of the business itself.
Prior to Bansal’s time at the helm, the company was operating as a multi-brand business with Cleanaway sitting among others under the larger umbrella of Transpacific. Although he was initially hesitant to consider rebranding the company, recognizing that it could potentially appear as a mere surface-level change, he soon realized that the Cleanaway name was one of the company’s most valuable assets. It not only had the longest history, but also had a strong brand presence that was indicative of the company’s goals. Bansal was able to discover what it was about the company that made it unique and had allowed it to survive, while also identifying the elements that needed to change in order for it to transform and grow.
Design for trust
One of the key indicators for how the transformation of a business is going is the way people feel about it. There are often many tough decisions that have to be made, from selling part of the business, layoffs, to radical shifts in strategy. However, if one develops ways to attract and deserve the commitment of all of your stakeholders – meaning not just your shareholders, but also your customers and employees – you can build a strong foundation that will give people reason to hope and invest their time and effort in the transformational process as a result.
When Bansal became chief executive officer of Cleanaway, he first sought to take a good hard look at the operating model. In looking at the company’s technical challenges, overall strategy, and the behavior and engagement of the leadership teams, he was able to quickly identify which areas needed to be course-corrected and build a solid base that would be the root of all future improvements. Once he had identified where cost could come out, Bansal sought to remain open with those in the company about the fact that in order to get things back on track costs would have to be cut, but he found that to his new employees, his honesty and straightforwardness was a breath of fresh air after years of being left in the dark. In fact, he was surprised to find that in one early town hall meeting his announcement of cuts was met with a round of applause in appreciation of his upfront nature.
In 2020, Bansal sought to further build trust with his stakeholders by publishing the company’s first sustainability report. With consumers and investors alike increasingly expanding more transparency from the businesses they support, this was a major step in getting ahead of what may soon become the norm. The 88-page document introduced a Value Creation Story, which took Cleanaway’s strategic pillars and demonstrated how the inputs they draw on were transformed through their business activities, while also elaborating on all of the company’s material topics. Additionally, it used the United Nations’ Sustainable Development Goals (SDGs) as a basis for prioritization of sustainable action, placing its focus on gender equality, affordable and clean energy, decent work and economic growth, industry, innovation and infrastructure, reduced inequalities, sustainable cities and communities, responsible consumption and production, climate action, and life on land. The company will continue to publish a new report every year, updating their stakeholders on their progress and creating a new level of accountability.
Create a strategic identity
Creating a strategic identity is more than just building a brand. Rather, it is the articulation of a single desirable future for your enterprise and focusing all of your efforts on achieving it. A company must develop a powerful identity in order to make a distinctive mark, which is paramount to edging out the competition. The identity must be one in which the company’s value proposition, core capabilities, customer and employee experience, and culture all reinforce one another.
For Bansal, one of his greatest legacies is in his implementation of the company’s mission statement and purpose: making a sustainable future possible. This phrase would serve to illuminate for employees, customers, and investors the driving force behind every decision made in the company. The “sustainable” aspect of the mission statement is particularly poignant, because they can simultaneously prioritize a sustainable future for their company, the country, and the world.
Going beyond dry jargon explaining the company’s strategic positioning, he sought to create a clear-cut strategy that aided in defining and aligning every person in the company toward their purpose, which he titled Our Cleanaway Way. Providing an on-page strategy that clearly defined the company’s values, Bansal created for the company a common language and narrative, from their corporate offices to each facility across the country. The strategy put down on paper a guide for prioritization when it comes to making decisions, while also outlining as a company what could be expected of each other.
Master the pivot from sprint to scale
In order to truly transform, businesses must gain the ability to continue to innovate with the speed and agility of a startup while also planning for the inevitable scaling that comes with growth. Whether it be a new product or service, entering a new market, or exploring new business models, a successful transformation involves a continual series of innovations, each of which building on the concepts that worked before.
Footprint 2025 was Bansal’s answer to this need. As a waste management company in a time when sustainability and environmental concerns are becoming increasingly urgent topics, he knew that there would imminently be a greater need for a company that did more than just pick up your garbage every day. Rather than viewing waste as a problem to be dealt with, Footprint 2025 was Bansal’s roadmap for how the company would meet the growing needs of communities by turning it into a valuable asset. Looking to long-term solutions that would allow for the recovery of more waste as well as processing more recyclables to ensure the least amount of residual waste is left to be disposed of, Bansal’s plan would provide solutions that followed the company’s mission statement of being both environmentally and economically sustainable.
One of the key factors in Footprint 2025 was to ramp up its capabilities considerably through strategic acquisitions and greenfield investments. When you think of transforming a business, it may seem like the solution will always be to cut costs across the board, but in this case the integration of companies with recycling assets such as material recovery facilities, plastic recovery facilities, and transfer stations meant that Bansal could quickly build the company’s infrastructure without going through the long and intensive process of building new facilities themselves.
The next phase in Bansal’s strategy involved extending the company’s value chain from a horizontal line into a web that took advantage of the convergence of industries. Rather than wait for FMCG players to realize the need to move away from virgin plastics and take matters into their own hands, Vik Bansal sought to take Cleanaway ahead of the curb, partnering with industrial packaging and beverages companies to build plastic pelletising facilities. Working with government-funded container deposit schemes, these collaborations will ensure that the scaling Bansal has been preparing for will already have a demand.
When Bansal started at Cleanaway, he intentionally decided against using the language of “fixing” or even “transforming” the business. Instead, he showed those within the company that he already believed in them by saying that he wanted to take it from “good to great.” Today, financial metrics for the company are at record levels with the company increasing its market capitalisation by five times and moving up almost 100 places in the ASX index. Cleanaway is positioned as an industry leader, driving innovation for the entire sector, while significantly improving people and culture metrics like safety and engagement. Bansal understood the company’s strategic identity, and as a result did not go into the job fearing it might not go well. Instead, he showed those within the company his high aspirations from day one, along with his confidence that they could meet them. Bansal’s work with Cleanaway is a prime example of just how effective these four building blocks can be, if you have a highly engaged leader to see them through.