September 24, 1997
After all these years, clients, articles and speeches, the doubts and questions still come–“we ‘can’t afford’ to get lean and clean; environment isn’t a significant issue for our company; we’ll attend to environmental issues after our company — or country — has developed and can afford it; we’re already as efficient as possible.”
And for all my talk of the new central business proposition of the 21st century — “more value with less stuff” — many companies seem slowed down by a fierce disbelief that they could possibly have their cake and eat it too.
So consider this: A billion dollar company that reports 20% growth in revenue, 30% growth in profits, and zero increase in physical throughput. These are “not unconnected coincidences” says Interface CEO Ray Anderson; they are the result of more than 400 initiatives (so far) that are part of Anderson’s mission to put Interface at the head of what Bill McDonough calls the “new industrial revolution.”
Interface is a $1 billion company that makes 40% of the world’s commercial carpet tile. Interface has grown to that size in barely three decades, and intends to double its revenue in the next decade — with its environmental vision as a key strategic driver. As I noted in “What’s New? Nothing” (NBL 6.15, July 17 1997), Anderson has publicly committed the company to a goal of zero emissions, and has challenged his employees to invent factories that have “no smokestacks and no sewer pipes.”
It’s true that there is not much environmental impact once carpet tiles are made and installed and just lie there, but would that it were so simple. Their manufacture and installation requires significant synthetic chemistry, and plenty of smokestacks and sewer pipes. And once carpet completes its six or ten year useful life on your office floor, it heads to the landfill where it just lies there for the next 25,000 years (by some estimates), ever so slowly yielding up the biologically delightful products released by decomposing synthetic chemistry.
For Interface the vision has become a challenge, which has become a set of design constraints, which have driven a host of innovations, which have in turn been responsible for both some very healthy financial results and an extraordinary cultural shift.
Most notable among some 400 ecoefficiency initiatives is Interface’s “Evergreen carpet lease.” Interface is redefining itself from a seller of carpet that spends a tiny fraction of its physical life as useful floor covering (six years out of hundreds or perhaps thousands) to a lessor of floor covering services. Customers can commission that service per square yard per year. Interface will replace the carpet tiles as they wear out; since most of the wear occurs in high-traffic areas, less carpet needs to be replaced, and less needs to be manufactured. And the worn carpet tiles will be recycled and remanufactured, eventually yielding a complete closed loop process, with satisfied customers, a profitable Interface, and more value with less stuff.
Anderson is one of those rare CEOs who can speak knowledgeably about his company’s physical throughput, and he doesn’t like what he sees. “Our factories and our suppliers consumed about 1.2 billion pounds of material in 1995 — which made me want to throw up; 400 million pounds was relatively benign, 800 million was petro-based, with two-thirds of that valuable stuff burned up — fossil fuel gone forever, except the CO2, helping us lose coastal Florida in an instant of geologic time.”
Speaking recently at the EcoTech III conference at Asilomar, Anderson observed that “Our company’s technology is plundering the earth. Society considers me a captain of industry, but I stand convicted by my self alone as a plunderer and legal thief — perverse tax laws my accomplice in crime.
“Maybe the ‘new industrial revolution’ can keep my kind out of jail,” he muses: “renewable, cyclical, benign, emulating nature, where there is no waste; we can begin to reinvent civilization in a quest to become sustainable, then restorative.”
In response to a question wondering how real this all is, Anderson responds, “Our efforts would be seen through if insincere. Customers are inclined to support us, which helps the top line; efficiency helps the bottom line. It’s a positive feedback loop (of doing well by doing good): the more good you do, the more well you can do; the more well you do, the more you attract attention, which helps the top line… It’s one of the few positive feedback loops that’s good for the earth.”
Anderson calls Interface’s 400 projects “a start. It’s daunting, trying to climb a mountain taller than Everest. We’re just on its lowest slopes, but [with The Natural Step as our compass] we know the direction is up.”
“Can a $1 billion company make a difference in a $25 trillion global economy?” he asks himself. “I don’t know. But unless somebody leads, nobody will.”
What can your company take away from this? A few elements that we are seeing again and again at some of the world’s most successful companies: offer a clear vision, powerfully articulated; decide “We’re going to do this” and then ask “How?” (instead of asking “Can we do this?”); embed that vision in hard-nosed business challenge (build revenue, profits, market share and share value); drive innovation; move FAST, measure results, learn and adapt.
We’ll explore these elements in more detail in future columns.