Confessions of a Radical Industrialist: Profits, People, Purpose-Doing Business by Respecting the Earth

by Ray C. Anderson, Robin White

Overview

In 1994, Interface founder and chairman Ray Anderson set an audacious goal for his commercial carpet company: to take nothing from the earth that can't be replaced by the earth. Now, in the most inspiring business book of our time, Anderson leads the way forward and challenges all of industry to share that goal.

The Interface story is a compelling one: In 1994, making carpets was a toxic, petroleum-based process, releasing immense amounts of air and water pollution and creating tons of waste. Fifteen years after Anderson's "spear in the chest" revelation, Interface has:

-Cut greenhouse gas emissions by 82%

-Cut fossil fuel consumption by 60%

-Cut waste by 66%

-Cut water use by 75%

-Invented and patented new machines, materials, and manufacturing processes

-Increased sales by 66%, doubled earnings, and raised profit margins

With practical ideas and measurable outcomes that every business can use, Anderson shows that profit and sustainability are not mutually exclusive; businesses can improve their bottom lines and do right by the earth.

Product Details

ISBN-13:	9781429959834
Publisher:	St. Martin's Publishing Group
Publication date:	09/15/2009
Sold by:	Barnes & Noble
Format:	eBook
Pages:	321
File size:	2 MB

About the Author

RAY ANDERSON was named one of Time magazine's Heroes of the Environment and one of MSNBC.com's Top 15 Green Business Leaders in 2007. He and Interface have been featured in three documentary films, including "The Corporation" and "So Right, So Smart." He co-chaired the President's Council on Sustainable Development and the Presidential Climate Action Project. He and Interface have been featured in The New York Times, Fortune, Fast Company, and many other publications.

Read an Excerpt

Business Lessons from a Radical Industrialist

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By Ray C. Anderson, Robin White

St. Martin's Press

Copyright © 2010 Ray C. Anderson
All rights reserved.
ISBN: 978-1-4299-5983-4

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CHAPTER 1

Mission Zero

I am Ray Anderson, and in addition to being a husband, a father, and a grandfather, I'm an industrialist. Some would say a radical industrialist. Time magazine called me a "Hero of the Environment." U.S. News & World Report said I was "America's Greenest CEO." Fortune magazine was kind and astute enough to include my company, Interface, in its annual list of the "100 Best Companies to Work For" — twice. The GlobeScan (2007) Survey of Sustainability Experts listed Interface, Inc., as leading the list of global companies with the greatest commitment to sustainability. Following Interface, in order of ranking, were: Toyota, GE, BP, and DuPont.

But I've also been called a hypocrite and a dreamer who pours his time, energy, and stockholder money into lofty ideas about ecology and sustainability instead of the bottom line. Yet I would reply that I'm as profit-minded and competitive as anyone you're likely to meet.

I grew up in a small Georgia town during the tail end of the Great Depression and the Second World War. My father worked in the post office. My mother was a retired schoolteacher. I attended college on a football scholarship, graduated with highest honors, and spent seventeen years in industry working for someone else.

Then, in 1973, I took the entrepreneurial plunge and founded a company, Interface, with nothing more than a good idea, my life's savings, and the faith of a few brave investors. We grew that company from scratch into the world leader in carpet tiles (modular carpet) with annual sales of more than a billion dollars.

In 1994, at age sixty and in my company's twenty-second year, I steered Interface on a new course — one designed to reduce our environmental footprint while increasing our profits. I wanted Interface, a company so oil-intensive you could think of it as an extension of the petrochemical industry, to be the first enterprise in history to become truly sustainable — to shut down its smokestacks, close off its effluent pipes, to do no harm to the environment, and to take nothing from the earth not easily renewed by the earth. Believe me when I say that that goal is one enormous challenge.

But as I said, I'm profit-minded and extremely competitive. I thought "going green" would definitely enhance our standing with our customers and maybe give us some good press, too. But I also thought it just might be a way to earn bigger profits from doing what was right by the earth. No one had ever attempted that kind of transformation on such a large scale before. We aimed to turn the myth that you could do well in business or do good, but not both, on its head. Our goal was to prove — by example — that you could run a big business both profitably and in an environmentally responsible way. And we succeeded beyond my own high aspirations.

Not everyone at my company was happy with this in August 1994. It had been a very good year at Interface. We had weathered a deep recession, we were growing again and very profitable. Why should we conduct this grand experiment when nobody, not even I, knew how it would come out? It was a reasonable question.

We caught plenty of flak from outside the company, too. Wall Street heard "environment" and thought "costs." Even after we showed them how reaching for sustainability could take a big bite out of waste and save us real money, even after we discovered that running a billion-dollar corporation with the earth in mind was a terrific new business model, there was still a lot of skepticism. There still is some, even though we now have over a decade of hard numbers that prove — beyond a doubt — that our course was both right and smart. Why, then, all the resistance?

I think it's because our transformation flew in the face of all the old rules that still drive the "take-make-waste" economy, old rules that we inherited from the steam-driven days of the first industrial revolution and (many of us) unthinkingly accept as true. That old way of doing business seemed to work just fine when we thought the earth could provide endless resources, endless energy, and endless room to throw away all the stuff we make and waste.

But those rules don't work anymore. Daniel Quinn, in his book Ishmael, said that they're like those badly designed wings of the early aircraft at the dawn of human flight. Our civilization is like that would-be "aeronaut" who jumps off a high cliff in his misbegotten craft. He's pedaling away, wings flapping like mad; the wind is in his face, and the poor fool thinks he's flying when he's really in free fall. Though the ground seems far away at first, his flight is doomed because the design of his wings has ignored the laws of aerodynamics.

Like that high cliff, the vast resources available to our industrial civilization — the oceans, forests, fossil fuels, even the air we breathe — make the "ground" seem far away to us. But as sure as gravity, it's rushing up fast. Our flight will end up no better than his. Why? Because our industrial civilization has ignored the laws of sustainability, laws that would enable humanity to pull out of our terminal dive and "fly."

Whichever way we look, from global warming to deforestation, from empty water reservoirs to vanishing species, to the price of a gallon of gas at the pump, the evidence is all around us. The earth is finite and fragile, and we ignore these plain physical facts at our peril. That's why we need a new industrial revolution and a new set of wings, ones properly designed according to the laws of "aerodynamics." Wings that will allow our civilization — and our grandchildren's — to fly, sustainably. To soar, not crash.

But conventional wisdom and the status quo are powerful sedatives. Like opiates, they dim our vision and blur our minds. They whisper, Maybe all those arguing experts are wrong. Maybe there's nothing to worry about. Or, okay, so there's a problem, but I surely can't solve it. Why even try?

Maybe that's why conventional wisdom, wed to the status quo, was certain there was no business case for sustainability, that what we started at Interface was misguided, tangential, and doomed to fail.

Conventional wisdom was wrong. Consider a few facts. Remember the Kyoto Protocol? It was designed to reduce greenhouse gas (GHG) emissions by about 7 percent by 2012 here in the United States. Though a small reduction like that doesn't even begin to address the problem of climate disruption, a lot of my peers in industry were sure that if the United States signed on to Kyoto, it would drive them right out of business. Really?

From 1996, our baseline year, through 2008, my business has cut its net greenhouse gas emissions not by 7 percent, but by 71 percent (in absolute tons), while our sales increased by two-thirds and our earnings doubled. Profit margins expanded, not contracted, while GHG intensity, relative to sales, declined some 82 percent.

No business case for sustainability?

While some businesses fret and sweat over rising fuel bills, renewable energy, limitless and available right now, provides electricity to power eight of our ten factories. The electrical power for seven of them comes entirely from renewables. Our consumption of fossil fuels per square yard of carpet is down 60 percent. As I write this, the price of oil has broken all previous records. Will it stay up there? Will it keep on rising, or fall back? I don't know. But go take a look at some of your recent fuel bills. Think you could make the case for reducing them by over half?

Our companywide waste elimination measures have put a cumulative $405 million of avoided costs back into our pockets. Not only have these measures paid for themselves, they helped us ride out the deepest, longest marketplace decline — the "perfect storm" of Y2K's diversion of capital to computer systems, the bursting of the dot-com bubble, and 9/11 — in our industry's history.

Even better, taking a sledgehammer to conventional wisdom has thrown innovation into overdrive. We've patented machines, processes, and products that do a whole lot more with a whole lot less, and better, too. Each year, more of our products take their inspiration from nature, exhibiting nature's beauty as well as benefiting from her genius for design that has been perfected over billions of years.

We're making more of our carpets from recycled materials, too; at last count, we've kept 175 million pounds of carpet out of landfills and trimmed the scrap we generate and send to the landfills by 78 percent. Now, what used to be waste for the landfill goes back into our factories as feedstock. Valuable organic molecules are salvaged to be used again and again, with less fresh oil required each year, emulating nature in our industrial processes. After all, in nature, one organism's waste becomes another organism's food.

We haven't used our final drop of oil quite yet, but I can see that day coming, and I hope to be around when it arrives. Just think about what that could mean for your business, your family, and your country. And if enough people did it, the planet.

In fact, since 2003, we've manufactured and sold over eighty-three million square yards of carpet with no net globalwarming effect — zero —to the earth. We call these climate-neutral products "Cool Carpet,(tm)" and they have been runaway bestsellers. That's competitive advantage at its best — doing well by doing good.

Here's the thing: Sustainability has given my company a competitive edge in more ways than one. It has proven to be the most powerful marketplace differentiator I have known in my long career. Our costs are down, our profits are up, and our products are the best they've ever been. It has rewarded us with more positive visibility and goodwill among our customers than the slickest, most expensive advertising or marketing campaign could possibly have generated. And a strong environmental ethic has no equal for attracting and motivating good people, galvanizing them around a shared higher purpose, and giving them a powerful reason to join and to stay.

Sometimes even they are surprised. Some of our best engineers and managers from top-tier universities have come up and told me, Ray, I never thought I'd be working for a carpet company. They come and they stay, because we aren't just making carpets. We're making history.

The business case for sustainability is crystal clear, and we're just beginning. You see, there's a mountain out there that we call "Mount Sustainability." It is higher than Everest, but we have a plan to climb it — all the way to the top — by the year 2020. We call this initiative Mission Zero.

We will reach the summit when we have cut our last umbilical cord to the mines and the oil wells, when we no longer dump any waste into the landfills or pollution into the air or water. When we no longer take anything from the earth that the earth cannot renew rapidly and naturally.

But Mount Sustainability is a high, high mountain — higher than Everest. There isn't just one path up but at least seven, and we know we must climb them all. Yet, if a company like mine can get there, any company can get there. And I believe that this book will help others — from CEOs to suburban homeowners — find their own way to their own summits, too.

Mind you, striving for the top will require nothing short of a vast, ethically driven redesign of our industrial system, a new industrial revolution that corrects the many things the first one got wrong. But can we do it in time?

I think we can, though I can't promise the climb will be easy or painless. But there certainly is reason for hope. As physicist Amory Lovins likes to say, "If something exists, it must be possible." We at Interface have committed ourselves to bringing sustainability fully into existence, to proving that it is not only possible, but profitable — a better way to bigger, more legitimate profits.

Based on our experiences since 1994, I can promise this: Done right, sustainability doesn't cost. It pays. And the view from that summit — looking out on a clean, healthy world for which our children and grandchildren will thank us — will make every step you and I take today for ourselves, and for them, worthwhile.

CHAPTER 2

The Power of One Good Question

I stood indicted as a plunderer, a destroyer of the earth, a thief of my grandchildren's future. And I thought, My God, someday what I do here will be illegal. Someday they'll send people like me to jail.

— Ray C. Anderson

So how did a man who had spent his whole working life in business — fifty-two years as I sit here writing — suddenly decide that modern industry (his own included) had it all wrong? That the old rules were not just financially foolish, but dangerous? In a word, reluctantly. Let me explain.

I'd like to invite you to imagine a pretty big corporation about to have a head-on collision with an even bigger problem, a problem that had nothing at all to do with cash flow, profit margins, or losing business to cheaper competitors. By those measures — by just about any business metric you could name — the corporation, Interface, was successful. In just twenty-one years it had grown from a dreamer's idea to nearly a billion dollars in annual sales, from one factory and no orders on the books to factories on four continents and sales in 110 countries.

You may be thinking, if that's Anderson's problem, it's one a lot of businesses would like to have, especially these days. And it's true. I was — and remain — extremely proud of everything we've accomplished. Why not? It was a Horatio Alger story come true. I was the founder, the chairman of the board, and the CEO, the man behind the wheel, driving a substantial twentieth-century corporation full speed down the road. Then the future showed up in our headlights, and I saw a very worrisome problem coming at us. I didn't like the looks of it one bit, but we couldn't stop, and it wouldn't move.

I founded Interface in 1973 to equip the emerging, technology-driven "office of the future" with a new kind of carpet, a floor covering that could change along with its owner's needs and offer the versatility that traditional wall-to-wall carpet could never provide. But carpet tiles, modular and infinitely adaptable, could.

Carpet tiles were already well established in European offices, and though they were starting to catch on here in the United States, they hadn't made much of a dent. In fact, when experts in the field heard we were cutting up perfectly good broadloom carpet into little pieces and selling them for twice the going price, I expect some of them chuckled and thought I'd gone around the bend.

By conventional standards they were right. But going around the bend is sometimes the very essence of leadership. Someone has to see what is out there. So when I traveled to England in 1969 and saw carpet tiles for the very first time, I knew I was looking at the future. I fell in love with the idea. I knew they were smart. I knew they were right. I had gone around the bend (and not for the last time, either), and I liked what I saw.

Sure enough, making carpet tiles turned out to be a very good idea. I watched my company, this "third child" (after my two natural daughters), grow into a dynamic and profitable organization with five thousand employees and global dominance in a highly competitive market.

As its founder, I was a local hero. I had quit a good, secure job with a major corporation and taken the entrepreneurial plunge to start Interface. I bet all my chips — my life savings, my reputation, even my marriage — on a new idea, and just look what we had accomplished in twenty-one years! Not many other boys who grew up in West Point, Georgia, during the Depression had become captains of industry.

And so, after two decades of what can only be called spectacular success, it didn't bother me a bit that Interface consumed enough energy each year to light and heat a city. Or that we and our suppliers transformed more than a billion pounds of petroleum-derived raw materials into carpet tiles for offices and hospitals, airports and hotels, schools, universities, and stores all around the world. So what, if each day just one of my plants sent six tons of carpet trimmings to the local landfill? What happened to it there? I had no idea. Why should I? It was someone else's problem, not mine. That's what landfills were for.

(Continues...)

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Excerpted from Business Lessons from a Radical Industrialist by Ray C. Anderson, Robin White. Copyright © 2010 Ray C. Anderson. Excerpted by permission of St. Martin's Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Contents

Title Page,
Dedication,
Acknowledgments,
Foreword,
Prologue,
Epigraphs,
1. Mission Zero,
2. The Power of One Good Question,
3. One Small Digression and Six Lessons,
4. Mountain Climbing,
5. Zero Waste: The First Face of Mount Sustainability,
6. Smokestacks and Other Relics,
7. Plugging into the Sun,
8. Round and Round They Go,
9. Getting Out of the Breakdown Lane,
10. The Circle of Influence, or Love on the Factory Floor,
11. The Final Ascent,
12. On Leadership, Programs, and Policies,
13. Science and Skeptics,
14. Awakening the Mind and Spirit,
15. The Next Ascent,
16. Every Reason for Hope,
Epilogue: Off the Grid in Lost Valley, North Carolina,
Appendix A: LCA Comparison of Two Carpet Tile Backing Types,
Appendix B: Master Evergreen Lease and Services Agreement,
Appendix C: The Interface Model,
Index,
Also by Ray C. Anderson,
Copyright,