Timberland is a pioneer in corporate sustainability, corporate social responsibility or however you describe a business that cares about people and planet as well as profits. I spoke with Jeffrey Swartz, CEO of Timberland, to find out what he’s learned from his experience. You can hear the full interview at Green Business Innovators. But I ended our conversation with more questions than answers. Swartz is not convinced that doing good translates directly into doing well…yet. I discussed with him how he is trying to change that by connecting with consumers.
Swartz has been with Timberland for over 20 years and has served as President and CEO since 1998. Timberland has grown from a $156 million company in 1989 to a $1.4 billion company in 2007.
At the same time, Swartz has built some of the most impressive and inspiring programs I’ve seen at a public company. Timberland employees put in 40 hours of public service hours each year through Timberland’s Path of Service program and annual Servapalooza. Timberland is committed to going carbon neutral by 2010. Timberland’s shoe boxes display nutrition information, which includes information about the manufacturing plant and the impact on the climate and community. And Timberland is starting a green index for all of its products. Just to name a few initiatives. (For more, see http://earthkeeper.com/blog)
But what is the business strategy behind all of these initiatives?
Swartz did not convince me they are good for business, but he did convey to me how essential a passion for human rights and the environment are when running a business. “The locus of value in our company is the brand. It is not on the balance sheet…. And so for our consumer-facing company with a brand as its premise, I think that strategy has to be a reflection of deeply felt values and beliefs wrapped up in sustainable emotions,” Swartz explained. Fifteen years ago, when Timberland formalized its code of conduct, Timberland was ahead of its time. But “formalizing a code of conduct is exactly what a good brand builder with passion should do,” Swartz told me.
Timberland is actually ahead of its customers it would appear. Swartz is striving to engage the customers by providing more information than any other brand, such as where its factories are and the impact of the manufacturing process.
The food industry has been relatively revolutionary in getting the consumer to care. If I could succeed the same, then all the lonely efforts become scalable, sustainable, transformative. And so to me, the initiative that matters the most is…the label as a frontispiece that says I want to engage with the consumers. I do not want to comply with the law. I do not even want to exceed the law; I want to engage the consumer, because that is a gradient for pressure and for innovation that will be extraordinary. That is where the revolution is.
But to date, Swartz has not been satisfied by the consumer reaction.
To really build the business case for a values-driven brand, we need to make sustainability sexy.
And by sexy…I mean in the attractive, the desirable, the boy I want to be in that store, boy I want to be in that brand, boy I want to change the world and here is how I can do it. That is the business case, and we are halfway to heaven and just a mile out of hell in Bruce Springsteen’s terms in accomplishing that goal. We haven’t done it yet.
Swartz encourages consumers to vote at the cash register by supporting brands that embody their values. But shareholders have been skeptical about Timberland’s efforts. “The shareholder wants to hear the sustainability of earnings and a business strategy that works. They admire, appreciate, condone social justice as part of the conversation as long as it doesn’t have any impact on reducing earnings per share, cash flow, or return on investment capital,” Swartz relayed. But if the consumer responds to the Timberland story and votes with its wallet, then the shareholder will support the efforts.
What Swartz has found is that consumers will only really believe a friend or their own experience. And you need to talk to consumers on their own terms.
Swartz stressed the importance of connecting the dots among sustainability leaders in the business world. We have more leaders today than 20 years ago, but our problems have grown, so we are clearly not doing enough. “The real value conversations are: how can we strategically, conceptually, at the highest level, how can we collaborate to create a different pace of outcome?… How are going to transform the civic square?”
What do you think? How can Timberland make sustainability sexy? How can we make the business case for doing good?