Yesterday, Jen Boynton published a review of Jeffrey Hollender and Bill Breen’s new book, The Responsibility Revolution. Be sure to check out the review and grab a copy when you can–it really is as good as Jen says.
The only thing more captivating than reading Hollender’s latest writing is talking to him personally, which I had the chance to do a couple weeks ago. So, without further ado, that brings us to the second part of this week’s leadership series: An interview with Jeffrey Hollender, Seventh Generation’s Founder and Chief Inspired Protagonist, about The Responsibility Revolution and the future of Corporate Social Responsibility (CSR).
Nick Aster: Thanks for your time, Jeffrey, we’ve been passing your book around the 3p offices and everyone’s been pretty excited about it. Let’s kick off with a little more about it. We’re thinking about this book as not just a blueprint for business, but almost a manifesto for the 21st century. Do you think that’s accurate? Tell us a little about the inspiration behind the book and where you want to take it.
Jeffrey Hollender: I certainly hope that it’s both a manifesto and a blueprint–that’s our highest aspiration for the reasons we wrote it. But the sad part is we felt compelled to write it because CSR has been failing and dying in the face of the social and environmental challenges we face and the willingness for business to only make very marginal, compartmentalized initiatives that at the end of the day won’t amount to anything nearly sufficient. That doesn’t mean they’ll amount to nothing, but it’s not much relative to what’s needed.
Aster: You talk about this idea of “CSR 2.0.” What does that mean and how would it address the problem you just described?
Hollender: In the simplest sense CSR 1.0 was about programs and activities–philanthropy, better packaging, cause related marketing, measuring emissions–but they’re not holistic, systemic or connected to the business as a whole. The movement to 2.0 is a movement from a highly compartmentalized, sometimes merely symbolic initiatives to a real shift that brings forth the understanding that the only way we can be responsible and sustainable is to embrace the notion that we need to look systemically at the problems we face and to embrace them holistically. CSR needs to be placed at the heart of corporate strategy and at the center of the issue and purpose of whatever the business is about.
Aster: When people hear “2.0” they think social media, online technology and so on. Ever since studying the Cluetrain Manifesto, we’ve always been big proponents of using Web-based technology to encourage conversation on issues such as CSR. The idea is that by their democratic, de-centralized nature, Web-based conversations enforce a transparency that couldn’t be had in large scale communications of the past. What do you think is the role of technology in this bigger picture and what’s next for Seventh Generation in taking advantage of it?
Hollender: This transition to CSR 2.0 is driven, as you note, in many cases by external factors that companies have no control over. The days when corporate communication was about issuing press releases are dead, and companies are waking up to the notion that the message about their business is not going to come our of their mouth. It’s going to come out of the mouths of their customers, supply chains, NGOs and so on. Social media or web 2.0 is a world that they either need to embrace or get killed by. I think this new world is very very challenging to business – both because business likes to control messaging, and also because businesses likes to control what and when they disclose information. This notion about radical transparency is incredibly painful to the business community because businesses are almost genetically incapable of saying anything bad about themselves. I know this – when we send a draft CSR report to our lawyer he almost falls out of his chair. It blows his mind that a business would be so self critical. Yet I see this new world as an incredible opportunity–and an incredible chance to distinguish ourselves from other companies and establish a competitive advantage. So radical transparency is not only possible but essential–when embraced, it will give us an advantage and a level of trust with our stakeholders that was never possible before.
Aster: I love blowing lawyers’ minds. What about competition? What’s the role of competition between companies given this idea of radical transparency? What about trade secrets?
Hollender: I’m not sure there will be a world without trade secrets, but we’re certainly entering a world where many of the problems we’re facing are far too big to be solved simply by one company getting to the solution quicker than another. Palm oil, for example – the reality is that unless we can get Unilever to aggressively participate in the support (as they say they will do) of reforming the palm oil industry, things aren’t going to change. Seventh Generation isn’t big enough to do it alone. It’s counter-intuitive to strive for an industry wide transformation because it eliminates what could be a unique benefit for Seventh Generation. Could we be identified as a leader in sustainable palm oil production? Yes, but we won’t bring about any really significant change alone, and we won’t be able to succeed if we’re the only company working on the issue.
Another example–we’ve spent 10 years trying to prove to legislators that phosphates are not required in automatic dishwashing products. The soap and detergents agencies as well as our competitors would disagree, we’d hand out our products to legislators and show them that it worked just as well, and finally, this summer, phosphates will be removed from all auto dish products in the industry. Why would we give up a potentially strategic advantage in being the only company around with phosphate free dish soap? Because the mentality needs to change – if we kept that benefit to ourselves we’d deprive the industry from helping the environment in a way that’s absolutely critical. What it means is you have to be willing to give away your successes and share them with everyone else as long as you can keep innovating and raising the bar.
Unfortunately, there is no shortage of problems to fix in the world today – we’re not worried about running out of opportunities to innovate.
Aster: Our readers recently named you one of our “Top Ten Sustainable CEOs.” What does it take to move a company in a more sustainable direction? Can it be done from the ground up, through a grass roots movement? Or must it come from an inspired CEO or other high level figure? What are the characteristics of a sustainable CEO?
Hollender: Instead of trying to figure out the “best way” that sustainability can enter the consciousness of a company, recognize that it’s going to be different at every company. In one company it might be an idea from the CEO’s daughter at dinner. In others it might be a ground-up kind of thing. But to answer your question on characteristics – at the top of my list would be being humble, knowing that whatever your success you still don’t know the vast majority of what there is to know and that most of the answers lie outside of your own mind and that you must forever be inquisitive, exploring, and to think about what you’re doing as part of a journey that never ends. It’s also critical to study and work toward a firm command of system thinking – to recognize the connectedness of all things. Systems thinking should be a fundamental requirement of any manager. It’s just too hard to make the changes you need to make without that kind of foundation.
You also have to be a role model for what it is you want your company to become. If you want to create a transparent company, you need to be willing to be it yourself.
Aster: We’ve had a lot of new entrants in the so-called “sustainable cleaning products” sector. Clorox, notably, has a massive and huge Greenworks campaign, and Method has come in to make things sexy and hip. Is this all a great surge that raises all boats? Are these challenges to the essence of Seventh Generation?
Hollender: We would have failed miserably if we hadn’t created competition. We look at these new competitors as a sign of our success. But they’re different. We’ll never stand for “sexiness.” Method’s done a fantastic job with their packaging, but that’s just not who we are. We want to be thought of as the most sustainable, most ethical, not the funniest or cutest. I’m very optimistic about our ability to continue to grow in this new marketplace along with our competitors. Our goal is that all products be green. That’s only going to happen when we convince all the companies in the cleaning space to move forward and be greener.
Aster: How about some final thoughts?
Hollender: Yeah–the one thing that can’t be forgotten with regards to the Responsibility Revolution is that the political and legislative landscape that must change just as radically for sustainable businesses to be successful. That is an area where we’re not into 2.0 yet, not even close. About 120 days ago, I helped start something called the American Sustainable Business Council to be a progressive, responsible alternative to the Chamber of Commerce. Business has become dominant in politics but there is no voice that is driving the political landscape in the right direction from a business perspective. In half a year we’ve signed up 40,000 business members and in the next two years will rival the distressing, misguided, and frankly offensive voice of the Chamber of Commerce.