Ray Anderson – Leading by Innovation
Growth for the sake of growth is the operating principle behind cancer. Innovation that focuses solely on the bottom line belongs in the same indefensible category. But, innovation that is also socially and environmentally responsible is innovation with a future.
“Green products don’t come from brown companies.” That was the bottom line of an address delivered to the American Marketing Association in Portland, Oregon recently. It was the knowledgeable position of Ray Anderson, President, Founder and CEO, Interface, Inc. Anderson is the leading corporate evangelist for sustainability. His position represents a complete turn around for the company he started it in 1973.
He described how Interface, a maker of carpet tiles, once plundered the earth’s resources for profit. Then, he read Paul Hawken’s The Ecology of Commerce and felt the spear hit his chest. He recognized himself as a source of the problem. He, and other industrialists like him, were ignoring the real cost of production by conveniently overlooking both upstream and downstream impacts of their processes.
Anderson turned his epiphany into a mission. Using a process created by The Natural Step, he challenged his entire company to rethink what they did, how they did it and with whom they did it. The goal: to find sustainable solutions to everything – processes, products, and the resulting impacts up and down their supply chain.
They questioned how they moved viscous liquids through the plant, then replumbed their production line to reduce friction, increase pump efficiency and reduce power consumption to 1/14th of its former level. New thinking, he calls it. Whole system thinking sees the entire cost stream. It’s all connection. Systems. Revenues. Environment. Responsibility.
“Viewing processes in isolation doesn't pencil out,” he said. The CFO who focuses on the bottom line misses the potential shared benefit and competitive advantage of entire supply chain as a whole. The COO, focusing on internal operations, misses opportunities to make carpet installation more efficient and reduce waste at the user end. When you view the entire system as continuous, you see solutions that function and benefit all participants in the process. Savings multiply. Efficiencies pay big dividends.
He described how Interface factory engineers collaborated with Atlanta’s city engineers to reclaim wasted methane off gassing from land fill. This power resource, previously lost to the atmosphere, now provides a 9% power cost reduction to the carpet factory. Better yet, the city can provide a 30-year stream of methane and postpone the need for a new landfill by 30 years.
This synergistic thinking reduces atmospheric gas emissions, provides his factory with a 460% carbon offset, and moves Interface that much closer to being climate neutral.
By permitting people to think laterally, reaching conclusions that are unthinkable (wrong by traditional thinking), new solutions appear. Anderson cited one example after another of how new thinking has made his bottom line stronger. Seeing the organization as part of a larger organism, from resource, to supply chain partners, to installer, to the recycle-ability of used carpet is an inspired view of the corporation’s responsibility. And it also represents a broader understanding of risk mitigation, resource management and performance management.
Ray Anderson represents a new breed of enlightened leadership. He embraces innovation in its purest form. It’s a view that should be at the root of all innovation. Synergy, sustainability, profit - it’s all connected. And, it’s the foundation of a brighter future than the one traditional thinking has provided so far.
Compliance is not a vision. The only institutions to lead human kind out of this mess are the ones that created the worst impact. Anderson remembers his days as a plunderer. He predicts that, “Someday people like that will go to jail for theft of their grandchildren’s future.”
He challenged his company to become a restorative company. At age 61, he amazed himself with what he was able to do. But, he is not alone, he claims. We are all leaders. It is important for everyone to see the whole picture. It is important that we all create change in the organizations we work for, and demand change in the organizations do business with.
Anderson represents the new leadership - a changing of the guard. The long term object being guarded is still corporate profit. But the critical shift is the recognition that the resources that generate profit must be nurtured in a sustainable way if long term profit is to withstand.
Tuesday, June 12, 2007 |
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