Ray Anderson died this week. Most of us in the business just called him “Ray”, because he really was such an approachable guy. I saw him speak in San Diego three years ago, and even to a business green business veteran like me, he was sage-like. To most outside the world of sustainability in business, the name hardly rang a bell. But to those of us within its three concentric circles, Ray was an icon. As many know, Ray Anderson ran InterfaceFLOR. As the leader of a major global carpeting brand, which at that time relied on heavy use of industrial chemicals, hydrocarbon based products, energy and water use, InterFaceFLOR, like other carpet manufacturers was enduring a major challenge to rethink how its products were being made.
By the mid 1990’s when Ray had become the company’s CEO, more customers were asking questions about the company’s sustainability efforts. In 1994, Ray had an awakening of sorts (his so-called “point of a spear into my chest” moment), when after having a number of meetings and discussions with his staff and reading Paul Hawkens the Ecology of Commerce, he became an enlightened, radical industrialist. He had come to the conclusion that the environment was at risk and a lot of that was caused by industry and companies such InterfaceFLOR that were based on petrochemicals and energy.
I, myself, was amazed to learn just how much stuff the earth has to produce through our extraction process to produce a dollar of revenue for our company. When I learned, I was flabbergasted. We are leaving a terrible legacy of poison and diminishment of the environment for our grandchildren's grandchildren, generations not yet born. Some people have called that intergeneration tyranny, a form of taxation without representation, levied by us on generations yet to be. It's the wrong thing to do.-Ray Anderson
The Radical Industrialist Takes on the Supply Chain
Ray was simply on a mission- for InterfaceFLOR to not only cut waste, but to be a leading, responsible business. He became the face of the “radical industrialist” (the title of his last autobiographical book which I received signed by him just two months ago is called Confessions of a Radical Industrialist) and in 1994 launched InterfaceFLOR into a first mover role to reduce its environmental and social footprint. The data is quite extraordinary in the 17 years since the company launched its many environmental initiatives. Of course, Ray started with a plan- one that by necessity started small- but was across the board, an overhaul affecting every link of the supply chain. Ray also smartly knew that go get his shareholders on board, he needed “obliterate costs/footprint associated with waste; silencing the shareholders that were uncomfortable with the risk involved with completely revolutionizing your company”.
We began to tackle the face of mountain we identified as waste. We defined waste, by the way, as any cost that we incurred that does not add value to our customer and that translates to doing everything right the first time, every time. It’s not just waste material, scrapped and low quality and so forth. If you send something to the wrong destination and have to get it back and reship it -- that’s waste. If you incur a bad debt -- that’s waste. So we defined waste very broadly and over time we actually said that any energy that comes from fossil fuel by our definition is waste and we need to eliminate it. We really began to think in different ways about our business in terms of climbing this mountain and it became very clear very quickly this was the smart thing to do. Not only did we start to generate answers for those customers, they embraced us for what we were trying to do. The goodwill in the market place has just been stunning. The rest of the business case is pretty simple. I cost it down not up. - Ray Anderson
According to Lindsay Parnell, InterFaceFLOR’s CEO for Europe, the Middle East, Africa, and Asia, the company has “reduced waste to landfill by 80 per cent since 1996, curbed water use by the same amount, reduced energy use per unit of production by 43 per cent, and cut greenhouse gases 44 per cent, partly by generating 30 per cent of its energy from renewable. But what also stands out (and what made Ray such a business visionary) was that there was a phenomenal financial payback that could be realized from “going green”. According to Parnell, "We could see that the millions of dollars were stacking up. Between 1995 and 2010 we have saved $433m – that is a huge amount for a company with revenues of around $1bn. There is no way we have invested $433m in this, but that is what it has saved."
It's not just the right thing to do, it's the smart thing to do. - Ray Anderson
From a supply chain point of view, InterfaceFLOR realized that to be e truly sustainable organization the company had to reach into its supply chain, especially at the end of a products life. InterfaceFLOR has since launched new sustainable supply chain concepts across its customer reach to reduce costs and offer cost savings opportunities for its freight forwarders. The company also set up its ReEntry scheme in 1995, collecting carpets at the end of their lifecycle. Any product which cannot be re-purposed is recycled or downcycled into a new product. According to Melissa Vernon, Director of Sustainability Strategy for InterfaceFLOR, the company also "consciously seeks out suppliers who share [InterfaceFLOR's] environmental commitment and entrepreneurial spirit ...and...has found it more effective to sit face-to-face with suppliers and discuss how they can help ... achieve... sustainability goals.
Climbing Mount Sustainability
Rays efforts were noticed for sure. Time Magazine featured him in an article this past spring and Fortune Magazine called him “America’s greenest CEO". He went out and "evangelized" over 150 times a year, until his fight with cancer started to finally slow him down. The awards and honors bestowed on Ray and the companies over the past two decades are too many to mention here. Recently, Interface ranked 11th worldwide in the 2010 Sustainability & Innovation Global Executive Study & Research Project by MIT Sloan Management Review and The Boston Consulting Group. They ranked second behind Unilever in the 2011 Global Sustainability Leaders Survey from GlobeScan Inc. and SustainAbility Ltd. Suffice it to say though that InterfaceFLORs efforts disruptively changed the way the carpet, building materials and textile industry operate today as compared to 20 years ago.
Meanwhile, in the last couple of years the company launched its highly ambitious Mission Zero ™ sustainability strategy, which aims to turn InterfaceFLOR into a zero-impact organization. Ray often spoke about how climbing the sustainability mountain in business was akin to climbing Mount Everest and that there were seven paths or fronts to get there:
- Eliminate Waste: Eliminating all forms of waste in every area of business;
- Benign Emissions: Eliminating toxic substances from products, vehicles and facilities;
- Renewable Electricity: Operating facilities with renewable electricity sources – solar, wind, landfill gas, biomass, geothermal, tidal and low impact/small scale hydroelectric or non-petroleum-based hydrogen;
- Closing the Loop: Redesigning processes and products to close the technical loop using recovered and bio-based materials;
- Resource-Efficient Transportation: Transporting people and products efficiently to reduce waste and emissions;
- Sensitizing Stakeholders: Creating a culture that integrates sustainability principles and improves people’s lives and livelihoods;
- Redesign Commerce: Creating a new business model that demonstrates and supports the value of sustainability-based commerce.
Making the Business Case
When you are being asked to make the business case for sustainability - perhaps ask them to make the business case for being un-sustainable. - Ray Anderson
You see, for the past 30 years I’ve been evangelizing like Ray for organizations to make “the business case” on behalf of reducing waste of any kind (be it over-consumption, generation of waste, human productivity waste, etc) so the bottom line is optimized and employees, communities and the environment are protected. To me it’s a “no brainer” and for folks like Ray it took an epiphany to make that realization. Since Ray’s awakening in 1994, and especially in the past half decade or so, more CEO’s and manufacturers with local to global reach are coming to their own realizations and drawing their own conclusions.
Ray stepped out of his comfort zone to challenge the status quo. He forged a new business normal that called for a respect of the land, responsible use of resources, smart design and innovative end of life (cradle to cradle) management of products. Mission Zero will continue for the many thousands of employees of InterFaceFLOR around the world- all because of one man’s vision. All because of Ray.
As Ray said back in 2008 when I saw him, “There are noble fortunes to be made in the transition to sustainability.” That inspirational quote stands right up there with my son’s from back in 1991 when he introduced me to his pre-school class as the Dad who “saves the planet”. Sometimes, being radical is not such a bad thing.
Mr. Anderson…er, Ray, thanks for all the inspiration- this one’s for you.