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Interview with Jeffrey Swartz, CEO of The Timberland Company
Can a Business Do Well By Doing Good?
If you’ve ever contemplated this question, then we’d like to introduce you to the musings and insights of Jeffrey Swartz, CEO of Timberland. Under Jeff’s guidance, Timberland has grown from a $156 million company in 1989 to a $1.4 billion company in 2007.
In this interview, Jeff shares candid thoughts, successes and challenges of infusing a business with values - the values stemming from three generations of family leadership at Timberland. You’ll be inspired to re-think what impact it’s possible to achieve through your business.
INTERVIEW HIGHLIGHTS
- Jeff Swartz expounds on “selling values” (Timberland) versus “selling sex” (other clothing retailers)
- Timberland’s Facebook campaign which mobilized thousands to action
- How Timberland creates positive impact in the communities and countries where its products are produced
- Is Timberland is more like Bono or Al Gore in creating messages for consumers?
LISTEN NOW (press play below)
TRANSCRIPT
AMIE VACCARO, GREEN BUSINESS INNOVATORS: This is Amie Vaccaro with Green Business Innovators and my guest today is Jeffrey Swartz, CEO of Timberland.
Jeff has been with Timberland now for over 20 years and has served as President and CEO since 1998. Under Jeff’s guidance Timberland has grown from a $156 million company in 1989 to a $1.4 billion company in 2007. It is an honor to have you here with us today Jeff.
JEFFREY SWARTZ: Thank you; it’s a pleasure to be with you.
GREEN BUSINESS INNOVATORS: So my first question, I notice Timberland is a great pioneer in doing well by doing good in the business world.
So for example, your employees serve a tremendous amount of public service hours, 40 hours a year, with your Path of Service program and your Servapalooza program. You are committed to going carbon neutral by 2010, you display nutrition information on your shoe boxes, which includes information about the manufacturing plant and your impact on the climate and your community impact. And you are starting a green index for all of your products, just to name a few initiatives.
I’m curious, what is the business strategy behind all of these initiatives? Are they good for business?
JEFFREY SWARTZ: Amie, at the heart of strategy, at least in a company like ours, which is a consumer-facing company with a brand premise that is the locus of all value, right? The locus of value in our company is the brand. It is not on the balance sheet, but it is the basis of relationships with consumers in 85 countries around the world. And so either folks believe in that brand and value it, or our efforts are not going to be rewarded. 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.
I am not sure about making the physics equation, but I am just telling you the notion of commerce and justice is not a business strategy that is designed from “here is a problem we have to solve.” It is not that we need a new advertising posture to think about how to do business with millennials. Or how do we make people think that this soap is more attractive because in the moment breast cancers are very topical notion, so how do we link those notions? I am not disparaging those strategies. I am simply telling you that for an enterprise like ours, it is a third generation of the family to be involved in it. It has been from the beginning built out from. This is what we believe. It has been built out from the beginning, for this is what we are passionate about.
It has been an unlikely build from the beginning, meaning it should not have worked, right? Entrepreneurs try things and they fail much more than they succeed. More restaurants go out of business than stay in business more. Family businesses that succeed in the first generation, very small percentage grow to the second generation and a much smaller percentage yet go to the third generation. And even in the midst of these extraordinary crisis days, and I have a fateful view that what we believe is worth fighting for.
And so when you say respect for human rights in the global supply chain and that is an important thing and if you are in fashion industry right now and you do not have a code of conduct - you’re naked. That is not a good idea, right? So your reputation is at risk and your compliance officer will have something to say about that, or you can get a shareholder resolution, all those are true statements. They were not true 15 years ago when we decided to formalize a code of conduct, and you would say, “Well wow, that was visionary.” Or you would say, “Wow, that was nutty.” And I would say it is neither. I would have said that formalizing a code of conduct is exactly what a good brand builder with passion should do.
And I would have said this: My grandfather was the first generation shoemaker, and he was an immigrant from the land of his birth. He came to America to be free, economic self-determination mattered, he had his ten fingers, he had a deep passion, he had a craftsman’s eye and a craftsman’s skill. And that served him right up until the day, the week of my dad’s wedding, when his hand got caught in a machine in the factory at night, because he and my dad were working after hours to make a few more pair of shoes so that my dad can have some cash in his pocket when he got married to my mom. And my dad was standing next to his father when his hand got caught in the machine and his fingers got torn off and my dad tied a tourniquet on my grandfather’s elbow, so his dad would not bleed out on him.
And the picture of my grandfather in these, like Humphrey Bogart (not to the extent that you would ever have mistaken Nathan Swartz for Humphrey Bogart) but the narrow lapel tuxedo that he rented with his hand all swabbed in white, right, the bandage. Some people say respect for global human rights, where does that strategy come from? It comes from the understanding, as a little boy, that this man that you love and respect and admire and– never complained about it, never. He told me the story but he never complained.
He said, “I had ten fingers to make my living and then I had seven and a half fingers to make my living but that was, that was the challenge. I got to figure out how. Bbecause there’s no welfare system, there is nobody else going to take care of this problem for me, I have to figure it out. And so I did.” That is my grandfather, and I was a little boy and I revered him and I still do. Yeah, I miss him very much and so where do you understand the notion for respect for human rights in the global supply chain? I can smell my grandfather when I go into the factory, and the standard that appears obvious and is if you take ten fingers to work in the morning, you got to, you got to wear them home in the same position they came to work at night. It is not a complex, it is not strategy.
Now we created a strategy. Here is a conduct, here is an audit profile, here is a way to create value in the lives of young women from the north who are working in the south and Southeast Asia. These are all big, big potent issues which we approach with deep humility and real collaborative spirit but at the heart. You say what is the heart of this? It is a belief that there is the way that it is supposed to be. There is a belief that if it lies within your grasp, you have a responsibility to reach for it. It is not complex in that sense.
GREEN BUSINESS INNOVATORS: Wow. Is there a particular program that Timberland has that you are excited about more than others or that you are about to start that you want to just tell us about? I know there is so much going on. We don’t have time to talk about all of the programs but I would love to hear more in depth about one of the programs.
JEFFREY SWARTZ: Well, in one of the things that is the almost the mirror opposite of the point I just made to you is this New England kind of, New Hampshire kind of frugality and innovation based on scarcity, sort of an Ethan Frome-ish notion of you have got to find a way to do it. It may be the Genesis. It is in fact the lonely man of faith is a theological, philosophical work by a very famous theologian. Lonely man of faith is a good way for me to think about how things began, but it is absolutely de-limiting in some ways, and I have learned that in the last 20 years, which is it is essential. It is necessary and it is essential that you have this passion that I have described for human rights based on this personal, deeply held belief.
But if you really want impact, if you really want to scale commerce and justice, you can be the ruggedest, the most effective one man, swashbuckling entrepreneur you ever could be. By the way, I am not. But even if you were, you are going to be as potent as all that - you know the African proverb that says, if you want to go fast, go alone, if you want to go far, travel in company. My conclusion is if you want to go far and fast you got to pick the right company.
So to me, the thing I obsess most about now is how to capture the same feeling which I believe is lodged in pulses in the breast of every man or woman that comes across Timberland’s proposition in 85 countries around the world. I believe that they, as I, they as you, do believe that it is our responsibility to answer to a truth greater than just self. They do want to leave a physical environment behind, they want to enjoy it in the meantime, and they want to leave it behind for their children, for the children’s children, they want to be stewards of a sustainable environmental circumstance. They like you, they like me, know that you can elect anybody you want, but that is not going to solve the problem.
They know that ringing their hands about it does not work. They know that an inconvenient truth that says “the world is coming to an end” is - great, we are scared, now what are we supposed to do? I think they, like me, would like to be called to a series of accessible means, easily accessible, convenient means that would be the method by which the world is transformed for the better. And so we put a label on our shoebox and people say, “Yeah, yeah it tells me it is a size nine, it is brown, this is the left one that is the right one.” And then there is the government that says you have to identify, I don’t know, whatever the bare minimum of compliance that the governments around the world insist upon and that’s all you need to do.
And I think to myself by analogy because that is in fact one of the modes of thought things that Brown [University] used to be really good at. I was a comparative literature major at Brown because I am not a creative guy; I am on the other hand a good editor, right? In our industry it is called merchandising. I am not a designer, but I am a good merchant. I know that goes with that. And so Debbie sends me to Whole Foods (I am married to Debbie), and I do not know exactly why I got the assignment but I did. And I came home with the wrong apples - but I was told to get apples so I brought them home, right, and they were supposed to be 12 and there were 12. And it was supposed to be in a bag with a twist off. There is a bag with a twist off. You did not say they had to be organic!
Well, okay it turns out they did, so back I went. I explained to the cashier, I am not that clever. She said, “I can tell by looking. You were supposed to get organic.” “Yes! I was!” So I brought home organic apples. And we had the kinds you go, they are funny looking. The first ones were round and routine. These are funny looking. Maybe they had worm holes in them. And Debbie said, “Yes, but they are better for our children.” Debbie was a amphib major at Brown, so she was not actually the doctor of biology so I said what are you talking about? The food industry has done an unbelievably good job of telling us that you could expect more from your purchase, and they used point of sale but they also used labeling as a way to disclose the facts about pesticides and herbicides and other not putting inside-your-cides-kind of things on the food. And I thought to myself, huh!
So I watched one of the big competitors of ours in this industry spend 10 years filing a retrograde action with activists saying, “Gives us the names of the factories where you manufacture.” And this big, un-named competitor, said, “No.” And so for 10 years I watched activists absolutely jump like lemmings off the cliff, because they made that a cause-celeb, whereas if they had refrained, it would have taken about 10 minutes of intellectual capital for them to figure it out on their own, but anyway they couldn’t, they didn’t. And I watched our competitor say, “No.” So I thought let us try the other approach.
Let us say, here is the factories, because it does not matter, right, it was a dumb issue for people to be fighting about and we started printing the name of the factory that manufactured shoes 4 or 5 years ago, and the number of responses, the consumer inquiry against that to-date was, I don’t know, with 100 million pairs of shoes, was zero. No one has ever said, what’s Stella Simona mean?
And so I thought to myself, okay, it did not work. I thought telling people where the factories were would engage the consumer, it didn’t. So I said what is next? Maybe we put down child labor on the label. Maybe we will say “no child labor is used.” That is a red flag. Somebody should raise their hand and say, “What do you mean child labor?” Somebody should ask a question.
Well, the truth of the matter is we don’t use child labor in the manufacture Timberland products. It is not a complicated notion. It is just not the right thing to do, so we don’t do it. By the way, some of our competitors do and you go to the point of sale, a great store, and you could find fashion today that is being done in a way that spoils the environment, that disrespects or disregards the human rights of other human beings in the supply chain and from companies that do absolutely nothing to invest in the civic solutions that are pressing upon us everywhere you look. And people walk in and say $19.99 and out the door they go.
My thought was, my thought is Amie, is that if we put a label on a box, we could call the consumer to action and then the lonely man of faith could link up with other lonely men and women of faith and social change can happen in scale. Because those people say, “Wait a sec, wait a sec, wait a sec. How much carbon is used in the production of this product?” I keep looking at the food industry as leaders about this because they… first they said organic and now they are saying local, and this is consumer-based. It takes nutty entrepreneurs like Alice Waters and Chez Panisse out where you are; right, to say I am going to take a point of view about food.
Now it takes guys like Andy Husbands here in Boston, another extraordinary chef who has taken the view that says, art, which is part of the food story, and retail, which is part of the food story, and principle, which is the heart of the food story. That is a commercial notion that can call people to action. And so you go to Tesco in the UK, I am going to be there unfortunately on Monday (it is unfortunate because I have got to travel) and you look at the amount of organic food being sold at Tesco as opposed to the amount that was sold there 5 years ago, it has changed. You go to Wal-Mart, offering organic and you can talk about “perfect being the enemy of good” if you want to but I take the view that the food industry has been relatively revolutionary in getting the consumer to care about this. If I could succeed the same, Amie, then all the lonely efforts become scalable, sustainable, transformative. And so to me, the initiative that matters the most is this frontispiece. 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.
GREEN BUSINESS INNOVATORS: That’s wonderful. And are you finding that customers are connecting with these initiatives and with the labeling initiatives in particular?
JEFFREY SWARTZ: We have those moments where you are straining your eye to the east, and do you know what? It just got to be, that has got to be the sun coming up. It just has to be because I can tell it is a little bit lighter than it was. The problem is - we spent time on the Cape - is if you are up at 4 o’clock in the morning and it is a cloudy day, it is really hard to tell if the sun is coming up. It depends how cloudy, right? Right now it is, as they say here in Boston, “wicked cloudy,” right, and so if you stare up at the night sky and say is it dawn yet, is our consumer is saying, this matters!
Look, I would say this with humility and clarity. No, they are not.
They are right now saying things like, “I am losing my house or my job or my optimism” and so I do not have any despair about the point that Americans in particular will sift through that quickly. I believe that bedrock value stuff that things that people care about and always have cared about will quickly come back. But in the minute I see people absolutely unconcerned at the consumer level. Unconcerned about this as a principal point. I see people much more concerned about more basic Maslow kind of things than not. I do not say that in a cynical way, by any stretch. I say the opposite. I say it in an idealist way. The pain is real, and so I have no expectation that all of a sudden the sun is going to burst forth. But I can tell you I also believe in short order as the bad news finally becomes clear. It is not yet clear. I think that people once again will resolutely be for the common good. In the moment - I don’t know what your sense is but my sense is people worry about the personal good.
GREEN BUSINESS INNOVATORS: And that leads me into the next question. How has this been for Timberland, given the economics and the forward thinking nature of your company?
JEFFREY SWARTZ: There is sort of three different dimensions you can talk about. You can talk about a business case dimension and you can say things like, changing all the energy inefficient lighting fixtures in our headquarters and buildings all around the world to energy efficient ones is a capital outlay that has a relatively short payback, whether oil is at $60 a barrel or $145 a barrel. So that’s like the Dire Straits song. When I was at Brown, Dire Straits was a band that was not famous yet. They played at Sayles Hall believe it or not. I did not go. That is how clever I am and you talk about the spot of trend, right? But you know the song, “money for nothing and your chicks for free.” It sounds like a patronizing line. I do not mean it to. But it means there is no intellectual challenge to think: why don’t you change out your light bulbs, right? The business case called “How values allow us to have a competitive edge”. You can make a long story out of it Amie, but I do not really buy it, because it quickly comes to the asymptote.
The solar array that we built in California over our DC [distribution center] in Ontario, which presents us opportunity to judge 60% of the energy in Ontario from the sun at $145 a barrel, the payback is faster than it is at $60 but I built it when oil was at $40. And so you can say better lucky than smart. Oil got more expensive. I don’t think that is lucky anyways, on one level. On the other level that is not why I built it. We built that because we believed it would be of value to us on two other levels. So the business case there is not “we’ll save money on energy.” There is a payback, it is measured in way too many years for a CEO or a CFO to be interested in per se. And there is a second soft value, which is a sense of theemployees of Timberland and the men and women who are as uncertain about the future as anybody in other companies are. You can see it in our employee surveys which is an imperfect predictor but there it is, a deep affiliation between values and personal commitment.
So that means on the margin, I think, a business case return can be made that investing in an exposition of commonly held values is a good way to knit together a community. That also is asymptotic because you still have to pay people fairly and you have to give them opportunity to develop their careers so it is not a single point of success either.
The third point, the profound win, the business case win, is the data I cannot present to you.
It is the data that says the fact that you use wind power in the Dominican Republic, and renewable energy is site-driven renewable energy is what drives your headquarters buildings and that your stores are LEED certified, the first stores in any mall in America to be LEED certified were Timberland stores. And when I tell you that that is the reason that our comparative sales month on month are up in our store in Garden State Plaza, New Jersey, then I have the business case. And I say to you with humility Amie, I do not.
Meaning the store in Garden State is having the same crappy, that’s a technical term, same crappy comp sales as the American Eagle Store next door, which is a totally valueless exposition about exploiting sex and teenage insecurity. So skin sells clothes. That store is doing as well (or not as well) as the Timberland store that is about recycled contents and materials and LEED Certified environmental store with bamboo floors from renewable energy sources and repurposed fixtures.
Sex is selling as well as values alright, this minute. And maybe, if you looked at the last three years you’d say a tawdry exploitation of sex is selling better than this notion of purpose or values. I say with humility that’s not the failure of the idea; that is the failure of the person expressing their idea.
Meaning that Mike Jeffries, the CEO of Abercrombie, has done a better job than I have of selling his idea. I think his idea is worth a lot less than ours socially, but I have to acknowledge with painful humility, he did a better job of selling it. And so I have to do a better job, we do, of selling this idea of commerce and justice to consumers not in an earnest way but in a sexy way.
And by sexy, I do not mean in the physical sense, 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 Amie, 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.
GREEN BUSINESS INNOVATORS: Well, since you may have already sort of mentioned this, and I am curious how you know that you are making an impact as a company. So for example with all the time that your employees spend doing public service, what is the outcome of all of that?
JEFFREY SWARTZ: The outcome of that is there is a “line of sight” outcome. You can go to places near here in New Hampshire, where we live and work. You can go to any number of sites and you can say for 10 years or 12 years or 15 years, you can go to the group home in Rochester and you can say for 15 years - that’s two almost generations of young offenders - Timberland employees have been going to this group home in Rochester. And for those same 15 years, the Timberland’s legal department in-house team has been mentors to and mostly older moms and older sisters and also older brothers and older dads, there is more women than men in that group. They have been partners to that group home.
You can say the famous City Year starfish story, the ocean washes up 10,000,000 starfish and all are dying on the beach and a little girl is walking down the beach and she is just appalled by all these starfish dying and she picks one up, and she throws it back into the water. And an older cynical man says to her, “Hey, at the rate you are throwing them back in, 99 out of 100 will die.” And for a minute she stops, and she pauses and there is tears in her eyes, then she bends down, picks it up and throws it back and she says, “Well that one didn’t, right?”
So impact? I can talk about the 15 kids per class at the group home in Rochester that have had impact from our general counsel and her staff. I can also tell you about the impact our efforts at the Rochester group home had. This is a really narrow example on purpose, right. I can tell you that the therapy course for young offenders in New Hampshire has changed. That it came by happenstance but if you only have happenstance when you are in the game. You have to be in the game before you can have luck, right?
We invited young people from a group home to come with us to a place in Exeter, where we were going to do a physical transformation day. And as a consequence, we gave these young offenders, these young adolescent boys sledge hammers and said, “Knock this wall down.” And one of the young men said to another guy here, a West Point grad, a real law and order guy and said, “Hey, you can’t fool me. As soon as I hit this wall the cops will bust me again.”
And Gordy said to the guy, “No, no, no. We are going to knock that wall down because we are building a day care center here at this local building.” And the two would not believe him, so Gordy picked the sledge up and he kicked the wall first and the kid, they looked like, oh my goodness, it is Christmas. And they knocked this wall down, in about 16 nanoseconds. “Anything else you want knocked down?”
Well, the counselors from the state, who traveled with them that day, saw the impact of what happens when you ask a youthful offender to become a youthful service hero. And so community service is now part of the curriculum for youth homes in New Hampshire. Is that impact? It is. Does that have anything to do with selling boots and shoes? Absolutely not, but if you were one of the people at Timberland who was involved in that service experience and they walked through this building, you recognized - I may be an accountant, but I’m heroic. I may be a marketing person but I can take anything that the world dishes out because I have a solution within me. I have the strength to transform whatever you present to me.
So I can talk about the impact one kid at a time, I can talk about the impact programatically and then I can tell you that we are hinting at the dawn where that impact, a one to one impact, a one to 10 impact, a one to 100 impact, can become - there is 5,000 Timberland people, there is 30 million Timberland consumers. When we find the voice, Amie, that connects together, 5,000 Timberland people’s efforts to 30 million consumers, they look at the label and they say, “I am not going to buy a product that is not done thoughtfully, I am not going to do business with a company that does not delight me and satisfy me in terms of its efforts in terms of the civic square. I am not going to vote once every 4 years. I am going to vote every time I go to the cash register.” If they vote every time they go to the cash register, that is the impact that is in front of us, that is the impact that says - Remember George Foreman, “I will not pay a lot for that muffler” and Federal Express “I want it absolutely, positively overnight.”
Those are ludicrous statements when they were first made. But they are not ludicrous now. They’re banal! Absolutely, positively overnight. Of course it is. If it is not there at 10 o’clock, where the hell is it, right?
What happens when the same calculus enters into the acquisition of boots and shoes and clothes, right? Of course it is organic cotton. And of course it was picked and procured and manufactured in the low-cost high quality, really sexy piece of apparel by a company that has invested in human rights of the people that are involved in the value chain right from the beginning right through to the end. It is done in a way that minimizes this carbon footprint. It’s sustainable; it is a cradle-to-cradle product.
Does this sounds absolutely nutty? Look, we have products that fit that bill. And we are going to find a way to make the consumer say, “Wow, that is cool, I want one of those.” That’s the impact that lies in front of us.
GREEN BUSINESS INNOVATORS: So that is kind of the front line impact, and taking it back a notch, what is your understanding of the impact of Timberland’s efforts at the ground level, say in communities where production occurs or where materials are sourced?
JEFFREY SWARTZ: Yes, my colleague, one of the guys that is so important to the enterprises, is in Bangladesh today, or let us say he was, it’s already tomorrow there, so that is 2 o’clock in the morning there. He is in Bangladesh. He is in a place called Chittagong. 145 million people that live in Bangladesh. It is a small country, the fourth most populous Muslim country on earth. I think I got the math right. We do business with a Korean manufacturer called Young One. They are a really principle group of nut jobs. They make apparel for us under contract. And so for 10, 12 years we have been doing business with them.
And we have a partnership with CARE and local NGOs because we piloted there, Amie, the idea of not just to complying but creating value. So it turned out there were some really easy ways to do it like ground water contamination, with cyanide in the ground water in Bangladesh. I do not know why, but it is everywhere and so if you dig a well you get sick. So dysentery was a number one disabler of the women who work in the factories. And so clean water did not cost a whole lot of effort.
If you didn’t do a needs assessment with the local NGO, you would not have understood that. You could say, pay a living wage right, but people are puking. So how about instead - let us get people’s gastrointestinal system to work and that is clean water. By the way, that’s short money and they are healthy and they are productive. That is kind of good. Then it turns out that all these women are remitting without pause, 90% of what they earn back to where they come from, right. And it is a cycle that just continues to churn because the money goes and nothing happens because women did not have access to the capital system. They cannot borrow money; they cannot save money, because they could not qualify for the private banking system in Bangladesh. So we became a banker and we have made I think, I do not have the number in front of me but I bet you it is something like, I just said it in another speech. I think it is 17,000 loans and Kate will tell you if I am wrong. She will find out the fact.
It can be a 170,000 loans. It is 17-something. It is at least 17,000 loans over the life of this program, which is, it turns out to be somewhere in a couple of million dollars, at wicked short money. 90 bucks a pop to these women and by the way, not every single loan, but everything has been paid back with interest meaning the program is self-supporting now. Timberland had to fund it to get the pump to turn, but now the program will support itself. It is a micro-finance program that is run by CARE and by other local NGO’s. We contributed to it. It was a nutty idea, it was short money, but it absolutely changed the economic future of a generation of women in Bangladesh.
I’ve got to tell you something. That to me is foreign policy, that is homeland defense, that is social justice, that is business as usual. That is exactly what for-profit business can do and should do. Because I tell you, we get the highest quality garments out of Young One, on time, on price, smoking outerwear, stuff that everybody ought to wear when it is cold and wet and rainy. And every time I put them on I feel a tiny bit warmer, because I know the people who made it were treated with decency and respect and for very short money, but I think for relatively long intellectual capital, we are able to recreate a possibility that did not otherwise exist. That to me is local impact.
I could tell you 100 stories like that and that is not said boastfully, but would not be all Timberland stories. I could tell you about other companies that are doing the same thing. I can tell you about the cycle of breaking monopolistic food prices in the Dominican Republic in our own factory. I could tell you about things that other companies have done. The fact is when we find a way to make consumers know and understand this; I think there is a revolution that waits from the other side of that communication.
GREEN BUSINESS INNOVATORS: Yes absolutely. That is what my next question is, how have gone about it and how are you planning to go about communicating this both internally, to your employees, and also to the outside world and to investors and have you found something that works?
JEFFREY SWARTZ: Talking to Timberland folks is relatively straightforward, right, so that is a campfire conversation. We do a lot of that and I say we are good at it but we are not great at it. And we are willing to talk about it; it’s another thing to do it. That is why we do organize things like Servicepalooza, earth day things, where we call people to action in big groups, not the 15 people going to the group home in Rochester, we say come on like 5,000 of us, let’s show up and do something. There is something very galvanizing about being part of what looks and feels like a revolution or a movement. So that, that is at the heart of what we do with consumers too. We did 4 events this fall called Dig It Rock, which is during the day we went to, say, San Francisco, where we went to a neighborhood and we tore up the concrete, we planted trees with an NGO in San Francisco that was all about reforesting in the city, because we’ve committed to 300 green spaces in urban environments around the world over the next couple of years.
We committed to planting one million trees and it is one thing to have an offset conversation, like I can build a wind farm in North Dakota. That is a good thing.
To me a higher standard would be to build a wind farm at your factory in the Dominican Republic. It is good to do planting of trees. It is better to do by commissioning somebody to do it. It is better to actually get your team out there with consumers in terms of just go to Los Angeles, Boston and New York, digging during the day and rocking at night. You throw a concert, this guy - what is his name; Stone Gossard. Yep, he is from Pearl Jam. I know you are too young to know but I also tell you I’m too old to know who Pearl Jam is …
GREEN BUSINESS INNOVATORS: I know who Pearl Jam is [laughter]
JEFFREY SWARTZ: Okay; I am the only one that did not know - there you go. My kids are not very pleased with me on any dimension including the fact that - they said “it is on your iPod, Dad.” I said: “When you show me how to use it, I will tell you what it is.”
Anyway I still have not heard the music, but this guy is a legitimate environmental steward. He put on a concert at night with some of his friends. If you dug during the day, you could rock at night and he would call in consumers to action. But it is not an advertising campaign Amie. That what was wrong with model people. I thought that would work; it didn’t.
Actually the only part of that, that worked was absolutely not what we intended. We had like 7 subjects in that campaign and one of them was a woman, in fact the pictures are right outside this room. I will show it to you after this. In the thesis was he or she is not a model; she is a model person. It talked about real life heroes wearing some of that stuff doing their thing like working at the group home in Rochester. And so, I mean it was a giant yawn, nobody reacted to it right, except the body type of the woman in the ad was a-typical. It wasn’t heroin-chic, the woman. So we got, and I am not kidding you, we got 10,000 postcards from an organization that said thank you for not objectifying women.
And I thought that is great, that’s nice, it is even wonderful but that was not what the campaign was about, like did anybody notice what we were doing here!!??
And so the data that we got back from that kind of communication is - no one believes it, Amie. If you want to have a conversation with a consumer, the only person they will believe is their friend or their own two eyes. It is very Machiavellian. People have to experience it. And so we have done things like the community builders tour in 10 cities across America.
We have done things like, we called consumers to serve and that is a very inefficient model. In the Dig & Rock events, what do you think we got? A 1,000 - 1,500 people? Okay, but we’ve got 30 million consumers. We have to build a funnel that allows them to have an experience.
So what we did this fall is we launched (okay, here we go into like techno hip stuff that I am not sure that I can pull off) on Facebook. Yup, I have an account right. The kids are still furious about that. The reason I have a page on Facebook is because we launched this tree planting thing and I thought it was kind of like nutty. But here is what happens, you click on this thing and you get like a little package of seeds and you can plant them on your Facebook page virtually and if you can get 5 or 10, I don’t remember, other people to water your little tree, it grows up and it turns into a mighty Oak. And when it grows into a mighty Oak and it is mature, Timberland commits to planting a real tree. And so they brought me this thing and I am like “yeah that will work.” And they said: “No, no, no, you got to show a little faith here, old man.” And I said “okay.” And so far Amie, 500,000 trees have grown to maturity on Facebook.
And yes, I am thinking soon - we are not ready to do it yet. We are going to have to tell people that - it does not matter, we have to get to it because it is the truth. We said we plant 1,000,000 trees, here is 500,000 we owe. We are going to have to double the commitment of trees. We are going to have to very shortly tell people, we are actually going to plant 2,000,000 trees in the next couple of years. That is so darn cool, it is nutty. It is absolutely cool.
This social networking thing - I did not get it, I am not sure I do get it. It does not matter, our consumer gets it. So how do you tell the consumer story? You have got to talk to them on their terms. It cannot be earnest, it cannot be - I will tell you one more story. I hope I am not boring you too much?
GREEN BUSINESS INNOVATORS: No, not at all.
JEFFREY SWARTZ: I was in Davos at the World Economic Forum, and I know that sounds wicked pretentious but I will make it less, quickly. I went to the breakfast session one morning at 7 o’clock in the morning. There is the guy from U2, Bono, and there is the guy from the White House, Vice President Gore. And Tom Friedman is refereeing breakfast between these two fellows. They are up on the stage. And Gore gets up there gets up there and he says in effect for twenty minutes - “We are all going to die.” It is bad, no, it is really bad!! We are all going to die.” And so he is a very powerful fellow.
Then Bono’s turn is up and he goes like: “Whoa; easy does it!” And he says, we are going to die but in the meantime we can have some fun while we’re going for it here.
And I heard this point, it was really profound.
If you ask me what the vice president said. First of all I heard that spiel so many times perhaps I stopped listening, but it really was citing wonkish facts about the end of the world like the R.E.M song, “The End of the World As We know It,” right?
And then up comes Bono and he says: “Look, I am a Gulf Stream flying, noise polluting, Irish rock star” - which is funny, it is cute, he says: “Forgive me Father Al because I have sinned with petroleum.” That is with an Irish accent, he was hysterical, right?
What he wanted to say next about poverty, everybody in the room heard. It is not because people like rock stars and not presidents or vice presidents, it is because “earnest” sells to the elite and engaged, and– not dumbed down, I am not saying that. Bono said very pragmatic, political, policy like things, most of which I disagreed with, but he said it in a way that was meant - it was not about him saying it, it was about you hearing it. That was the difference between an Irishman and a politician.
The Irish realize that - if I cut off my ear right, and you do not buy my painting, life sucks. Whereas if I can find a way to put the right rift on the guitar and the right back beat on the drums, you will buy my album and if you could buy my album and you buy my idea, then I win, right? Then I can be the Gulf Stream flying rock star from Ireland as opposed to the world is coming to and end and the profit of doom, right?
And so we are working really hard to be Bono-like, and I am not being disrespectful, at least on purpose, to Mr. Gore, because he is an extraordinary leader. I am just saying you’re point was - how do you sell this to consumers. It cannot be - Mom used to say, there are kids are starving in Africa. Eat your dinner. But I do not get it. How does me eating my dinner…? First of all, I am not motivated. It is not good to hear about the kids starving. Tell me how are they connected, right? So what do you want me to stop and tell me how I can make a difference?
Bono said, you are going to change the darn light bulb and the ballast. And so yes, there is global warming and yes there is an ozone layer problem. Yes, we are going to eventually die, but right now, change the darn light bulb.
I think to myself, that is a consumer facing message Amie, right? Change the light bulb. Shareholders do not want to hear this, period. Not the social justice shareholders. I think with deep respect that industry is a fraud. The idea of social investing to me is a clever way for people to get you to give them their money, your money for their mutual fund. Because if you look at what they do, and I know it is not as disparaging, and maybe I shouldn’t be quite so hard, but I tell you my belief.
If you look at a company like Timberland and you look at our investment holding from the outside world, you would have guessed right? Based on who we are and how we do our business, that a big percentage of our shares would be held by institutions that are so called social investors. And it is just not true. We have the same amount of social investment money as Timberland that GE has. And I have got to tell you something - to me that is the proof that the shareholder paradigm is one you should not invest a ton of time in. The shareholder wants to hear return on investment capital.
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. They do not buy the argument that investing in reputation management or employee retention is a worthwhile investment. They will say “take them out for dinner”, right? Or run a professional development class. You do not need to invest in City Year to make people feel good. Paint the walls, give them a Halloween party, do more at the Christmas party.
And you know what, on that level; I understand their assertion, right? The only thing the shareholder cares about, the external institutional shareholders that get us into so much darn trouble in this country is what happened at the end of 90 days. Did you do what you say you were going to do? If you did, I almost do not care how you did it and that includes the so-called social justice investors.
Because if you look at their investments. Look at Starbucks. I do not know this, but I bet Kraft foods has the same percentage of social funds as Starbucks does. To me it is actually revealing, right? It makes it easier. I have given up wondering about people investing in a socially thoughtful way.
Right now my view is: win with a consumer and a shareholder will follow. Sell this notion of commerce and justice to the consumer and the shareholder will say “that is a good idea,” because you are getting paid for it.
GREEN BUSINESS INNOVATORS: So my last question - Timberland is just one company and one that is doing a lot; how are you impacting other companies and do you feel there are partners or suppliers or peers of yours that are learning from you, and as a finale to that, what advice or questions do other business leaders ask you for the most and what do you tell them?
JEFFREY SWARTZ: Well, I believe that the redemption of our society is the congregation of lonely people of faith, meaning that you should not come into the civic square unless you have faith in the civic square. But if you have faith in the civic square you cannot stay at home and simply tend your own garden. You have to come into the civic square and you have to do what I call the awkward dance, you got to get over your social concerns whatever they are.
You have got to come into the civic square and you got to collaborate - with competitors, and you got to collaborate with across industries, and you have to collaborate with non government agencies, and with the government, and you got to get mixed up with the church. And you got to– it is just like you got to get up, close and personal. You got to smell the other guy.
And so I absolutely feel no less lonely now than I did then. That is a personal thing. But I feel much less alone now than I did then. If you look around 20 years later in the civic square, are there 1,000 points of light? No there is more like a million points of light. The problem is it will not be a million points or billion points of light if it will only come from the connecting of those dots, right? We got to raise up the sparks. That is a neat religious notion. Raise up the sparks and we got to catch fire, right? The sparks, there are lots of sparks. There are lots of our competitors, there are lots of other industries and real vision leaders who are doing extraordinary things, right? And you can see it anyway you want to look.
Even the cynics will have to confront the reality, I think, that the barnyard animals have fled. You can slam the door, but I do not think we can go back to an expectation, even in these hard economic times that it is all about just making a buck and who the heck cares? I don’t think that the business of business is to earn a return for shareholders, it has no other purpose and no other accountability. I do not think that is as credible as it once was, and I am very encouraged by that, right?
Am I effective at getting other people to share a sense of passion and purpose in this regard? Certainly, I would judge me “no, not effective” because I do not judge it by inputs, I judge it by outcomes, right?
I know that 20 years ago business was less involved in the civic square that it is now and I also know there is more hungry children in America today than there were 20 years ago. And that is with 40 billion dollars spent and with some of the best most entrepreneurial social justice organizationists like Share Our Strength that exist in the world partnering with very big powerful businesses, for-profit businesses in a powerful way, not in a philanthropic way. People like Henckel Knives or restaurateurs all invest in the Share of Strength, and there are more hungry children now than there were before. We have more educational failure now than we did before. So how effective am I being, or are we being at populating the civic square with enough interconnected dots that will blow away these problems? Not powerful enough.
I keep using that line “halfway to heaven and just a mile out of hell.” We are half way to heaven though, we are. There is data that it is empirical. The elites wrinkle their nose at Wal-Mart and say, “Well, I know they do organic, but that is not good enough.” And I say, “okay, great, knock yourself out; have another sip of wine,” right? I think that the “perfect is the enemy of the good” and if you look in the civic square there are a lot of odd looking CEO’s in the suspenders, in belts, and braces and suits and limos, and jets and I am glad they are there. I am glad every one of them is there and come on in, there is room, right?
I also see religious leaders there and I see - frankly, I see less in the political world there. I hear tons of speeches from left, right, center, up and down, and yet, I do not see yet an expression politically enough of what I think is the consumer’s will. The desire to see real substantial, sustainable social change, pragmatic, concrete, hard stuff. I pray that we get more leadership from the local, state and federal government. I pray for that. I look at what is going on right now and I work and I tell myself I am going to die soon, so I got to try harder, right? I have to try harder.
So when I get a chance to talk to other business leaders, what do I tell them? Well, mostly I get questions from people that are based on - tell us about the mistakes that you made when you started this program because we do not want to replicate them. And those are easy conversations, like when you begin a commitment to renewable energy. Like what are the three things that are the most wrong. So that is easy stuff.
The hard conversations, 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? Those are the conversations to me are the most bracing, the most intimidating, the most valuable and they are the rarest; they are. The conversation too often devolves to “let me tell you about my program, and you tell me about your program.” It’s well intended. I see the value of that Amie, meaning that it is like we are reciting to each other. I am a good guy; you are a good guy, right? We are both good guys. Good. It is reassuring, right? The lonely people in the civic square that give you assurance but I am anxious for– it is not that I wouldn’t like reassurance, please, but I need it.
But I am more interested in real convened conversations about - okay the Harlem Children’s Zone in 25 square blocks of New York in Harlem is a transformative social justice program, and now everybody who read who read the article knows it. Okay so how come there are not 10 of them? Why has it not gotten off of the ground in Los Angeles?
Because, okay there is only one Jeff Canada. I know, right, the answer is not let us pray that there be 10 Jeff Canada’s. We can pray for it but I only know the one Jeff Canada. So how are we going to create the solution in Los Angeles? Because the need is the same and that is the conversation that I want to have.
That is the conversation that I am most excited about and they are the hardest, right? Not “blah, blah” conversations, but okay how are we going to build a more perfect union? How are we going to perfect our democracy? How are going to transform the civic square?
And the truth is, the CEO in that conversation has a lot to say, because she is smart, she knows how to run a business, she knows how to make payroll, she knows how to make hard tradeoffs and choices. And the rare times when I get involved in those conversations I go home feeling good about things.
GREEN BUSINESS INNOVATORS: Well, thank you so much. This has been a really valuable conversation and there are so many things would like to dig into but I have run an hour now so I want to wrap it up right here, so thank you so much Jeff and Kate for spending this time with me; I appreciate it very much.
JEFFREY SWARTZ: We appreciate the opportunity. Have a great day Amie.
GREEN BUSINESS INNOVATORS: Thank you so much.
May 11th, 2009 at 10:02 pm
[...] Read the transcript and listen to the audio of my interview with Jeff Swartz on Green Business Innov… [...]
June 2nd, 2009 at 4:25 pm
Excellent insights from a multi-generational business. I’m delighted that a business has built up that much value-capital over the decades. And sorry to hear that investors and customers don’t value true value. When is “real” enough for us? Why does everything have to be “sexy”? Or “cocaine inspired models” as Jeffrey alluded to. Is that really fun and admirable and desirable for our future health and well being … and survival? Just asking! Carolyn, CaliforniaGreenSolutions.com
June 7th, 2009 at 9:35 pm
[...] 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 [...]
September 11th, 2009 at 9:14 am
On the surface view the statment being good do well is okay to superficial minds. It is great for them.
I am a farmer and also learned art of colours theoritically and experienced it in work and crafts making enterprises for 25 years .
There are artist and fine artists.All are bogus infront of simple life living a farmer who creates the very life he is living . This he does by creating the nature itself .He is fish in the water of aesthetic taste .
Now I entered into green business.
I now know what the cellose is what the organic cell is as I studied science from Life scientists as well from Lab scientists.
Clearly see the Mordern days designers of fashion garments are be fooling women with false colours and material as real .
If ones eyes are not trained to percive colour by academic training or creative innate intutive realisation he is easily decived in colours .
So , by being good you could not do well ,may do sucessful ,not well. It all depends how you define the well/success.
Hence , by being creative solid is contribution .It may be innate or by delibrate trained one.
All others are success not doing well.
March 7th, 2010 at 7:44 am
The moden days that is fresh millanium creativity does not lie in the hand Big company researchers or designers.
The very life style of Academicians and Scientists and Industrialists is not natural to learn creativity when innate is absent. Also Doctors and mechanics and fisherman are using tools stylish way. Farmers have to cope in multidirections and bewilderingly aware from 360 directions to produce life out of life.
This world food supply sources were ruined by non creative people who are sitting at the power seats.Govt. interferes and spoils the eco system. For example the meat produced in Ranches where animal is made to live in one place is not quality or tasty.Pastoral herders in Africa now create better cash from a hectare of land and his meat of animals moving on land is tastier and quality one. By making organised farming it is being ruined.In South India aerable land for cattle gazing is reseved for forests and retreats the organised farming is spoiling their incomes.Ego policies of non creative people has systamatically only spoil the world . They are incompetant to the work they are given to do and they naturally create troubles for all except for them selves.
Similarly art and craft must not be organised under large factories ; mono scale processing for accuracy shining garrish effect that excites people eyes and mind sensually, than bring peace to mind and serenity to surroundings.
The Fashion designers befooled people with man made and synthetics as true and real colours . They became psycho nurotic to that extent they want to die peacefully in Malls where they lost it when alive. They are right ,their soul seeks peace where it lost. They lost it in malls and seek there as there is good light ,otherwise they will die.
Now Organic farming and natural dyed garments on natural fibres have to return.Companies who focus on cost effective rural craftsman effecient production and indirectly encouraging organic fibres alone can survive in CYBER SPACE.
Keeping this in view kept our research going relentlessly for decades and now have come out with Art of Ecstasy. We AS R.H. Macy’s ex supplier of crats in volume learned the lessons of Large is never enough . Less is more.
In a macro world micaro units aresubject to get market struck. What is our advantage is disadvantage too. Strike a balance.This reality the geedy middle men must understand. Other wise the green business also will be twisted to death.
Because power seat is usually occupied by non creatives or stylish ones, that creates obstacles to others and benifit only to them.
Basic truths to be reached no use of holding on to tails .