Tuesday, August 24, 2010

Ray Anderson: Green Business

Biography

Ray Anderson was born in Georgia in 1934. He attended Georgia Institute of Technology and worked for a food company before switching to the carpet industry. In 1973, he spotted a new opportunity – to import European carpet tile technology to the US where broadloom carpet was the norm. This led to the foundation of his carpet tile company Interface, the largest in the world with about 40% of the market.

In 1994, Anderson was challenged by an employee to say what the company was doing to protect the environment. By coincidence he had been passed a copy of The Ecology of Commerce by Paul Hawken, so he read the book to give him some background for his response. He has described the impact of the book as “a spear in the chest”. He declared a goal of the company having zero impact on the planet by 2020 with a long-term ambition to become a “restorative company” – ie one which would have a net positive effect on the environment.

As a result of his efforts, Anderson has been awarded a raft of awards and honorary positions, for example, co-chairman of the President's Council on Sustainable Development in 1997, and the inaugural Millennium Award from Global Green in 1996. In 2001 he became the first corporate CEO to be awarded the prestigious George and Cynthia Mitchell International Prize for Sustainable Development from the National Academy of Sciences. He has written two books describing his experiences, Mid-Course Correction in 1998 and Confessions of a Radical Industrialist.

During a speech to the UCLA Anderson School of Management in January 2010, Ray Anderson announced he had been diagnosed with cancer.

Contribution

Ray Anderson’s company, Interface, is the least likely champion of green business that you could imagine - it is the world's biggest manufacturer of carpet tiles; products made from oil-based chemicals using huge amounts of energy and producing tonnes of toxic waste. As Anderson says:
“If we can do it, anyone can. If anyone can, everyone can.”

Anderson’s response to his "spear in the chest" is the radical ‘Mission Zero’ commitment to have a zero ecological footprint by 2020. In order to achieve this, Interface developed the idea of ‘Mount Sustainability’ which has seven faces - all of which have to be climbed:

1. Zero waste

2. Eliminating emissions and effluent

3. Renewable energy

4. Recycled or renewable materials

5. Making transport resource efficient

6. Sensitizing stakeholders

7. Redesigning commerce

Anderson estimates that Interface is 40-50% of the way to achieving Mission Zero. There are too many examples of how they have progressed to list here, but here are a few key examples of innovation:

• TacTiles - a new carpet fixing tape, inspired by the tiny hairs that allow geckos' feet to cling to any surface, to eliminate the need for glue and make the carpet easier to recover.

• the Entropy carpet tile, again inspired by nature - this time leaves on a forest floor, which can be laid in any direction.
• Fairworks, a ‘fairly traded’ carpet tile made from natural materials by social enterprises in India.

These are great examples by any measure, but what lifts Anderson and Interface above the crowd is their ability to find a business opportunity where others see problems. For instance they turned the perceived cost of installing solar energy in one factory into a new product. The solar panels would generate zero carbon energy equivalent to the whole supply chain's carbon emissions, but wouldn’t give a realistic return on investment on energy savings. So they installed the system and branded the carpet from the factory “Solar-Made”. This product has won huge public sector contracts, worth at least 20 times the original investment.

Another success factor is Interface’s willingness to kill off products and services that do not comply with their goal. This ruthlessness is a spur to innovation as the deleted products need to be replaced by new products which score well ecologically as well as commercially.

A third key achievement is the embedding of sustainability into the DNA of such a large international industry. Anderson tells the story of a forklift driver who, when asked what his role was by a visitor, told her “Ma’am, I come to work every day to help save the earth.” I was told by a director of Interface’s European arm that “You can’t talk to anyone here for more than 5 minutes without the conversation turning to sustainability.”

Interface isn't afraid to fail either. Their much talked about "Evergreen" carpet leasing service (part of face 7) was a marketplace failure - mainly because their customer's financial systems and the US tax system couldn't cope with carpet being a revenue item rather than a capital item. But they continue to innovate, developing the ReEntry 2.0 carpet takeback system as they know to hit that zero footprint they need to close the loop on their own products.

Ray Anderson is in many ways an unlikely green guru. An industrialist, a Southern Gentleman, self deprecating and almost impossibly polite, he is as far from a tree-hugging tub thumper as you could imagine. But nobody else has delivered green business improvements on this scale. He has taken the theories of gurus like Amory Lovins and Janine Benyus and demonstrated that if done correctly they do make good business sense. By transforming an archetypal ‘dirty’ industry such as floor coverings, he has demolished the excuses from other sectors that it can’t be done. And he is committed to spreading the world, reportedly delivering around 150 speeches and interviews a year. When it comes to industry, Ray Anderson is the green guru.

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2 Comments:

At August 26, 2010 at 8:35 AM , OpenID davidcoethica said...

A true leader.

Great article about Ray and I'd thoroughly recommend both his own book and the book that started him down this path, The Ecology of Commerce.

A time reminder of what can be achieved through leadership during a time Ray faces his biggest personal battle against cancer.

 
At December 23, 2010 at 3:16 PM , Anonymous Lynn Fang said...

Great article about Ray. He is an inspiration - with more industry leaders like him stepping out to take a stand, we can really transform our economy and society. Sad to hear he is battling cancer - he will be sorely missed.

 

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