The Inspired Protagonist

The Two Faces of FedEx

Inspired Protagonist — Fri, 02 Jan 2009 12:58:45 -0800

This past May, I wrote a post about Steven Greenhouse's book, "The Big Squeeze: Tough Times for the American Worker." I castigated FedEx, a company that I had held in pretty high regard.

The post included an excerpt, from the book, about Jean Capobianco, a two-time survivor of breast cancer and former independent contractor to FedEx. According to Greenhouse, Jean and other independent workers were abused and cheated so that FedEx could save about $400 million a year.

So FedEx isn't the "good company" we once thought it was. Well, it's never that simple. To the best of my knowledge, FedEx hasn’t resolved Greenhouse's allegations. But it made headlines a few weeks ago, this time for its enlightened response to the financial downturn.

Writing in the Wall Street Journal, Peter Eavis reported that instead of laying off employees, FedEx is preserving jobs by trimming salaries.

"In response to terrible shipping trends,” Eavis writes, “FedEx said next year senior execs would have salaries pruned by 7.5% to 10%, while other salaried employees would face a 5% reduction. Hourly workers aren't included in these cuts.

"Why might this approach work? It could help avoid the disruptive and expensive process of firing lots of workers in a trough -- and the added cost of rehiring them when the recovery occurs. FedEx's cuts for its better-paid employees also might give management credibility to ask for cuts elsewhere if the recession drags on.”

Compared to the slash-and-burn policies that have left millions of workers unemployed as hundreds of the nation’s largest companies announce super-sized layoffs, FedEx's response is smart and responsible.

The same company that reportedly abused its independent contractors offers an enlightened way to limit the pain to its full time employees. This leaves us with a vexing question: How do we know which companies are truly good, which are posers, and which are a mix of both?

Despite corporate responsibility publications, voluntary sustainability standards, and ratings by socially responsible investors, there is simply no broadly accepted evaluation that you can turn to. While B Corp. has created a standard for small and mid-sized private companies, none exists for large, public businesses—an opportunity worth seizing.

So in future posts, I will ask for your help in outlining principles that make for an authentically good company.

A Silver Lining for the Financial Meltdown?

Inspired Protagonist — Mon, 22 Dec 2008 17:05:55 -0800

“I have no sympathy for Madoff. But the fact is, his alleged Ponzi scheme was only slightly more outrageous than the ‘legal’ scheme that Wall Street was running, fueled by cheap credit, low standards and high greed. What do you call giving a worker who makes only $14,000 a year a nothing-down and nothing-to-pay-for-two-years mortgage to buy a $750,000 home, and then bundling that mortgage with 100 others into bonds — which Moody’s or Standard & Poors rate AAA — and then selling them to banks and pension funds the world over? That is what our financial industry was doing. If that isn’t a pyramid scheme, what is?"
--Thomas Freidman, 12.17.08, The New York Times

Almost a decade ago, the business community betrayed society with a stunning series of scandals. Notorious outfits like Enron, Tyco, and WorldCom exacted a terrible price for putting our trust in them. There was, however, a sliver of a silver lining: the debacles cast a spotlight on the nascent corporate responsibility movement. Enron’s disgraceful demise was a potent—if ironic—argument for the notion that “doing good” is good business.

Over the past decade, corporate responsibility has hit the mainstream of business thinking. But sad to say, we have not made sufficient progress. Far from it. While many companies proclaim their commitment to the CR concept and a handful publish GRI-based corporate responsibility reports, no company has surmounted the twin challenge of becoming socially and environmentally sustainable. And too many companies cloister their CR efforts in their PR departments.

Now comes the meltdown in the stock market and the credit markets, which has drained the swamp and exposed the rot at the core of our financial system. We now see that under-regulated markets have hollowed out the economy; that the Ponzi-like scheming on Wall Street rewarded those who destroyed value; that our obsessive consumerism is ultimately unsustainable.

As we venture into a new year, we must once again look for a silver lining: that the pain of rising unemployment and the collapse of the stock and housing markets will make way for a new social order. An order nurtured by our new president; one that gives birth to new possibilities rising out of old ashes—and makes us authentic guardians of the next seven generations.

A new day is almost at hand. Get ready to do your part. You are needed now more than ever.

photo: Siday Astarr

A Smile for a Stranger

Inspired Protagonist — Wed, 17 Dec 2008 06:21:25 -0800

Like most people, I feel good when I help others in small ways, so that they feel good. The smile you put on the face of a stranger is a thrill that never loses its luster. The simple act of chasing after a stranger who has dropped something or assisting someone who just can't seem to get a bag to fit in the overhead compartment of a plane -- small acts requiring only seconds of effort -- have cumulative and lasting effects.

It's wonderful to work in an office full of people who put a smile on each other's faces. With few exceptions, I find that to be true around Seventh Generation. Through small acts of kindness, people have a way of helping each other that's ultimately contagious.

Now new research takes that idea a step further. Writing in the New York Times, Pam Belluck observes, "How happy you are may depend on how happy your friends' friends' friends are, even if you don't know them at all." Reviewing a recent study by Dr. Nicholas A. Christakis, a physician and social scientist at Harvard Medical School, Belluck concludes, "Emotions have a collective existence -- they are not just an individual phenomenon."

James H. Fowler, co-author of the study (published in the British Journal BMJ), put it this way: "if your friend's friend's friend becomes happy, that has a bigger impact on you being happy than putting an extra $5,000 in your pocket."

In a separate study of 1,700 Facebook profiles, the researchers found that people who smiled in their Facebook photos attracted more friends than those who didn't smile.

So pass on the good cheer. It will soon be your own!

photo: AIRO BD

Wal-Mart Takes the Lead

Inspired Protagonist — Tue, 09 Dec 2008 11:11:16 -0800

Last month, Wal-Mart convened about 1,000 of its suppliers to announce stricter environmental and ethical standards, including requiring suppliers to certify compliance with local laws and regulations. Suppliers must sign agreements that prohibit child labor, forced labor, unpaid labor, and paying workers less than the local minimum wage.

You could argue (and some have) that Wal-Mart should have moved on this a long time ago. True enough. But what's also true is that the meeting marked an important step for the company, which had previously focused almost exclusively on environmental issues and took years to turn its attention to issues of social equity and justice.

Wal-Mart CEO Lee Scott reportedly said that if suppliers "do not improve, they will be banned from making products for Wal-Mart." I hope that's true!

Marc Gunther reported in Fortune magazine this week on what sounds like some encouraging progress.

"Last spring, shareholder advocates began a campaign on behalf of Uzbek children who, according to media reports and human rights groups, are forced to pick cotton for low wages and under inhumane conditions. The BBC spotlighted the problem with an eye-opening investigative report that said, among other things, that 'for two-and-a-half months a year, classrooms are emptied across this Central Asian nation so that the crop can be harvested.'

"The activist investors, continued Gunther, "wrote to more than 100 retailers and brands, asking them to trace the cotton used in the goods they sell and avoid Uzbek cotton. Most ignored the letter. (Bed Bath and Beyond, Costco, and J.C. Penney were among those who did not respond.)"

Wal-Mart was an exception. The world's largest retailer, along with Levi Strauss, Target Haines Limited Group, and Gap, agreed to try to exclude Uzbek cotton. Wal-Mart is also requiring its suppliers to trace the origins of the cotton they use. This is a breakthrough for Wal-Mart -- other retailers had claimed it was hard or impossible to trace cotton to its source. Wal-Mart is clearly a leader in confronting the Uzbek cotton controversy.

photo: Anthony Easton

EarthSayers.tv: Spreading the Word on Sustainability

Inspired Protagonist — Wed, 03 Dec 2008 12:27:20 -0800

I sometimes wonder, after I've spoken at a conference, whether I learn more from listeners than listeners learn from me. Take, for example, an email I recently received from Ruth Ann Barrett, a marketing executive who's previously worked for Hewlett-Packard and Sun Microsystems.

Ruth Ann recorded a talk I gave at the Economist magazine's recent conference on building sustainable businesses. I spoke of Seventh Generation's corporate responsibility reporting and the challenge of creating metrics that are meaningful and helpful for consumers. Ruth Ann thought my remarks were interesting enough to post a snippet on YouTube. But what really interested me was learning about a new venture she's leading, EarthSayers.tv.

EarthSayers.tv consists of a group of high-tech veterans who aim to grow sustainability awareness and education on the Internet. When you Google the term "sustainability," you get a little less than 30 million results. Do the same for "Britney Spears," and you get nearly 100 million. EarthSayers seeks to change that sorry state of affairs by increasing Internet traffic for those sites that really matter. Through its video and audio clips of the "unfiltered voices of sustainability" -- the pioneers, innovators, and unsung heroes -- EarthSayers.tv is also helping people to enter the "learning cycle" and do the right thing for society and the environment.

EarthSayers.tv has launched a prototype; I encourage you to check it out.

Spotlight on Jeffrey Immelt

Inspired Protagonist — Fri, 21 Nov 2008 05:57:37 -0800

General Electric CEO Jeffrey Immelt spoke at the recent Business for Social Responsibility conference -- the first time I've heard him. He was earnest, direct, self-critical. He never tried to sugar-coat his view that corporate responsibility won't succeed if it doesn't grow the business.

I don't believe that coal-based power and nuclear energy should have any place in GE's "Ecomagination" initiative, which seeks to "build innovative solutions that solve today's environmental problems." And I'm afraid I was less than surprised when I read last year that even while it was putting a green sheen on its image, GE was pushing the EPA to weaken its anti-smog rules for locomotives. After all, GE is hardly the only multi-national that's dipped its brand in greenwash.

And yet, while I've been more than skeptical of GE's lofty talk of creating "a better world," I can't help but be heartened by the company's big-time commitment ($2.5 billion to date) to cleaner technology R&D. So it was that I listened to Immelt with an unsettling mix of cynicism and hope.

Here are a few highlights from my notes:

In Immelt's view, the economy is not enduring the downside of a volatile business cycle. The economy is experiencing a total "reset" -- a fundamental restructuring of entire industries, as well as the bond between business and government. "That relationship will never be the same."
People are afraid of the future; Wall Street is confusing and scary. At times like these, business' fundamental responsibility is to "teach people how to compete, so that they can win again." Winning is fine, but at what cost?
"CSR must stand at the core of a company's strategy, not its periphery." That's typical big-company boilerplate. It also happens to be true.
Immelt touted GE's long-term dedication to its people. His evidence: a $1.2 billion investment in training. Our evidence: whether GE refuses to engage in mass layoffs during this tough recession.
GE's philanthropic work aims to benefit society…and GE. "In our foundation, the focus is on education that leads to the development of engineers."
How does Immelt know whether GE's monitoring of its global supply chain is succeeding? "It's working if you're [uncovering problems and] firing people." That pretty much sums up the GE way.

photo: World Resources Institute Staff

Can We Agree on What Really Matters?

Inspired Protagonist — Wed, 19 Nov 2008 10:45:38 -0800

All over the world, millions of organizations and hundreds of millions of people are working to slow global warming, stop hunger, provide affordable health care, monitor human-rights abuses, protect endangered species, and work on tens of thousands of other projects to make the world a better place.

I regularly attend hundreds of conferences that are filled with these deeply committed people. They tell me stories of success and failure. They write me emails, asking for help and advice. I serve on boards from Greenpeace to the Vermont Businesses for Social Responsibility. I spend the vast majority of my time trying to help as many people and organizations as I can.

Yet I am not at all convinced that the sum of everything I do -- we do -- is enough. Enough to prevent the ecological tragedy that is all but certain to result from global warming, or to ensure that the vast wealth that the human race has amassed will ever by equitably distributed. Or for that matter, that any of the other big problems confronting our deeply troubled world can be solved as quickly as they need to be.

I recently met Gus Speth, author of the brilliant book, The Bridge at the Edge of the World. He spoke at a Greenpeace meeting. I will take the liberty of paraphrasing his main point: Time is running out…we are hopelessly focused on making incremental improvements when what we really need are big, bold, paradigm-busting changes.

I couldn't agree more.

So what should we be asking of each other? We can't discuss switching to compact fluorescent light bulbs when what we really need is fundamentally greater consciousness, clarity of purpose, and the willingness to work on important issues, even if they aren't our issues.

This much seems to be true. We need a movement, not more well intentioned organizations that act independently of each other. We need a coherent vision and disciplined leadership. We need to inspire people to reframe life's purpose, so we leave the world a better place than we found it.

I have no doubt that we can succeed, so long as we can agree on what we most need to do now.

Do you have a point of view? Please let us know.

photo: Quinn Dombrowski

Product Downsizing Revisited

Inspired Protagonist — Mon, 10 Nov 2008 10:28:56 -0800

It's a hoary old adage, but it happens to be true: "those who live in glass houses shouldn't throw stones."

In my recent post, "Less for You and More for Them," I took other packaged-goods companies to task for product downsizing, the practice of selling less content per package while charging the same (or higher) price. The subject is fair game for discussion, but I was wrong to "throw stones" at other companies for downsizing when we have occasionally done so ourselves (which I acknowledged inadequately and incompletely in the earlier post).

I made a second mistake in that post: I grossly over-simplified a very complex set of issues.

Downsizing most certainly is not a simple equation where reduced size = increased profit. And it's not always bad. Yes, it's absolutely wrong to sell less, charge more, and not inform consumers. But sometimes, cutting the content allows a company to deliver product enhancements without increasing the price.

And yet, downsizing often results in the upsizing of packaging waste. When you reduce the count in a baby-wipes tub from 80 to 70 and use the same package, you obviously increase the waste per wipe. An exception is flexible packaging—the stuff that's used on diaper and most paper products. When the count goes down the packaging is reduced and as a result, the waste is reduced as well. As I said, downsizing gets complicated.

Downsizing is one among many gears that companies use as they navigate through a dauntingly competitive landscape in these tough economic times. For Seventh Generation, product pricing and sizing decisions are largely shaped by external costs and the needs of our manufacturing and retailing partners. Let me take a moment to explain.

Issue #1: Costs are never constant.
The cost of raw materials, transportation, wages, insurance, and the rest are always in flux. Most often, the reasons for the changes are beyond our control. Nevertheless, to some extent we can influence costs by striking the best balance between the 3Ps: performance, price, and the packaging of our products. In the past, we've improved the performance, kept the same price, and lowered the counts of diapers and bath tissue, so as to cover the higher costs of raw materials and improvements to machinery. We take these decisions very seriously.

Issue #2: We don't own our manufacturing facilities.
We contract with outside manufacturers who make our products. This is not always easy, as our unique raw materials and product specs are usually very different from the conventional products they manufacture. Sometimes, we are asked to conform to product sizes and counts that run efficiently on their machinery. If we don't agree (and sometimes, we don't), we face higher prices. We must constantly manage what we want to provide with what our manufacturing partners can produce.

Issue #3: Our price point is not always the retailer's price point.
By the time you buy one of our products, it has exchanged ownership one or more times. The final price reflects many decisions that are outside of our control. Retailers may ask a manufacturer to downsize a product if cost increases for the current size would force them to break a widely accepted price point. While we influence these decisions, they are not ours alone to make.

So how do these issues play out in a pricing/sizing decision? I'll use Seventh Generation diapers as an example.

Last year, raw material and other costs were increasing rapidly due to the run up in the cost of oil. That led to an industry-wide price increase on diapers this past February.

At the time, Seventh Generation and our manufacturing partner were working to enhance our diaper line by improving the taping system. Rather than take a price increase at the same time as other brands, we reduced our counts to make them equal to Huggies Supreme and Pampers Cruisers jumbo sizes. On a per-package basis to new consumers, we became more competitive. Current users got a better product at a higher cost per diaper. Ultimately, the cost increases we needed to pass on were included in the downsizing.

In your comments to my earlier post, some of you argued that not many people buy our products based on the price alone. For that, I am truly grateful. We recognize that when you opt for environmentally safe products over conventional offerings, there's a financial implication, and we thank you for your continued support.

Nevertheless, consumers sometimes complain that our products are too expensive. We do our best to offset our price tag with online coupons. And we are committed to finding other ways to our make our products more accessible to more people—especially at a time when all of our wallets are getting squeezed.

It's a constant balancing act to put forth authentic products made from superior ingredients in competitive sizes at price points that consumers can afford. As we move forward, I promise you that we will work hard to avoid downsizing whenever possible.
photo: Matt Buck

A Beautiful Sunset: Priceless, and Worthless

Inspired Protagonist — Wed, 05 Nov 2008 08:04:20 -0800

"Why is it that some things are worth money and some things aren't? How is it that I can watch a sunset for free but I must pay to watch a movie? … We have convinced ourselves that what's valuable is what transacts for money. But very often what's valuable is other things like friendship and law and order and education and enjoyment of nature. We need to be a bit more holistic in the way we think about these things."

So said Pavan Sukhdev, the managing director at Deutsche Bank and the head of the project, The Economics of Ecosystems and Biodiversity. (Sukhdev is also the head of Deutsche Bank's Global Markets business in India, and a founder-director of the Green Accounting for Indian States Project.)

Well, thank God that in the midst of the economic crisis, someone at Deutsche Bank is doing more that adding up what's left of the bank's assets. Could the meltdown in financial markets have a transformative effect, helping us reevaluate what we really value? A beautiful sunset is priceless, but our financial markets regard it as worthless. No wonder they're collapsing.

On a distant atoll in the South Pacific, my daughter Chiara put on a mask and dove to a coral reef to see the wonders living below the surface: thousands of colors; fish that made Nemo and his friends pale in comparison. Will my daughter's children, and her grandchildren, ever see the same sights? Will that atoll vanish as the sea rises, and its millions of secret inhabitants die off as pollutants from distant lands make the ocean increasingly uninhabitable?

What is saving that wonderland worth? Especially given the fact that this country's infrastructure is decaying, hundreds of thousands of workers are losing their jobs, and more are unable to access healthcare or pay for retirement. How do we balance these conflicting demands?

By cutting waste, wars, and military spending. By investing in radical energy efficiency and education. And by using those non-renewable resources -- our time and our talent -- to begin the hard work of creating better and brighter possibilities for the next generations.

photo: jelleprins

The World's Best Company

Inspired Protagonist — Mon, 03 Nov 2008 13:24:45 -0800

In 1985, a small band of idealists joined together to further the causes of human rights, women's rights, peace, and environmentalism. They bucked conventional wisdom when they launched their startup not as a do-gooding non-profit, but as a do-gooding for-profit -- specifically, a phone and credit-card company.

The company's founders reasoned that by helping people spend in a socially responsible way, they could turn everyday purchases into automatic acts of generosity. They put some of their revenue to work by supporting progressive causes, and so they called their company Working Assets. More than two decades later, Working Assets might just be the best business on the planet.

Working Assets, now called CREDO, sends one percent of each customer's monthly phone bill and ten cents on each credit-card purchase to a non-profit group that works for human rights and the environment. To date, CREDO has raised more than $60 million for the ACLU, Greenpeace, Doctors Without Borders, and many other progressive groups. Customers, not some company overlord, vote annually on where the money goes, and the company’s CREDO Action website provides a virtual village green for people to speak out on causes they believe in.

But CREDO does more than give money to worthy causes; it turns consumers into activists. In recent years, CREDO has:

developed and distributed the best software available for online voter registration
registered an astounding 4 million voters
created the free service "Text Out the Vote" -- an interface that transmits text messages from you to your friends, reminding them to vote
helped its network members send more than 4 million messages to legislators
organized a grassroots environmental lobby that's stopped the construction of coal-fired power plants, helped to achieve higher national fuel standards, and enact bans on toxic chemicals

I can't recommend more strongly that you consider choosing CREDO as your cell-phone provider. It delivers national coverage through Sprint at very competitive rates. And with each call you make, you'll help make the world a better place.

Click here to visit credomobile.com and learn more, or call 877.762.7336