Issue link: http://www.e-digitaleditions.com/i/54806
You have to start with a strong product or service and have a unique, sustainable, competitive position. If you don't start with that, it will be very difficult to be a great corporate citizen or environmental steward. responsibility, which includes avoiding sweatshop labor, treating its employees well, and coexisting with the com- munities where it works. Of course, if a company does those things correctly, it's my belief that it will have strong finances. We're teaching students that they need all four of these macrovalues in their strategic plans to succeed. But even if the social component is missing, some companies can still go a fairly long time without repercussions. For example, Lehman Brothers was 150 years old before disaster struck. Ah, but the model requires that there must be a great product or service! In Lehman's case, it had turned to collateralized debt obligations, or CDOs, which did not meet the definition of a great product or service! Financial engineering is not a true product. How do you think students today are different from when you were in business school? I was very much an environmentalist when I was getting my MBA back in the late '80s, but I was one of the few. Back then, I was considered a "tree hugger"—I was seen as being on the fringe. From what I've seen so far, values are very much front and center for today's students. They want to align themselves with an organization or other like-minded people who have values similar to theirs. Sustainability isn't a fringe movement anymore. What do you think are students' biggest misconceptions about business and social responsibility? Students must understand that it doesn't matter how eco- groovy you are, or how well you treat your people. If you don't have a product that wins in the marketplace, your com- pany is out of business. You have to look through the SEER lens—through all four values. You have to start with a strong product or service and have a unique, sustainable, competitive position. If you don't start with that, it will be very difficult to be a great corporate citizen or environmental steward. What companies do you point to in the classroom as examples that bring together the four aspects of a profitable and sustainable business? I always start with the Patagonia case, of course, but there are a number of other really good ones. Ray Anderson and InterfaceFLOR is one of the best. GE also is doing amaz- ing things right now. Nike also is a great case study. It's one of the real leaders in the sustainability movement. It had been a target for NGOs for a long time, but what Nike did was brilliant. It was among the first companies to make its CSR reports public. Its executives said, "Here is what's going on in all of our factories." They joined the Fair Labor Association, which made surprise visits at factories and put information on Web sites for the public to see. Nike invested in transparency, and it's always been at the forefront of looking for ways to promote sustainability. As you look back on your business career, what has been your most eye-opening experience? I would say spending time with Yvon Chouinard, Patagonia's founder. A couple years before I joined Patagonia, he had visited conventional cotton fields. He saw the toxic ponds filled with pesticides, and he saw that the farmer posted guys with shotguns around them because he didn't want birds to land on them and be poisoned. He thought, "We can't be a part of that." Almost overnight Patagonia became one of the largest users of organic cotton in the world. Because of that its margins suffered, and the business had to completely change. But Yvon said, "If we go out of business, we go out of busi- ness." Conventional cotton farming had crossed a line, and he couldn't support it anymore. Visionaries like him and Ray Anderson at InterfaceFLOR are people who really inspire me. They have taught me that you have to lead with your values. What do you most want to accomplish in the years to come, either as a professor, business leader, or in some other role? I would love to continue to be a part of this movement as it moves more into the mainstream. I'm still on a number of boards, but I think one of the ways that adds the most value to this movement is helping to train the leaders of tomorrow. I became a CEO at a young age, and I've had great mentors in my life who helped me through the learn- ing curve very quickly. I would like to repay that. It seems like you'll have your chance to be a mentor as well, now that you've made the transition from business leader to academic. It's transformational to see these young people so hun- gry and so ready for this movement toward social and environmental responsibility. It's been fascinating to see their enthusiasm. When they're talking about their ideas and starting to bolt those ideas to the ground, their eyes just light up. There's no better feeling than that, because they're the future CEOs of our planet. ■ z BizEd MARCH/APRIL 2011 25