I get a ton of questions from people who ask me how to choose a good niche.
I’m going to tell you exactly what to do to get it figured out for good.
It all boils down to one very simple thing. 

What’s your promise?

Everything you do in your business is about making and keeping promises to your customers.
 
Seriously, think about it.

• Tylenol promises to reduce fevers and help your headache go away.
• Your TV promises to project moving images for your entertainment.
• Your manicurist promises to help your hands look more beautiful.

What are you promising with your service?

A confused customer always says no
 
Are prospective clients confused by what you do?
  
Here’s a tip: think about the service or product that you provide as a promise. 
 
Instead of thinking of yourself as a massage therapist, what if you thought of yourself as “helping women get totally relaxed in an hour” expert, then you can totally devote yourself to delivering on that promise.
 
Instead of thinking of yourself as a life coach, what if you thought of yourself as a “find a career that fulfills you” expert then you can do what it takes to you have all the tools in place to help people with just that problem.
 
When you can promise what your ideal clients want, and consistently keep that promise you will have more business than you can handle. 

Are you a generalist?

It’s often said that generalists tend to be less successful then experts in a service based business. Simply put, people want to work with experts or specialists.

I’ve run into this challenge myself, because I have the tendency to be a generalist. Here’s my own experience: the more I became an expert in helping you get more clients in less time, the more money I started making.

Because, figuring out your niche (and your promise) is such a common challenge, I’m going to be launching a unique program in a few weeks that will give you powerful tools for CLAIMING a niche that you can be an expert in. I’ll send details soon.

I promise you’re going to love it!

If you are a green business owner, entrepreneur or someone who is even just toying with the idea of green business…
EcoTuesday is one of those unique and innovative networking events that I think has been a HUGE success at building a community of like-minded (i.e. sustainable-minded) green business people.

The next one is THIS Tuesday, September 22nd.

More info on EcoTuesday:
http://www.ecotuesday.com

For those of you who are unfamiliar, EcoTuesday events are held across the country the 4th Tuesday of every month.
Right now you can find their events in the following cities:

Denver / Detroit / Los Angeles / Minneapolis / San Francisco / Seattle / Silicon Valley

If you don’t see your city listed - why don’t you consider contacting EcoTuesday and launching one in your area?

FOR YOUR INSPIRATION

If you’re in San Francisco this Tuesday, you don’t want to miss EcoTuesday since there’s going to be amazing speaker - Marianne Williamson - speaking on the connection between sustainability and spirituality. I’m really excited to see her in person tomorrow.

If you can’t be there, then I’d like to share with you something that she wrote which has been an inspiration to me and many, many others.

For your inspiration, in life and in green business
- Patrick

=======================

“Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness, that most frightens us. We ask ourselves, who am I to be brilliant, gorgeous, talented, and fabulous? Actually, who are you not to be? You are a child of God. Your playing small doesn’t serve the world. There’s nothing enlightened about shrinking so that other people won’t feel insecure around you. We are all meant to shine, as children do. We are born to make manifest the glory of God that is within us. It’s not just in some of us, it’s in everyone. And as we let our own light shine, we unconsciously give other people permission to do the same. As we are liberated from our own fear, our presence automatically liberates others.”

- Marianne Williamson

=======================

We did a survey of our Green Business Innovators group on Facebook back in April about your business needs, and we wanted to share some of the interesting results. Take a look at the 2 charts below.

A few things I want to highlight:

• You have questions about a *wide range* of business-building topics
• However, a few key topics clearly stood out from the rest…
• Regarding business growth and marketing - our survey respondents had the strongest interest in having a marketing plan for their business. (Obviously having a powerful marketing strategy and then knowing what marketing actions to take is critical for business owners). After that, people were interested in having web sites that capture clients better and also SEO (Search Engine Optimization).
• As for personal mastery, there was a clear desire to be more focused and to practice better time management. This is such an important point. We frequently hear from our clients that their biggest productivity challenge is to eliminate distractions and “make time” for their priorities. Often when Bill and I work with our clients on their marketing, we also include time management techniques (planning, project management) into the discussion to help with implementation.

Last but not least, we want to thank you for taking the time to take our survey. We know how valuable your time is and we’re grateful that you took a few minutes out of your busy day to share your thoughts.

Have any observations about the survey results? Please share in the comments below.

Question #1: There are many valuable business and marketing tools for generating new clients and more revenue and traffic to your business. Which of these would you have the most interest in learning about for your business? [Please choose ALL that apply.]

businessandmarketing

Question #2: It’s not enough to develop your business. Your own personal development (your “personal mastery”) is critical too.
Which aspects of personal mastery would you be interested in working on? Which would have the most impact for you? [Please choose ALL that apply.]

personalmastery

Jeffrey Swartz, CEO of the Timberland Company

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)

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.

Free is ALWAYS good

So, I’ve compiled some great resources that I think that can help green businesses and entrepreneurs.

Take some time, grab a coffee and check out a few of the ones I’ve listed below. I think they you’ll find them really useful

Do you have any great resources that would benefit others? Tell us about them! I’d love to hear what free tools have been useful for you.
Please add them to the comments area below.

• No Country for Old Ideas - Five Essential Tips for Managing Sustainability at Your Organization

Do you manage sustainability projects? Justine Burt, Chief Green Officer for Greenwala.com, will share five essential things you need to know to implement projects swiftly at your organization. Join her for a FREE 30 minute webinar on Tuesday, March 31, 2009 at noon Pacific Daylight Time. Here’s how to join this online meeting.

1. Go to
http://tinyurl.com/ceqgjn
2. Enter your name and email address.
3. Enter the meeting password: Burt109
4. Click “Join Now”.

• “The Way of the Radical Business” from Tad Hargrave
This free, 195-page ebook combines marketing concepts you should definitely be thinking about with more advanced concepts and outside-the-box ideas

To get this ebook resource, go to Tad Hargrave’s web site and sign up on the left hand side.

• The State of Green Business 2009
This free report from GreenBiz.com provides an excellent overview of the environmental impacts of the business sector as a whole.

Download the report

Or read highlights from the review on our blog.

• Green Drinks
Too many entrepreneurs try to build their business in isolation.
Check out GreenDrinks.org to find green groups in your area, and join forces with like-minded businesses. There are groups meeting in dozens of countries.

• National Green Pages, from Green America
People frequently ask me, “how can I find other green businesses in my area?”

Check out the green business directory from Green America.
It’s an excellent source of information about green businesses across the US.

(photo credit)

We’re so excited to unveil Green Business Camp to you.

Green Business Camp 2009

Like you, we’ve been to MANY diverse conferences, presentations and seminars focused on green business. And although many of them have been wonderful and very informative we frequently left thinking “did that help me make progress with my business”, or “well, now what? How do I apply this new learning to me and my business?” Plus, we always felt like we managed to meet many of the other attendees; who we’re certain had some great experience and knowledge that we could have learned from.

From BarCamp to Green Business Camp

With this in mind, we decided to create our own event based on the creative spirit of BarCamp (a pioneering “user-generated” event born from the desire for people to share and learn in an open environment). We’ve created a mashup of BarCamp, green business, added a few additional tweaks …. and Green Business Camp was born. We’ll bring you the same powerful environment of creative, collaboration, and knowledge sharing, where you’ll make new business contacts and friends.

Let us tell you a bit about what Green Business Camp is …

Green Business Camp is a participation-oriented, entrepreneur-driven, one day “unconference” in the San Francisco Bay Area dedicated to the growth of green business. It will be taking place at the Greenv Sustainable Center in South San Francisco on Thursday April 30, 2009 from 8 am -5 pm.

This event will give you the opportunity to network, collaborate, and share knowledge with 100 top green business owners and entrepreneurs in the San Francisco Bay Area.

Ready to attend? Check out our registration page.

Never been to an Unconference?

Then you’re in for a lot of excitement!

Green Business Camp isn’t your typical conference filled with PowerPoint presentations. Instead, in our innovative event program the participants themselves will create and lead event sessions. This will bring out the best ideas of the group and allow everyone to share knowledge and resources with other green businesses.

This video gives you a taste of what an unconference is like. (One difference will be that their attendees are giving short pitches on their new startups, we’ll have breakout sessions for group discussion and brainstorming on topics selected by event participants.)

Have a topic you would like to lead a discussion on? Want help with a business challenge you are facing? Or, perhaps you want feedback on a new idea or venture? Submit a discussion topic and get your own brainstorming team to help you.

So what’s the agenda?

Most of the agenda will be created by participants during the first hour of the event. We’ll be pulling topics from the above document or you can bring business topics for discussions that you want to lead or participate in. All of these topics will be voted on and organized into a schedule and from there you will choose which you want to attend.

From there, the topics that were voted on will be discussed in a 45 minute breakout session of approximately 20 people.

By the end of the day you will have attended 5-6 of breakout sessions where you’ll have met a few dozen other interesting green businesspeople.

A good start and a good finish

The day will kick off with a special “Art of Networking” workshop to give you tools and techniques to more easily make new business contacts and future business partners during the event.

We’ll end the day with a nice and relaxing wine tasting reception.

OK, now join us!

In recognition of the current economic challenges, Green Business Camp has implemented a “pay what you can” pricing model. Secure your place at Green Business Camp for only $25. At the end of the event, you can pay what the event was worth to you and ONLY what you can afford to invest.

Want to hear the latest event news? Sign up for our newsletter and get on-going updates that will keep you informed.

See you at Green Business Camp.

Recently Joel Makower, executive editor and chairman of GreenBiz.com, and his team of editors unveiled the second annual State of Green Business Report. The report looks at data behind 20 indicators to find out how companies are doing in creating changes in environmental issues. It’s an comprehensive report with invaluable information for all businesses. If you haven’t yet, be sure to get your copy of State of Green Business Report.

“This year’s update is a mixed bag of encouraging and discouraging news,” says Joel Makower, the report’s principal author. “But on balance, despite a growing chorus of corporate commitments and actions, we’re less optimistic that these activities, in aggregate, are addressing planetary problems at sufficient scale and speed.”

The report shows that despite the slumping economy, green businesses have continued to grow. On the flip side, environmental improvements being made are still low, which is cause for serious concern.

Some statistics/trends I found interesting:

• Our continued love affair with our cars. According to the report the number of solo commuters has inched down from 77.8% in 2003 to 76.1% in 2007
• Consumers’ distrust of companies offering sustainable alternatives despite their desire to lessen their carbon footprint
• Our inability to deal with our e-waste properly and in a sustainable way
• We have decreased our packaging use (as slight as it may be) using less aluminum, plastics, cardboard and other materials per dollar of GDP
• We have decreased our paper use by 27% less paper per dollar of GDP over the last decade and increased the amount of recycled paper - also by 27%
• We are steadily increasing our energy efficiency.

I know how much work goes into a report like this, so I sincerely appreciate the efforts of Joel Makower and his team at GreenBiz.com.  I look forward to what we can do with the info in this report NOW - and how this effort will influence the 2010 report.

Innovation is nothing new to this Danish company

Amazing customer experience every step of the process is becoming even more important in our current business environment.  HEMA, a Dutch department store has taken this to the next level.

I’ve never seen anything like and have just emailed this out to all of my colleagues.

Take a look at HEMA’s product page.  Make sure not to click on anything until the action begins on the page and turn up your computers speakers.

By the way, you don’t have to be a young company to be innovative. HEMA’s first store opened on November 4, 1926, in Amsterdam. Now there are 150 stores all over the Netherlands.

How can you create an experience for your potential customers that will have people talking about you?

Journey to Sustainability

[Many thanks to Rachel Botsman of OZOlab for providing this insightful guest post showing how to make progress on the journey to being a more sustainable business]

We are awash in “green” articles that highlight examples and best-practices of companies such as Patagonia, Stonyfield Farm, and Timberland-businesses that have had sustainability as part of their DNA from the outset.

But for large multinational brands (especially suppliers of packaged goods) that are dependent on energy-intensive supply chains and high volumes of raw materials, a different approach is often required.

For such brands, the journey to a more sustainable business usually starts with the entry question of “where (or how) do we start?” - particularly in the case of those brands for which, to put it simply, “selling more stuff” (and more than their competitors) has been the prevailing internal mindset and the business priority, up until now.

This article focuses on leading global brands that are making the transition from treating sustainability as a hot “green topic” to embracing it as a true business strategy. It includes US and European companies that have identified “hotspots” in their supply chain where their environmental impact can be reduced, relatively quickly and inexpensively.

Viewed in isolation, some of these steps may seem minor. However, viewed against the total volume of transactions, their cumulative impact is undeniable.

These seemingly small changes are not quick fixes or marketing makeovers but true sustainable strides that have entered the mainstream marketplace. They also reflect successful collaboration between marketing and operations departments that have worked together to implement genuine environmental changes vs. marketing half-truths that consumers are starting not to believe. These brands recognize that sustainability should not be viewed just as a cost saver but also a sales driver, and that products and services embedded with sustainable practices are attracting more publicity and increased brand loyalty-and in many cases they are selling faster.

A common theme that emerges from the examples that follow is the need to challenge old assumptions around products and packaging, and the processes that link them, in order to deliver rule-bending innovation. While it is true that groundbreaking sustainable innovation that results in totally new business models is still rare, it’s also true that brands are starting to move along the eco-innovation spectrum and out of the obvious incremental changes such as carbon offsets and recycling programs-toward looking at the total picture and the rich opportunities environmental challenges can create.

The following six examples from M&S, Wal-Mart, UPS, Unilever, Boots the Chemist, and Whirlpool have been selected because each highlights an innovation across a different part of the sustainability spectrum, from design and packaging, to product formulation, to waste and transportation.

Admittedly, some of these innovations, such as the UPS example, emerged initially from cost-savings thinking, with the environmental gains a byproduct of the initiative; but the key, in each case, is that the innovation became a catalyst for the company to think about sustainability differently. All these companies also still have a long way to go to becoming truly sustainable, but they are getting started and the small changes are giving them market wins, increased stakeholder loyalty, and internal momentum to set their sights on much bigger business and brand transformations across their product and service portfolios.

Responsible Packaging: Marks & Spencer’s - Looking at the “Whole Package”

The leading UK retailer, Mark’s & Spencer (M&S), is making big sustainability strides with its five-year, 100-point “eco” plan called “Plan A” (because there is “no Plan B”). Two of the five key pillars of this plan are “waste” and “sustainable raw materials,” both of which have had a big impact on how M&S thinks about the whole picture of packaging.

M&S started simply, by quickly identifying food product “hotspots” where there was excessive packaging that could easily be changed to reduce weight, footprint, and the amount of the materials used-without negating safety, freshness, or quality. It also smartly recognized that the packaging of the product is just part of the picture, and that it is the entire supply chain-from farm to factory to depot to store to a customer’s home-that needs to be addressed and considered. For example, minimizing packaging of the product on the shelf may mean more packaging in transit, so that would not be a balanced or real solution. Also, removing packaging may not always be the most sensible solution if unpackaged foods become damaged or rot quicker, because having to discard perished products only creates more waste.

Below are three examples of how small, simple changes have made huge differences to materials usage. Through changes such as these, between April 2007 and May 2008 M&S saved 1,402 tons of packaging (equivalent to 255 elephants) for these three food products alone.

Traditional apple crumble packs were covered by a full paper carton; by changing the sleeve and making the tray container lighter, M&S cut the weight of the packaging 70%.

Packaging Example #1

By removing the tray from the beans package, M&S achieved a 92% reduction in materials.

Packaging Example #2

M&S has cut down the packaging weight on its fresh meat products 69% by using a “skin pack” instead of a tray. The new solution also keeps the meat fresher for an additional five days, which means it is less likely to go to waste.

Packaging Example #3

In addition to individual package changes, M&S has replaced most of the cardboard boxes in its supply chain with returnable trays, saving over 27,000 tons of cardboard from going to waste each year.

A smart move M&S has been to be clear and authentic regarding its journey, in terms of where its and how far it has to go. It is transparent around the goals it meets and those that it misses. In doing so, it is bringing its customers along, using the journey to change habits and subsequently building trust in the M&S brand. And the strategy is working not just from an environmental perspective but from a brand and business standpoint as well. Brand loyalty has increased since it launched Plan A, and profits from 2006 to 2007 rose 26%, in an economic climate where higher interest rates, increased personal debt, and reduced consumer spending began to bite.

Transportation Innovation: UPS - “No Left Turn”

UPS famously adheres to a no-left-turn policy by installing technology into its vans that help map out routes that minimize the number of left turns the driver has to take. Avoiding left turns at intersections reduces idling, which in turn lowers fuel consumption-UPS estimates it saves approximately 54.4 million gallons a year. Drivers are also trained to maintain proper air pressure in their tires, drive under 50 mph, and turn off their vans whenever they stop for a delivery, even if just a few seconds. “It seems small, but when you multiply it across 88,0000 vehicles making nearly 15 million deliveries every day during the course of a year, it adds up,” according to UPS spokesperson Steve Holmes (UPS press statement, 2006).

According to the company, this simple technique saves a huge amount of gasoline. “In the last year alone, this system has shaved nearly 30 million miles off UPS’s delivery routes, saved 3 million gallons of gas, and reduced emissions by 32,000 metric tons of CO2-the equivalent of removing 5,300 passenger cars off the road for an entire year,” a UPS release stated, (www.boston.com, April 18, 2008).

If you do the back-of-the envelope math, 3 million gallons saved, at an average diesel fuel price of $2.68 a gallon, amounts to cash savings of approximately $80.4 million.

“No Left Turn” has become a catalyst for UPS to pursue a more rigorous sustainability agenda, including introducing the largest fleet of alternative-fuel vehicles in the entire transportation industry and extensive infrastructure initiatives designed to improve energy efficiency. UPS is becoming a great example of a company with a complex supply chain embracing systems thinking to reassess changes across its value chain.

Product Formulation: Unilever - Let’s Concentrate!

With its “Small & Mighty” products, Unilever has doubled the concentration of its Persil and Surf liquid detergents to cut the bottle size in half, bringing a 40% reduction in packaging and a 60% reduction in water usage. (www.sciencedirect.com)

Packaging Example #4

And because the product is smaller, Unilever can also deliver more product per pallet and fit more product on the shelf (200% more) while reducing the number of truckloads required to ship the same number of units by 66%. (http://www.greenbiz.com/feature/2007/08/10/small-packages-have-big-impact)

In addition, consumers benefit from having a smaller bottle, which is easier to transport and easier to pour from. The environmental benefits of Small & Mighty were promoted by Wal-Mart and helped the brand to grow its sales in the US to $140 million in 2007.

“Small & Mighty” has provided an important easy and first step for many consumers to start to change their habits around using concentrates, and for Unilever it has become an icon for its first step toward creating more sustainable products that address the growing trend among consumers to value “better” over “more.”

Design Efficiency: Sam’s Club (Owned by Wal-Mart) - One Gallon at a Time

A new boxy milk container design introduced by Sam’s Club is cheaper to ship and better for the environment; moreover, the milk is fresher when it arrives in stores, and it costs less.

Packaging Example #5

The new design does away with the need for traditional milk crates. Instead, a machine stacks the jugs into multiple layers with cardboard sheets in-between and binds it all in shrink-wrap (and both materials are recycled after use).

By eliminating crates, Sam’s Club estimates that it has cut water use 60-70% (the old crates needed to be washed). Big fuel savings are achieved because no empty crates need to be picked up, reducing trips to each Sam’s Club store to two a week, down from five. Energy efficiency is also gained through less refrigeration space-224 gallons of milk can now be stored in the same cooler that used to hold just 80. Customers also benefit from these energy savings. A gallon of milk in the new container now costs 40 cents less.

Wal-Mart is a quickly becoming known as a company working closely with its suppliers to embrace sustainability as fuel for innovation and to collaboratively reach its visionary goals of reaching zero waste and using 100% renewable energy.

Energy Saving: Whirlpool - “Sixth Sense” Green Kitchens

It is estimated that 90% of a household appliance’s impact on the environment occurs in the course of its normal use versus during its manufacturing or disposal. Consequently, Whirlpool is putting much of its innovation focus on cutting-edge sustainable solutions that save energy and water during daily use.

Whirlpool’s 6th Sense technology adapts work cycles in real-time through smart sensors that reduce the use of water and energy to the quantity necessary to perform their task in an optimal way. For example, Whirlpool’s top-loading washer “Knows Every Load”: By weighing each load, the machine ensures that it does not use more water than necessary; and its dryer prevents over-drying by sensing when the required drying level is achieved, and automatically stopping.

It’s a smart strategy that is easy for consumers to understand and tangible in terms of energy efficiency, and that feels authentic to Whirlpool’s heritage of cutting-edge home solutions.

Waste Reduction: Boots The Chemist-Waste Not Want Not

The UK’s leading retailer of health and beauty products, Boots The Chemist aims to prevent the generation of waste whenever possible. In 2002-03, it set a target of reducing like-for-like waste for disposal by 20% within five years. By the end of 2005-06, it had achieved a 7.5% reduction-with 47% of its waste currently going to landfill. (source: http://www.enviromentor.co.uk)

Boots The Chemist has done this through waste innovation and small cutting-edge changes across its categories: fully compostable packaging for its sandwiches and reusing the trays used to carry the sandwiches (cost savings of approximately £200,000 a year); and free-standing display units, made from cardboard, that are 100% recyclable (a saving of 83 tons of cardboard and 429 tons of waste diverted from landfill-for total savings of approximately £165,000). The Display Units also flat-pack, meaning that you can get 20 on a pallet instead of 6 (saving in transportation costs of approximately £240,625 a year). Replacing foam board with cardboard makes further materials savings.

Also, 80% of all goods supplied to Boots stores are now delivered without any transit packaging-most of it having been stripped off at the warehouses and distribution centers. Plastic bottles damaged during manufacturing are now recycled, an innovation that diverts 20 tons of waste from landfill. Similarly, Boots diverted 175 tons of “cosmetically damaged stock” from landfill, saving around £22,500 in disposal costs.

From an environmental as well as a cost perspective, the impact of these changes has been impressive. Since 2001/2002, Boots The Chemist’s percentage of recycled total waste increased from 37% to 50.5%, delivering a 67% saving in waste-costs. (source: case study from marketingprofs)

What is notable about Boots’s strategy is that it is not reacting to the issue of the moment but constantly using its brand’s power to exert influence on behalf of its consumers.

* * *

Common themes emerge from the examples above that other companies can use to help answer the nagging question: “Where do we start?”

1. Start simple

Some of the answers are pretty simple, and they are probably staring your brand in the face. Identify the “hotspot” in your value chain that you can impact immediately and get a quick win. Be cognizant of distinguishing between an artificial “quick fix” and an authentic small change that is sustainable over the long term.

2. Create an easy first step

Provide consumers with an easy but concrete first step they can take toward more sustainable habits, and educate them on how this action is benefiting the environment and what they can do next.

3. Focus on the journey, not the destination

Be extremely transparent around where you are and where you have to go to reach your sustainability goals. Place more focus on the journey that your company is going on versus end-point claims that can come across as “greenwashing.” Talk about mistakes and learnings from them as much as your successes.

4. Be concrete and tangible

Focus on cost and environmental savings that consumers can relate to and which feel authentic to your brand’s heritage. Stay away from abstract concepts like “global warming” and “save the planet” that consumers are now desensitized to.

5. Recognize that “Better” is replacing “More”

Ensure that your brand’s positioning is evolving with the trend among consumers to value “better” over “more,” and the growing awareness that more does not necessarily mean better.

6. Embrace systems thinking

Avoid thinking issue-by-issue or product-by-product. Instead, use systems thinking to reassess the relationship between your different departments, the product relationships across your brand portfolio, and the changes that can be made across the entire value chain (from sourcing raw materials, to consumer use, to waste disposal). This approach will help generate the collaboration and connectedness needed from the outset.

7. View sustainability as an innovation platform

Create a culture where sustainability equals fuel for innovation, not a constraint that is equated with regulations. Challenge old assumptions and pick an innovation focus such as less, simpler, better, cheaper, etc. and ideate off these platforms.

Photo credit

ABOUT THE AUTHOR:
Rachel Botsman is the Head of Strategy of OZOlab (www.ozolab.com), an innovation incubator that identifies, creates, and markets sustainable products and services. She can be reached at Rachel@ozolab.com.

Xavier Helgesen, Co-Founder of Better World Books

Buying Books with Heart and Soul

Next time you’re buying a book online – you may be able to help people around the world learn to read.

Better World Books is an online bookstore that supports nonprofit organizations with literacy programs such as Room To Read and Books For Africa ($3.1 million contributed so far) by donating a percentage of its revenues. In the process, Better World Books has saved 8,170 tons of books (millions of books) from landfills.

Co-Founder Xavier Helgesen explains how a business started by college students has thrived in the online marketplace ($21 million in revenue in 2007) while staying true to its triple bottom line mission of creating positive social and environmental impact in addition to financial value.

INTERVIEW HIGHLIGHTS

• Why Better World Books targets the mainstream audience, not just the “green” consumer
• How to decide whether your mission-led venture should be a for-profit or nonprofit
• An innovative strategy for offering books on numerous e-commerce web sites at the same time
• How Better World Books overcomes the challenges of a rapidly growing business

LISTEN NOW (press play below)

AMIE VACCARO, GREEN BUSINESS INNOVATORS: This is Amie Vaccaro with Green Business Innovators. My guest today is Xavier Helgesen, co-founder of Better World Books. Glad you could be here, welcome.

XAVIER HELGESEN: Great to be here, Amie.

GREEN BUSINESS INNOVATORS: I was looking through some of your marketing materials, and I see that you describe your business as a self-sustaining, triple bottom line company that creates social, economic and environmental value for its stakeholders. And as far as I am concerned that is kind of the ultimate company, and I would love to hear you kind of explain that and explain your business model in that context.

XAVIER HELGESEN: Well, we are a stakeholder driven company; we are part of B-corporation actually, which is the network of about a 130 companies where management is obliged, not just to the shareholders to maximize profit but to the stakeholders to create social, environmental and economic value. So we focus on our triple bottom lines.

Our social mission, in particular, is to channel the book buying power of all of us out there. People will buy about $20 billion worth of books in the US alone this year. And if we can channel just part of that money to funding literacy programs, we can make a huge dent in the fact that 1 out of 7 people in the world cannot read, 1 out of 7 adults, and not to mention the next generation coming up.

Environmentally, we are a company based upon reuse, so our fundamental idea is that if possible, a product should be reused through an effective mechanism. And the Internet is a great place to find new homes for old products, in our case, books. So we do sell new books but our business model is really based around collecting books that someone does not want and finding someone who does want them, using the profit generated through that to help fund literacy programs. And economically we are a for-profit company. We finished our past year with about $21 million in revenue, and we are still growing fast.

GREEN BUSINESS INNOVATORS: And so how did you decide to be a for-profit rather than a non-profit?

XAVIER HELGESEN: Ultimately, we wanted to be able to have our employees share ownership in the enterprise, and also we realized that we were always going to be 100% earned income, so we were never going to go out there and apply for grants or try to get people that donate money to us or hold big fundraisers. That was never our idea. We thought we need to sing for our supper, so the way we need to do that is by getting books and selling them and competing on a level playing field with anyone else out there who is selling books. So we, from the early days, decided that we were a company but we knew we were a different kind of company so it has been great that the B-corporation has come along and we have become a founding member of that, so that we can codify it a little more of what we are.

GREEN BUSINESS INNOVATORS: So give me a more of a sense of how the business operates and kind of big picture of what you do?

XAVIER HELGESEN: Absolutely. What we do is we organize book drives on college campuses and we work with libraries and communities to collect books. So the books that you try to sell back to your bookstore and they would not pay you anything for, maybe they would pay you a few dollars, we will work with a student group to collect those books and send them back to Indiana where our warehouse is. And we will inventory those books and we will also track them; we will track those books as to what cause they were benefiting.

So if it is a book for Africa Book Drive, we will track those books all the way through until the point that they are sold to a customer. And when they are sold to a customer, we then channel part of the sale price back to Books for Africa or whatever the organization was that we collected the books for in the first place. So in that way, the non-profits and libraries we work with; they are not just recipients of our good will, they are actually part of our supply chain. They are a critical piece in us getting quality used books that people will buy. And so because of that we are able to channel much higher amount of money to them than if we were just a normal bookstore that was giving away part of its profits or something like that.

GREEN BUSINESS INNOVATORS: And so will you tell me a little bit about these causes. Are there a whole bunch of causes that different book drives benefit, and what percentage of the money goes back to those causes?

XAVIER HELGESEN: That is a great question. So we have 5 major literacy partners, and by major literacy partners we basically mean we thoroughly vetted these organizations; we generally go visit them on-site. We work in very close partnership with them to run nationwide book drive campaigns on their behalf. And so those are Books for Africa, Room To Read, which funds girl’s scholarships in Vietnam and Cambodia among many other programs; Invisible Children, which is a movement that has over a half a million fans on Facebook, an incredible youth movement to end the war in Northern Uganda. World Fund, which works in Central and South America and the National Center For Family Literacy, which works here in the US in low income communities.

So there is those 5, then there is a whole bunch of libraries and smaller literacy groups that are funded primarily through our library discounts innovations program. So if a library has extra books, they buy a new book and take an old book off the shelf or someone gives them some books, we take those books on their behalf, sell them online; part of the money goes back to the library and then part goes to a literacy cause that they get to pick. The rates that they get paid depend on how much the programs cost us to run and how much the shipping costs because we do not charge the literacy programs or the libraries anything for the program so it averages about 7% of our revenue, so that is not 7% of our profit, that is actually 7% of our revenues go directly back to that.

GREEN BUSINESS INNOVATORS: So does that go to the causes including the libraries?

XAVIER HELGESEN: Yes. Exactly.

GREEN BUSINESS INNOVATORS: Okay. Great. And before I get too far into the meat of things, I am curious how this all started and where you had the idea for the benefits of Better World Books.

XAVIER HELGESEN: Absolutely. The concept started in 2002, the co-founder and I tried to sell books back to the bookstore after college and had not really gotten any money for them, so we took those books back and our friends had all left their textbooks as well, so we probably had a good hundred books and we decided to post them on the internet to see what would happen, and we could not believe that these books were just flying off the shelves. They were selling for $50, the same book that the college bookstore would not pay you a dollar for. So there was a big disconnect, clearly between the Internet market for textbooks and the physical buy back market for textbooks.

And we wondered if there was a way you could take advantage of that and the idea we came up with was that you could organize book drives for causes because we thought people would give their books if the cause was compelling and if we were transparent about how much of the money was shared back to the cause when we sold the books. So we ran a book drive at Notre Dame.

We got about 2,000 books and we spent the summer cataloguing them. We worked with a community center in South Bend that had some room in their back so that we were able to store the books, and then we sold them in the fall for about $20,000 and essentially split that money with the community center and we were off. So we figured well, that was one campus and there are about 4,000 colleges and universities in the US and that is even before you get to other markets so we figured that was a lot of room to expand.

GREEN BUSINESS INNOVATORS: So I saw also that before Better World Books you founded a company in college called Preview Studios?

XAVIER HELGESEN: Yes.

GREEN BUSINESS INNOVATORS: Want to give us just a quick little bit about that?

XAVIER HELGESEN: Sure; I like to say that we were Facebook long before Facebook was a good idea. So when they go in the annals of history before someone got it right and came up with Facebook, they will find our website, which was quite a thriving, a user generated content site in 1998, 1999 called MBToday.com. It is actually still up and running and it combined news with user generated content; teacher evaluations were probably the biggest killer app.

So people would evaluate the teachers on the system, and then everybody else could look at that, and when you were picking classes it was pretty invaluable to see what your peers thought of different teachers. So, we branched that out to also have sites at Yale and University of Michigan and Purdue, and then we were able to sell that company for a little bit of money after college.

GREEN BUSINESS INNOVATORS: So again, looking through some of the materials, it sounds like you guys have raised $4.5 million for your partners, donated more than 5,000 tons of books and created 200 full time jobs?

XAVIER HELGESEN: Yes.

GREEN BUSINESS INNOVATORS: That is fantastic. I would love to hear a little more details around that and physically, how many books is 5,000 tons of books?

XAVIER HELGESEN: Oh boy, millions, millions. Everyday we take in about 30-40,000 books a day. These come from all over the country, in fact, come from Canada and now even the UK, so we just started a warehouse in the UK. We take in all these books and basically find buyers for as many as we can. The ones we cannot find buyers for we offer to our literacy partners so if it is a good textbook, it will be sent to Africa with Books For Africa. If it is a children’s book, it might be distributed in the US with National Center For Family Literacy.

And there are some books that we cannot sell and we cannot give away, and those we have to recycle. Those get turned into generally post consumer products made out of recycled paper.

GREEN BUSINESS INNOVATORS: And so how do you sell –  I mean, I have sold on Amazon.com; is it like that, you list each one on your website?

XAVIER HELGESEN: Yes, it is a bit more automated than the way you probably do it.

GREEN BUSINESS INNOVATORS: I hope so.

XAVIER HELGESEN: It is. It is all driven by barcodes and software and so we wrote all of our own software for the business and that has been a critical driver of our success. In addition to BetterWorld.com, which is our only commerce site, we sell books on about eighteen different marketplaces. The big ones you may know are Half.com and eBay and Amazon but then there is a number of book specific marketplaces, international marketplaces. Other partnerships we can do that will find more buyers for these books, so we have a very broad global business. We ship thousands of books a day internationally and that helps bring in a lot more customers for the books.

GREEN BUSINESS INNOVATORS: So if I were to donate a book, would it be listed on all 18 sites, as well as your own site?

XAVIER HELGESEN: It would. That is part of the software, it actually can list one book on all these different channels and so if it sells on BetterWorld.com then it is immediately taken off of Amazon so someone there does not buy it.

GREEN BUSINESS INNOVATORS: Yes, I would imagine that would be a lot faster.

XAVIER HELGESEN: Yes, and that allows again to have more customers looking at more of our books.

GREEN BUSINESS INNOVATORS: So I am curious in terms of your operations, I know a part of your kind of mission is environmental. How have you tried to keep your operations “green”?

XAVIER HELGESEN: We do a lot of little things and big things. We have a sustainability coordinator now. We were actually able to make a full time position for that and her name is Kelly, she is very deep Green. Among the things that Kelly has led up; we have actually created an employee garden so we have an organic garden going off the side of the warehouse in Indiana and people go garden on their lunch hour and then anybody who pitches in is welcome to share in the bounty.

We are about to start a shuttle program because a lot of our employees pretty much have to drive to work in Indiana. South Bend has very bad public transportation so unlike here in San Francisco where I think there is only one person in the office who even owns a car so everybody else either bikes or walks to work or takes the bus, that is not the case in Indiana, so we want to cut down on the number of single person, single vehicle trips, that have to be taken and also save our employees some money.

If we can pickup people in one van that holds 15 people, not only do they save money on gas and on car repair, but we have hopefully a happier workforce and a lot less environmental impact from our business. We unfortunately do not own our warehouse, which prevents us from doing some of the green retrofits that one would like to do. It is an old packaging plant so it was formerly a packaging plant that was just sitting there dormant so we revitalized it and we have created a lot of jobs, but there are definitely a lot of things that we would like to do with it that we would not be able to do until we (a) have some more capital to put in and (b) own the place.

GREEN BUSINESS INNOVATORS: So it sounds like all the books you collect in the US end up in Indiana. How about the transport of books; have you done any thinking around the impact of that?

XAVIER HELGESEN: We have done a lot of thinking around the impact of transporting books because there is dual benefits; we can reduce the carbon intensity of transporting books in. Generally, it means we also reduce our costs. UPS shipping a single box is going to cost a lot more than a full truckload and a full truckload costs more than a full railcar and each of those have decreasing carbon intensity.

So what we try to do we now have over 20 consolidation points around the country where we consolidate lots of small groups of books into larger groups of books that can be shipped at least in a truckload, and if you ship books in a truckload the environmental impact is a lot less. Now furthermore, if you can take that and you can put it on the rails that is even greater cost savings and even greater carbon savings because a freight train is actually a very efficient way to transport things. And the rail industry is growing dramatically with the increasing costs of oil.

GREEN BUSINESS INNOVATORS: So since you have installed these consolidation places, have you seen the cost of shipping decline?

XAVIER HELGESEN: Absolutely. Our 2 biggest costs in the business are inbound shipping and outbound shipping, so we pay a lot of attention to those. On our outbound shipping we work with local postal services rather than a UPS or a FedEx because there is a lot less intensity to it and a lower cost. If it is a postal worker walking door to door everyday as opposed to a UPS truck double parking outside the place and running in, dropping off a package and then driving to the next location.

GREEN BUSINESS INNOVATORS: Right.

XAVIER HELGESEN: So the great thing about local postal service is that they do have very low intensity and they allow us to provide cheap shipping to customers. So that is how we can ship for free on BetterWorld.com in the US and how we can ship for $4 anywhere in the world.

We consider that as kind of a combination of passing cost savings onto our customers and marketing. We feel like people do not want to pay, they do not want to get hit with a hidden shipping charge at the end of shopping. They want to look at things on the website and say okay that is what that costs. That book is $5, and that is all I am going to pay for it.

GREEN BUSINESS INNOVATORS: Yes, actually, I really like that; I saw that. So stepping back a little bit, as a business, something I am really interested in, the impact, the social-environmental impact; how do you know that you are having an impact and do you measure that?

XAVIER HELGESEN: It is a great question. I think most social enterprises wish they could do more distinct measurement than they do. A lot of what we rely upon is our partners, especially as far as making sure the funding goes to good work. We have to choose an organization like Room To Read really carefully because we know that they can take a small amount of resources and deploy them very effectively and to further their mission.

We also have a really interesting program where we have allocated stock options for our literacy partners and so they are actually going to begin starting this year to receive an equity stake in the company and that means that they have a bigger and bigger stake in our future so not only are they getting checks from us in the short term based on funds raised, but in the long term, they will actually own a part of the company and that is also based on impact; not only their impact in working with us but also their impact as a whole on literacy.

GREEN BUSINESS INNOVATORS: So in a typical business model there is sort of the addressable market and I think kind of parallel to that here is the addressable impact. What do you characterize as your addressable impact that you are trying to address?

XAVIER HELGESEN: Wow, good question. The addressable impact is massive, because not only when you have got 1/7 people in the world who are not literate and that is just your starting ground, and then you have huge areas of the world where there is not nearly the access to books or the access to education that you find in the US. And that, we have been so lucky to have growing up, so when you look at the amount of work that needs to be done, I mean, look at the 750 million people in sub-Saharan  Africa, and what is the average access to books? Well, it is not great, it is not great. And Books For Africa has shipped 20 million books, which is astounding, but it is only a drop in the bucket.

Well, we have all the resources we need to address these issues. We have all the organizations and all the systems; basically, they need money. So what we think is that this is a market-based mechanism that we can get that money to them and just by people making a conscious choice, “Hey I am going to shop at BetterWorld.com rather than go to Barnes and Noble or rather than go to Amazon.” They know that they are part of that movement and if enough people do it, it is going to be a larger and larger and larger chunk of funding going to these programs, which is going to let them scale.

And when you look at addressable market, again there is that $20 billion being spent in the US on books every year, you go worldwide it is probably $50 billion or more and by channeling some of that, that is huge power far beyond what we could ever do just by asking people to give money to literacy. Literacy can be a very abstract thing. It can actually be somewhat hard to raise money around but it is the foundation of anything else; it is foundation of self-sufficiency, it is the foundation of entrepreneurship, it is the foundation of education, so that is why we focus on it and it makes a lot of sense too that a book company that would fund literacy.

GREEN BUSINESS INNOVATORS: So I am hearing that illiteracy is kind of a big piece of the impact that you are addressing or most of it, but I also notice that there is kind of intertwining environmental and social goals within Better World Books. Can you talk a little bit about how those two work together or do you feel like they are totally separate…?

XAVIER HELGESEN: That is a great question. Well, so much of what we can do to stop environment degradation is to educate people and for people to really understand why something might be a good idea in the short term but not a good idea in the long term. And so I do see a lot of it tied to it.

And I also see that in our business model that by reusing this product, books, we have the ability to kind of kill two birds with one stone there, that we can not only keep a book out of the landfill but we can also raise some money by doing so. So that may be a unique feature of our business model but it is something that was intentionally designed that way and so a lot of our business is intentionally designed to achieve these multiple benefits.

GREEN BUSINESS INNOVATORS: I think that is great. I am curious whether you have been raising capital from outside sources, and also if you are doing so (I am assuming you are) what have you learned about the different kind of information that investors are looking for regarding kind of your impact?

XAVIER HELGESEN: It is a great question. It depends on the investor. We were very, very fortunate to have mission-aligned investors. Our first 5 years we did not take any investment. We were what is called “bootstrapped,” which basically just means the money you can raise or the money you can personally lend to the company. And we definitely got to a stage where we needed to either slow down our growth a lot or bring in some outside capital to keep it going, because the numbers just bigger and you could not just put things on your personal credit card anymore when you have a company this size.

So we had been talking to Good Capital for about a year before we actually closed an investment with them. But they are explicitly mission driven investing and so they are looking to prove that you can invest your money, see a big social impact and get it back with a return. So their first 2 investments are Better World Books and also a company called Adena, which is essentially selling a fair trade frappuccino if you will, so they are trying to be the first mainstream fair trade product and really hopefully we will see this at every convenience store in the country in 2 or 3 years which would be exciting to see a fair trade product get that far.

GREEN BUSINESS INNOVATORS: How do you promote yourself and attract customers?

XAVIER HELGESEN: It is an ongoing struggle to get the word out. We are fortunate that our best promoters and marketers are our existing customers, and so we work very hard to make sure they are very satisfied. We take customer satisfaction surveys and we get about 100 of them a day, so those give us a real time monitor of are we making people really, really happy and we are fortunate because the vast majority of people say absolutely 10/10 I would recommend you to a friend, and a lot of people even tell us they already have, so that is a big part of giving the Better World message out.

When people understand that they can do something good for the world and not only will it not cost them more, it will actually probably save them money, that seems to be a really compelling combination and I do not feel like in tough economic times you can always ask people to spend double on the same product but we are not doing that; they are probably saving 80% on the cost of a book plus getting free shipping and used books are one of the used products that is actually considered by many people to be preferable to a new product, whereas you get a used car and you are wondering, “Hey! Do I have lemon? What is going on here?”

Used books - almost universally people say used books are great, they have a history to them. They still work just fine, I can still read the book, I can pass it on to someone else or I can send it back to Better World Books and someone else can get it.

GREEN BUSINESS INNOVATORS: So it sounds like you rely on word of mouth and kind of pleasing customers more than marketing dollars?

XAVIER HELGESEN: Yes, I think (a) we do not have the budget to do it anyway to run national TV campaigns or anything like that or (b) that kind of marketing it is not dead, it is dying. You can only beat people over the head so much when you have a– you know, as crowded of media environment as we have.

So it is a lot more authentic if your friend tells you about a product or service than if you just get marketed to and they are able to tell you a little more complete story because you never heard of Better World Books before, it might take you a few times before you realize, oh I see, okay it is an online bookstore that has everything you can find in any of those other bookstores but a huge added value for the society and the environment.

So, that is really who we are trying to reach. We love the 10% of the population that is deep Green or strongly Green that will proactively seek out products and services that fit their values - but we really want to reach the other 90%. And if all you care about is the cheap book, hey, we will probably be there for you too. Hopefully you think that it is great, that you get cheap books and then on top of that it is like icing on the cake that you have the social and environmental piece.

And I think you see the most successful social enterprises of green businesses targeting the whole population and not just ceding that other 90% and saying no, I am not going to worry about them because they do not get it, because it’s really not true.

GREEN BUSINESS INNOVATORS: Right.

XAVIER HELGESEN: They may not be as deeply educated about sustainability, but it does not mean they do not want to help people out.

GREEN BUSINESS INNOVATORS: And so do you find that having a social mission is attractive to your customers, and can you tell me just a little bit about who your customers are, how many they are …?

XAVIER HELGESEN: We have millions of customers; they are red states, they are blue states; they are from 180 countries around the world. One of our best customers is the middle of Malawi. He is the dean of a Catholic university in the middle of Malawi, and he orders tons of books from us for his school.

We have people who just love to read; just love paperbacks; they may pick up 10 books from us for $50, shipping included, and for them that lets them support their reading habit on a more affordable basis than if they were going to Barnes and Noble and trying to do it. We also have a good deal of students who come to us looking for cheap textbooks, and often we have a great deal for them and we have new books too. So, people who like our mission can and sometimes a book will be too new to really have many used copies out there. So, hey, no big deal; our new books are discounted too and you can pick them up just like anybody else would.

GREEN BUSINESS INNOVATORS: Will you tell me what have been some of the biggest challenges that you faced along the road?

XAVIER HELGESEN: Well, first of all, you have just growth and growth is – when you are growing at 100% a year or the more everything changes so quickly, it is just like you  are trying to build the car as it is hurdling down the road at a 100 miles an hour, and you are still trying to bolt on the steering wheel. You do not have the whole engine built, but you are already moving and moving so quickly that if you do something wrong, it could just go careening off the road. And so we have really had to stay very focused on attracting great people and giving them a lot of responsibility and we have been lucky that as a company a lot of people are drawn to work for an enterprise like ours. And when we put a job out there and a lot of times we will get 50 applicants. So it has been great for us to be able to choose really the cream of the crop and make them part of the team and then let them take parts of the business and run with it.

Another challenge we had was we, like many businesses, needed to establish a line of credit because books take a long time to sell and so if you put all of the money in to ship books into your warehouse and you have 2 million books sitting there you have already pretty much paid a lot of money up front to have all of those books there. You need to finance that in some way and we really had to work hard to find a bank that was willing to loan against used books. Because no bank wants to be stuck with two million used books, and so we really had to build relationships there. We have a pretty good relationship that luckily has not been affected by this crazy credit crisis. We give a shout out to Bank of America for being a very good bank.

GREEN BUSINESS INNOVATORS: What are current strategic focuses, and does it include expanding book sales; if so, how?

XAVIER HELGESEN: That is a great question. Our current strategy is really to grow the BetterWorld.com brand and to make it a household name. We would love for everyone to actively make a choice when they buy books online and say, “Hey, am I going to buy it from BetterWorld.com, or am I going to buy it from Amazon.com?” If we can get to that point, I am confident that a lot of people will chose Better World, and as we get to that scale, we can continue to make sure that we are a better deal as well as a better cause.

There is plenty of room built into the price of books even from a site like Amazon, which does discount. That we discount as well and still channel money to literacy. Also, we are rapidly expanding our book collection programs. With Invisible Children this fall, we launched a campaign in high schools all over the country. So any high school can launch what is called School For Schools with Invisible Children and the top book drives win a trip to northern Uganda – one person from that book drive will win a trip to Northern Uganda to visit it the Invisible Children Program and actually meet the kids. And this is driving a huge amount of energy, a huge amount of competition among these different schools, and so we have already seen a hundred and fifty book drives spring up in the past month since Invisible Children hit the road and started showing their fall movie.

GREEN BUSINESS INNOVATORS: Is there something you have learned from your customers along the way that has changed how you to operate?

XAVIER HELGESEN: Yes: Do not send them the wrong book! [laughter]. We have learned from our customers that they love us, but they are not willing to accept an inferior level of service and so we have worked very, very hard on putting the systems in place and having the right people in place so that people get their books very promptly, at least as promptly as we can with given the postal service. Once we hand it to the postal service it is kind of in their hands, but what we can do is get it in their hands as quickly as possible.

And we have also learned from our customers that we have to keep offering them a great value and we cannot just raise the prices on them without really having justification for it and without still giving them just a really good value. Because they have come to look for that from us. So if we do not meet that, then it is inconsistent with our brand, which is good value for a great cause.

GREEN BUSINESS INNOVATORS: Do you have a very loyal customer base would you say?

XAVIER HELGESEN: We do; we have some fanatics. If you go to our Facebook page we have about 4,500 friends or fans, as it were, and it is cool. We can do competitions with them; we just did one where if you put a picture of yourself next to your bookshelf, we will send you a free tee shirt if you put that up on Facebook.

So we have had a bunch of people do that and from all over the world; so it is pretty cool to see who these people are and most of them we have never met in person. It is just found us through the web and now they look to us a place to buy books.

GREEN BUSINESS INNOVATORS: Do you think, are a lot of these loyal fans there because of your mission or because of your service?

XAVIER HELGESEN: I think it has to be a combination. I mean, as much you might love what we do if you do not buy books online, you are probably just not going to be that huge of a fan or an evangelist.

GREEN BUSINESS INNOVATORS: Right.

XAVIER HELGESEN: So, you have to be someone who loves books and we looked at Amazon a little bit, like it is becoming the Wal-Mart of the Internet. It would just assume to tell you a flat screen TV and a blender as it would a book, and we are not really like that. We are really focused on books and being a great book store and trying to invoke some of the things you love about your independent used book store with the advantages of on-line which is low cost, ease of shopping and huge selection.

GREEN BUSINESS INNOVATORS: So what keeps you up at night?

XAVIER HELGESEN: Well, the economy could be better.

GREEN BUSINESS INNOVATORS: Yes. I guess it could.

XAVIER HELGESEN: So we are concerned as to whether people will really rein back in their spending, and if they do, how that will affect us and I am hoping people might see the wisdom in not gassing up the SUV and driving 20 miles to a Barnes and Noble from the suburbs and instead shopping on-line, and so that would save them money. As more people shift from new to used; again, that would be in our favor and so that could help us make it through a recession stronger than ever. And it could even limit what some of the competitors who are more expensive and who are more brick and mortar base can do.

Borders Books is already in a lot of trouble because really they have a tough business model. They have a huge retail space they have to keep up. The books are expensive. They are way more expensive than you would buy them for on-line and people have to drive to get there and so all of those are working against them. And it is always a challenge; we are still trying to figure out how to get the word out about Better World Books in new and creative ways and to get it out to a really large audience because that is what necessary to drive traffic to the site. These days we have thousands of people coming to the web site everyday and so we are definitely doing something right, but there is so many more people who would buy from us if they just knew about the mission and knew about the value, so I am just going to have to keep communicating that as much as we can.

GREEN BUSINESS INNOVATORS: And what is your favorite part of the job?

XAVIER HELGESEN: Ooh, favorite part… visiting the literacy programs. I have gotten the privilege to take 2 trips to Africa; so I got to go to Malawi, South Africa, Tanzania and Zambia; just came back from Brazil in August. So I got to visit some amazing programs in Brazil and that has really been the joy of the project because that is when you actually see the result of all of this work. It can seem very distant and removed when you are worrying about marketing strategies and you are not actually with literacy programs. So when you actually get back to it and you see that you are making a real impact it is definitely exciting.

GREEN BUSINESS INNOVATORS: And lastly; where do you see yourself in Better World Books in the next couple of years and then, even longer term?

XAVIER HELGESEN: Well, I see myself as continuing to play whatever role is best suited for me in the company. I used to be a lot more heavily involved in our technology but as we have gotten great technology people in the door, I have been able to step back from that and let people who are much better at that job take it over. I am a bit of a generalist anyway so I know a little bit about a lot of things and I know just enough to know to that other people know a lot more about these things and are a lot better at them than I am.

So my job really is to just make sure that we stay innovative and we stay fresh and we come up with good ideas. So we take advantage of new technologies quickly. I think one good example is Facebook, which one of colleagues in the office, Jack Hamlin, has been very active on. We have had almost as many as fans on Facebook as Amazon does because they do not care and we do. And our Facebook page is certainly a lot more fun theirs. So we can continue to try to do stuff like that to make sure that our personality shines through. We also have a really funny order confirmation email if you ever order from us. So we try to make people laugh a little bit.

GREEN BUSINESS INNOVATORS: Okay, well thank you so much.

XAVIER HELGESEN: Yes, absolutely.

XAVIER HELGESEN: We do, we do. And that is, not only in terms of what programs we push, because we go out and we actively market these book drive programs, and so if a non-profit is more effective and it is doing a better job, they will see more money come in from us because we will be able to push the programs better and students will be more receptive to them.