Moving from eco-efficiency to eco-effectiveness: An interview with Ray Anderson and Bill McDonough

Two industry leaders discuss what it takes to breed truly environmentally responsible businesses.

reprinted from Corporate Environmental Strategy:
The Journal of Environmental Leadership, Autumn 199


ay Anderson and Bill McDonough are at the forefront of change in how business deals with environmental issues. Ray Anderson is CEO, Interface, Inc., a $1.15 billion carpet manufacturer. Since adopting sustainable standards for Interface, the company has increased revenue by 20 percent and earnings by 30 percent.

Bill McDonough is Dean, University of Virginia School of Architecture, a principal in McDonough + Partners, and cofounder, McDonough Braungart Design Chemistry. He is an internationally recognized environmental architect and product designer.

This interview elucidates the current thinking of these visionary leaders. Timothy Judge, Corporate Environmental Strategy associate editor, conducted the interview.


Designing sustainable change


Tim Judge: In redefining how business operates, what were the greatest obstacles that you both had to overcome, and how have you done it?

Ray Anderson: Not enough happens by focusing on what is referred to as eco-efficiency - waste reduction here and there, emissions here and there. To make real progress, the product development people need to understand what sustainable design is, and should be wholeheartedly involved in moving in that direction. This is what Bill McDonough talks about.

Bill McDonough: Once people realize we have a fundamental design flaw, that we're working from the wrong platform, that's when everybody starts to realize we're operating from a new set of principals. When this light bulb goes on when people realize we're in a different game, and that [sustainable design] is not "business as usual" is the dramatic moment for me.

At Interface, Ray's been able to give his people a goal of "let's go for a new kind of target; a target of 100 percent sustainable." He's not saying "let's try to be less bad tomorrow, and shoot for zero percent bad." Zero percent bad means you accept the world as it is and you try to be less guilty. 100 percent sustainable means you use your creative resources toward a productive end. Once you see what that looks like, everything starts to move, and the log jam breaks.

Anderson: The most important breakthrough in our company happened when the head of product development "got it" and began to think differently about dematerializing the product line. He took material content out of the design and used materials that were recyclable.

McDonough: It's based on the "Technical Nutrient" and "Organic Nutrient" protocols. I'll give you an example:

We had a project with Interface where people were coming to grips with the issues [of sustainable design]. Suddenly, they saw we could use materials which achieved the goal of sustainability. Instead of just trying to figure out how to get rid of poisons or energy inefficiencies or materials that weren't necessary, we were able to say, "here is your breakthrough." As Ray has pointed out, when the product development people came up with new products based on these principles, then everyone else saw it was possible.

Judge: What advice would you give environmental professionals who are trying to convince senior management of the value of sustainable business practices?

McDonough: I would say, copy Ray Anderson. He got in and did it, he's successful, and the magic is happening.

Judge: Ray, what was the key thing that convinced you?

Anderson: Everything I know I put in my book which has just been published. So, I'd say, buy my book, read it, and give it to the CEO. Do to him what somebody did to me.

Someone at Interface convened a task force meeting that brought together people from all our businesses around the world to assess the company's worldwide environmental position. They asked me to give the keynote, and to give them an environmental vision. I didn't have one and that's when Paul Hawken's book landed on my desk. I started reading Ecology of Commerce, and, in the first 50 pages I had the vision for the speech, and more than that, a vision for my whole company. It was a bolt of lightening, you know, a spear in the chest, as I've described many times.

Somebody set the stage, frankly, for that propitious moment by inviting me to make a speech that I didn't want to make, because I didn't know what to say. So, I would say to the environmental profession, invite your CEO to make a speech and set him or her up. Ask her to give your people an environmental vision, and then see she gets the right book at the right time. It can be a life-changing experience.

McDonough: Ray's exactly right; you take the best of the best, and put it in front of everybody, and just let them get going. At Nike, it was their line people who got it. They listened to the concepts we outlined for them as design protocols, and they said, "let's just do it." They have a corporate ethic of performance. For them it was about total quality management - this is the right thing to do and you just do it.

Yesterday, I was at a major retailer giving a presentation on the future of retail products and buildings, and I felt I was watching light bulbs go on. I know Ray had this experience too, because he was there a couple of weeks earlier. One of them said, "you know, the moment it hit me was when Ray Anderson said, "Someday people like me will be put in jail." So, whatever it takes to get the epiphany.

Judge: I constantly see environmental professionals hit the "Green Wall." We have a client that has been pushing to change things at his company. He meets with his senior executives, talks for two hours, and at the end, they all walk up to him and ask, "are we in compliance?"

Anderson: It took us a year of spinning our wheels before we began to get any traction. A particularly hardheaded group was our European management group, who just couldn't believe this was coming from the United States. They view our country as energy hogs, and when they heard this message of sustainability coming out of Atlanta, Georgia, they just couldn't believe it. They thought it would pass, but I just kept talking.

I made a speech in Scotland to an outside group and some of our people were there. During a break, one of our people was sitting in this big meeting hall all by himself. I walked up to him and he looked up, and there were tears running down his face. At that moment, he really believed that I was serious and that we as a company were serious. Today, he is the most committed guy in the company. But it took a year.

You have to have the persistence to keep on talking. Don't change the story; keep it consistent. That is what brought him and others around, one by one. It turned out to be a powerful galvanizing force for the company. It is management at its best. People want to work for a higher purpose, and it has become, in our company, that higher purpose.

McDonough: That's the key, that the message is coherent. Paul Hawken said the other day at a talk how interesting it is that there are so many people talking about so many sorts of belief systems, and developing so many ways of looking at this picture, but that none of them are contradictory. They may not be identical, but they all fit. It is what I call the "Declarations of Interdependence."


Eco-effective strategies in business


Judge: How would you describe moving from beyond compliance to the mode of sustainability?

Anderson: The change is in the mindset. However, the whole thing begins in the heart, not the head. Anybody who comes at this from the head is going to come up short. You ultimately want to appeal to the head, but it must begin in the heart. Or, to put it another way, it begins on the right side of the brain, not the left side.

McDonough: The framework is different, the attitude is different, the economics are different. It's about legacy instead of activity. We do not forsake the future for the present, period. It's a design question. Nobody's asking you to give up anything; we are asking you to be smarter.

It's not just restorative, it's regenerative. Michael Braungart and I have coined a new term, which we call "Eco-Effective." Eco-efficiency is a framework that says, "let's feel better by being less bad or go to zero." What we're saying is, let's go for 100 percent sustainable and be Eco-Effective. We can celebrate abundance and that is different than bemoaning limits, which is what eco-efficiency does.

Eco-efficiency asks, what are the limits to exposure to cadmium? Let's try and get down below that. We're saying, why cadmium exposure? Look at the "Product of Service" concepts as applied to Ray's carpets; this is what they've done. Let's design carpets so they can be "Technical Nutrients"; so they can go into closed "cradle-to-cradle" cycles, accrue assets over time and sequester a certain amount of raw material for making carpets forever. Now, that's powerful.

On top of that, he's going to become the first solar powered carpet manufacturer. Interface is working from the only source of income the planet has. Interface, like any good household, runs off of income, not off capital.

What he's doing is not a restoration job; it's a regenerative job. That's the part that's so exciting and powerful. It is like asking how many songbirds can you bring back to the site of a building? That's how you measure your progress.


Triggering grass-roots public policy for sustainability


Judge: Ray, as cochair of the President's Council on Sustainable Development (PCSD), where do you see the council heading, what policy changes do you feel are needed, and what do you see as the roadblocks?

Anderson: The first term of the PCSD resulted in the delivery of the report, Sustainable America, to the President. In this second term we are focusing on implementing ideas from that report and continuing to raise awareness. I think the main deliverable that will come out of this second term is the National Town Meeting for a Sustainable America, that is being convened by the PCSD with the help of the entire environmental community. The core meeting will be held in Detroit, May 2-5, of this year. There will be events going on around the country simultaneously, where local sustainability efforts will be spotlighted and showcased.

The idea is to reach out to the country. There may be as many as 50 million adult Americans who are sympathetic to one aspect or another of sustainability, but many not even know what to call it. They are running food kitchens and hospices, working in the social equity area, and the whole environmental community. There are mothers of Boy Scouts, and the PTAs, people involved in their communities in local social or environmental efforts. They don't know they're not alone. The vision of the National Town Meeting is to network 50 million Americans and have them rise and speak with one voice for a Sustainable America, in the belief that this will move government and business, and that will change the world. If we can halfway accomplish that, it will be historically monumental.

On just the pure policy level, there is the issue of climate change and the ratification of the Kyoto agreement. If there is a roadblock in the way of America today, it is the Congress - the Senate has to ratify the agreement.

I don't know what is going to change that except to get 50 million Americans to speak up. If the people lead, the leaders will follow. So, we hope to inspire people to step up, and lead and move Congress, move business, move the world. Change that rudder setting just a bit and the big old ship will eventually come around.

McDonough: In a way, it's almost alright that we didn't do it until now. Look at the energy situation. Within three years, we will see photovoltaics competing head on with other energy sources. Until now, they've been made with heavy metals, and we have been substituting a mass problem for an energy problem. We're about to see the result of extraordinary effort from NASA, where we talked about why such things are made from toxic material. They got to work, and they did it. And it's cheap. We are going to see nontoxic roofing materials that are invisible PVs - basically shingle and metal roofs. This is really exciting!

As the call goes forward, the technology that needs to respond to the call is actually getting prepared. Enron, the largest natural gas company, is now in the energy services business and is discovering that solar and wind power is cheaper in certain circumstances. They're going to sell solar or wind energy. It's not a moral question for them, it's pure business.

Anderson: The other aspect of PCSD's work in the policy area is to visualize environmental management systems for the next century - how the EPA will do its job. The fundamental notion is there should be a lot more carrot and a lot less stick. As the technologies come on stream, there's an opportunity to offer incentives for people to do good things instead of keeping them from doing bad things. It means a shift in the mindset of EPA as well; its time to move beyond compliance to being proactive. The

EPA is, I think, realizing this, and is trying to figure out what its role would be in that proactive world.


Product design from end to beginning


Judge: Bill, I have heard you speak about retroactive design. How is that applied in practice?

McDonough: Let's use a TV set as an example. The retroactive design assignment would be: design something to sell to consumers who can't consume it. Give them the responsibility for 4000-plus chemicals and heavy metals, and then give them the responsibility to dispose of it. Make it cheap and make it so it has planned obsolescence, either technologically or stylistically. As soon as someone receives this assignment they say, "wait a minute, I thought I was making a television."

Once you realize that design is the first signal of human intention, then the question is: Would you consider that design assignment to be an ethical thing to keep doing, once you know what you're doing? When does negligence start? It starts when you know better and you don't do anything about it. Clearly at this point you must adopt a strategy of change, and that's what we want. What are your new intentions?

So, we give them a new design assignment. Let's design fabrics that don't contain mutagens and heavy metals, and that are made in situations where people treat each other with respect, where people get paid a living wage, where men and women are treated equally for equal work, where they are not exposed to dangerous materials from factories, and don't expose the world to dangerous materials as a result of their manufacture. The design needs to be economically intelligent so it can make a profit and be efficiently produced so we're not marshalling resources in ways that are "profitably stupid." That's the new design cycle. The marvelous thing is, as Ray pointed out, when your product development people get it, magic happens.

Judge: Both of you call for the elimination of regulations. Many grass-root environmental organizations are pushing for lower emission levels and greater regulation. How do you convince them what you're proposing is actually going to work?

McDonough: You just do it. Most people say we need smaller pipes or filters on pipes, but what I'm saying is put a filter in your head. Use intelligence filters. We don't need to use that material in the first place, so just don't use it. Regulations are a sign of design failure.

Anderson: Regulators deal with people who just don't get it. As more and more companies get it and move beyond compliance, in time the whole regulatory process will become obsolete.

Judge: Ray, you say the transition at Interface took over a year. What was the hardest thing you had to change from a business perspective?

Anderson: The hardest thing was to get our suppliers on board, because we're utterly dependent on them, in some cases, to develop the new technology. We've said we won't make investments that don't make sense, in a true business sense. When you make a statement like that the accountant's reaction is, "if it costs more then you won't do it." My answer was, "no, I didn't say that." What I said was, "we won't make investments that don't make sense."

We put on our marketing hat, our manufacturing hat, our product development hat, and our accountant hat - we wear all hats. Then we ask if it makes sense. We are about to invest in PV for our carpet factory in southern California, and we are going to make the world's first solar-made carpet. And it will sell. We're absolutely convinced it will sell. We don't care that the electricity to drive the machines is going to cost a bit more. The accountant didn't understand that, but the marketing people do. This makes total sense for our business. To get that kind of thinking to take hold in the company is really a hurdle. To get that kind of thinking to take hold in our suppliers is an even bigger hurdle.

When we say to Dupont, you have to recycle nylon, they start telling you how hard it is. You just keep talking and tell them to just do it. Finally, they put their best people on it, and sure enough, you begin to see the pieces fall into place.

  Ray Anderson's new book, Mid-Course Correction, Toward Sustainable Enterprise: The Interface Model, is available through Chelsea Green Publishers, McDonough + Partners:

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