Question: How important is sustainability in business?
Jeff Swartz: I guess it depends what the stakeholders’ point of view is. If you’re an employee sustainable means that they will be humble and powerful and excellent and they’ll adapt and I’ll keep my job and I’ll build a career and I can count on that, not count on that as Japanese, but count on that as long as I do my part in this relationship they’ll do theirs.
Unsustainable is let’s get excited about some really bad idea. Let’s convince ourselves we’re right. Let’s not listen. Let’s power down the path and let’s fire you for my decision. That’s not sustainable and so if you’re an employee as a stakeholder sustainable is better than not. If you’re a consumer sustainable is important both from a product perspective and from an environmental perspective. If you’re a shareholder I don’t know about that to tell you the truth because despite all the conversation with social responsibility investment it doesn’t show up from my perspective and so most of our shareholders are predicated on knowing when it is no longer sustainable. Most of the people who do business in Timberland stock or anybody’s stock do it on the basis of I buy it before you know what it’s worth and I sell it before you know what it’s worth and so it’s absolutely not a sustainable notion. What is sustainable there is I know something you don’t know. I have an insight you don’t have and so if Timberland is consistent and predictable that is… That takes the fun out of it for the folks that invest in turning over their positions. So with the exception of the shareholder on the level of financial results sustainable seems to me and all win, no loss proposition.
Well the way the shareholder values sustainable is if we can generate a return for it, so if we can create a culture where the men and women who are Timberland are committed to it, not just in loyal terms, but in engagement terms, we’ll be more innovative than our competitors. If we can create products that are more innovative than our competitors and find ways through different media strategies, which is innovative again, to make the consumer care about Earthkeeper Footwear from Timberland then we’ll outsell our competitors and then our shareholders will say sustainable is interesting to us in so far as it generates superior returns. I don’t believe that the enlightened shareholders at hand yet. The enlightened consumer is much closer to hand than enlightened shareholder and so my view of that is… Bill Clinton said this once. He said, “The world is made of yes, no and maybe, spend just the minimum amount of time with yes you need to feel reinforced, ignore no and focus everything on maybe.” And so if the shareholders’ view is like whatever then my view is fight for the consumer. The conversation is if I can convince you that Mountain Athletic, lighter faster, further, sexier and green is a unique proposition and you will buy our trail running shoes, not North Face’s the shareholder will think whatever you’re doing you keep doing it and I sound borderline cynical there. I’m surely skeptical. I think the shareholder is going to get… The shareholders should have woken up by now, but they haven’t.
Topic: Getting rid of bottled water at Timberland
Jeff Swartz: I saw something on Twitter about bottled water or something like that and our team made the mistake of letting me do Twitter and so I can like get around my handlers and so I just blasted a note that said I’m getting rid of bottled water. I can’t solve the world’s… universe’s problems right this minute, but it makes no sense for our employees to be buying bottled water and no, it’s not big brother. It’s none of that crap. I’m just telling you I can give our employees a raise by banning bottled water and so I thought that would be cool and it would be hip and my kids would be impressed. None of it worked. It was like, “What the hell are you doing?” “I like my bottled water.” “What about the soda machine?” It was like for crying out loud. So then I got the equivalent of the daycare team together and said, “Will you… Since I’ve said we’re going to do this will you make me look no stupid and make I happen?” And they got together and they wailed away at it and we made bottled water go away and everyone at Timberland thinks it’s a pain in the neck. Everyone at Timberland thinks it’s kind of cool and everybody at Timberland thinks… knows. They know Victoria that something big is coming and it wasn’t bottled water. Bottled water was an example that said the status quo sucks and we need to challenge. Existentially, politically, spiritually, practically, professionally good enough isn’t good enough. It’s time to rock it up a little bit and so okay, I’m going to ban smoking next at Timberland. People now go outside to smoke. I’m saying… I’m going to post armed guards, shoot them, no cigarette smoking because I watch the government just bludgeoning to death this notion of healthcare and in the meantime I’m paying for healthcare at Timberland. We’re self-insured and people in our community are smoking cigarettes and you and I are paying for it if you’re a Timberland person. So like no, no, no, no, no, come on, back to the ownership mentality. No riders on the storm here. We’re going to differentiate healthcare rates at Timberland. If you take care of yourself you get one rate. If you don’t’ take care of yourself… Look, this is America. We’re not telling you what to do, but we’re going to create incentives or disincentives because hey, come on, we’re not getting any younger here.
Recorded on September 21, 2009