Twenty years ago, the late Ray Anderson had a vision for his company, Interface, a manufacturer of carpet tiles: to lead Interface to environmental sustainability. That process would begin by transitioning the company off of oil-based derivatives, which at the time made up virtually all of Interface’s raw materials. It was a journey that, at the outset, Interface made alone since the carpet industry at the time was probably the brownest, dirtiest industry of all,” according to Dan Hendrix, who has served as the company’s CEO and president since 2001, adding the chairman’s role in 2011.
As Hendrix, who was the company’s CFO at the time of Anderson’s epiphany, remembers, “In 1994, when Ray came up with his vision of getting us off oil, I was a naysayer, I was a nonbeliever, and I could not get my head around how we were going to become sustainable and still make money. I fought it by fighting everything on the ROI standpoint with Ray and this vision. I had been named the CFO in 1985, and I was all about driving costs down.”
That all changed, though, when Hendrix took a step back to look at the situation from the point of view of the marketplace, and how innovation could not only help Interface reinvent how it manufactured its products but could change the whole image of the carpet industry. Among other customers, Interface sells its products to the architect/design community, who are very passionate about the environment, Hendrix points out. “Once I got outside our traditional box and looked at the situation, it made sense: companies needed to pursue sustainability or they wouldn’t be in existence in the future. But to get my head from being a CFO who was all about ROI and reducing our costs every day, to why sustainability was the right thing to do was probably the hardest thing in my career to do.”
Under Hendrix’s guidance, the company is pushing past its own four walls to address sustainability throughout the entire supply chain as part of its Mission Zero initiative, whereby Interface hopes to source 100% recycled nylon by 2020 while eliminating any negative impact that company has on the environment. That kind of far-reaching effort, he notes, has to begin at the top, rather than from supply chain VPs or chiefs of supply chain.
“It really has to start with the CEO, and that CEO has to look through different lenses and drive a lot of innovation if they’re going to change their footprint,” he says. “So if you challenge your supply chain—you have a stick and a carrot both—you’ve got to find partners that want to do what’s right, those that see the same vision that you have, and it starts with their CEOs to change their model. “
From the get-go of Ray Anderson’s vision, Interface has focused on eliminating waste, which helped the company reduce its carbon footprint significantly. That effort has included dematerializing the product, recycling early and often, and incorporating biomimicry into the process, which involves taking the point of view of asking: How would nature make a carpet tile?
“In nature, nothing is identical, everything is different, but it all works,” Hendrix explains. “So we created a carpet tile where every square is different and random. If you think about manufacturing, there’s no waste, and if every product can be different, you don’t really have any defects in the product. You manufacture it, you cut it into squares, and it’s a manufacturer’s dream. So there’s a lot less waste to it. From a design standpoint it sort of changed the whole market for carpet tile around random and making it more sustainable.”
Some companies fall into a sustainability trap, though, where they assume customers are eager and ready to pay more for greener products. “There’s always the issue of: Will they pay more? But the way that I look at it, and the way Ray looked at it, is that if you’re equal on a bid process—Ray liked to call it a jump ball—you’re going to get more of those jump balls if you’ve created goodwill with your customer. If our customers come to our plant, they see us recycling and putting it back into the carpeting. They actually can tangibly feel and see what’s going on there. That creates a bond, a relationship with the customer that allows you to win business, but they might not pay more for it.”
Hendrix still maintains something of a finance officer’s common-sense view of how a company should be run. “Unless we’re economically sustainable, we can’t be an environmentally sustainable company. That’s the number one criterion.” He also hopes to see the U.S. government get more solidly behind green energy. “We need a race to green energy with China like we had a race to the moon with Russia. China is investing a lot of money in solar and green energy because they’ve got a huge pollution problem. They have a sense of urgency, so they’re making huge investments in green energy, hydro energy, even nuclear energy, to get off of coal. I think everybody needs to step up, but I think the U.S. needs to have a similar agenda to allow companies to get off of coal and natural gas too.”
Above all, Hendrix insists, manufacturing leaders should never underestimate the higher purpose with their people. “Create a culture where your people really want to get up and go to work, and they believe they’re doing something besides just earning a paycheck.”