For a business that relies on other companies renovating or opening new buildings, one might expect the European head of international flooring giant Interface to be just a little panicked at the global recession. But Lindsey Parnell, CEO and president of InterfaceFLOR Europe, Middle East, Africa and India, is looking remarkably calm. Does he know something the rest of us do not?
As he contemplates a question about the recession, I find myself wondering what wise revelations I am about to get. Then he leans forward and utters these revolutionary words: "When business is bad you need sustainability more."
Sitting in an unglamorous manufacturing plant in a small town called Shelf in West Yorkshire, with the world crumbling around us, this was not the answer I expected. Yet never were there more pertinent words; for if ever there is a time for businesses to think about sustainability it is during a recession.
"CEOs are paranoid about wasting money," says Parnell. "If businesses are doing sustainability right, then it gives the advantage of falling costs. But if they have been looking at CSR under the thin veneer of marketing, the recession will have an impact on their programmes. CEOs will drop it like a hot brick if it is not attached to the bottom line."
Parnell knows what he is talking about. Over the past 13 years InterfaceFLOR, which specialises in environmentally-responsible modular floor coverings (carpet floor tiles to you and me), has gone through a comprehensive transformation process with the aim of becoming the world's first genuinely sustainable business by 2020. Led by Interface Inc's charismatic and environmentally-evangelical founder Ray Anderson (see p33), the company is consumed by what it calls Mission Zero - a programme to deliver its promise to eliminate any negative impact it may have on the environment by 2020. Note the 'any' negative impact, for this is not just tinkering at the edges of CSR. InterfaceFLOR - and its parent - are re-engineering the whole operation to achieve what most business leaders are unlikely to contemplate even in their most forward-thinking moments, the move from a 'take, make and waste' Industrial Revolution form of manufacturing to a more natural and cyclical system of material and resource flows.
It is a big ask for any company, let alone one that employs 1,000 people in Europe alone (435 in the UK), has a global turnover of US$1 billion and is in a petroleum-intensive industry relying on materials including glue, plastics, chemicals and dyes and a process including huge energy resources in the form of heating, water, oil and natural gas. But InterfaceFLOR is truly revolutionary when it comes to sustainability (see Mission Zero box).
At the heart of its success is a clear corporate vision, strong leadership and real organisational commitment to the strategy. And, luckily for Parnell, founder Anderson had what he calls his "spear to the chest" before the environment became the hot potato it is now.
"We have been doing it a long time and it has been hard work," reveals Parnell. "We have 12 years of heritage when we were not in the spotlight so we could stumble our way through the early stages. Today, if you are accused of greenwashing it is difficult to get your reputation back."
According to Parnell: "You can't let the fear of getting sustainability wrong prevent you progressing." He suggests using lifecycle analysis tools to help the process and warns: "If you do not know what you are doing with recycling you could end up with a bigger footprint. What is right this year is not necessarily right next year. Two years ago it was all about planting trees, now it's not. "
Pivotal to Parnell's success has been careful analysis of the impact of all decisions on business, not on sustainability. "Investment must meet normal business criteria," he stresses. However, every investment the company makes is assessed on how it will enable it to minimise environmental impact. For example, it has spent £3.5 million on machinery in its Shelf and Craigavon UK factories that allows every by-product of the manufacturing process to be recycled and reused later in production.
The company began the transformation programme with an internal focus on waste. One of the main challenges to embedding sustainability into the culture was to engage employees at all levels. To achieve this InterfaceFLOR introduced QUEST - Quality Using Employee Suggestions and Teamwork. As head of HR Simon Carlton explains: "Through QUEST employees are rewarded for improvements to their work that encourage better environmental performance. For example, on the shop floor we run a bonus scheme that incentivises waste consumption reductions." Indeed, as you walk through the Shelf factory, you see evidence of this. Boards with smiley faces show when a shift has achieved its target, be it a 10% reduction in waste, energy, material variance or labour.
Gaining employee buy-in comes early in the company's recruitment process. In fact, Carlton is in the enviable position of having people knocking down his door in a bid to work there.
"We want to fast forward to 2020 so are energising everyone to achieve the Mission Zero goal," he says, explaining that this takes in three stages. Induction includes information about sustainability and what it means to the business. The second phase focuses on climate issues and gets staff to think about how they impact on their own departments. Phase three is what Carlton calls "critical analysis". Senior managers consider the wider business issues and everyone, from the CEO down, is challenged to come up with a totemic idea to help.
Then there are the 100 sustainability ambassadors. They have completed training in sustainability and "anyone who wants to can step up to plate", says Carlton. There is also the Sustainability Leadership Council, which ensures environmental targets are met.
Constant employee communication reinforces the message. A quarterly executive briefing underlines the approach while the company regularly cascades information from the executives and managers to the shop floor.
"It is remarkable how many people get turned on by sustainability," says Parnell. "They feel they make a difference. You have got to harness this, give them permission to get on with it."
What is most impressive about the company's approach is that it has encouraged innovation both in cost-cutting initiatives and in product design. So it has infrared lighting ensuring lights only come on when a forklift truck enters an aisle in the factory or someone enters a laboratory. Or energy is saved thanks to a production line on which the rollers only move the tile forward as it hits them. There is also a reduction in the recycled cardboard weight and depth for the boxes that hold the tiles, earning a 10% saving and less impact on the environment when 1.2 million boxes a year are reduced by 120,000.
Then there is the Re-entry scheme, under which businesses can give back old tiles and InterfaceFLOR will give them to charitable organisations, keeping them out of landfill. And a new machine called Cool Green for window waste (edge waste). Window waste is the biggest landfill item but Cool Green cuts it up, grains the waste into a fine powder and that then goes back into the carpet.
In product design, the UK business developed Straightforward - randomly designed tiles that are cut so they can by installed non-directionally. This gives faster installation and minimum waste.The pile material is made from recycled solution dyed nylon and is manufactured using 100% green electricity. This product is part of the Cool Carpet programme, which offsets emissions generated during the life of the carpet.
But it does not end here. Among countless other initiatives is the Evergreen carpet leasing system, whereby InterfaceFLOR supplies, installs, maintains and replaces flooring products in return for a monthly leasing charge, enabling it to reclaim the product at the end of its life for repurposing. Then there is Interlock, a vinyl product that can be recycled back into itself at the end of useful life.
Sustainability is not just about waste. The company also takes training very seriously. Its cross-training programme equips workers to work any machine in the factory as required, not only, says technical director Robert Boow, resulting in labour efficiencies but also acting as "a great way of motivating people". Signs remind staff of another initiative - the 5S (Sort, Set in order, Shine, Standardise and Sustain), which aims to improve efficiency through shortening lead times, improving workplace appearance and working conditions.
Sustainability is also about responsibility to suppliers and last year the company introduced Just, the first product in a new FairWorks range. This is the result of the company working with artisans in rural India through Industree Crafts Foundation, an accredited Fair Trade organisation. Each tile uses locally sourced material and traditional handicraft techniques.
So the company's strategy is certainly impressive, but what about results? Globally the savings alone have reached $372 million since 1996. There has been a 75% reduction in waste from manufacturing to landfill, an 82% cut in net greenhouse gas emissions, a 45% reduction in total energy consumption per unit of output, and 100% renewable electricity is used in manufacturing in Europe. Moreover, 27% of global energy consumption is from renewables and there has been a 75% reduction in global water usage.
But just as important is the competitive advantage InterfaceFLOR has gained. The company has a 40% global market share and competes against three major global players and several national players. Parnell is adamant that its position on sustainability is winning contracts. "On average, flooring is dumped every seven years as a result of redesigns and new offices," he says. "Given this, the product is often over-engineered. So we sit down with clients and talk about capability, life span and re-use."
If convincing your client they should trade down doesn't seem like good business then consider this - sales have leaped since the company has embraced sustainability and profits have doubled.
"In the 1980s business was all about a quality drive and accreditation," says Parnell. "Fast movers used this to their advantage - others then had to compete. The window is closing rapidly to use sustainability to your advantage and give marketing edge. In the next few years it will be a given - that's if we don't see legislation first."
1. Eliminate waste: eliminating all forms of waste in every area of business
2. Benign emissions: eliminating toxic substances from products, vehicles and facilities
3. Renewable energy: operating facilities with renewable energy sources - solar, wind, landfill gas, biomass, geothermal, tidal and low impact/small scale hydroelectric or non-petroleum-based hydrogen
4. Closing the loop: redesigning processes and products to close the technical loop using recovered and bio-based materials
5. Resource-efficient transportation: transporting people and products efficiently to reduce waste and emissions
6. Sensitising stakeholders: creating a culture that integrates sustainability principles and improves people's lives
7. Redesign commerce: creating a new business model that demonstrates and supports the value of sustainability-based commerce
THE GECKO EFFECT
When the product designers got the hang of Mission Zero it opened their eyes to a new way of looking at design, according to Anderson. He tells how head of design David Oakley took a team deep into the rainforest for inspiration. Looking at the ground cover of leaves they realised it was random yet somehow all worked together.
The result is a design approach that mimicks nature. The first product, Entropy, simulates the random patterns, shades and colours found in nature, meaning every tile is unique.The style can be laid non-directionally, making for faster installation, easy replacement and, most importantly, reduced wastage. It is now one the most popular products.
Another innovation based on nature is TacTiles. This breakthrough emerged from a question: how does a gecko cling upside down? A square is adhered to the backing of carpet files, bonding them together to create a 'floating floor'. Installers then lay the tiles directly on top of the floor without permanently attaching the carpet tile to the substrate. No glue, less pollution.