August 26, 2011

Business Lessons from a Radical Industrialist

I've been reading Ray Anderson's book Business Lessons from a Radical Industrialist. Great book. 

Ray Anderson was CEO and Chairman of Interface, a commercial carpet company that used to be totally dependent on fossil fuels. He recently passed away at age 77. 

In 1994 he set a goal for his company that they would take nothing from the earth that could not be replaced by the earth. Internally he called this goal "Climbing Mt. Sustainability". 

The book covers the first 15 years of his quest to eliminate waste and fossil fuels and transition to renewable energy and materials. 

In those 15 years his company, Interface: 

Cut greenhouse emissions by 94%
Cut fossil fuel consumption by 60%
Cut water use by 80%
Cut waste water by 72% per yard of carpet
Increased sales by 66%, doubled earnings and increased profit margins
Invented many new machines, materials and manufacturing processes
Developed a devoted customer base and energized the company's workers. 

If they can do it in an industry that had been totally dependent on fossil fuels - any company can do it. 

They set measurable targets in 7 areas

Moving towards zero waste
Moving towards benign emissions - throughout the supply chain
Energy Efficiency and Renewable Energy
Closed loop recycling
Resource efficient transportation
Culture change
Redesigning commerce around accurate costs and real prices including externalities

They have employed the science of biomimicry to achieve many of their goals and  follow these natural design rules:

Nature runs on sunlight
Nature uses only the energy it needs
Nature fits form to function
Nature recycles everything
Nature rewards cooperation
Nature banks on diversity
Nature demands local expertise
Nature curbs excesses from within
Nature taps the power of limits

One example of this - They sent their designers into a forest to see how nature would design a carpet. The designers came back with the understanding that no two square yards of forest floor were the same, but they all blended into a harmonious whole. 

So they set a goal of designing carpet the same way. They designed carpet so that each carpet tile was slightly different in pattern and color. They found many advantages to this. You could lay the carpet randomly instead of in a monolithic fashion. It was easy to make repairs, because the tile didn't and couldn't exactly match its neighbors. Customers liked it better! 

On top of that, off quality tiles practically vanished because inspectors could not find defects among the deliberate different patterns and colors. Now all tiles could find a place in a symphony of color and pattern, harmonious and pleasing. Dye lots now merged with each other, eliminating the need for customers to buy extra tiles of the original dye lot. You could rotate the tiles, like tires on your car, to extend their useful life. 

This product quickly became the biggest selling product in the company's history. 

Another example, they studied how geckos can cling to a wall or a ceiling to eliminate glue (and its volatile organic compounds) from the back of the carpet. 

Lots of great ideas. 

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