MG: So talk about the change of the business model because I do think it’s a kind of a shift that we could see beginning to be adopted by other industries as well.
RA: Right. As we look at our own business model we are taking raw materials from the Earth through a supply chain, creating products in this linear take-make-waste system that’s common to the industrial system, all of that driven by fossil fuel derived energy, wasteful, abusive, and focused on labor productivity, more carpet per man-hour.
As we studied that system we realized that linear had to give way to cyclical, that fossil energy had to give way to renewable energy, that wasteful had to give way to waste-free, abusive to benign, and that we had to learn to focus on resource productivity, the productivity of all resources, not just labor.
When you think about that you have just modeled an industrial system after nature, because nature is all of those things: cyclical, renewable, waste-free, benign, and nature is of course very productive.
MG: You were into biomimicry before the word was invented.
RA: That’s exactly true and when I read Janine’s book, Biomimicry and got to the last chapter, it described Interface. She had never met anyone and knew nothing about Interface, never met anyone from Interface. I didn’t know her until I read her book and then met her later, but she had described Interface in general terms.
MG: Again for people who don’t know the company, give me a brief description of how you did change the business model from selling and disposing of carpet to something else.
RA: Well we make carpet tiles primarily, but also broad-length carpet, but the core business is modular carpet, and we make carpet tiles around the world. It’s this linear take-make-waste system. Well we set out very early on to create a system that would sell the service that the product delivers as opposed to selling the product itself.
For us that means color, texture, comfort under foot, design, ambiance, functionality, acoustical control, all the reasons anybody would want our product become the service that the product delivers, and we would retain ownership in the stuff, the means of delivery.
That approach to the market did not fly. There was so many impediments that became just too hard, but –- and then today practically all of our business is done in transactional mode, selling the stuff yet again but with a commitment to take the stuff back at the end of its life.
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MG: Just a couple of other questions, Ray. Reading from your book this transformation of the business model, cut greenhouse gasses by 82 percent, fossil fuel consumption by 60 percent, waste by 66 percent, water use by 75 percent. Of course the numbers a lot of businesspeople are gonna wonder about are sales and profitability. What’s been the impact on the company purely from a business standpoint?
RA: Over that same period of time those reductions were achieved, sales increased 60 percent and profits doubled.
MG: So it’s been good for business.
RA: Yeah, and that spans the recession in our industry that’s the deepest recession since 1929, so we survived that recession when we might not have without the advantages of sustainability.
When I talk about the advantages it’s very clear cut. Our costs are down, not up. The waste elimination effort alone, the first face of Mount Sustainability, has produced over $400 million in waste avoidance, cost avoidance, which has more than paid for all the rest of the sustainability initiative, so sustainability for us has been self-funding. Our products are the best they’ve ever been.
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Like Deepak Chopra says, people are doing the best they can given their level of awareness. This whole transformation is about raising level of awareness.
