Accumulated Wisdom
Dan Hendrix, former CEO and former board chair, Interface
For loyal readers, you’ll know that in a recent post I raised the question of whether we can learn fast enough to avoid extinction at the hand of artificial intelligence. I know, it was a pretty scary and even potentially depressing piece. Fortunately for me and you, I then had the opportunity to speak with Dan Hendrix, former CEO and former board chair of Interface, the world’s number one maker of carpet squares. I can see the look on your face; “What’s a carpet square company got to do with the end of the world?” It turns out that Interface may just save us all.
Dan didn’t start out in life thinking that he would become a CEO, let alone change the world. He lost vision in one eye when he was 8 years old but went on to be a star athlete, serving as the captain of his football and basketball teams in high school. He wasn’t the best student; he said he could find his way to the athletic fields but couldn’t tell you where the library was. At Florida State he was pursuing a career as a PE teach and already had a position lined up at high old high school before graduation. Then came one of those moments. His father, who had given up his dreams to support his family, challenges Dan to do more. He saw in him more than a PE teacher and coach; he saw a leader and urged him to go to business school. Fortunately, Dan listened and pivoted to study accounting, eventually graduating with high honors. He was an external auditor for Interface when he met Ray Anderson, its charismatic founder, and “fell under his spell.” He went on to become the youngest CFO in any Fortune 500 company and eventually CEO when Ray handed over the reins. A heartwarming tale of success, to be certain, but that’s not what this story is about. The truth is, that when Dan accepted that job at Interface, he had no idea what he was in for, and neither did Ray.
At the time, Interface was a $50 million company that had its shares of ups and downs but tremendous potential due to the advantages its products offered to architects and operators of commercial buildings. Carpet squares are easier to install, allowed easy access to under-floor systems and saved money when a small portion of carpet needed to be replaced due to stains or wear.
By the 1990s, architects were being challenged to build greener buildings (more energy efficient and less harmful to the environment) and passed that challenge on to Interface. Ray asked one of his executives to lead a team to look into what could be done without any real expectations of what would come of the effort. The executive invited Ray to kick off the meeting, which is when Ray realized he had no idea what to say. In preparing for the meeting, he read Paul Hawken’s book, The Ecology of Commerce, that made the case that if the planet was to be saved from almost certain extinction, business was the only group with the capability to do it. Ray said reading the book hit him like a spear in the chest. Ray then made a very short speech to the task force that proclaimed that Interface was going to become a leader in sustainability. He referred to the challenge of “Climbing Mount Sustainability,” meaning that the company would meet the audacious challenge of achieving zero emissions by some date in the future, which he left for the task force to define.
At the time, other companies weren’t taking the sustainability challenge seriously and Dan was fairly certain that Ray’s new mission for the company would be a “flavor of the month” kind of thing. As CFO, he couldn’t make the link between spending on sustainability and shareholder interests. Ray didn’t give up. At the next investors’ meeting, he took the slides away from Dan that Dan was going to use to go over the financial results and told the assembled audience that, “Someday, people like me are going to go to jail for what we have done to the planet.” He laid out the new mission for the company even though, as he admitted that at the time, he didn’t know how or when the mission would be accomplished. He never addressed the financial performance of the company. Investors weren’t pleased. Some imagined that Ray must have been terminally ill and was either trying to leave a legacy or preparing to meet his maker.
Being among the first to travel down the sustainability road, there were few examples to follow. However, being first had its advantages. Ray knew Interface needed help and decided to pull together an expert group to advise the company on its sustainability strategy. Paul Hawken accepted his invitation, as did the biomimicry expert Janine Benyus and leading sustainability architect Bill McDonough. This group became known as the “Dream team.”
The train was moving. All employees were trained in what being a sustainable company meant and invited to suggest innovations. Over time, the company was able to entirely change how its products were produced, moving away from virgin latex and nylon to greener, recyclable materials. Factories were 100% powered by renewable energy, water usage was cut dramatically, and product innovations that came from adopting ways that nature behaves boosted sales dramatically.
It wasn’t a smooth ride. By the time Dan took over from Ray as CEO, the company had grown to $1.2 billion in sales but had also seen three downturns during which 25% or more of employees were let go. One of the first things Dan had to do was replace a good portion of the leadership team, since there were still skeptics who disagreed with the direction the company had taken and were not pulling in the same direction. Dan saw how essential it would be to create a culture with common values and a complete commitment to the sustainability mission. At that point, customers and employees wouldn’t accept anything less. Still, Dan had to undo acquisitions that he and Ray had made in the quest to turn Interface into a company that could provide architects with anything they needed, even though some acquisitions were not good businesses. Dan spun off those acquisitions and refocused the company on its core business and Ray, who was still on the board, backed him in doing so. Dan’s message at the time was simple but profound, “If we wait too long to decide, we will only have one decision to make.”
By bringing in new, younger talent at the top, Dan created a team that felt like a group of entrepreneurs. Innovation flourished and the competitors had a hard time keeping up. Not everything worked; some products under-performed in use. At the same time, Interface’s success, culture, values and mission allowed it to attract incredible talent, people whose own values aligned with those of the company. These folks provided a massive advantage which allowed the company to stay agile and keep expanding.
Eventually, Interface realized enough of its initial sustainability goals to require new goals to be set. This time, it wasn’t enough to strive for zero environmental impact; the new goal was to “take back” carbon from the atmosphere and restore it to the earth. By setting the example, the hope was that Interface could spur other companies to join them and actually begin to reverse climate change. It was a big goal but a challenge that Interface’s people readily accepted. Before long, Interface was producing carpet squares that like trees, absorbed CO2 from the atmosphere.
When Dan was ready to step down, his successor wasn’t certain that continuing the journey was in the company’s best interests. Loyal employees were ready to jump ship. A retreat with the Dream Team changed the new CEO’s mind. He became fully engaged in the effort to make Interface the company that saves the world. The company is currently led by its first female CEO, who is keeping the company’s goal to reverse climate change front and center. Let’s hope Interface succeeds.
In a speech to graduating students, Hendrix shared his philosophy. Make your own luck through hard work; take responsibility for your success but more importantly your failures; take lots of risks; be motivated by a desire to serve; find something you love and if you’re not loving it, check to see if you are on the right path; find mentors but more importantly, people who will sponsor you to get to the next level; think beyond the obvious; surround yourself with people who are smarter than you are; make fun a priority; make friends at work; maintain work life balance; don’t sacrifice your integrity; be a team player; understand your competition; and execution is what matters. As he says, “It’s not rocket science.” But if you can’t learn these fundamentals, there isn’t much hope that you will eventually save the world.