In Part 2 of our interview, the former CEO/activist of Seventh Generation talks about how he would launch a company today, the tensions of scale, and what motivates him the most.
After leaving Seventh Generation, the company he founded and ran for twenty years, Jeffrey Hollender didn’t stop in his fight for corporate responsibility, sustainability and social equity. In Part 1 of the interview, Hollender spoke on today’s labor movement, changing the rules of business and politics, and the biggest failure at his old company. Jumping in where we left off –
So, let’s talk about large companies again – is scale ever a sustainable business model? You’ve pointed a lot to small and medium-sized companies that can’t compete. Is there a situation or model where scale can occur, but can still be meaningful and contribute positively to our society?
I don’t want to say that big is always bad, because there are many good things that large companies can do that no one else can do. Walmart, for example. If Walmart decides to eliminate a chemical from products they sell in their stores, they can force that chemical out of commerce much more quickly and much more effectively than the government can.
So we’re in a position of tension. On the one hand, harnessing the power of large companies to do things that even the government can’t do. Yet at the same time, Walmart is a company that cost the state of California hundreds of millions of dollars because they don’t provide a broad health care coverage for their employees and thus, they go into the emergency room and the state of California calculated that that costs hundreds of millions of dollars.
When you have a dynamic that is set up where the only things that matters and the only things that get measured is the maximization of profits, you have a conflict between what’s best for society and what’s best for investors.
And the notion that the marketplace will take care of it all is a complete fallacy because there is no free market. There never was a free market. And we have a market that is designed to do certain things, to benefit certain companies and certain products and certain services. We need to change the way that system of benefits works so that it more broadly serves society and doesn’t only serve a handful a companies.
That plays in well to the next topic I wanted to address. The Internet allows us to have more currencies than simply money – there’s reputation, authority, data, etc. that allow us to exchange value in a way we don’t in the non-interneted world. I’m curious, do you think technology can change how our current system of benefits works?
We already have many, if not most, of the solutions we need to get the world headed in the right direction. It’s not that we don’t have the technology to produce clean energy. It’s that we have a system of subsidies and incentives that subsidize and incentivize the wrong kind of energy production.
While I see technology playing a role in solving many of the most difficult and challenging problems we face, I don’t think at the moment we have to wait for technology. I think we to again stop incentivizing and supporting the wrong technology and support the right technology.
I think the peer-to-peer economy is one important piece of the economic transition we need to make. But there are other important pieces as well. I think that we have to transition to an economy where we don’t have employees, where we have worker-owners. We live in an economy where most of the wealth of that is created by business ends up in the hands of very few people. We have a more unequal society than Egypt or Tunisia. That’s a dangerous situation from a social perspective and to my mind, one of the biggest and quickest ways we can address that is to transition and create businesses where ownership in those businesses is more widely held, so as value is generated, we lift all the people who are working, rather than few people at the top of the corporation or the outside capital that comes in to finance the business.
I am interested in legacy lately. Do you want to leave a legacy? If so, what do you want your legacy to be?
I honestly have never– I’m not entirely sure what legacy is about. I think a little bit more about responsibility and I feel that I have a responsibly to make a contribution to society and to the world that may leave a legacy but that legacy doesn’t particularly motivate me. I’m more motivated by seeing someone smile and the feedback one can get by doing good deeds, than how those deeds will be viewed after I’m gone.
At my full-time job, I work for Alice.com, a start-up that allows CPG manufacturers to sell directly to the consumer. As a result, I’m interested in the rise of private label and the fact that retailers hold all the data. Is there enough shelf space for the really cool innovative products? Or will that become an issue?
Well, I mean today, there is already not enough shelf space. We live in a world where shelf space is largely controlled by large companies, and I’ve found it increasingly difficult for small innovative brands to get shelf space. And I think that the solution is the internet. If I was launching a business today, I might entirely skip trying to get it on the shelves of stores and go directly to consumers online. The store has a limited number of square feet in which they can sell stuff, and by the very nature of that limited space, there is going to be limited variety.
You know when you talk about technology… we want to balance, on the one hand, and support our local retailers because they’re anchors in our community; they create jobs and yet there are many things that we won’t be able to get from our local retailers that we can access online.
I’m glad you brought up the tension between local retailers and the Internet. I think we need to wrap this up. Is there a question I should have asked, but didn’t? Or that you wish others would ask? This is your chance to get whatever you want to say out there.
Yeah, I’ll give you one or two concluding thoughts. One of the things that concerns me deeply is the fragmentation and compartmentalization of the world. We have lost the ability in many cases to see the connection between things as we become increasingly focused and increasingly specialized. As we become so focused, we lose sight of the unintended consequences of many of the things we may do or many of the things that we may support. And I think there’s a greater need today than there ever has been for us to look at the whole system. And to look at the impacts of what that system produces and the way we’ve designed that system. Albeit, that is a way of thinking that few of us have been taught to do.
The other side of that coin is that when we look at the landscape of organizations, particularly NGOs that are trying to solve problems that the world faces, we have millions of organizations that seem largely incapable of working together and do a better job of competing amongst themselves and a new sense of cooperation is absolutely critical to address the problems we’re facing.
We can’t think of something like global warming as an environmental problem. Global warming is as much an economic problem and a health problem as it is an environmental problem. And when we look at it through a single lens, we won’t understand and we won’t develop strategies to change it in a lasting fashion.