The ever-increasing awareness of how manufacturing, consumption and commerce affect the environment continues to offer exciting new opportunities in the business world. Companies that have environmentally focused strategies are making genuine connections with customers, which translates into success with traditional business measures.
But it's not easy. In theory, every company has the ability to prioritize sustainability and make more environmentally friendly choices. In reality, it requires strong leadership and vision to take on the potentially greater risk or longer timelines for profitability.
Getting the best of both worlds
Environmental and business objectives are not mutually exclusive. In fact, these two seemingly disparate elements can work together to produce bottom-line results.
Ray Anderson, the founder of Interface Inc., faced a wake-up call in the 1990s – 20 years after starting his carpet manufacturing company. He credits "The Ecology of Commerce" by Paul Hawken for his environmental awakening as a "spear-in-the-chest experience." As a result, he steered the company on a path to erase any negative effects Interface had on the environment by 2020. Anderson realized the tremendous influence and economic power businesses have to drive tangible change. The path of his business was forever altered, and he went on to earn the nickname of "World's Greenest CEO."
Yvon Chouinard of Patagonia is another leader whose environmental philosophies have become legendary. In addition to leading the way by using ethical suppliers and sustainable or recycled materials, Patagonia's marketing strategy is famous for encouraging customers not to buy its products. Instead, Patagonia emphasizes the high quality and durability of its wares and pioneers efforts in recycling and developing new materials to help the environment. Given that the company’s sales hit $750 million in 2015, it’s clear that customers support this strategy.
Lessons learned while making mattresses
With these inspirational leaders in mind, my partners and I opted for a different approach when we founded 2920 Sleep in 2016 and entered the hypercompetitive, direct-to-consumer mattress industry. Combined with personal experiences seeing our natural environment rapidly changing over the past decade, we started the company with the opportunity and passion to do things differently – especially when it came to sustainability and product design.
One of the biggest problems we wanted to tackle was the industry's high return rate. Up to 16 percent of direct-to-consumer mattress purchases are returned, which is more than three times higher than a traditional mattress retailer. Returned mattresses are incredibly difficult to resell. Donation centers have been overwhelmed by returned beds, and it has admittedly been easier to send them to recycling centers or landfills. This domino effect has created serious landfill issues, as each bed takes up about 23 cubic feet of landfill space, in addition to sending large numbers of near-new mattresses to recycling centers.
Our strategy focused on investing in quality and design first and foremost. We invested extra time and resources on independent testing to validate our design and material choices. We pushed ourselves on manufacturing and quality control to minimize our waste. The result? A higher-quality product, a return rate significantly lower than our competitors, higher customer satisfaction, and a direct benefit to our bottom line and the environment.
Four principles for prioritizing sustainability
Odds are you don't operate in the direct-to-consumer mattress industry. Fear not, as there are ways to incorporate sustainability into any business. To ensure you're just as concerned about Mother Earth as you are with your profit margins, here are a few key leadership principles to guide your strategies and decisions.
1. Chart a new, authentic course.
Business leaders have both the opportunity and the responsibility to lead on sustainability. Making the deliberate choice to factor sustainability into your business practices marks the beginning of an exciting, new and sometimes difficult journey.
At the start, the most important thing is to be authentic in your decisions and the actions that follow. Write out your mission, talk it through with the people you trust, and spend time crafting a plan that will become part of your company's DNA.
2. Keep the conversation going.
Getting employees to join your cause is crucial, but that cannot be accomplished with a mandate from above. Instead of dictating change, look for ways to create organic conversations about the topic.
Whether you're discussing recycling or local parkland preservation, people's personal passions can spark countless engaging conversations across your company. These discussions might lead a local coffee shop to switch to biodegradable plastic, a carpet company to increase its efforts to reduce waste or a car manufacturer to commit to renewable energy. The most important part is simply starting these conversations.
For our company, the conversation starts with the first interview. Our commitment to sustainability and the environment is how we introduce ourselves. Once new members join our team, one of the first things we invite them to do is read Yvon Chouinard's "Let My People Go Surfing" and "The Responsible Company." This immediately shows that our company is truly committed to a different path, but it also allows them to hear it in the words of someone who has pioneered this path.
3. Get into your customer's head.
Prioritizing sustainability means it becomes part of every process, particularly product design and go-to-market strategies. We begin by asking three questions: First, what is the customer's product need? Then, what are the potential reasons for dissatisfaction? Finally, how can smarter design and more sustainable material choices solve these needs and address potential sources of dissatisfaction?
The way we developed the 2920 Pillow is a great example of these questions in action. We recognized that choosing a pillow is a highly personal experience. As a direct-to-consumer company, however, there is no way to try a pillow out before you buy one, which can drive up returns. Adhering to our deliberate design process, we opted for a more expensive latex-hybrid filling material because of its increased durability and comfort. And we created a customizable design to allow customers to personalize the amount of support their pillow provides. The result? An amazing level of positive customer feedback, countless stories of customers sleeping better, and almost no returns.
4. Celebrate your new normal.
Changing company culture takes time and commitment. As leaders, it's essential to pair actions with consistent communication that reinforces the company's beliefs and goals. From there, take every opportunity to celebrate successes.
It boils down to making the commitment real for your employees and your customers every step of the way. For example, we actually congratulate customer service reps who "lose" a sale because they took the time to understand a customer's needs and explain that our product was not the best fit. We also work with local shelters to donate test products that would otherwise end up in the landfill. Most importantly, we give 1 percent of our revenues to environmental causes through our membership in 1% for the Planet.
To achieve lasting success, companies that prioritize sustainability must inspire customers to come along on the journey. While a diverse set of businesses – including Interface and Patagonia – can serve as great role models, tap into your leadership abilities to achieve your own unique and authentic commitment to changing the world for the better. Your customers (and the rest of society) will appreciate the effort.