Enough Is Enough
by Peter Block
Tick Tock, Your Life Is Like A
Sorry We're Closed: Diary Of A Shutdown
NFC: CEO Dale Crownover of Texas Nameplate which recently received the Malcolm Baldrige National Quality Award says that only about seven percent of the family-owned companies make it into the third generation. He says when he looks at his two-year old son it drives him to ensure the sustainability of his company. A lot of what has been written in the press about Timberland is that it is a family-owned company. You are the third generation, so you've made it to that seven percent. But when you look ahead, does that put a pressure on you to create sustainability for your children?
SWARTZ: The issue is a real one. While I must think short-term to meet the quarterly demands of a public company, the demands of Wall Street and Timberland shareholders, I must also think about the long-term sustainability of our enterprise for our employees, for the communities where we do business, for the consumers who buy our products, and for my children. All these stakeholders, and more, have a vested interest in the long-term health of Timberland.
My children are interested in Timberland, but I don't feel pressure to create Timberland around them or for them. In fact, what I'm really interested in is nurturing three boys to have a sense of self that helps them create or pursue their own dreams whether its theatre or journalism or shoes or anything they want.
We try very hard to foster the notion that this is a family business. There's my family and there is your family. So it does reach the spectrum of the connection of a human being and his/her world and their work life. And so one of the things we work hard on is to be cognizant of your family and work/family issues.
NFC: Many companies in the past five years have embraced those values. The difficulty is in how do you create a company where every employee feels like it's their family business?
SWARTZ: I sit on the board of a company that's working very hard to take advantage of the free agent market place. They talk about the lack of loyalty and that people are loyal to their own agenda. That isn't per se a bad thing. Enlightened self-interest is a good thing. There is a psychic income that is undervalued in some of our competitive employment frames here in Southern New Hampshire and I think broadly across the country. We talk about the fact that employees qualify for 40 hours of paid leave time to do community service as a benefit. And it is a benefit to the community.
But fundamentally this is about looking at the potential of each human being. When people go out and serve, they connect with their own strength and power. It's not loyalty that you breed. It's positive sheer experience that you breed. We invite people to find their own greatness. That doesn't mean everybody says, "I'm thrilled to death where I am." Some people look at it and say, "I've found my greatness. I'm off to explore." We create an atmosphere, I think, of real, shared purpose and that's a powerful binder. It's something that pulls us together and I think that creates a powerful community.
Service, in the corporate sense, use to mean you go out, you put on a T-shirt, you'd paint a wall and take a picture and come back and then you'd do what your supposed to do. We try very hard to make service be more than about painting a wall. The objective is: what you model outside of the building you have to try and practice inside the building
NFC: And what are the challenges of doing that?
SWARTZ: Machiavelli wrote, in the "The Prince," "To dare a new order of things is a very challenging notion, because what people can't see they aren't willing to risk." For example, we did a service project with 25 sites. I went to one of the sights and I saw the logistics team and the information services team looking at a landscaping challenge. Now, they are ill-prepared for it. They are not trained for it, they don't have the right tools for it, they don't have any expertise, so what do they do? They figure it out. They do a spectacular job. I went to the wood chip pile that they were working with and I picked up a handful of wood chips and shoved them into my jeans pocket. I went to talk to two of the team leaders and I said, "Tell me why this experience of problem solving doesn't transport into the building. When your two teams work together it's conflicting, it's not productive." They had a long conversation. When I went back to the building I put a mound of wood chips on each person's desk and I said, "I want you to try and recreate that experience over time." How you cooperated to solve that problem is precisely the way you need to solve that problem internally. And I think by suggesting the possibility in an empirical way you do open up people to risk taking.
NFC: In 1995, Timberland had to go through some rather significant changes. What was the dark side of that, given Timberland's values? Change, invariably, hurts people, even though it stimulates growth.
SWARTZ: The ecosystem says, "If you're gonna cut the rose bush back, that's wonderful except if you're the one on the cut side." So, there's no euphemism for what happened. Management screwed up. The net is we had to cut costs. We had to redesign how we do what we do. We did three things. One is, we asked, "Who are we and what do we stand for?" And that's going to guide us as we make tough choices here. We talked about what our core purpose was and what our core values were and we ended up with four words for values: humanity, humility, integrity and excellence. So we're going to eliminate the training department in sales that means people are going to lose their jobs. Let's talk about that in the context of these four values - how do you do that? And you make infinite accommodations. When I think of running a business that asserts that it has values the image in my mind is a barefoot person dancing on a tightrope. If you lean too far left, you fall off. You lean too far right you fall off, in the meantime you run along the middle and try to keep your balance. You make constant compromises and mediate between your four values. And we did. And so people did lose their jobs and at the same time we increased our employee benefits and we increased our service commitment at a time when the company lost money. The management team felt that the only way to buy its way out of the problem was to invest in its community. That's one of the three things that we've got to do. We've got to invest in the community. We've got to remake the product line and we've got to make tough choices about activities that we're not going to do.
NFC: How did you eliminate people's jobs with humanity?
SWARTZ: There's no euphemism. One day the person had a job and a future, and the next day they didn't. So, were we humane? I've heard, "You compare how we treated these eight people to how they would have been treated by 20 other companies and we did better than all the 20 would have done." It does not obviate the fact that they lost their jobs. I call that a working compromise, nothing more. Meaning that I live in the real world trying to mediate between the values that we aspire to and the pressures that we feel.
NFC: How do you feel about that?
SWARTZ: There are times that I feel great about me as a CEO. I've made impeccable decisions and everyone benefited. Those are rare, rare times. Most of the time I feel like I make compromises that are good for some and not for others including myself. I feel conflicted about them. There are times that I feel downright lousy about my choices. I can't find a creative solution, except a lousy one. So if you try to do a normal distribution: I feel great five percent of the time, lousy five percent of the time and compromised most of the time. And by compromised I don't mean morally compromised, I mean intellectually, psychically, spiritually and morally compromised all the time. I don't know if that's real life or real living but that's mine as I experience it.
NFC: Aside from the community involvement, which is very well-documented, if I'm a new hire, coming to Timberland, how do I get acclimated to the company's values?
SWARTZ: Timberland has a number of traditional and non-traditional vehicles for introducing a new employee such as orientation meetings, Social Enterprise and Human Resources updates through email, staff meetings, all-employee rallies and just being at Timberland day in and day out.
NFC: Can you give me an example of others?
SWARTZ: I'm standing at the company rally and somebody raised their hand and said, "So what about childcare?" And I said, "Well, I'll tell you what. I think it's a neat question you've asked and I'm dying to hear what answer you come up with. So let's agree that 10-12 of you get together and run this like it's a business. Figure out what to do about this and let me know. I'm open to suggestions."
And so, 10-12 people worked together, cross-functionally, to put together a business proposition that said, "I'm going to solve this problem." And it was spectacular. It was a spectacular invitation to their greatness. Now you had to bid to get on the team. You weren't automatically accepted. You had to do your job.
The childcare team came around and said, "Ok we know exactly what it takes to do this. It's going to cost $50,000 a year incrementally operating expenses, but it's going to cost $900,000 in capital." So I said, "Where are you going to get the money?" And they looked at me and said, "Well, I thought you were going to give it to us." And I said, "Well I love your ideas, but I don't have $50,000, I don't have $900,000-go see the operating managers in the building. If this is a good idea make them give you the money." And off to the races this team went. And they made the case brilliantly.
NFC: What about your job keeps you up at night?
SWARTZ: I worry, personally, about living a life of value. I worry about that constantly, because I have three young kids. I ask myself the question that I challenge Timberland people with all the time: Are you doing with your life, what your supposed to be doing? I worry about that. And day by day, the answer is more yes than no, and so I keep doing it.
NFC: What's your destiny?
SWARTZ: I would like not to be to my children the guy that made and sold boots, made a lot of money and provided comfort. I would like to be a person who lives a life of value. It would be a wonderful thing, maybe even worthwhile if, at the end, I made boots and sold them and made a big profit from a traditional profit model perspective and created the question in a small group of people's minds, "Can business do more? And should business do more?" If I could be part of asking that question broadly in the business community, I'd think that was OK.
I actually have a pretty simple notion of my destiny- it's a religious one, but it's a reasonably simple one: I'd like to raise three boys, with my wife, who have a sense of self and act with moral conviction in the world as they grow up. Part of the way I work on that is trying to be the "boot guy" whose business is engaged in the job of creating social value. That's how I think I can be a model to my boys. That was a hard question.
NFC: My last question, it's an easy one. What do you read, where do you get your ideas from?
SWARTZ: I was a literature major at Brown - French poetry, I loved it. But now, I read sacred text, the newspaper and I scan the web. In the morning I study the Talmud and in the evening I look at the Bible.
NFC: And what have you gotten from that?
SWARTZ: I have a sense of purpose because I'm looking for how to live a life of transcendence in mundane, day to day topics, not waiting for moments of exaltation, which may never be accessible to me. I've got to find spiritual content in everything I do, including firing somebody. I've got to find a way to do that morally, spiritually and ethically. And I find that in the sacred text. I also find frame of reference and an enforced sense of humility, which I seek.