Case Analysis of Interface Inc.

Lidan Li

11/06/2012

Interface Inc. made their sustainability commitment in 1994, applied ESA model and created a seven-point plan to fulfill their commitment of being a sustainable enterprise. The company’s progress toward becoming a sustainable corporation is due to some key aspects, including successful leadership, innovation, employee training, outside input, financial scrutiny. Their experience shows how an innovative and incentive program could influence consumers’ changing behavior of sustainable consumption. Though a long way from their goals, they have made some achievements through this ESA model and seven-point plan.

Interface aims to be the first company that, by its deeds, shows the entire industrial world what sustainability is in all its dimensions – people, process, product, place and profits – by 2020. Interface’s vision and mission statements refer to cherishing nature, restoring the environment, maximizing all stakeholders’ satisfaction and making the world a better place. This perspective aligns with Dee’s definition of social entrepreneur which the social mission looks for long-term social return and investment. Ray Anderson, the CEO of Interface is an entrepreneur full of social responsibility, innovation, and persistence. He kept on pursuing opportunities and continuous innovation of fulfilling his commitment and realizing his goal of changing Interface into fully sustainable with zero negative impact enterprise. His innovation and faith led Interface’s growth.

To generate a consumer behavior of sustainable consumption, Interface faces five barrier – lack of awareness, negative perceptions, distrust, high prices, and low availability. (Bonini & Oppenheim, 2008) While dedicated to break down these obstacles, Interface has made quite a few achievements in cultivating sustainable consumption.

In order to break down the barrier of consumers’ lack of awareness, Interface has its goal called “sensitivity hookup”, which is educating all stakeholders and competitors to raise their awareness of environmental sustainability. To most effectively communicate with consumers, Interface build dialogues with both internal and external stakeholders. Mr. Anderson dedicated his effort to his promotion of his vision of sustainability through his inspiring speeches, which arouse a broad attention from the public. Interface also tied its strategic commitment to sustainability to the employee incentive plan to embed sustainability in facility operations. As engaging employees and their families on sustainability helps drive change within business and direct impact on society, educating employees not only influences other consumers, but also generates insights about translating abstract sustainable strategies into concrete employee action and innovation. Interface developed a set of dialogue processes with different stakeholder groups. However, their influence was still relatively limited. In my opinion, what they could do first is to more engaged the whole industry in this education program. When the carpet industry — many carpet companies are involved in this sustainable movement, broader range of consumers would be influenced, the awareness of sustainable consumption would grow much faster. Furthermore, searching for support from government policy could also help increase consumers’ awareness.

To dismiss consumers’ negative perception of environment-friendly products, Interface began to build better products. As Interface was originally made of  high-quality material, after it is transforming its linear take-make-waste industrial model to a circular closed loop system, that is all waste material is designed to be a valuable input into other processes. The fourth goal of their seven-point plan is “closing the loop”, which intended to use cyclical material from used carpet. In 1995, Interface has diverted over 1 billion pounds of material from landfill. The GUEST Program also began in 1995, which aimed at driving waste reduction efforts inside the company. It is an employee-led system fulfills the goal of elimination of waste, limiting toxic emissions and measurement of the achievements. This program is an enlightened transformation of company’s culture that lead their future progress. Their goal of providing better products and services to customers and making customers have a faith in their products would be more effective if government were to institute enabling policies and regulations at true cost and measure sustainable progress. (Hutter, 2010)

To build public trust, Interface is committed and consistent to being transparent about their progress toward Mission Zero. To achieve consistency, Interface positioned sustainability at the heart of business and build it into long-term vision rather than instant profit. Transparency is a way they inform the public their true environmental impact and achievement on sustainability, also a way they build brand trust and share their knowledge and experience. They periodically published data reveal their progress on turning sustainability: using renewable energy sources, water consumption, and raw material. Their cumulative savings from global waste elimination activities raised from $10 million in 1995, to $185 million in 2001. EPDs are leading-edge methodology for both consumers and companies make life cycle assessment which details the resource use and environmental impacts of products. In 2011, Interface developed EPDs for more than 90% of its products globally. This method is simple and easy to be understood, which will be more acceptable by the consumers. Inside the company, to encourage all facilities to track and compile date in a similar format, Interface created a format for reporting and monitoring. By administering employee-environmental-awareness survey, Interface monitored and revealed the effectiveness of its training efforts. By transparency, they hope to achieve the bigger goal they have set for themselves: to become a restorative company by the power of their influence. Interface opened their innovation to the public, attempted to be a catalyst for change rather than only be a green company.

Facing the barrier of high price of their high-end carpet, Interface changed their concept from product-based to service-based to satisfy customer’s demand and expectations. Interface introduced Evergreen Lease model in 1995, whereby a floor-covering service is provided for a monthly fee. This innovative business model not only consistent with their mission of sustainability, but also attempt to shift consumers’ concept of purchase. However, to date, limited success has been achieved with this service. One of the reasons may be most customers do not value the new concept. It requires a change of value that consumers value sustainability enough to purchase a leasing service rather than a product. Though Interface tried hard to educate and communicate their visions with the stakeholders, changing the concept and behavior to make decisions based on environmental aspects more than financial imperatives still needs a long-term effort and a broader influence.

Interface is gradually reaching their goals, but also facing several problems to solve: The lack of acceptance of its leasing product by customers; the existing regulations governing commerce; the preoccupation criteria of valuing financial performance more than social and environmental impacts; the current infrastructure subsidises unsustainable industrial processes. As Interface has already stepped in the right direction of cultivating green consumption and built a reputation of eco-friendly enterprise, it has the potential to attract more loyalty from customers as long as Interface removes the obstacles between consumers’ desire to buy green and the action of buying green.

References

  1. Lawrence Hutter, Peter Capozucca, & Sarita Nayyar, A Roadmap for Sustainable Consumption, Deloitte Review, 2010.
  2. Sheila Bonini & Jeremy Oppenheim, Cultivating the Green Consumer, 2008.
  3. Rogelio Oliva & James Quinn, Interface’s EvergeenTM Services Agreement, 2003.
  4. Jennifer Dubose, Sustainability and Performance at Inteface, Inc., 2000.
  5. “Five Questions Businesses Must Answer to Advance Toward Sustainability According to Interface, Inc.” Internet Wire 2 Aug. 2012.
  6. Interface case study http://www.pp4sd.org.uk/downloads/pdf/2Case%20Study%20Interface.pdf

http://www.interfaceglobal.com/Sustainability/Our-Progress/Waste.aspx

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One thought on “Case Analysis of Interface Inc.

  1. tlhill2012 November 24, 2012 at 6:31 PM Reply

    Lidan –

    Thanks for a very careful analysis and for tying in several other readings. I think you do a very good job analyzing the issues.

    My main question is how might interface overcome the barriers to implementing their service agreement? This is a huge shift in their approach, from efficiency-oriented manufacture to customer-oriented service, and such change requires fundamental adjustments in orientation, skills, understanding of the customer (seeing things through the customers’ eyes), understanding of the regulatory environment, organizational structure (to emphasize customer relations), and incentives.

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