Product is Not the Mission . . . an interview with Don Mayer, CEO, Small Dog Electronics

Don Mayer returned his draft card to the Selective Service with a letter, as an act of civil disobedience.  He then called the FBI  asking why they hadn’t come looking for him. Similarly, Don has always worked in the business world with an eye to how to make the world a better place.  He continues to ask the hard questions about his company and the impact it can and should have.

Are there some lessons we can glean from Don that would apply to businesses switching mid-stream?  Don would say, “Yes!”

Mission
Early on Don learned the “product is not the mission.”   He lived with the Dreamers in North Wolcott, Vermont, a farm community that tried to grow 100% of their own food for a year. When the community moved to West Virginia, he stayed on the farm and started North Wind Power, a wind energy company.  He and his co-founders hoped that windmills would solve the energy crisis of the 1970s.

One day he found himself in a room with uniformed Navy personnel, giving a presentation for North Wind Power Company, and had what he called an “out-of-body experience.  I looked at myself and wondered what I would have thought of myself when I was a draft resister if I could have seen myself in that room.  I realized I would have done ANYTHING to avoid being there and being a defense contractor.”

From this experience he took the lesson that the “product is not the mission.  It’s more important that you build a company with a responsible social mission.”  His current company, Small Dog Electronics, sells Apple gear out of Waitsfield, Vermont.  Its mission is to “create amazing products to improve people’s lives.”  The website says:  “We are a socially responsible company, which means we have a multiple bottom line.  The effect we have on our environment, community, customers, and employees is just as important as maintaining our profitability.”

Don believes you can and should measure all these parameters, not just profit, but Small Dog’s impact on people and the planet.

People
On the importance of how you treat the people that work for you, Don says that in every company he has run (up until a few years ago and the advent of direct deposit) he delivered paychecks by hand, with a handshake, and a thank you.  “One day at North Wind Power Company, we couldn’t pay.  There was still the handshake, still the ‘thank you’.  All the employees worked another three weeks until we could pay them.  It became apparent that respecting employees was a smart business strategy.”

Small Dog Electronics offers dog health insurance to its employees, allows dogs in the workplace, has exercise facilities and a book group.

The flip side to that, is the relationship with customers.  At Small Dog Electronics, “We use a net promoter score to measure customer satisfaction. (We read a book on this together in our company book group).  We survey every customer, every transaction.  One question we ask is, ‘Based on this transaction, would you recommend Small Dog Electronics?’  There is a 10 point scale.  8,9,10 are promoters; 1,2,3 are detractors.  By department, we inform staff how their total NPS score is doing.”

Planet
But how does a small company in rural Vermont make a difference in the environment?  With respect to its own energy use, Small Dog has recently installed a large solar photovoltaic array that powers 100% of the electricity of the South Burlington Store and a good percentage of the Waitsfield location. They have also installed a FreeAire cooling system for the server that uses outside air to cool.

Beyond Vermont, Don says, “We partner with companies that have working conditions that we support.  As we become a larger player, we have more influence.  For example, we have leather cases for iPads being made in China.  We ask about the content of the dye, the tanning process, the hours employees are working.  The packaging on the paper had a PET coating (a polyester film) and we had them change it to oil, which is more environmentally benign.  I said, ‘I want the most environmentally safe packaging you can come up with.’  We have a guy in China that teams up with the producers.  Because we’re bigger, we get more attention now.”

Another initiative that has impact beyond Waitsfield are eWaste collection days.  In 2006, Small Dog held a Free eWaste collection day on Earth Day. “We received 50 tons of computers, TVs, and other electronics.  The next year, we took in 150 tons.  Then 175.  Now Apple completely funds both Small Dog’s four annual eWaste collection events in Vermont and New Hampshire and weekly pickups of eWaste at each of the company’s locations. And manufacturers are paying for recycling. We got a lot of publicity within Apple.”  The collection of Ewaste is now free at all of Small Dog’s stores.  In 2010 Small Dog lobbied and had the best eWaste law in the nation passed in Vermont.

Profit
So what about the bottom line?  “You have to decide what kind of business you want to be. You can be a good corporate citizen.  But you need to build a business focused on more than profit and have to figure out how to do this.”  Granted, Don says, it’s easier for some businesses to do this than others.  Many companies have low profit margins.

Small Dog has a wide array of ways in which it, as a business, draws its customers, employees, and suppliers in, and tries to make a positive impact on the world.  “On our website, we list eight or nine charitable organizations, human rights, women, gay, dog welfare. If customers donate, we match customers donations to the maximum extent of our annual charitable giving budget.  When Haiti had the earthquake in 2010, we raised $35,000 in 48 hours for Doctors Without Borders.”

He gives the most credit to companies that build a socially responsible business mid-stream. “I’m more impressed with the local gas station owner who wants to be sustainable.  If you’re already in business, making the leap is difficult.”

Build the Business with a Socially Responsible Mission
What resonated in our interview with Don is that any business, with any product or service, can be run in a socially responsible manner.  It is the mission of the business, rather than the product itself, that determines impact in the world.  This impact beyond profit can be measured:  employee commitment, customer satisfaction, dollars raised, clean manufacturing, tons recycled, etc.  In fact, the many ways to measure how the “people” and “planet” missions are only growing.

Don exudes possibility.  With Don it is clear that an ordinary product can have an extraordinary impact.

smalldog.com

Ellen Meyer Shorb

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The Risks and Advantages of Socially Responsible Change: from a conversation with Mary Powell, Green Mountain Power

The executive offices of Green Mountain Power used to occupy 3,000 square feet on the top floors of a three story, glass building.  Now the current CEO, Mary Powell, has a stand up desk facing the front door occupying about 15 square feet.

It is a wonderfully stark image of a profound internal transformation.  In 1998, Green Mountain Power was a traditional, publicly traded utility facing bankruptcy. Now it is a financially sound, environmentally breakthrough utility providing 25% of Vermont’s energy.

The question that hung in the air as we talked to Mary Powell, the dynamo that drove this transformation, was, “Is this a classic case of a strategic realignment in the face of crisis – or are there lessons to be drawn from a traditional company reaching down to its core values and adhering to socially responsible principles in order to drive success?”  The transformation of Green Mountain Power shows how driving change through socially responsible (SR) principles can be both harder and easier than a traditional business turnaround.

When Mary came on board in 1998, under then-CEO Chris Dutton, she entered a company that had, “an arrogant reputation.  It was a big, stuffy area utility.”  She felt, “If we want to be saved, if we want customers to pay more money, we have to transform ourselves into a company worth saving.” Dutton agreed.  Mary and the senior team drove a change process that trimmed the fat in the organization reducing officers from 14 to 6 (now 4), employees from 340 to 200, square footage from 89,000 to 25,000, and the Executive area by 90% to 300 square feet.

Mary and the senior team clarified Green Mountain Power’s core values:  GMP would be the low cost, low carbon, incredibly reliable energy provider for Vermont.  “The neat thing about our values is that they align a lot with the State’s values.  We were looking at what key stakeholders want.  Vermonters want green and free.  Once you get that fly wheel spinning, it is amazing where it can take you.  We are becoming a renewable energy company.”

As with any change process that upends a company this dramatically, the changes engendered fear and pushback.   In the case of GMP, and other companies where SR principles drive change, Mary faced an additional layer of suspicion and politics.  Renewable energy was, and is, political.  There were factions opposed to renewable energy because of its perceived high cost, and/or because they didn’t believe in climate change.  On one side were the true green, anti-nuclear folks; on the other, the hard core Vermont Yankee supporters who wanted GMP to use nuclear power forever.

Fortunately, when Mary was made CEO, Dutton characterized her well; “fearless as she embraces change and new thinking.”  Mary said, “Courage is not the absence of fear, it is the presence of fear and the willingness to walk through it.  At times it was terrifying on a personal level.”

Mary contends that because driving change with SR strategies draws on deeply embedded values, it is powered, supported, and ultimately successful because individuals want and believe in this re-orientation.   “There were really smart, funny, committed, caring people.  Some who had strong environmental values, but they were over here in a pocket.”

Thus, Green Mountain Power, in committing to “low carbon”, aligned itself with a broad customer base that went beyond the naysayers and was able to leverage this market differentiation.  “Our vision was just about our customers and our vision for our customers.  The comment that ‘this is just a marketing ploy’ is not true.  It is really about our values.  We really want to see an energy future that is clean and green and renewable.  Have you seen another utility try to do a windfarm?  Tough decisions, but important ones, if a company is values-based and focused on the values of the majority of customers they serve.”

Taking a traditional, publicly held utility green faced some political landmines.  At the same time, it drove the current success (the wind project will greatly increase the size of the company) by tapping into a powerful customer value for clean, green, and renewable.   Driving a company to the next level with socially responsible strategies can be more risky and, at the same time, facilitate and ensure a profound transformation.

greenmountainpower.com

Ellen Meyer Shorb