(4 of 5)
Trouble was, the new glues cost three times as much. So Timberland's engineers cut the volume of the adhesive required to manufacture the boots enough to break even. "I can now make the fact-based case to the hardest-nosed engineer in the world that we've eliminated the volume of volatile organic compounds" without increasing costs, says Swartz. "That's not limousine liberal, not self-indulgent. It is hard-nosed business. That is the innovation we seek." When foreign vendors complain that water-based adhesives are too expensive, Swartz says, Timberland invites their engineers to its plant in the Dominican Republic and shows them how to cut costs.
INSPIRING THE WORKFORCE
Swartz would have pressed on even if he had failed to bring costs down. Why? Because the green glues added value to a brand worn by environmentally conscious outdoor enthusiasts. But there's another reason: the effect Swartz believes such socially responsible initiatives have on the rank and file of his company. That also accounts, in part, for why he has installed stringent fair-labor policies at Timberland's factories and those of its vendors in Asia, Eastern Europe and North Africa. Timberland does not allow workers to put in more than 60 hours a week--a rule that has provoked much grumbling abroad, where laborers often want to work more. (Swartz says that the policy is nonnegotiable and that he is not yet satisfied with the results.) In China the company has started funding skills training for women at its suppliers' plants. In Bangladesh it's working with CARE in Chittagong to provide microloans, health education and training to some 20,000 workers at one of its vendors, the YoungOne Co.
Those practices--arguably a drag on productivity--could all be construed as detrimental to shareholder interests. But Swartz sees in them a huge return on investment. That return is employee satisfaction--assuming that people like to work for companies that do good, a belief notoriously difficult to prove. (Citing internal surveys, Swartz says his employees identify strongly with the company's human-rights positions.) That reasoning also supports Timberland's current drive with actor Don Cheadle to raise awareness about the genocide raging in Darfur, Sudan. Although it doesn't cost the company much, the campaign could be dismissed as the sort of self-indulgent do-gooding or splashy p.r. drive that irritates some CSR activists as much as it does the movement's detractors. But Swartz sees a direct link between his policies and the productivity and creativity of his employees. "What we do is our jobs," he says. "But what we be is engaged citizens who happen to work for Timberland. And engaged citizens always come up with better business solutions, with better products."