Anyone remember Y2K, the much-hyped computer-apocalypse-that-never-was?
Forgive us if the Y2K jokes aren't as funny to us; Y2K nearly was the end of the world for Interface. It was also one of our first lessons in the connections between business sustainability and resilience.
In 2000, we were so dependent on sales of carpet tiles to corporate offices that we were in trouble when most global companies elected to spend discretionary dollars on fixing computers rather than replacing carpets. The subsequent three-year slide, which also included the burst of the dot-com bubble and 9/11, brought us to the verge of bankruptcy.
When Ray Anderson would speak about the business case for sustainability, he liked to show how well the company performed financially since committing to sustainability in 1994. The dark years from 2000 to 2002, when annual operating income dropped nearly 50 percent, always required some explanation, but during those years we began to question many of our assumptions about sustainable business and planted the seeds of our future growth.
As early adopters of biomimicry, we regard nature as the ultimate measure of sustainability. We mostly have used biomimicry to inspire product innovation but examining Interface's near-death experience after Y2K through this lens brings us into the rich field of nature-inspired organizational innovation. With a nod to some pioneers in this space, such as David Hurst and Dee Hock, we believe that nature shows us that sustainable companies are something of an illusion. It's seductive to think of business sustainability as an ideal of continuous progress toward greater profitability, with simultaneous progress toward zero impact or other environmental goals.
In nature, however, there is no continuous long-term growth, no unchanging homeostasis or "zero" finish line; there are only infinite cycles of growth and maturation, disruption, reorganization and regeneration. This "adaptive cycle" can be seen when a forest fire reduces a mature ecosystem of tall trees to ashes and charred stumps. For species adapted to this kind of disruption, fire does not mean death, but may in fact be essential to long-term survival. The lodgepole pine, for example, is itself extremely flammable but has cones that do not open and release seeds until exposed to the heat of a fire. Rather than avoiding disruption, the lodgepole pine actually invites it. It is resilient because its seeds will survive and sprout rapidly on the ground cleared by the fire.
What ecosystems and species have mastered is not sustainability. Sustainability, the ability to endure over time, is actually a function of resilience and regeneration in the face of disruption, not the ability to prevent or avoid disruption forever. Nature seems to tell us that to be a sustainable business, even in the most basic sense of long-term economic survival, our organizations must be able to die and be reborn over and over again, a very uncomfortable thought for the average corporate executive trying to maximize quarterly profits.
But like the lodgepole pine, a company actually will die if it cannot preserve its seeds. In the short-term, we can stave off disruption as the U.S. auto industry did by preventing the strengthening of CAFE fuel efficiency standards and other reforms for years, but this will only make the eventual inferno more destructive. In a forest where fire is suppressed for years, dead wood becomes fuel that builds up to the point where a fire may be hot enough to consume even the cones and seeds. In nature, there is no federal bailout.
Nature teaches businesses that even when disruptions destroy or render key infrastructure or strategies obsolete, a company may survive and evolve if the core information (DNA) of the organization is preserved. Once the disruption subsides, what are the enduring seeds that will enable your company to grow again?
A corporate 'seed bank'
In the wake of Y2K, Interface convened a global meeting of 125 top managers in which the company's vision, mission and strategies were put on the table. With the business in decline, everything was up for discussion.
"There was 100 percent agreement among the 125 managers that sustainability was firmly rooted in Interface's DNA," Anderson recalled.
This began a process of sorting out what in the company would remain unchanged, even as we shifted the foundation upon which decades of previous success had been built, such as our dependence on the corporate real estate market. It took two more years of disruption and reorganization to emerge from our tailspin, but we consider the work we did to define our company's "seed bank" a key to our subsequent recovery that saw us return to years of record growth — until the next cycle of disruption began in 2008.
Today, we have begun a more proactive inquiry at Interface into our seed bank by asking, "What should be perennial about our company, even in the face of the ecological and economic disruptions that loom in our future?"
We have begun to identify the core elements of our cultural identity. When the next disruption comes, we know that whatever may change about our strategies, business model and product offering, we will be a company with certain unchanging cultural traits, including a pioneering and entrepreneurial spirit, permission to care deeply about each other and our customers, and a commitment to leave a world-changing legacy.
On a larger scale, those of us who aspire to create a sustainable economy that is resilient and restorative must ask similar questions:
• How do we collectively plant the enduring seeds of the more restorative and resilient economy that we want to emerge after the next big disruption?
• What are the business models that will be able to adapt to some predictable disruptions such as scarcity of resources and global climate change?
Nature teaches us that disruptions always will come and only those who can find and preserve their DNA will be sustainable. So, what's in your organization's seed bank?
Seedling image by Ken Easter via Shutterstock.