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Herman Miller, the BHAG, and Internalizing Sustainability

2006 sustainability report, covering the company's operations in 2006 Sustainability Report. Although this is the first of many such reports, Herman Miller has long been a pioneer in green practices, including its use of safer chemicals, sustainably harvested wood, and Design for Environment principles. The company has repeatedly been honored for its practices.

Paul Murray, Director of Environmental Health and Safety for the company, was in Cleveland last month to speak on behalf of Entrepreneurs for Sustainability. E4S is a diverse network of over 4,000 business leaders who are putting the principles of sustainability into action, and was named the 2007 Nonprofit of the Year by Green Energy Ohio.

Murray spoke to a capacity crowd at the Cleveland Museum of Natural History about Herman Miller's Perfect Vision 2020 Initiative. The organization has set a BHAG -- pronounced "bee-hag," this is shorthand for "Big Hairy Audacious Goal" -- to convert to 100 percent renewable energy at all facilities by the year 2020.

Murray sat down with Tim Zaun after the talk to discuss Herman Miller's sustainability report, the company's larger sense of environmental responsibility, and how chicken droppings can fit into a global business plan.

Tim Zaun: As an original document, what do you think is the most important aspect of the 2006 Sustainability Report?

Paul Murray: It's a holistic approach, not only focusing on our environmental issues but also economics and social, including our gift giving and employee programs. It's a great addition to our straight environmental piece that we've done in the past.

TZ: Could you give an overview of Herman Miller's Perfect Vision 2020 Initiative?

PM: Our first "Big Hairy Audacious Goal" was set in 1990. We wanted to get to zero landfill by 1995.

I often ask the question: "Do you have a zero-landfill home?" The answer is "No." Why then would Herman Miller shoot for something, knowing that you're not going to get there anytime soon? Because of technology, we were sending 41 million pounds of waste to the landfill in 1990. By 1994 we had reduced it to 21 million pounds. In 1995, our zero-landfill goal hadn't been met. But it was still the right thing to do and our efforts were saving an incredible amount of money.

Our Environmental Steering Committee reviewed our progress and upped the ante to aim for zero footprint by the year 2020. You'll probably never get to zero footprint but it's still an admirable goal. Our zero footprint isn't only 100 percent renewable energy, but also 100 percent landfill-free, hazardous wastes-free and air and water emissions-free. To achieve this, we'll need to design better products. So our goal set is huge. For a company our size, we believe our Perfect Vision 2020 Initiative is the significantly right thing to do.

TZ: Herman Miller promotes energy efficiency by building and renovating its structures to LEED (Leader in Energy and Environmental Design) specifications. Could you summarize LEED Certification and is it expensive to pursue?

PM: The U.S. Green Building Council has created tools to assess green projects, whether it's new construction or a renovation. There is now LEED for laboratories, hospitals, homes and neighborhoods.

There are multiple levels within LEED, and while Gold and Silver are important, they're not exclusive. There's also Certified which is the bare minimum. You earn a point every time you do something above Building Code Standards. Platinum is the top level and it's very hard to achieve.

At Herman Miller, we've hit Certified for two of our projects for various reasons. Our remaining 9 or 10 projects are Gold-Certified.

Regarding cost, it's project-dependent. At Herman Miller, we've saved close to $4.6 million over the last seven years by moving out of our non-certified, leased buildings into newly designed Gold-Certified structures.

TZ: Herman Miller earned a place on Diversity Inc. magazine's list of the country's top 10 supplier diversity programs. Why is supplier diversity so important?

PM: Michael Ramirez, a peer of mine on the same work team, oversees our Inclusiveness Program and is best equipped to answer that question.

I can generally say however, that as a company concerned about its future (and that's what business sustainability is about -- are you concerned about being in business in the future?), diversity is vital.

Baby Boomers are preparing to retire. To attract the next generation of workers, we'll need diverse thinking, not only in race and color but in a variety of categories.

We're working very hard internally here at Herman Miller to create an inclusive workforce. We ask the same of our suppliers because we're in a symbiotic relationship. Having a diverse thinking workforce across the board will help create great products for the future.

TZ: After a 10-year effort, Herman Miller won approval from the Michigan Department of Environmental Quality to mix a portion of sawdust with chicken droppings, compost it, and return it to the environment as high grade topsoil and nutrients. Employees also travel to annual company meetings by bus and reusable shipping blankets are now standard procedure. It sounds like there's a lot of room within organizations for creative sustainability.

PM: Herman Miller is a participative management company, meaning that managers are open to suggestions from employees. Every one of those ideas that you mentioned originated from employees who aren't in managerial roles.

The project involving sawdust and chicken droppings I tried to kill several times. Luckily, my engineers said, "No, we're going to keep doing this." It was costing a fair amount of money and I wasn't seeing a return on the investment. I started doubting the project and I shouldn't have. Now the state finally approved it and it's a great program. So, the best thing managers can do is get out of the way and let creativity flow.

TZ: Regarding sustainability, the report makes the statement that " The right way isn't always the easy way." Could you elaborate on its meaning?

PM: A good example is our Design for the Environment (DfE) team where we approach our suppliers and ask them to remove any harmful chemicals in their products. It's called Cradle to Cradle protocol. It took thousands of man-hours to secure an offline database documenting every chemical and material used in every Herman Miller product. Was it easy? No. But the result is we're going to have greener products for the future.

TZ: Herman Miller's Founder, D.J. DePree, declared that the corporation would be a business leader and not a follower. How might a company begin to lead the way in sustainability?

PM: Utmost, a company has to understand where they're at before they know how far they can go. Everybody needs to take a snapshot in time. How much are they throwing into the recycling bin? How much are they throwing into the landfill? What kind of lamps are they using? How are their products and processes environmentally sound?

Once they make that analysis, they need to do two things. One is to create a structure to get things done. The second is to create a goal set to chart their path. If you know where you want to go and devise a structure to get there, results will follow.

TZ: The report says, "We're aware that the information contained in the report puts us" on the record, "holding us accountable for past, present and future actions." Do you think most U.S. companies today would be willing to make that statement?

PM: In general, after the 2002 Sarbanes-Oxley Act, most corporations in the United States understand the importance of transparency. When you put something on record like an environmental report, it had better be accurate. That's what we mean by our "on the record" statement. We're committed to publishing easily understandable and accurate information.

TZ: In its conclusion, the report says, "We believe our strengths and values have prepared us to respond to the inevitable challenges we will face in the future." What do you see as some of those "inevitable challenges?"

PM: One of the most recent is carbon emissions and trading from our manufacturing plants. People are becoming increasingly alarmed at the rate of global warming and view manufacturing as one of its root causes. I anticipate our customers requesting us to offset our manufacturing carbon emissions very soon.

It won't be an easy task, but it's one that we'll need to address. We're currently using 27 percent renewable power. That will have to go to 100 percent because it's the easiest way to offset our carbon emissions from our energy use.

We'll continue to improve our manufacturing and transportation processes. We're still delivering products in diesel-fueled trucks. So, that's a challenging opportunity to change as well.

TZ: Full-time Herman Miller employees, own approximately 12.4 percent of the business. The result is what you call "a highly motivated, business-literate workforce" that challenges convention and works to create increasingly greater value for both its customers and owners. Do you think most companies would make the same declaration?

PM: I don't think most companies are like Herman Miller, with its participative management approach. Today, it's morphed into something we call Economic Value Added, based on the concept of a Profit and Loss Statement. Annually, we offer our employees a refresher course on its elements.

Employees understand the effect of capital and returned merchandise. They understand the effect of warranty and everything we do, including operating costs and how they affect the bottom line. If they submit a money-saving suggestion, they understand which category it affects. Consequently, having employees who understand a cost/benefit analysis makes for an engaged workforce.

TZ: What actions do you hope our readers take away after reading this interview, and Herman Miller's 2006 Sustainability Report?

PM: Each company should begin to construct a similar report of its own.

We ask that readers examine the breadth of our programs. If they see anything that's missing, please contact us. We're not a perfect company and it's a brand new report. There's bound to be something missing, either in content or company programming.

Also, begin to put pressure on all suppliers of major materials that they purchase, whether it's for home or business. Go online and research different brands.

Our 2006 Sustainability Report is a reminder to readers to openly discuss environmental successes and failures. We need to put pressure on ourselves as well to make the world more environmentally sound.

Tim Zaun is a Cleveland-based freelance writer specializing in business, environmental and technology.

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