How To Build A $600 Million Social Enterprise

Jeffrey Hollender Interview

Jeffrey Hollender: [00:00:00] So most products, including most seventh generation products, are what I would consider less bad. And when you think about the challenges we're facing globally, whether it's climate change or running out of fresh water or soil erosion or species depletion, Less bad is not going to solve the problems we're facing. We actually need to repair the damage. We've done. We need products that are good.

Brandon Stover: [00:01:15] Hey, welcome to evolve. I'm Brandon Stover and today's guest went from dropping out of college and selling skill classes, like the art of flirting or how to marry money to building one of the most successful sustainable product brands in the world. Seventh generation, which sold to Unilever in 2016 for over $600 million.

Their line of over a hundred products is distributed in some of the most leading retailers, including target whole foods, Kroger, Safeway, and Amazon. And for the last 30 years from its humble beginnings as a mail order catalog till now the brand has been focused on nurturing the health of the next seven generations.

But after being ousted and by his own company in 2010, he took his idea of doing good to a whole nother level, becoming a leading authority on corporate responsibility, sustainability and social equity. He created a coalition of over 250,000 businesses called the American sustainable business council, which drives progressive public policy.

He serves on the board of directors for Greenpeace, having his fair share of nights in jail for standing up for what he believes in. And with all of this, he still found time to teach others as an inspiring author of seven books and an adjunct professor for sustainability and social entrepreneurship at New York university

in 13 with his wife and daughter, he created Hollander, sustainable brands,  which started sustained natural, a new brand of female focused, all natural sexual wellness products. The company has rapidly grown And was acquired by Grove collective in 2019. Today's guest is the co-founder of seventh generation, the American business council and Hollander sustainable brands. Jeffrey Holland,

Jeffrey has had an astonishing 30 year career building successful businesses. But he humbly began his first business, the skills exchange of Toronto. After dropping out of college, he created a print catalog and was selling SCO classes for 15 to 25 bucks a piece. Despite his father being a business exec and his mother and artists, they were not happy about their son dropping out of college to pursue some harebrained idea.

Jeffrey Hollender: [00:03:05] My dad and I remember, well, Kept saying to me, Jeff, you know, you're going to go on a job interview someday, and they're going to ask you where you went to college and you're going to be really embarrassed because you won't be able to answer the question.

And I said, dad, I don't ever plan on going on.

Brandon Stover: [00:03:25] Well, when you started that, what were you trying to pursue as an entrepreneur? What were you trying to make of your life?

Jeffrey Hollender: [00:03:32] You know, I did what I advise others to do, which is find something you're really passionate about. That to me is more important than being driven to make money.

Being passionate about an idea to me is the core requirement for any entrepreneur, particularly a social entrepreneur. And I had read a book by a. Educational philosopher named Ivan Illich, who wrote a book called the schooling society. And he talked about the challenges that professional universities have and how in many ways they filter out lots of great teachers and prevent a lot of students who can't afford it to come.

And he said, you know, let's, create these things called skills exchanges by just getting great teachers together. Letting them teach students in their living room whatever they're most interested in passionate about. And I read that chapter of the book on skills exchanges, and I said, wow, that's such a cool idea.

Particularly as someone who didn't thrive in the college environment to me, this was a great way to share knowledge in a very cost-effective fashion. With everyone who was interested in. So I basically not knowing any better set out to create a skills exchange in Toronto. Never took a business course.

You didn't have any knowledge about business whatsoever. But I was pretty honest about what I didn't know and what, I didn't know how to do. Sure. And that put me in a good position to be able to ask for help from people who did have knowledge that I didn't have. And to me, that's really, really cool, critical for entrepreneurs.

You've got to know what you don't know. You've got to know the limits of your own capabilities, and you've got to be willing to ask others for help and the ability to find great teachers and mentors for you and your business. To me has always been a critical part of successfully building companies.

Brandon Stover: [00:05:41] Sure. Talking about the D schooling society book, do you use any of those ideals or teachings in your current practice as an adjunct professor at NYU?

Jeffrey Hollender: [00:05:52] Well, I have almost in every class, lots of wonderful guest lecturers who come in. To the class and speak. And some of them are, well-known like the former CEO of Ben and Jerry's some of them are less well-known, there's a wonderful guy that I met who runs Cape airlines.

And you wouldn't think of an airline company as being the most sustainable responsible, but he's an amazing guy. He's committed to being the first airline that actually commercially uses electric planes. He has an employee owned company. And he built a solar farm to offset his CO2 impact. So he's a visionary guy and tells wonderful stories about how to reinvent an industry to become more sustainable.

That is not typically considered to be so

Brandon Stover: [00:06:48] sure. Yeah. Well, after the skills exchange, you decided to start doing books on tape and eventually were able to sell that business. And in an interview while I was researching you you were talking about how it was the first time that your dad had felt proud of you after dropping off out of college.

So what was that experience like for you to be able to be a successful entrepreneur and, you know, get that validation?

Jeffrey Hollender: [00:07:12] Yeah. Fortunately, he made an investment in the company and when we sold the business, I think he got a check for a million bucks or something of that sort. And all of a sudden he realized that I was much more successful than he had given me credit for because he's a very traditional guy conservative, Republican and for him.

My ability to take one of my harebrained scheme, sell it to Warner communications and make what was a thousand percent return for all the investors was very, very impressive. And he finally began to let go of the idea that I needed to have a college degree. He finally sort of got comfortable with the notion that maybe I will find my way successfully in the world without getting that degree.

And you know, that was sort of a turning point in our relationship. You know, no son likes to not feel appreciated and considered successful by their dad. This was certainly a turning point in his attitude about me and my abilities.

Crossing the First Threshold: Seventh Generation

Brandon Stover: [00:08:20] Sure. Yeah. And this was also a real turning point in your life was when you started to write how to make a world a better place. How were your motivations starting to change there that eventually led you to, you know, seventh generation?

Jeffrey Hollender: [00:08:34] Yeah. Well, let me just give you a little context on the book. I mean, you know in part, because of my dad's influenced. We ran much more commercially oriented classes and produce books and tapes on subjects.

It would not be considered particularly responsible. We had a course called how to marry money. The art, we had a course called the art of flirting, how to get invited to the right parties things that, that don't build the best values. And I was feeling, even though, you know, we sold the company, we made a lot of money.

I was feeling really, really uncomfortable and sort of guilty about having promoted values that were not ones that I was proud of. And I decided I really needed to explore what I could do. To make a positive influence in the world and the book, how to, how to, how to make the world a better place was really my journey of research and exploration of all the things I could do to help people find ways to make positive contributions.

while I was researching the book I came across a pretty cool company. In Washington, DC called renew America. And they had a mail order catalog that sold entity energy and water conservation products. And I thought what a cool idea to have a business that sells products that helps consumers lessen their adverse impact on the planet.

And at one point. I called them up and was sort of exploring whether or not I could be helpful to them. And they told me that unfortunately, they had gone out of business and had given the catalog to this guy named Alan Newman who ultimately became my partner in watching seventh generation.

But I loved the idea. That. And again, this is not such a novel idea today, but it was back in 1988 of having a business that by the very nature of the business and the products it's sold, helped people have a positive impact on the planet.

Brandon Stover: [00:10:52] And this is how seventh generation got started from you know, failing mail order business.

Jeffrey Hollender: [00:10:57] Yes. It was a failing mail order business. Alan. And the, the staff, he had renamed it from renew America to seventh generation. One of our staff was a native American Mohawk, and she understood the meaning of the name seventh generation, which comes from the Iroquois Bible in our, every deliberation.

We should consider the impact of our decisions on the next seven generations. And it's just a beautiful, beautiful, Name, it has such rich meaning it's a name that, you know, the company will probably spend its entire life trying to live up to. And after about a year, Alan and I got together and became partners and I helped him raise some capital and joined the business.

Plan: Growing Seventh Generation

Brandon Stover: [00:11:48] Yeah. How did you guys start turning this catalog business around and getting your first customers to really start growing it?

Jeffrey Hollender: [00:11:55] You know, when we started and this goes back to 1988, 89, 90, most of our customers were members of environmental organizations. So we would rent the mailing list of people who were donating to Greenpeace or the Sierra club or the environmental defense fund.

And we would. Assuming that they cared about the environment because they had donated to these nonprofits. We assumed that they would be interested in environmentally responsible products. And those were the people who were our first customers. And that worked relatively well. Except there were a limited number of them, particularly back in the eighties and we soon.

Began to run out of potential customers and needed to broaden the assortment of the products we were selling. And that's when he got into selling paper products that were made from recycled fiber cleaning products that were made from vegetable ingredients and not tested on animals, Wells, and began putting our own name on those products and creating the seven generation brand And that turned out to be very successful because unlike selling someone, a shower air Raider to reduce the flow of water out of the shower, paper products and cleaning products were things that people bought every month.

So instead of spending $10 or $20 with us, they would actually spend a couple of hundred bucks over the course of the year. And that turned out to be a very successful strategy for us. And in any e-commerce business because today, very few people even have mail order catalog. It's all in commerce. But if you're in the e-commerce business, having products that are what are called consumables that people use, use up and have to buy again, are a great way to build relationships and loyalty with consumers.

Yeah. So smart.

Trials: Co-Founder Relationships

Brandon Stover: [00:13:57] This is Brandon Stover and you're listening to the evolve podcast with Jeffrey Hollander co-founder of seventh generation in just a moment. You're going to hear how after successfully growing the company in its first few years, seven generations started to go South. As a result tension between Alan Newman and Jeffrey started to build in the co-founder relationship until it caused them to part ways.

But first I wanted to let you know that all the resources and lessons from this episode are available as a free worksheet@evolvethe.world and clicking on the worksheet button in the upper right-hand corner. All the lessons from Jeffrey's 30 year career growing hundred million dollar startups are super valuable, but they are only as valuable as the ones you actually put into execution.

That's why I distill all the action items from each episode into one, easy to use step-by-step worksheet. So you can immediately apply them to your life and business. Lessons like how to have a successful co-founder relationship, how to navigate selling a company and how to apply whole systems thinking to actually solve problems and so much more.

All these lessons are available@evolvethe.world and clicking on the worksheet button in the upper right-hand corner. That's evolve the doc world, or you can follow the link inside the show notes of your podcast app.

Now let's get back to the evolve podcast with Jeffrey Hollander co-founder of seventh generation, as he describes the pressure of sales tanking, leading to a breakup with his co-founder Alan Newman.

Jeffrey Hollender: [00:15:25] Yeah, you know, we had, we went from a hundred thousand in sales to a million to 7 million and we expected the next year would do about 20, 21 million in sales. And one of the things that propelled much of the growth. From a million to 7 million was the 20th anniversary of earth day. We had a tremendous amount of media coverage for pages.

Some people magazine, lots and lots of media coverage. We got hundreds and hundreds of thousands of people requesting copies of the catalog. Then earth day ended and people sort of forgot about the environment, lost their enthusiasm for environmental products. So, you know, we had a terrible, terrible year.

We, we didn't hit 20 million. We didn't hit 19 million, 18 million. We ended up doing the same 7 million that we had done the year before. And that was a real crisis. We had bought inventory to support 20 million. We hired our staff and doubled it from 60 people to 120 people in anticipation of that. And it was a real struggle to keep the company going.

We were losing millions of dollars and Alan was feeling the stress and, and wanted to take a sabbatical break from the company. I wasn't so happy being left alone to try to keep the boat afloat and you know, ultimately he did take the sabbatical expecting to come back in six months. My attitude was, you know, if you leave now while the boat is sinking, don't assume it's going to be there to get back on to when you want to come back.

And so we parted ways and and I was ultimately against him rejoining the company later when he wanted to come back both feeling hurt, both feeling a little bit abandoned and And feeling like, you know, he had really sort of left me to, help make sure that the company survived at a time when I was, was pretty, pretty challenged to do so, but I'm not someone who gives up part of being an entrepreneur is never giving up.

I'm, I'm convinced that the only time companies go out of business is when the owners decide they don't want to do it anymore. 'cause I'll tell you. We, we always found ways to keep seventh generation going, despite the fact that we were losing lots of money.

Brandon Stover: [00:17:55] You've spoken quite a bit about co-founder relationships needing to be treated, kind of like a marriage and how should founders approach like finding a co-founder and what should they test forward to make sure it's a good marriage for this business?

Jeffrey Hollender: [00:18:09] Having a co-founder is not for everyone. And I think the first thing you have to decide is, do you really want a co-founder, you know, the idea of having someone else to lean on and share problems with, you know, that's a nice fantasy, but it doesn't always work out that way. Right? The other side of the coin is often having a partner means you've got to go to someone else.

Before you make decisions and operate on your own. And you know, it turned out that, that I wasn't so good at doing that. I liked to make my own decisions. I didn't want to have to check in with someone else about everything I was about to do. And Alan was sort of the same way. And so genetically, we were, bad people to enter into a partnership because that just wasn't in our DNA.

But if you're going to have a partner I would, first of all, make sure that your, a partnering kind of person and that in your life, whether it's having a coach, a co-leader of a soccer team, you know, whether it's having someone else that you're partnering with, that you've experienced what it's like to have a partner.

If that's the case, I would also say that you should, you have a written agreement in terms of what that relationship looks like. You know, everything from how you're going to handle vacations. So that you don't both go on vacation at the same time, too, how you're going to divide up responsibilities.

And one of the things that Alan and I failed to do was, was put some of those things in writing, particularly what the understanding was when he took his sabbatical.

Brandon Stover: [00:19:47] Are there any other must haves before fully committing to starting a company with another person that you recommend entrepreneurs have.

Jeffrey Hollender: [00:19:55] Do a lot of due diligence to really get to know the person. I mean, this is one of the most important decisions you're going to make in your life. As you said, similar to getting married and, you know many people will date for a year or two, if not four or five or more. Partners don't typically do that.

They don't invest the time in getting to know each other well enough. And I think that's really critical. You really got to get to know the person and, talk to their friends, find out you know, what makes them tick, find out how they go about making decisions. Find out what they don't like doing.

One of the challenges is if you have two people who both don't like doing the same thing, that's a problem. And you know, it is a relationship that is similar to marriage when, when Allen and I were not working together and he wanted to come back to the business and I didn't want him to, we went and saw a therapist together to see if we could work the relationship out.

Ultimately we didn't but we did the same thing that the husband and wife might do if they were having challenges in their relationship.

Brandon Stover: [00:21:03] Well, we're going to talk about sustain a little later in the interview, but you co-founded this with some of your family members, your wife and daughter. Why did this co-founders relationship workout better than say the one with Alan?

Jeffrey Hollender: [00:21:16] Well, as a family, we were going to stick together no matter what happened, but it certainly had its Rocky times.

We didn't always get along. But unlike a relationship with, a business associate, we weren't going to let this tear the family apart. It almost did at times. I mean, it was not an easy thing to do. And we, we definitely didn't always see eye to eye. And when we started the business, my daughter didn't want to ever be the CEO.

And as the years evolve, she decided that that was something she'd like to do. And luckily I was happy and my wife was happy to step aside and let her assume that role. But you know, that doesn't happen in every business where the CEO wants to give up their position. After a few years, someone else that only really happened because it was our family working together.

Approach: Key Decisions

Brandon Stover: [00:22:14] makes sense. Well, after the breakup with Allen seventh generation decided it was going to go public, try and grow the business more. And you had to make a key decision after that, of sticking with the mail order side, which was 80% of your guys's revenue or switching over to a whole wholesale vision that you were having.

How did you go about making that decision to maybe sacrifice 80% of the revenue that you have coming in?

Jeffrey Hollender: [00:22:40] I mean, the truth is that I knew more about the wholesale business than I did about the mail order business. And perhaps because I had more knowledge about the business, I was more comfortable and could see more possibilities for that business than I could see for the catalog business.

We did a fair amount of analysis, but at the end of the day, It was a big risk to take, to give up 80% of our revenue. And I would say it was as much an analytical decision as it was a gut decision. I'm a great believer in intuition. And if my intuition is strongly telling me to do something, I've found that not listening to that is usually not a good idea.

So we made the decision to sell the mail order catalog. We made an unusual deal, which was that we sold the catalog, but kept ownership of the name. So that created a really interesting situation because since we own the name and the paper and the cleaning products were such a big part of the catalog, the catalog became a customer of ours buying those seven.

Generation products and reselling them for us. We also, because we own the name, got the benefit of the mail order, catalog, building awareness of the seventh generation name. Cause they were bailing out millions and millions of catalogs and it really helped launch the seventh generation brand. Those two things.

And ultimately the owner of the catalog decided that it was a bad idea to keep investing and building up the seven generation name and change the name to harmony. But we had already established ourselves and had achieved distribution in a number of natural product stores and Luckily that relationship with the mail order catalog really helped launch us as a wholesale company.

Brandon Stover: [00:24:41] Well, you mentioned making the decision from a certain level of intuition. Are there any other examples of majors decisions you've had to make in either your life or business? That really came from that intuition level?

Jeffrey Hollender: [00:24:53] Well, I would say any major decision that I make, I will meditate on. And ask for guidance where that guidance comes from.

I don't always know, and I'm not sure I always care whether it's a more spiritual or whether it's just reflecting more deeply inside me. You know, I believe that we have way more knowledge and potential than most of us are able to see. Seize and utilize. And the practice of meditation will often reveal some of that wisdom to me.

Brandon Stover: [00:25:30] Is there a certain practice that you have for meditation? Do you do it every single day?

Jeffrey Hollender: [00:25:34] Yes, I do. TM.

Brandon Stover: [00:25:36] Okay, perfect. Yeah. I have found meditation to be really helpful in my own life and making those decisions. I do it every morning to kind of get clear.

Jeffrey Hollender: [00:25:45] Yup. Great practice. One of my, my regrets is that it's not something that I taught to all the employees at all the companies I started.

Not only do I think it's a good practice, but I think it will build a more effective company if that's something that you offer voluntarily to all your employees.

Brandon Stover: [00:26:03] Sure. Yeah. Well, after you guys made the decision to go wholesale, you went. And got into whole foods and focused a lot on educating the customer.

When I was reading your book, the responsibility revolution, you talked about one of the sales leaders who created the gift program which you know, was turning sales clerks into advocates and educators for sustainable brands. How did seven generation implement education to really grow its sales?

And why was it so effective?

Jeffrey Hollender: [00:26:30] Well, we were doing something that is not something that I would recommend to other businesses, but we were selling products that many people didn't know they needed or didn't know why they needed. Sure. And because that was the case, we had to do a lot of education. And I'll just give you an example around things like indoor air pollution.

One of the challenges of traditional cleaning products is they have chemicals that produce volatile, organic compounds, and those VOC is actually pollute your indoor air. And often the air inside our home is far more polluted than the air outside. Yeah. Of our home. We had to educate people. About the importance of indoor air quality, the before they would be really interested in buying our cleaning products that were designed not to pollute that air.

And so that was the case with many of the products we sold our paper products, for example. most people understood the benefit of recycling and brine products that may were made with recycled fiber so that they didn't go to the landfill, but they had no idea why it was important to buy paper products that were not bleached.

Yeah. They didn't know that bleaching paper with chlorine creates a highly, highly carcinogenic chemical called dioxin. That causes cancer. And again, it was through the educational process that we helped our consumers understand why our products were not just good for the environment, but we're healthier and safer for consumers to use.

we took that even further. One of the programs we ran with our natural product retailers was, was a program where. Some individual from each of the stores would win a scholarship to go to Washington DC for a week, be trained by Greenpeace to become an environmental activist. So not only were we educating people, but we were going beyond that and turning people into educators and activists to continue to spread the message.

About Company Culture

Brandon Stover: [00:28:46] Yeah, that brings up a point. And some of the companies that you've made around this idea of company culture and incentives and how you're incentivizing people. And I remember hearing that's one of the things that you did was for the people that had the biggest mistake, like they reward rewarded for doing that.

Can you talk about some of maybe those company culture values that may seem a little different, but are definitely effective?

Jeffrey Hollender: [00:29:10] Sure. And that was one of Allen's you know, vacations. I mean, we believed that we wanted to create a culture where people didn't feel bad when they made a mistake, because the people feel bad when they make a mistake, they tend to cover it up and hide it.

And that can be really dangerous to a business. If you don't talk openly about a mistake, other people could make the same mistake and that mistake. Might not get fixed or corrected if people try to keep it secret. So in order to encourage people to be open about the mistakes they made, we would give a monthly award of a dinner for two at a local restaurant to the person who made the biggest steak that month.

That sends a real message. All of a sudden there's an open conversation about mistakes and people clearly are not going to hide the mistake. If they're in a culture that is in some ways, celebrating the importance of discussing mistakes openly and transparently, and those aspects of the culture.

I mean, you know, it's one thing to say, you want to have an open and honest and transport. Parent culture. It's another thing to design the, the habits that actually ensure that that becomes a reality inside the company. You know, another thing that we did in our, monthly staff meetings was create the opportunity for the staff to ask any question they wanted had to be a respectful question.

But they could ask anything they wanted and I would answer them honestly. And we would really reward the people that asked the most challenging questions because what we found was that a lot of people had those questions on their mind. Most, and many were scared to ask those questions. We want to do encourage people to ask those difficult questions.

in a similar vein we actually taught people. How to have difficult conversations. One of the things that we learned was that there's a whole bunch of things that I might want to tell you, but I might feel awkward about telling you, because I'm going to hurt your feelings or upset you, or you'll get angry at me.

And that's bad for the culture when people withhold those feelings, that's often not a good thing. So we taught. And had courses that we would give the entire staff on how to design a difficult conversation. And again, all of those are ways of building the corporate culture. The corporate culture is easy to put on paper, but hard to live.

Ordeal: Getting Fired from Seventh Generation

Brandon Stover: [00:31:50] When did your values inside of Seventh generation start to shift away from those of the board. And you guys started to have that Rocky.

Jeffrey Hollender: [00:32:01] as you suggested, I was fired by the board in 2010. And there were a bunch of reasons, but, a couple of them were one I was a huge proponent of employee ownership. And I, I believe that one of the real challenges that we had and still have in America is that business operates in a way that concentrates wealth in the hands of a few people knows are really those who are already wealthy, who can afford to make venture type investments in companies.

And so these businesses provide tremendous value and tremendous wealth to these investors, but generally don't do much for the employees. Most people will get a salary and they spend most of the salary. It's not easy to say that. And so I believed that a business would perform better and it was ethically and morally the right thing to do.

To share the value that the company created with the employees and over a 20 period 20 year period of time, we distributed about 20%, about 1% a year of the ownership of the company, to the employees, my board ultimately decided that they were uncomfortable with that, that. It was diluting their returns and they didn't want to continue to share that.

In fact, they wanted to undo some of that program that they had put in place. So we had a big disagreement about employee ownership. We had also brought in someone to run the business on a day-to-day basis so that I could spend more time writing and speaking and promoting responsible business. The person we chose after about six months, I concluded was the wrong person. They came from a big consumer products company and Understood the consumer products business, but more so aligned with the company's values.

And that was my mistake. And I went to the board and I said Hey I think we made a mistake in hiring this individual. I'd like to let them go and search for someone new. They decided they liked that in individual a lot more than they liked me. That was not someone who was on the board of Greenpeace and who was going out and getting arrested and doing some of the crazy things that they perceive me to be doing.

So you know, there was a, a real disagreement about who the leadership of the company should be. But, you know, I have to take some responsibility for that. I am an impatient person. Sometimes I push them faster than they were comfortable going. I pushed ideas on them that they weren't always comfortable with.

Yeah. And some of that came back to bite me.

Reward: What he learned from getting fired

Brandon Stover: [00:34:48] One of the blogs that you had written up about it afterwards there was a quote in there I'd like to read really quick, which was this issue. Ration forced me to ask by self important questions that I had never asked myself in the comfort of my job in those 23 years.

What were the questions that you were asking yourself then?

Jeffrey Hollender: [00:35:06] Well, one of the things that had happened. That I was really responsible for was a tremendous addiction to growth as fast as it could possibly happen. And I really became addicted to that growth. I found it so exciting that I pursued it, I think, to the detriment of the company.

One of the things that, that growth necessitated was us hiring lots and lots of people and hiring people with lots of experience and those individuals who had lots of experience, weren't always the same individuals that were committed to the values of the company. And that created a lot of internal tension.

You know, I also had to, quite honestly look at. How I got people to agree with me and I could be quite forceful and aggressive and convincing. And it's not a good thing to get people to agree with you when they really don't want to sooner or later that'll come back and create problems. And yet, you know, I had and have, I guess, Maybe I've lost some of it, a sort of forceful personality in pushing people to agree to things that they weren't really, really ready to agree to.

So I, you know, I try, I don't know seed, but whether things go right or go wrong, I try to always learn from those and particularly learn from my mistakes and the things that I get it wrong. And I think that's an important trait for an entrepreneur to endlessly, be humble, to always admit your mistakes and shortcomings and invite feedback from other people on how you're doing.

Brandon Stover: [00:36:55] Is there any practices or habits that you do to regularly take that reflection for yourself?

Jeffrey Hollender: [00:37:00] Well, we taught the company. The art of reflection. How to think about your thinking, how to think about your behavior, how to sort of stand above yourself and watch the way you behave and you interact, and then try to figure out where is that in alignment with who you want to be and where isn't it.

Where is your behavior preventing you from becoming the kind of person you want to become? What do you have to change about your behavior in order to become that person? And I'll give you an example as anyone who's listening to this can tell, I've got a lot to say I'm a big talker. I always have answers to questions.

And one of the things that I discovered was. Because I would sit in a meeting and talk so much and always have an answer to a question. I was preventing other people in the company from taking on that responsibility and from sharing their own ideas. And that translated into me putting a little sticky note on my computer that said, stop talking, start answering questions, asking questions.

And I spent 90 days in every meeting that I went to focused on changing my behavior because I had the intention. Of change and changes and easy. It takes a tremendous amount of attention. And I don't think it happens without people developing that kind of intention around exactly what it is they want to change about themselves.

Roadback: Doing good

Brandon Stover: [00:38:36] Hmm. Well, after, you know, leaving something generation during that time, it really started to get clear during your reflection about the impact you wanted to have and start doing businesses that should do good rather than less bad. Can you explain what that means?

Jeffrey Hollender: [00:38:52] Sure. I'll use seven generation. As an example,

I had always considered seven generation products as good if not great products and in some respects they are. But I think what we often get confused about is products that are less bad rather than good. And if we think about. Seventh generation paper towels. Yes. They're a hundred percent recycled with post-consumer material.

They are unbleached. They're made, you know, domestically. There's lots of things that make them better than the alternatives you could buy that doesn't make them good. That makes them actually less bad because they're highly disposable. They end up in the landfill, they take energy and water to manufacturer.

And any paper towel you use leaves the world worse off than it was before. That's a problem. What we really should be selling our cloth cows that are reusable rather than paper towels, but you don't need hundreds and hundreds of dollars of cloth towels, right? So you can make a lot more money selling paper towels.

And people like paper towels, they're lazy. They don't want to wash the quad pals. So most products that you could look at, including most seventh generation products are what I would consider less bad. And when you think about the challenges we're facing globally, whether it's climate change or whether it's running out of fresh water or we're facing with soil erosion or species depletion, Less bad is not going to solve the problems we're facing.

We actually need to repair the damage. We've done. We need products that are good, that are what you might call regenerative in the way they repair and regenerate the nature that is being wiped out by business all across the planet. this is a real challenge because we have this whole natural products, green products, sustainable products industry.

And I would say most of the products that are sold. Are what I would consider the less bad. And so I got obsessed with this idea of, well, could you make a good product? Could you make a product that actually did leave the world better off than it was before, and actually directly tackled some of the challenges we're facing?

And that's how I ended up in the condom business. I mean, you know, the condom business is a strange business. I certainly never, as a little boy said, when I grow up, I want to sell condoms. Use a maybe, but probably not. And the amazing thing about condoms are that particularly if you market them to young women, They help young women control the size of their family in the United States.

51% of all pregnancies are unplanned. We want people to be intentional about having kids. We don't want unplanned pregnancies and of course, giving women the comfort, the, authority. Helping empower them to buy condoms and use them helps control the rate at which our population grows, which is one of the key ways to control climate change.

Because the second biggest driver of climate change on the planet is population growth. Obviously condoms also help prevent the spread of, AIDS or, STDs or STI. That's another positive benefit. So you're starting off with a product. That's pretty good to begin with. We added to that condoms are the SAP of the rubber tree.

That's where they're made from. And we found a plantation that was for stip forest stewardship certified, which meant that they were protecting the biodiversity of the plantation. They were using regenerative agricultural practices and they also were certified as fair, too straight. So they were paying a 20% premium to their workers that enabled their workers to, to live better lives.

They also provided free education and free healthcare to their workers on the plantation. So we did a whole bunch of things to take a pretty good product and make it better. And that doesn't mean. It doesn't have some negative impacts. The condoms were made in India. We had to ship them by boat to the United States that certainly created some CO2 emissions, but we believe that on balance, the positives way, outweighed the negatives.

And that to me is where we need to go. When we think about the future of sustainable, responsible business and products.

Whole systems thinking

Brandon Stover: [00:43:52] Yeah. Sustain naturals is a really good example of another idea that you bring up a lot, which is shifting from carbon park, metalized, thinking to a whole system level, thinking and thinking about how it fits into the entire ecosystem of things.

Can you elaborate a little more on that idea?

Jeffrey Hollender: [00:44:08] sure. I mean, we, have grown up in a society. Where everyone becomes version, say everyone, but many, many people become highly specialized. So you're a doctor, you're a lawyer, you're a nurse, or you're a healthcare professional. And the world doesn't work that way.

You know, the, the world and the natural world is a mixture of all different types of things, interacting with each other. We often as individuals because we become so specialized lose sight of that, we, we don't understand the way things are interrelated and interconnected. And we end up with lots of negative unintended consequences from the things that we do, because we don't see the system.

We don't see the whole system. And you know, probably one of the best examples of that is ethanol. Someone had the bright idea of making a, fuel from a vegetable. And it sounded like a good idea. Instead of mining for petroleum, you would take corn and turn it into ethanol. Seemed like a great idea using vegetables to power cars instead of petroleum.

Right. But unfortunately if you take a systems view of ethanol, what you realize is that it takes as much energy to create the ethanol. As the ethanol actually produces the ethanol, which is almost 50% of the us corn crop drove up the price of corn dramatically and actually caused starvation in Mexico for children who depended upon corn tortillas as part of their diet.

So. We were also using a lot of GMO corn. We were using corn that was grown with a tremendous amount of petroleum based fertilizers and pesticides. So when you take a holistic systems perspective of ethanol, you realize that it's actually not a positive product, but one that has much more negatives associated.

But because most people don't learn systems thinking. And I think systems thinking is one of the most important disciplines that everybody should learn, but it's especially important for entrepreneurs to think like,

Brandon Stover: [00:46:29] yeah. Do you have any frameworks or ways to start thinking in that sort of way? I mean, I feel like it's really hard to grasp it because there's so much that is separate from us that maybe we're not looking at.

Yeah.

Jeffrey Hollender: [00:46:41] Yeah. My mentor. Is a wonderful man named Peter Sangha who wrote a book called the fifth discipline. And Peter saying gay is one of the creators of systems thinking as a discipline. Another woman is Danella Meadows who sadly passed away some years ago, but she wrote a book on sort of an introduction to systems thinking, which is a good place for people to start.

Brandon Stover: [00:47:09] Perfect. Well, we'll put those in the show notes for everyone. Talking about sustained naturals. I heard it, you daughter's speaking during an interview saying that there's going to be a focus on educating the customer about sexual wellness moving forward. And it reminded me a lot of seventh generation educating their customer about sustainability.

What are the ways we can practice educating consumers for the betterment of themselves as well as society as a whole.

Jeffrey Hollender: [00:47:34] one place to start is right on the package, right on the product. I would hope that someone learns something important just by reading what's on the label of any product that I sell.

Another is certainly on your website. You know, a lot of people say, well, don't put all that information there because it takes away from people being focused on buying. I think that's bad advice. I don't think that's a good way to build a relationship with a potential consumer. I think you want to provide education and information.

So certainly on your website is another opportunity. If you have a newsletter, an electronic newsletter that you're sending out, you know, don't just send out. Deals where you can save 10 or 20 or 30%. Every newsletter that we ever sent out at any company that I ever ran was filled with information was filled with education.

And I think you build a very different type of relationship with the consumer when they become to depend upon you. As a trusted source of information, not just they sell our products,

Brandon Stover: [00:48:44] right. Well, I'd be remiss not to ask if it was awkward to start a sexual wellness company with your daughter being the father, daughter duo selling condoms.

Jeffrey Hollender: [00:48:54] We had our awkward moments. We were we did an interview with L magazine. And they wanted to do it in the museum of sex. And I said, well, no, okay. That's not going to make us uncomfortable. But the interviewer decided to conduct the interview in front of a movie screen that was running a very, very old movie called behind the green door, which was a, which was relatively pornographic.

And the, the interviewer had her. Back to the screen. And she had Mika and I facing the screen for about an hour watching this movie and it ultimately became a little bit uncomfortable and I requested that we move to a new location in the museum for the rest of the interview.

Climax: Selling Multiple Successful Businesses

That's too funny.

Brandon Stover: [00:49:44] Hey, this is Brandon Stover and you're listening to the evolve podcast with Jeffrey Hollander co-founder of seventh generation. In just a moment. You're going to hear the most important lessons. Jeffrey tells every single social entrepreneur after successfully selling three companies and what it felt like for him to do so.

But first I wanted to let you know that all the resources and lessons from this episode are available as a free worksheet@evolvethe.world and clicking on the worksheet button in the upper right-hand corner. All the lessons from Jeffrey's 30 year career growing hundred million dollar startups are super valuable, but they are only as valuable as the ones you actually put into execution.

That's why I distill all the action items from each episode into one, easy to use step-by-step worksheet. So you can immediately apply them to your life and business. Lessons like how to have a successful co-founder relationship, how to navigate selling a company and how to apply whole systems thinking to actually solve problems and so much more.

All these lessons are available@evolvethe.world and clicking on the worksheet button in the upper right-hand corner. That's evolve the doc world, or you can follow the link inside the show notes of your podcast app.

No, let's get back to the evolve podcast with Jeffrey Hollander co-founder of seventh generation, as he describes the lessons learned after having three companies successfully acquired for millions of dollars.

Jeffrey Hollender: [00:51:07] I mean, particularly with seven generation, I was really scared about selling the company.

We had taken such a long time to build up the values and the culture of the company that I was really concerned that a buyer of the company would not uphold those values in a way in which, which I could feel good about. And we were really lucky. In, in many respects, Unilever was about the only company that I was, proud of in terms of the way they operated their business and their commitment to sustainability.

So I was really, really lucky that they sold to Unilever and that Unilever's attitude was. We want to learn from you. We want to integrate your practices around responsible business, sustainability into our company. Not, not watered down what you're doing as a business, and it's, it's been a terrific relationship.

They have pushed us to go further and faster and to be more committed and more aggressive about our journey to become. A sustainable responsible business. They've they've learned from us they've and they've taught us some, wonderful things as well. So it's worked out terrific. And I think the same is true with Grove.

I mean, in Grove's case, they had a very similar mission to sustain. They were selling sustainable natural products through e-commerce. They were just a much bigger player than we were. And in both of those cases I would say the mission was preserved if not deepened but that's a real concern.

When you sell a business, it's almost like a giving your child away. You're really scared about how the new owner or the buyer will, will treat the company. And you know, for the first 20 years I was in seventh generation, I kept telling people that we would never sell the business.

Brandon Stover: [00:53:03] How do you navigate that? You know, doing your due diligence to make sure that the company you're selling to has the same values as you and navigating that decision.

Jeffrey Hollender: [00:53:12] Yeah. It's a difficult process and some of it has to be done legally. I mean, in, in some respects, you know, we had a a 1% program where we gave away 1%. Of sustains revenues to NGOs and environmental and women's healthcare organizations.

And at seven generation it's 10% of our profits. Those things were legal requirements. So the purchaser was legally required to continue to do those things. As long as the company was in existence. all of these companies were also B corporations and we wanted that B corporate status to be maintained.

So those were things that were done on a legal basis. But that doesn't replace getting to know the buyer talking to other companies, you know, usually these companies have made many acquisitions in the past and you can do some research and talk to. The CEOs or the former CEOs of companies that were sold to the same buyer that you're talking to find out what it's like, you know, what was it like to go from, from working for yourself to working for this new company?

How did they treat you? Did they, they uphold the values what would you have done differently? So that kind of due diligence is, is just critical.

Brandon Stover: [00:54:37] Yeah. What, what what did it feel like for you in 2017 when you were invited back to the board of a company that, you know, you started 20 years ago?

Jeffrey Hollender: [00:54:46] It was pretty bizarre, pretty scary.

You know, I had trepidations even walking into the building that, that I had spent, you know, 20 years in. But it was also. An incredibly powerful sign of Unilever's commitment to the company's values. they were bringing back this crazy trouble man on the board with them and to really protect the mission and vision or help protect the mission and vision of the company.

So I thought not only was it a wonderful thing to do, but it was pretty wise and pretty brave of them to do that.

Return: Sharing what he has learned

Brandon Stover: [00:55:25] definitely. Well, having successfully grown, you know, several companies with lots of obstacles along the way, what is the most important lessons that you teach your students at NYU?

Jeffrey Hollender: [00:55:36] Well, that would take 13 weeks of that.

But you know, certainly I do a whole class on corporate culture and all of the ways in which you need to. To invest in, in develop that corporate culture and how that starts with the way you write job descriptions and how you think about people's responsibilities and how you define those responsibilities in your employee handbook.

So, you know, it's not just the tagline you have for your company, but it's every aspect of every decision you make. Should be evocative of that culture and those values you want to create. So, you know, I do a class on the 50 ways in which you can build purpose into your culture. I do a whole class on curiosity.

I think that to be a successful entrepreneur, you need to be really curious. You need to ask questions, you need to investigate new things. And when I hire people, I look for that same curiosity, but that's a really important trait for entrepreneurs. And we talk a lot about passion. We talk a lot about how do you know if this is the right thing for you?

What process do you go through to help come to a clear perspective? Because you're not going to be a hundred percent certain that this isn't the right thing for you to do talk a lot about good versus less bad. How do you take a less bad idea and make it good? How do you design a good product from the ground up?

So that's, that's another really important thing. And we, go through some basic things like how to write a business plan, but how to write a business plan that is driven by an evocative of the values that you want to have in your company. And. That should be present. You know, you can't hide those values in that purpose from your shareholders.

They should be right out front. They should be very clear. And if they're going to cause trade-offs, I mean, for example, when we started seven generation, we printed the catalog on recycled paper that cost more money on an annual basis. We would spend. initially 30, but it's at some point probably a quarter of a million dollars a year extra just to use recycled paper.

And we wanted our investors and shareholders to know that that was non-negotiable. We had to live our values. Even if those values at times were going to cost us more money to do. So those types of decisions and those types of commitments are really important to make clear to your investors.

Brandon Stover: [00:58:32] A case study example that you use in your book that I really liked was how Nike uses sustainability, like baked in as part of their innovation inside of their products and their company, not just as like a marketing claim.

So how should companies. Use global issues such as sustainability, human rights, equity, and justice to fuel innovation inside of their company.

Jeffrey Hollender: [00:58:53] Yeah. Well, first of all, as we talked about earlier, you need to think about this from a systems perspective. So I see a lot of entrepreneurs decide that they're going to have a company that is responsible in its water use, so that.

That's good. That's important, but that doesn't mean you can ignore the use of fossil fuels and the CO2 emissions that creates. So you have to think holistically, you might have a focus on water, but you have to think about all of the systemic impacts that your business has on the planet. And. We also have to make a real effort to, to understand that sustainability is not just about the environment.

It's as much about people as it is about the planet and how you treat your employees. One of the things that we had as a part of our mission was to create the best working experience that anyone had ever had anywhere that they had worked. And That was you know, in many ways, again, going back 30 years, a lot of uncharted territory, we had a misuse who came to our office for three days a week and provided free massages to everybody.

You worked at the company. It's amazing what that did for people's morale and attitude about the business. And it was relatively inexpensive. So I think that in many respects, much of success in business comes from a clear notion of what your purpose is and making sure that you're expressing that purpose in absolutely everything you do.

one of the things that we believed in is that we wanted to support our local economy In Burlington and in Vermont as a, as an important business issue and on the check request form, it said, are you buying this locally? If not stop. And there's part of, I think, what, what was really creating creative and exciting.

Was figuring out all of those ways in which you could express that purpose. And it was sort of like an onion where the best part was inside. A lot of companies put all the good stuff on the outside. And then when you peel the onion, it's sort of rotten inside. You know, our goal was to have good stuff on the outside, but the deeper and deeper you looked and the more you went in, the better stuff you found.

Brandon Stover: [01:01:32] Yeah, absolutely. And I think it's, you know, living that throughout the entire company, but then also like living that as an entrepreneur, as your yourself in your life. So how have you kind of taken the values that you live inside the company in your own life?

Jeffrey Hollender: [01:01:46] Well, that's an interesting question.

Sometimes my family says. Why don't you treat us as well. If people that you work with, sometimes they challenged me that saving my worst behavior for when I got home. And so that's certainly a flaw I had to come to terms with. But I think in order to be successful doing the things that I've done I've had to be on it.

Constant learning journey. I've constantly been in this process. I use that example of talking too much in meetings. I'm constantly reflecting on where I can be better. I'm constantly inviting people to engage me in a dialogue around where they see opportunities for me to grow and be that there.

And it's, it's really a passion and a hunger I have for my own growth in my own development. the truth is not everyone likes to do that. Not everyone has that same interest. And I learned that it was really important for me to find people who we hired at seventh generation and sustain who had that commitment to their own growth and their own development.

I'm in we talked about the importance of patients you know, I'm, I'm still an impatient person and I'm still working on being more patient. I am I would say sometimes I have unreasonable expectations of people. So, one of the things that I look for, particularly when I'm hiring people is how self-reflective are they, do they know or have a sense of where and how they would like to grow as people.

if they don't have that, you know, that's something that I find missing and I'm probably less likely to hire them. I, I really like people that are self-aware. That are clear about their own developmental opportunities and where they need to continue to grow. And again, I have to be an example of that.

I have to be willing to talk openly about my own limitations and my own journey to grow and develop. And I've been lucky to have a whole bunch of mentors in my life who have helped me along. With that journey. One woman that we spent three years working with at the seventh generation is named Carol Sanford.

And she's written a whole series of books about this kind of developmental process and how it benefits the individuals at the company as well as the business.

Brandon Stover: [01:04:21] Well, I think some of the traits that you mentioned you know, patients and not Not maybe like pushing things too hard and whatnot, I think are traits that are also helping too.

Move your businesses because we're trying to solve problem that, you know, need a little bit of that. Drive a little, a bit of inpatients. One of the sobering points that I've heard you stress is that all the good business that we are doing right now, just isn't adding up enough to solve the problem.

And I'm wondering if you believe that we'll be able to solve some of these big global issues before they reach a catastrophic point that we can't turn back from.

Jeffrey Hollender: [01:04:59] Well, in some respects, they've already reached a catastrophic place. I think, you know when it comes to depleting species, when it comes to fresh water, when it comes to climate change, we've done damage that there may not be a point of return from and you know, we have to face that fact that you, that you just mentioned that all of the sustainable businesses added up together.

Has not made enough of a difference at slowing the rate at which our society and our planet are getting worse and facing incredibly an increasingly difficult challenges. I'm a strange kind of optimist. I think that we will recover. From these challenges, the question is how much pain and suffering will we subject ourselves to before we make that U-turn and start to get it right.

And I think that we, as human beings have an incredible responsibility to minimize the pain that we cause to people and the planet before it gets any worse. It's gonna get better. And I'm. I'm optimistic that we have a new administration in Washington through the work I do with the American sustainable business council.

We've had lots of dialogues with the new administration. And even though they have made some wonderful commitments about things. It's like climate change. We will be relentlessly on their case, pushing them every day to make sure they live up to those commitments and do even more. So I think that that unlike the four dark years we've just passed through we're, we're at a point where we're trying to get the boat headed in the right direction, but it takes a long time to turn a big boat and it's a slow process.

And the challenge we face is making incremental change at a time where we really need revolutionary change. We really need big bold changes to, confront, things like income inequality, which are, have reached horrific levels in this country. The promise that that America has historically offered people about, Possibility for them you know, is increasingly less the case, less the case for lower and middle income people than it's ever been in the last hundred years. And those are things to really be worried about. So it's going to take a lot of hard work and, and everyone needs to participate. I mean, the fact that only 50% of Americans actually take advantage of voting in elections.

Is it terrible? A symptom of a dysfunctional democracy. The fact that we allow one individual to invest a hundred million dollars into the political process makes a mockery of our democracy and makes people disinclined to vote because they think that their vote doesn't matter when people are spending so much money to influence the outcome of the election.

So we have some, some real serious challenge and but there's something that all of us can do. To, to make positive change in turning around some of the worst of those challenges that we're facing.

Brandon Stover: [01:08:18] Yeah. For the social entrepreneurs that are listening right now, and they are passionate about one of these problems, they want to you know, find a solution for it, but they're running up against who am I to solve this problem?

It seems too big. They're having a little bit of that imposter syndrome. What advice would you give them?

Jeffrey Hollender: [01:08:35] Join the American sustainable business council. We are a group of a couple of hundred thousand companies working to make positive change in public policy, working to increase minimum wage to a living wage, working to put a price on carbon so that companies can externalize those negative impacts of those CO2 emissions.

And make climate change, worse, preserve fresh water, invest in regenerative agriculture, take away subsidies from fossil fuels. There's a dozen things that we're working on. You get to work with other entrepreneurs on these issues. We arrange meetings with legislators in your state Capitol, or in Washington, we help you become a business activists.

Right. And that's what the American sustainable business council is all about is turning business people into business activists for positive social and environmental change.

Brandon Stover: [01:09:40] I love that. Well, before I get to my last question, where's the best place for people to follow you, get in contact with you?

Jeffrey Hollender: [01:09:47] probably through the American sustainable business council.

My email is up there connected to my bio and I used to have a blog that I write, but I haven't found the time to do that. That was one of my most favorite things that I've sort of given up, but get in touch with me through the American sustainable business council and happy to hear your questions and thoughts.

Awesome. Well, my last question is how can we push the world to evolve?

Most of the limits that we face start in our own minds. And it's our belief that we can't do something that is often the greatest limitation we face. I have lived a privileged life. But I've found that when I believe in something and, you know, look, seven generation went for almost 13 years of losing money before it became profitable.

You got to really believe in its possibility and be deeply passionate and committed. So I think those things are, are, are critical. You have to start by examining your own beliefs. You have to start by looking in the mirror every day. And a lot of us say, well, there's all these people doing all this bad stuff.

Well, what role are you playing in your own life to contribute to those problems? I think you have to start with yourself. You have to start by really taking Gandhi's quote, be the change you seek to make to heart and live that, be that change. Be the kind of person you hope the world becomes. Another thing that's critical.

So looking at your belief system, looking at the role that you play in creating and contributing to problems be a humble, compassionate person. It might seem like a silly thing to do, but walk around and smile with people, put out some positive energy. I love it. When someone walks down the street and gives me a smile, just makes me feel good and puts me in a position to smile at other people.

And that in a small way changes the experience that people has every day gives them more potential and enthusiasm and excitement. So you know, I think it starts really inside your own mind though. And and making sure that you're not limiting yourself and you believe in the possibility of what it is you want to accomplish.

Brandon Stover: [01:12:15] I can't think of a better answer. That was fantastic. Thank you so much, Jeffrey for coming on the show today.

Jeffrey Hollender: [01:12:21] My pleasure. It was a fun to be with you, and I hope this has been valuable to your listeners.

Brandon Stover: [01:12:26] That was Jeffrey Hollander co-founder of seventh generation. One of the most successful sustainable product brands in the world Which sold to Unilever in 2016 for over $600 million  and continues its mission nurturing the health of the next seven generations of our people.

All the nuggets to Jeffery shared today are absolutely astonishing. I really enjoy how much he described whole systems thinking and the way that you apply it to problems in order to not just solve one little thing. But in order to look at the problem as a whole, be able to solve all of its parts.

Likewise. I like how much Jeffrey looked at himself and everything that he did in his career was trying to come from a place of being the change that he saw in the world. Just as Gandhi spoke, Absolutely. It was something that we believe in, at the evolve podcast, because the thesis of this show is that it takes us first evolving ourselves before we can go out and make any sort of change in the world before we can push it forward. It's going to have to take each individual looking at themselves.

What can I change? What type of personal responsibility can I take for my life and change the things of myself in order to. Make a greater impact in the world.

Now, as a reminder, all the resources and lessons from this episode are available as a free downloadable worksheet@evolvethe.world and clicking on the worksheet button in the upper right-hand corner. You can also find all the show notes and transcripts for this episode at evolve, the.world/episode/jeffrey Hollander.