1 April 2015

Doing right by consumers is a privilege not a pain.

The following is an excerpt from Harvard Business Review April 2015 interview with Mr Fisk Johnson , the full article can be read in their publication.

With a history going back to 1886, and nearly 130 years of Johnson family guardianship of the brand, it is possibly not surprising that Fisk Johnson, the current CEO is passionate about doing the right thing when it comes to his products. This personal connection and his predecessors ethos of doing the right thing , even when it might impact sales mean that SC Johnson is in a unique position as a company to act correctly for long term wellbeing as against short term gain and stakeholder approval.

Speaking in the Harvard Business Review (April 2015) Fisk Johnson outlined some of the core beliefs of his company and how it is possible to do the right thing for consumers when it comes to environmental or health benefits of its products.

One very important example, as he explains concerned Saran Wrap. Acquired in 1998 from Dow "the key to Saran Wrap's success was that it created an impenetrable barrier to odor. Its other competitive advantage was superior microwavability. Polyvinylidene chloride (PVDC) was responsible for both those unique differentiators. Without it Saran Wrap would have been no better than wraps made by Glad and Reynolds, which did not contain PVDC. No manufacturer of a product as successful as Saran Wrap would make changes to it without a lot of thought and groundwork beforehand. Not only product sales but the manufacturer's credibility -- which in the long run may be more important than trust in any one product -- would be in jeopardy. But sometimes not making changes, even to a profitable go-to household item like Saran Wrap, is just as risky.

Around the time we acquired Saran Wrap, the U.S. Food and Drug Administration, environmental groups, and consumers began to express concern over the use of polyvinyl chloride. We ourselves were concerned, because when materials containing chlorine, such as PVC and PVDC, end up in municipal incinerators and are burned, they may release toxic chemicals into the environment. Some of our product packaging contained PVCs."

This concern led to the development of a system called greenlist - introduced in 2001 and still going strong today. According to Fisk, ", ingredients we use or are considering using are sorted into functional categories, such as solvents and insecticides. Within each category relevant criteria, including biodegradability and human toxicity, are used to rank the impact of ingredients on the environment and human health. An ingredient the company would use only when no alternative existed (and even then, only on a limited basis) is rated 0; 1 is "good," 2 is "better," and 3 is "best." Scores for a product's ingredients are averaged, and the product is assigned an overall rating. Under Greenlist criteria, PVC rated 0, so we pledged to eliminate it from our external packaging altogether".

While this was taking place, there was a simultaneous concern over PVC from the industry and consumers. He continues "It didn't matter, however, whether concern over PVDCs was misplaced or conflated with concern over PVCs, or whether people were calling for manufacturers to stop using PVC specifically but not necessarily PVDC. Although most decisions are a matter of trade-offs and evolving priorities, one priority doesn't change for us: acting in the best interests of our customers, whose trust in our company is a primary reason they buy our products. This was not the first time we had been faced with eliminating a key chemical from a formulation. We've removed product ingredients for reasons of health or environmental hazard many times, especially since we introduced Greenlist -- and we've taken whatever hit accompanied each instance. For example, we simply do not use some of the active ingredients available for use in pest-control products because of their Greenlist score, even though our competitors do. We found a substitute for them, and we maintained performance. Despite the cost, it was the right thing to do, and as someone with experience in chemistry and physics, I sleep better at night because of it."

He later speaks to the principles instilled in him by his great grandfather "Back in 1927 my great-grandfather said something that has been a guiding principle for me throughout my career: "The goodwill of people is the only enduring thing in any business. The rest is shadow." In other words, trustworthiness is the most important quality a company can have. It has to be earned" and, in the case of SC Johnson, it has to be nurtured and maintained, generation to generation to ensure that the consumers interests remain at the front of the business identity and strategy.