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 Ray Anderson –
Climbing Mount Sustainability
A case study about ethical leadership

2011
by Sam Young
 Ray Anderson – Climbing Mount Sustainability
A case study about leadership

Interface Inc, a formerly “plundering, global, billion-dollar carpet business”, was

transformed by its Founder and Chair, Ray Anderson, into a company whose
mission is to have a zero environmental planetary impact by 2020 1.
The late Ray Anderson, author and self-styled “radical industrialist”2,

G R EE NI ES - W HO - M A DE - T H EI R - FO RT U N E - S A VI N G -
has been feted as “America’s greenest CEO”3, honoured by Forbes
Magazine, was Ernst & Young’s Entrepreneur of the Year in 1996,

E A RT H FI R S T ( N . D .). R A Y - A N DE RS O N . JP G .

HTTP :// E A RT H FI RS T . C O M /25- RI C H - AS S -

appointed co-chair of President Clinton's Sustainable Development

R ET RI E V E D 7 A U G US T 2011 F RO M
Council in 1997 and President Obama’s Climate Action Plan in

T H E - E N VI RO N ME N T -25-21/
2008, was named on Corporate Responsibility magazine’s ‘100 Best
Corporate Citizens List’ in 2005 and 2006, and as “Hero of the
Environment” by Time Magazine in 2007.4
But Ray wasn’t always environmentally aware. After finishing an
industrial engineering degree at the Georgia Institute of Technology,
in 1973 Ray founded Interface Inc, a carpet manufacturing firm in
LaGrange, Georgia. Seeing a niche to soft-furnish the ‘office of the future’, his start-up modular carpet factory was
run conventionally for eighteen years, with single-use resourcing, using petrochemicals in manufacture, creating over
900 toxic pollutants within the production process, consuming millions of gallons of water, kilometres of packaging,
and sending all waste, unsold product and spent carpet to landfills.5
Then in 1994, Interface managers started fielding questions about from customers asking what the company was
doing about the environment. In response to his management team’s queries, Ray suggested that they form a
taskforce to look at the issue, and was asked to give a launch speech to kick off the taskforce project. Knowing little
about environmental issues, and so against his better judgement, Ray agreed. At the same time, Paul Hawken’s book,
“The Ecology of Commerce”, was given to Ray by a customer, which, upon reading, he felt was like a “spear in the
chest”. 6 He was particularly moved by Paul’s views of the ‘death of birth’7 – the likely extinction of many species –
and that those who are creating the most biosphere damage are those who gain most from it; business and industry.6
Ray related that he was appalled to realise that he was part of the problem that Paul was outlining, and that he and his
company were playing a not-inconsiderable role in killing the planet6. However, it is what Ray did next that makes
Interface unique. Ray sold a new, sustainable vision to his entire staff, and together they determined to become part
of the solution8. They called Paul Hawken and got him to join their Interface taskforce. They audited EVERYTHING.
Employee input was actively sought and encouraged. They broke up the problem up into seven goals, aiming for zero
waste; environmentally-benign products; renewable energy; ‘closed loop’ processes and products; resource-efficient
transport; sensitivity hook-up9; and redesigning their approach to commerce. Named “Climbing Mount
Sustainability”, the project set deadlines, responsibilities and hard targets for the next twenty six years to 2020.5 6 10

1
(Valparaiso University, 2009)
2
(Anderson, 2009)
3
(Valparaiso University, 2009, p. 5; US News & World Report, 1999; Huffington Post, 2010)
4
(Beck, 2009; Speakers Spotlight, 2010; Harvard University, 2001)
5
(Beck, 2009; Keeley, 2007; Valparaiso University, 2009)
6
(WatchMojo, 2009, Interface Inc, 2004)
7
(Hawken, 1993, p. 19)
8
(Rosenberg, 2009)
9
Which means “raising awareness of sustainability goals in employees and business partners” (Rosenberg, 2009, p. 429)
10
(Lamb, 2010)

1
At the beginning of 1995, Interface invited their major suppliers along to a “green the supply chain” meeting to talk
about how their suppliers could help Interface climb that mountain. In his soft Southern drawl, Ray told shellshocked
suppliers simply “It’s up to you, but those who come with us will get the business, and those who don’t won’t”. 11
Between 1995 and 2009, Mount Sustainability was climbed halfway. Interface reduced greenhouse gas emissions by
82%, fossil fuel consumption by 60%, waste by 66% and water use by 75%12. In 2007, Interface started achieving
negative net greenhouse gas emissions12. During the same time, Interface increased sales by 66%, doubled earnings,
and raised profit margins by 28%, growing sustainably to operate on four continents, in 110 countries.12 6
On the way, the Interface team has invented new industrial processes, equipment, materials and systems to close the
loop on manufacturing, partnering with firms such as Cargill and Dow to minimise their environmental impact13. All
efforts are supported by staff, team and supplier training programmes. They use “a bunch of different eyes” to look at
issues – a weave room problem will be tackled by a variety of employees from throughout each plant8. Currently,
100% of Interface’s product lines are climate neutral14. They have invented and patented carpet fibre made from
corn15. They have revolutionised commercial carpeting by creating lease-back arrangements where Interface installs
the carpet, cleans it, takes it out when worn, replaces it, and pulls it up for recycling at their closest plant when the
building is demolished1. Their philosophy is “cradle to cradle” on all they do; aiming for that closed loop.14
Ray believed that any company which makes money by taking more from the earth than it gives back is plundering the
planet, referring to himself as a ‘recovered plunderer’. “Theft is a crime," he told the TED conference in 2009, "the
theft of our children's future [will] someday be considered a crime”.16
Simple principles of thrift, reuse and ‘closing the loop’ underlies everything every Interface employee does. Visit any
Interface plant and you will see raw materials in tatty cardboard cartons swathed in festoons of biodegradable tape
doing the rounds of the factory again and again, finally being recycled into something else only when they fall apart.17
With Interface’s manufacturing programme on track, since 2001 Ray had been a sustainability change agent,
consulting, writing, on TV, in movies and an international keynote speaker18, leaving CEO Dan Hendrix in charge of
Interface19. Ray learned so much from Interface’s journey, he established a consultancy firm, InterfaceRaise, so other
businesses can learn to become more sustainable.20
Ray died from cancer in August 201119. Currently Interface has 60% climbed Mount Sustainability, with nine years to
go until their self-imposed deadline of “Mission Zero” by 202021. And Ray’s legacy? “If we're successful, we'll spend
the rest of our days harvesting yesteryear's carpets and other petrochemically-derived products, and recycling them
into new materials; and converting sunlight into energy; with zero scrap going to the landfill and zero emissions into
the ecosystem. And we’ll be doing well…very well…by doing good. That’s the vision”.22

Ray Anderson – Climbing Mount Sustainability | 2011

Discussion Questions
1. What type of leader do you think Ray Anderson was? Why?
2. What difficulties do you think Interface has faced on their journey? What skills would a leader need?

11
(Posner, 2009)
12
(Barnes & Noble, 2009)
13
(Beck, 2009; Harvard University 2001; Valparaiso University, 2009; Socialfunds, 2001)
14
(Lamb, 2010)
15
(Socialfunds, 2001)
16
(Walsh, 2011)
17
(Valparaiso University, 2009)
18
(Speakers Spotlight, 2010; Barnes & Noble, 2009; InterfaceRaise, 2010; Anderson, 2011)
19
(Huffington Post, 2011)
20
(InterfaceRaise, 2010a)
21
(InterfaceRaise, 2010b)
22
(Keeley, 2007; Valparaiso University, 2009, p. 9; Anderson, 1997 as cited by Interface Inc, 2008)

2
 TEACHING NOTES

Use of This Case

Case Synopsis This case is designed for second or third year degree
This is a true story of the
students studying leadership.
late Ray Anderson,
entrepreneur and founder of
Interface Inc, a carpet Case Objectives
manufacturing company in
LeGrange, Georgia, USA. Students will learn about ethical leadership from a corporate
social responsibility and sustainability perspective.
Because customers started
asking about what Interface Students will examine the components of ethical leadership
Inc was doing for the and understand how they can be applied in business.
environment, the company
radically changed direction.
They have become one of
the greenest companies in
the world with a strategy to
DISCUSSION QUESTIONS & ANSWERS
offset all their emissions -
“Mission Zero” – under Ray
Anderson’s leadership. What type of leader do you think Ray Anderson was?
Along the way – a seventeen Why?
year journey – they have Ethics
had to change and challenge
everything they made and Collins English Dictionary defines ethics as “a social, religious, or civil code of
how they made it, making behaviour considered correct” or “the moral fitness of a decision, course of
their customers, staff and action, etc” (1994, p. 533). In a business context, Hall, Nichols, Moynahan, &
suppliers more resourceful Taylor state that “ethics is a standard of conduct and moral values that governs
and resource-conscious. the behavior and practices of a particular person or business” (2007, p. 251).

This case looks at the ethical

leadership from a corporate Ethical Leadership
social responsibility and
sustainability perspective, Brown and Treviño defined ethical leadership as “the demonstration of
and the components of normatively appropriate conduct through personal actions and interpersonal
ethical leadership and relationships, and the promotion of such conduct to followers through two-way
understand how they can be communication, reinforcement, and decision-making” (Brown et al, 2005, p.
applied in business learning 120, as cited by Brown and Treviño, 2005, p. 2006). Ethical leadership is a
outcomes. transformational, relational leadership style.

3
Since 1994, Ray Anderson has been relentlessly in the business spotlight. In that time, he has consistently
demonstrated a high standard of moral behaviour that pervades all he does in business, leading by his own example.
He has encouraged his staff to participate in business sustainability, investing in training, taking on staff ideas and
spreading ‘the word’.

Zauderer (1992) defines an ethical leader as a list of factors:

- Possesses humility
- Maintains concern for the greater good
- Is honest and straightforward
- Fulfils commitments
- Strives for fairness
- Takes responsibility
- Shows respect for each individual
- Encourages & develops others
- Serves others
- Shows courage to stand up for what is right.

Soft-spoken and contemplative in manner, Ray displayed qualities of humility. He demonstrated those qualities in
how he worked in partnership with his staff and suppliers to achieve the company’s Mt Sustainability targets
(Rosenberg, 2009). He stepped down from his company in 2001, leaving the leadership of his company in the safe
hands of CEO Dan Hendrix (Huffington Post, 2011; Beck, 2009; 4-Traders, 2011).

Ray displayed a concern for society’s greater good by having established InterfaceRaise, by going on an arduous
speaking circuit, by publishing two books relating his own journey, “how to” guides to help other companies follow
his path, and taking part in two films on sustainability and a television series (InterfaceRaise, 2010b; Beck, 2009;
Achbar, Abbott & Bakan, 2003; Sundance Channel, 2007; 4-Traders, 2011). Even the tape that holds Interface’s raw
material cartons together in their processing plants has been specially designed to be biodegradable and sustainable
(Valparaiso University, 2009; Beck, 2009).

Ray showed honesty by doing exactly what he said he would do. He made no excuses for his company’s former
approach to sustainability, but also made no bones about the fact that the company is profitable; that sustainability

Ray Anderson – Climbing Mount Sustainability | 2011

makes money.

Diligence, persistence and courage are demonstrated by not giving in when suppliers walked away, by having kept on
with a single-minded sustainability approach since the day they started in 1994 – seventeen years of focus.

Ray modelled fairness, concern for others and for others’ development by practicing what he preached, having good
training programmes, and ensuring that all the staff get to buy-in.

He showed responsibility, service and courage by having stood up for what he believed in, and seeing a single long-
term project through to near-completion; only prevented by his untimely death from cancer at age 77.

Ray Anderson demonstrated a high standard of moral values for the planet, for future generations and for sustainable
business practices. He consistently showed himself to be an ethical leader.

4
 What difficulties do you think Interface has faced on their journey? What
skills would a leader need?
Daft & Pirola-Merlo (2009) said that ethical leadership requires courage, in order to do the right thing, and that
balancing “profit with people, selfishness with service, and control with stewardship requires individual moral
courage”. The leadership skills needed to create the kind of company that Ray Anderson created would definitely
include individual courage, fortitude and stewardship.

Moral Development

The corporate world has reeled from scandals - the names of once-revered companies have become
synonymous with greed, deceit, and financial improprieties (such as Enron, Martha Stewart, Lehman
Brothers, Chase). American broadcasting company CBS conducted a survey in 2002 which found that 79%
of the 645 respondents believed questionable business practices are widespread, and fewer than one-third
thought that CEOs were honest (Nofsinger & Kim, 2003, p. 6).

Gary Yukl (2006) proposed that ethical leadership required – amongst other things – values, conscious
intentions, and examination of their stage of moral development.

Lawrence Kohlberg (1976) describes three stages of moralisation. Starting at level one as ego-centric
children, individuals balance punishment and reward, and look for payback to themselves. Children, and
some adults, populate level one.

Kohlberg's (1976) level two is reached when individuals conform to what others expect of them -
conformity to "good boy /nice girl", where one earns approval by being ‘nice’. Level two is characterised
by a law and order orientation, by doing one’s duty, with most adults being at this point.

Kohlberg's (1976) level three is where individuals impartially apply 'universal' standards of behaviour to
resolve moral conflicts, where one balances self-interest with a concern for others and for the common
good. Less than 20% of adults are at this stage, requiring a very internal locus of control. This is the moral
stage where people display uncommon courage by whistleblowing, acts of selflessness, or philanthropy when
they have nothing to give. Individuals may break laws that are perceived as unjust - such as those broken by
Emily Pankhurst, Nelson Mandela, Mahatma Ghandi, Mother Theresa and Martin Luther King. Level three
moralists have a strong personal sense of 'rightness'.

These are the leaders who have the courage to think for themselves, and encourage their followers to do the
same, and to expand their understanding of moral issues.

Ray Anderson had the courage to think for himself. He encouraged his followers to do the same, as he has
shown industry leadership in assisting others to undertake their own sustainability journey. Ray appeared to
have a strong internal locus of control, demonstrated by his acknowledgement that his pre-1994 behaviour
was irresponsible, and he invested a lot of effort from 1994 until his death trying to put those perceived
wrongs right. He said “Theft is a crime. The theft of our children's future [will] someday be considered a
crime” (Walsh, 2011).

Courage

Collins English Dictionary defines courage as “the power or quality of dealing with or facing danger, fear,
pain, etc., without fear; bravery” or “the courage of one's convictions, the confidence to act in accordance
with one's beliefs” (1994, p. 366).

5
 Kohlberg’s (1976) Level Three Stage of Moralisation is reflected in leaders who have the courage to think
for themselves, and encourage their followers to do the same, expanding their follower’s understanding of
moral issues.

Ray Anderson had the personal courage to think for himself. He also had the courage to change his mind
when presented with what he felt was irrefutable evidence, and to take action on the new paradigm. He then
encouraged his followers to embrace his vision and to go out to other businesses and encourage others to
commence their own sustainability journey. He had the courage to first seek sustainability, then seek profits
(which came as a result of the innovation, service and cradle to cradle approach that Interface embraced).

Courage also requires a belief in a higher purpose. Ray discovered that higher purpose in Hawken’s book,
and it transformed himself, his company and directed the last seventeen years of his life.

Vision

Collins English Dictionary defines vision as “the ability or an instance of great perception, esp of future
developments” or “a vivid mental image produced by the imagination” (1994, p. 1715).

Daft & Pirola-Merlo (2009, p. 412) state that a vision is “an ambitious view of a better future that everyone
in the organisation can believe in”. Yukl (2006, p. 295) says “before people will support radical change, they
need to have a vision of a better future”. That vision must be compelling, attractive and achievable enough
for the followers trade-off against the effort, pain and sacrifice achieving the vision will require.

Ray Anderson sold a difficult yet compelling vision of a future where Interface could be – “If we're
successful, we'll spend the rest of our days harvesting yesteryear's carpets and other petrochemically-derived
products, and recycling them into new materials; and converting sunlight into energy; with zero scrap going
to the landfill and zero emissions into the ecosystem. And we’ll be doing well…very well…by doing good.
That’s the vision” (Keeley, 2007; Valparaiso University, 2009, p. 9; Anderson, 1997 as cited by Interface
Inc, 2008). His Interface staff embraced this vision in 1994, and has spent the intervening seventeen years
whole-heartedly translating into action.

Values

Ray Anderson – Climbing Mount Sustainability | 2011

Collins English Dictionary defines values as “the moral principles and beliefs or accepted standards of a
person or social group” (1994, p. 1694).

Manning & Curtis (2007, p. 100) suggest that organisational values are “social glue” that “provide structure
and stability” for those within an organisation. They also cite Jack Walsh, in that values are a “primary source
of corporate identity”, but provide a warning; “values must enter into the daily practices of the
organization”, else the employee cynicism arising from that corporate hypocrisy will undermine the worth of
the organisation’s expressed or inherent values (Manning & Curtis, 2007, p. 100). Corporate values are each
individual organisation’s authentic institutional standards of behaviour.

Interface’s actions have been consistent with their new values from 1994 onwards, have provided their
corporate identity, and have entered into their daily practices. Ray Anderson led the change of values at
Interface Inc. In his case, the change in moral stance on what were accepted standards of behaviour within
the business permeated all aspects of the company, down to the parcel tape used on the raw material
cartons.

6
 In some ways, the values that Interface has adopted reflect the African concept of Ubuntu – “how my
humanity is caught up and bound up inextricably with yours” (Archbishop Desmond Tutu, cited by Dahler,
2011; Manning & Curtis, 2007, p. 106), blended collective values of harmony, compassion, respect, human
dignity and societal unity.

Now Ray Anderson has died, do you think Interface will still summit Mount
Sustainability by 2020?
There are a number of factors which would impact on whether Interface continues on its sustainability path. They are
ownership, succession planning, how compelling the vision is, and culture.

Ownership

Interface Inc is a publicly listed company on the NASDAQ exchange with 66 million shares in circulation of
Class A and B stock. Only Class A stock is publicly traded. As at 31 March 2011, there were 645 Class A
stockholders, and 89 Class B, the latter including all company directors (Interface Inc, 2011).

Interface has a Stock Incentive Plan. All Interface (or subsidiary) staff, independent directors, consultants or
contractors can participate, although only employees are eligible for incentive stock options (Yahoo!Finance,
2011).

Only Class B stock (circa 8 million shares) can elect Directors. As Board Chair, Ray Anderson owned 47%
of the Class B stock, which will now pass to his heirs. Interface Inc has a shareholder rights agreement
designed to discourage stock offers “that could result in shareholders receiving a premium over the market
price by holders of Interface’s common stock being able to purchase a fraction of a share of our Class B if a
third party acquires beneficial ownership of 15% or more of our common stock without our consent”
(Interface Inc, 2011).

Interface has further protected their stockholding from takeover by ensuring that anyone transiting out of the
company swaps their Class B stock for Class A at a market equivalent value (Interface Inc, 2011).

Interface appears to operate somewhere in the middle-of-the-road for share price and dividends. Its price has
been relatively stable making a slight gain on average market returns. It appears unlikely that the company
would be a takeover target (Yahoo!Finance, 2011; Interface Inc, 2011).

Succession Planning

Succession planning is the “[i]dentification and development of potential successors for key positions in an
organization, through a systematic evaluation process and training” (BusinessDictionary.com, n.d.).

Ray Anderson handed over the day-to-day running of Interface Inc to Dan Hendrix in 2001, who has been
with Interface since 1983, working his way up from financial accountant (Interface Inc, 2010). The company
has been operating under his guidance for a decade.

The remainder of the seven person management team, with the exception of the Chief Marketing Officer,
have been with Interface for between 15 and 22 years (the CMO has been with Interface for three years).
Most senior managers have been groomed for promotion in off-shore business units or subsidiaries. There is
considerable depth of talent in the management team, and, correspondingly, considerable strength in the
twelve member board (Interface, 2011).

7
 Succession planning at Interface appears sound.

Vision

When the leader is no longer present, will the vision survive? A compelling vision that has been taken and
‘lived’ into the culture of the organisation should survive, providing values are upheld, rewards are aligned
and the vision retains its valence.

According to Daft & Pirola-Merlo (2009) a vision is comprised of several aspects. A vision links what
happens today to the future; it creates commitment and energises the team; it makes sense of the work that
is done; and it establishes quality and behaviour standards.

Ray created a vision from 1994 to 2020, clearly drawing a path for the organisation to follow. His team has
shown commitment and the vision has energised the entire company, which has made sense of the work and
the teamwork that Interface make to their customers and their suppliers. The EcoSense and QUEST
programmes are quality and behaviour standards that are lived within the organisation. These are likely to
endure for some time as they have been built into the fabric of the organisation.

Culture

Culture is a pattern of shared assumptions about how things get done in an organisation. Culture can be
defined as “the way we do things around here” (Deal & Kennedy, 1982, p. 4). The way Interface now does
business clearly shows their culture; cradle to cradle, mission zero, closing the loop. All aspects of their
business appear aligned to achieving their Mount Sustainability goals, down to the tape on their cartons.

According to Daft and Pirola-Merlo (2009) culture responds to two main factors: internal integration, and
external adaptation. External adaptation changes in culture are driven by the need to meet organisational
goals and objectives, in response to customer needs, and in response to competition. Internal integration is
the creation of a collective identity, to define what is acceptable – and unacceptable – behaviour, and an
organisation’s modus operandi – the way they do things at their place. What drove Interface’s 1994 cultural
shift was the external adaptation to customer needs, followed up by a change in organisational goals, led by
Ray Anderson.

Ray Anderson – Climbing Mount Sustainability | 2011

What has sustained Interface’s culture has been internal integration. Culture changes slowly. It has taken
seventeen years for the sustainability culture at Interface to take hold, but now they hold this vision, it has
become their collective identity; the way they do things there; and has set acceptable behaviours.

Hughes, Ginnett & Curphy (2005) say that the values of a company’s senior leadership is a determining
factor in an organization’s culture. Most of the senior management team at Interface have long service with
the company. All staff at Interface, including directors and managers, are trained EcoSense and QUEST,
Interface’s two environmental programmes. They share, and have bought into, the company’s values, so are
likely to be sound future stewards of the company culture.

Since Ray Anderson’s death, providing company leadership remains consistent, it is likely that the “Mission
Zero” goal may take on more significance. This would then mean that all staff would be even more focused
on ensuring that the company’s efforts are targeted at reaching their Mount Sustainability goals by 2020 as a
tribute to their founder.

On balance, it appears more likely than not that Interface should be able to summit Mount Sustainability by 2020.

8
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