Crisis in the mid-1990s

When Jeff assumed the role of COO in 1991, the company was in a major phase of growth. Between 1986 and 1991, Timberland had more than doubled sales, with much of the volume resulting from overseas expansion. Profit margins were thinning. In 1990, Timberland earned $7.8 million in net profits on $196 million in sales, posting a profit margin of about 4% compared with Nike's 8%.

Questions emerged about Timberland's commitment to its corporate citizenship initiatives, including the Path of Service program and the partnership with City Year. Some within the company called for the elimination of its social enterprise activities altogether—or at least until the company's solvency was assured.

But Jeff and other leaders within Timberland believed that its community service was—and should continue to be—a fundamental aspect of Timberland's long-term strategy, for both the business and the social value it created. At the time, Jeff based his assessment on a range of factors, including what he called the instincts of a third-generation entrepreneur, as well as employees' comments, such as the following:

Having paid days for service creates a whole different culture than the culture I came from. That company had a fairly large foundation, but there was no sense among the employees of ownership and pride in the foundation's activities. It was the CEO's operation. Here everybody pulls together and there is a sense of community. It's not just outside these walls digging or painting; it's the way we treat each other in this building, too. . . .

Jeff's argument that community service efforts were integral to the company's long-term operations was not, however, received with universal approval.

Community Service Evolves

The encouraging financial results along with an evolving successful Path of Service program portfolio led Timberland to articulate its path of a dual strategy with the Swartz mantra of "commerce and justice."

The company developed and communicated four "bold goals" to guide this dual strategic approach: 1) deliver outdoor-inspired, innovative products that exceed customers' expectations for value and values; 2) be the reference brand for socially accountable business globally; 3) deliver exceptional financial return for shareholders; and 4) be a top 10 employer of choice globally. These goals were designed to cover the range of constituencies that Timberland sought to serve: consumers, the business sector, the community, shareholders, the investment community, and employees.

Crystallization of Corporate Values

As Timberland became increasingly "values-centric," the overall benefit package offered to its employees became more and more comprehensive. The Path of Service program was proudly touted by human resource officers as a unique company benefit that helped in recruiting talented employees. Other benefits included adoption assistance, infertility coverage, and full benefits for both full- and part-time employees and their domestic partners. The company also provided "an onsite childcare center, cafeteria, fitness center, lactation rooms, ATM, and a host of services ranging from dry cleaning to travel reservations."^[2] In addition, managers were offered stock options, and employees could purchase company stock at a 15% discount.

Beyond these benefits, the company crystallized an aspect of the corporate culture to which it was deeply committed: It wanted each Timberland employee to feel respected and acknowledged as a "complete person . . . both financial analyst and mom, marketing executive and Little League coach, product developer and citizen."

Date: 2015-01-29; view: 553