Exceeding Expectations — S.C. Johnson & Son

by Gene Bisbee
6 November 2007

Some may argue that you don't mess with a sure winner, but consumer products maker S.C. Johnson relentlessly looks for ways to improve its products and business practices, often with surprising results.

Take Windex, for example. The window cleaner is a longtime S.C. Johnson success story that few could fault. In 2001, however, the company created a database of all the ingredients in their products and scored them by their environmental impact. Pollution-causing volatile organic compounds, a component of Windex, appeared at the bottom of this so-called Greenlist and chemists set about removing them.

When the company released the reformulated Windex in 2005, S.C. Johnson had reduced those volatile organic compounds to just 4%, removing the equivalent annual emissions of 70,000 cars. Another benefit, cleaning power rose 30%.

It's just one in a long string of innovations that the family-owned company has been making over its 120-year history. The $7 billion a year company with operations in 70 countries around the world has found that the improvements it makes to environmental quality, the workplace and worldwide business practices pay off.

Samuel C. Johnson, a carpenter, launched the company in Racine, Wisconsin, in 1886 and began making waxes for his hardwood floor customers. The business kept growing as later generations expanded the geographical reach and product line..

One of those descendants, H.F. Johnson Jr., set the company on its pioneering course of environmental responsibility. In 1935 he undertook a 15,000-mile expedition to Brazil to find a sustainable source of wax, decades before sustainability became a widespread corporate issue. Once there, he boosted the local economy by establishing the production of wax from the Carnaúba tree, at the same time achieving a reliable source of high-quality wax for his company.

Jump ahead 40 years and S.C. Johnson voluntarily removes chlorofluorocarbons (CFCs) from all of its aerosol products, three years before the US bans their use as aerosol propellants because of damage to the Earth's ozone layer.

The company's environmental stewardship continues in the 21st Century with the Greenlist. This method of reviewing raw materials for environmental harm has led to a number of changes: exchanging an organophosphate insecticide for a natural one; barring chlorine-based paperboard and PVCs from packaging; and changing the formula of Saran Wrap to remove chloride. S.C. Johnson offers its patented Greenlist, free of royalties, to any company that's interested.

Meanwhile, the company is cutting greenhouse gas emissions from its largest manufacturing plants. The largest factory, at Waxdale, is powered by natural gas and methane from a neighboring municipal landfill.

The company also puts a premium on supporting its workforce. During the Depression, S.C. Johnson set up a pension plan for employees and avoided layoffs. More recently, it opened childcare centers exclusively for employees in 1980s and lately instituted a profit-sharing plan that boosted pay by 19%. No wonder the company boasts a 2% turnover rate among its 12,000 global employees.

The innovations haven't stopped with the environment and workforce. The company has embarked on a Base of the Pyramid strategy that targets the world's poorest people as entrepreneurs and potential consumers. Working with youth groups in the slums of Nairobi, Kenya, S.C. Johnson has helped create community-based companies that provide insect treatment, cleaning, and garbage pickup services using its products.

It's too early to tell if this effort will succeed, but if it does, this innovation could create vast new markets for S.C. Johnson products as well as help lift a segment of the world's population out of poverty.

Some other companies employing similar innovations to S.C. Johnson:
DuPont - Reduces energy consumption and uses renewable materials
Patagonia - Uses only organic cotton in clothing; also makes recyclable clothing
Genentech - Supports its workforce; high rate of shareholders
Starbucks - Pays premium for coffee beans from farmers who use sustainable farming practices
Microsoft - Sets up thousands of computer kiosks in India operated by Base of Pyramid entrepreneurs

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