This talk was originally presented at Commerce+ in 2019 in New York. In this series, we've pulled together relevant talks from our past events in Sydney, London, and New York City.
What is Commerce+
For the last two years, Shopify Plus has hosted Commerce+, a global thought leadership conference that brought together industry leaders to share their knowledge and best practices in the ever-evolving world of commerce.
During this talk, Jad Finck, VP Innovation and Sustainability at Allbirds, sits down with Dana Davis, VP Sustainability at Mara Hoffman, and Sunny Madra, VP at Ford X where they discuss how more companies can rethink their business models and adopt more sustainable practices.
This transcript has been edited for clarity.
Finck: Please share a brief introduction to yourselves and to your companies.
Davis: I'm Dana Davis, I'm the VP of Sustainability Product and Business Strategy at a contemporary brand called Mara Hoffman. My background is in product development, design, and manufacturing. The brand is coming on its 20-year anniversary this year, a privately-owned contemporary fashion brand. 15 years into the business is when we started shifting our entire operation by putting the people and planet first. Mara came to me in a state of, “We must change or shut down the business”. My thoughts were, "Okay, let's not shut down the business. I'd like to come back to work tomorrow." And that responsibility became mine. So that's how we’ve moved from product and development into focusing on sustainability and business strategy.
Madra: I’m Sunny Madra and I work at Ford. I actually joined Ford through the acquisition of my company, Autonomic, last year. What I focus on at Ford now is innovation and incubation, and my team is really leading the efforts at Ford to take us on the transition from being an automaker and putting cars on the road to the next generation of mobility options, like scooters. We bought a scooter company late last year, and we're really pushing that and looking to innovate in and around our commercial vehicle customers as well.
Finck: Great. So obviously, innovation, the theme of the presentation, theme of the talk right now, means a lot of different things to different folks. Can you tell us a bit more specifically, what does innovation really mean at your respective organizations?
Davis: I’m coming from the fashion industry, which is a pretty archaic operation with systems that haven't really changed or advanced in a really long time. So innovation is really around the new opportunities that exist within materials. Whether it be in some of the regenerative fibers or new materials that haven't existed in the past.
We're also looking at ways to move out of just this regular model of making and selling product. How do we take back what we've owned and maybe find new ways to incorporate that into our designs? Or also looking at the “take, remake, resell” model. It's just such an interesting time right now where the industry is, under so much pressure, to change and look at new ways to do business. So when we think about innovation, it's expanding the mind and thinking outside of the box of that traditional fashion model.
Madra: Bill Ford, who's the great-grandson of Henry Ford, did a TED Talk in 2012. In that TED Talk, to the entire automotive industry, he said, "The future of the industry isn't making more cars." The world is at peak automobiles right now. We see that in New York City and other places, the world can't sustain twice as many cars on the road. So he put a big challenge out there to all the companies to think about how they will evolve, and that's the challenge at Ford: taking a more than 100-year-old company that has been built around building vehicles and looking at how we can move people in different ways. That's such an important thing in transportation, because we've seen such innovation in Uber and Lyft and Bird and Lime, so it's a really exciting time in transportation when it comes to innovation.
Davis: It's so great because you're thinking about how to create new models outside of just making cars. In fashion, we're seeing a lot of that right now where we want our customer to own something longer and not necessarily go out and buy, buy, buy. So how do we, as a business, create a new model? What we're seeing is: If you no longer want that, we'll take it back, and maybe we'll repair it, renew it, and put it back into that stream. Versus the typical model to create, make, and sell.
Madra: That applies to us as well. If we think about the traditional vehicle purchase sales model, it's: Someone buys a car, keeps it for a few years, and then there's no contact other than maintenance. But the entire model is changing, where we want to stay in touch with our customers; we want to work more closely with them, offer them additional services and features that help them with their businesses. Specifically, when we think about Shopify and we think about our commercial vehicle businesses, there's a lot of interesting things that come to mind for us around a collaboration between taking a van, and utilizing that as your real estate and your business now. As that becomes electric, you can run your entire business out of that. So there's a lot of interesting things that we're thinking about that's changing in the world of transportation.
Finck: One of the provocations that I know you guys are looking at that I thought was great was: How do you address the customer that doesn't own a car and isn't planning to own a car?
Madra: There's a journey. If you rewind back 25 years ago, you needed a car to have a job, either right out of high school or right out of college. That was the first thing you would go and get. But I think if you look at the generation today, with urbanization, more people move into cities, so they don't get a car right away. But there's still a moment when a car comes. I always use the following example, it's the car seats and strollers. Because you can't Uber with those things. So I do think vehicle ownership will continue to exist, but I think it's shifting.
Finck: So when you guys are looking at these innovations, how do you foster a risk-taking culture internally? The experimental nature of it, how does it work inside small and big companies?
Davis: We're a small company. We're privately owned. That makes us nimble. So we can see the possibilities that exist in the world and how we can plug and play that into what we're already doing. Where we don't necessarily have to go out and get multiple people to commit into something. If I believe in something, I can go directly to Mara and say, "This is where I believe the future of the industry is going. Are you in?" And she pretty much usually stands behind that. So for me, that's not really a challenge.
Madra: It's not as straightforward as that for us being a company of 200,000 people. But it really starts top down. So if we think about Jim Hackett and Bill Ford, they both believe in innovation and this transformation that's occurring. So when the leadership does that, it really enables and empowers the teams to go and do these things. But there is day-to-day, like you want to get something going, you may have to get approval from a bunch of people. A lot of large companies have lower risk tolerance as we try these things. But it's just about finding the balance between pushing the envelope but also respecting the brand, and the processes that are there.
Finck: Dana, what about in your world? We talked a little bit backstage about some of the exciting materials that Mara Hoffman focuses on. Can you tell us a little bit about some of the innovative materials that you guys have launched out there?
Davis: We take a very similar approach to Allbirds as far as working from the fiber supplier up, which is really challenging with a lot of the materials that exist out there. Something we launched about three and a half years ago is hemp. It has been an amazing textile for us as far as just diversifying our portfolio, but also it's a really cool story, it's also a great plant. We like to tell people it's this sister plant. It's a weed; it sprouts up, and it also helps take care of the environment and also sequesters carbon and it's great to wear.
In our swimwear, we have a large swimwear business, it's probably one of the hardest places to truly push sustainable materials, because you are taking petroleum-based fibers and you're blending them with another fiber to create stretch. Within that though, you also want to ensure that it lasts long and it retains that shape. So instead of working with some virgin materials, we work with a lot of recycled materials, and we're just continuously trying to push the innovators who are out there. As a brand, we can't necessarily back them up with a budget, but what we can do is we can help bring some of those to market. So looking at some of these incubating companies that exist out there. We ask which audience they’re focusing on, and how can we help bring those to market, and just thinking outside the box continuously.
Finck: If you're really trying to change the way people make stuff but you're holding it tight and not sharing and not in leading and not educating, I feel like it doesn't really work in the new model. What's both encouraging and also required, especially when it comes to circularity, end of life of these products, this really shouldn't be a specific brand effort. It's going to cause huge redundancies and waste, and the customer's not going to want to put a recycle bin and a Mara Hoffman bin and an Allbirds bin. They want it to be easy. If it's going to be something that moves the needle, it's got to be ubiquitous and simple, and that's only going to happen when brands collaborate, especially in those areas.
Madra: The benefit is to everyone.
Finck: Right. How do you guys enforce a sustainability mindset across your whole organization? This is something that's a great question for us because sustainability at Allbirds grew out of our product team. I get to lead innovation and sustainability and we put those together because north of 70% of our overall footprint comes from our products. So if we weren't really building sustainability into our products, then we were doing it backwards.
So the real challenge was, how do we get beyond that team? Sustainability is an inherent filter in the way we look at anything from a product standpoint. But what was new was, how do we get this out to the rest of our company?
For us specifically, it's literally getting that into the goals outside of our team, the annual goals of the company. Last year, it was a big step forward to us to have some of those sustainability goals built into people's bonuses, people's goals for the year. So sometimes it's just the nuts and bolts of saying, "Look, it's on the paper. It's now just not us being the police, but this is part of everybody's job." So that was obvious but new for us, a step we took forward. How about you guys? How do you get it through the company beyond just the sustainability team so that they're not the sustainability police?
Madra: I think you nailed it. It's got to be across the company goals, the company values, the company beliefs. You have to weave that into compensation and everything else, and I think that helps keep it top of mind for folks.
Davis: I come from the product and the design side, so where you have your largest impact areas, I was able to really push that and lead that within the design team. But then you have your sales team, your brand comms team, and your logistics team. Where we saw success was when we created an action plan meeting, a monthly gathering where everybody in the company was invited, and we talked about ways that we could create less impact within our office and also work closely with our community. That meant doing different types of volunteer programs. How could we get connected for people to see, "Okay, as an industry, as a whole, these are some of our challenges, and these are things that we can do that can also create better change here in New York or in other areas."
So with that, we also started doing clothing swaps in the office, or things that got people to understand that they could make changes within the workplace and also outside in their home. And then from that, we saw who was really interested, and we created a sustainability task team. So we don't have a sustainability department yet in our company. The task team, those are people who already have a full-time job, and were people who were passionate and wanted to ensure that they could help drive some of these initiatives within their own departments, and we've seen a lot of success in that.
Finck: Sunny, if there's something you would give to the folks, say to go back and have their companies be more innovative, what would you challenge them to go do?
Madra: It's similar to what you've just talked about on the sustainability side, find those people that have a passion for those things. I think a lot of times people get put in their roles and they get stuck in it and they wouldn't get a chance to really let them go after something they really like. I like what you just talked about there. It's so great, find the people that are passionate about sustainability and put them together. So I think that doesn't happen often enough.
Finck: Great, find the passion. Dana, for you something folks in the audience and go back to their companies about sustainability to take a step forward?
Davis: Don't be scared. Ask different questions, frame the questions differently, go for some of the low hanging fruits. You do that, they're successful, you build momentum, you get people inspired, and then you can create more of that long-term strategy.
Finck: Great. From my side, low hanging fruit, ask your company, could we be carbon neutral? We can do a lot of things in the future, but why can't we be carbon neutral along the way?