Case Study 1

Interface Ltd, a carpet company, has emerged as perhaps the most cited example of a sustainable
company in the world. It has replaced petrochemical fibres with corn-based biomass that is certified
climate-neutral and the carpet tiles can be returned to Interface for the next customer (see also Case
3.1). It wasn’t always the case. In the mid-1990s, their factories and suppliers consumed around 1.2
billion pounds of material. The company’s technology [was] plundering the earth. Rob Coombs, Asia–
Pacific President of Interface, summarizes what has driven the company in our region: The business
world is slowly coming to the realization that it needs to develop practices sympathetic with the natural
environment in which it operates. The slumbering giant is beginning to understand that there are also a
range of stakeholders affected by business practices and that there is a social contract that needs to be
rethought and redeveloped. This awakening brings with it many pressures; the need to rethink age-old
values and approaches to problems, the need to find solutions to previously unapproached technical
barriers, and the need to create a new set of decision-making criteria. For Interface, in the Asia–Pacific
region, the evolution of sustainable business practice has created another challenge: How to play an
important part in the process of becoming a sustainable business within a large organization at the
leading edge of the debate? How to support the position for which the company is known globally and
how to live up to the position on a local basis? With a vision to become sustainable and then restorative
through the power of its influence by 2020, Interface has already established a clear measure of
business success. It is moving towards this goal through the adoption of a strategy on seven fronts:
eliminating waste, using only renewable energy sources, creating only benign emissions, closing the
product loop, energy efficient transport, energizing people and changing the nature of commerce itself.
Asia–Pacific represents 5 per cent of global Interface revenues and although the region is seen as a
growth engine for the business, the relatively small scale of the division creates a series of challenges
around the move to sustainability. How has Asia–Pacific embraced the philosophy and what has it done
to support it? What are the challenges faced by a small division of a leading force in sustainable business
development? For example, Japan has embraced, by necessity, the concept of recycling as a noble
activity and it is promoted by government and within the business community. Therefore, Interface is
engaged in a wide range of activity in Japan around this issue, while discussion around renewable energy
receives much less attention. The two countries across the region that appear most engaged are Japan
and Australia. In most other countries, sustainability remains a very low priority and Interface operates
with less external stimulus. The stimulus from customers for more sustainable solutions is the greatest
driver we have. With this less evident, Interface operates in a vacuum. In both our Australian and
Thailand manufacturing facilities, Interface has reduced dramatically all forms of process and material
waste. In Australia, for example, waste per unit of production has reduced by 90 per cent since 1996, an
achievement that has both funded other sustainability projects and helped to deliver greatly improved
business performance. The waste effort has been driven in both facilities by people working in teams at
operator level with strong supervisor leadership. It is very much a grassroots program to reduce the
company’s environmental footprint. Equally, regional success in reducing harmful emissions has been
encouraging. Since 1999 our annual greenhouse gas emissions have reduced from approximately 1650
metric tons of CO2 to 1450 metric tons, while at the same time we have increased our production
throughput by 35 per cent. The source of these emissions is electricity production 63 per cent (indirect
contribution) and the burning of natural gas 37 per cent (direct production). We have reduced and
rationalized the use of solvents at our production facilities and even gone to the extent of identifying
new cleaners with less solvent emissions for our Carpet Spot Cleaning Kits, admittedly a small
component, but significant in the message we are trying to put out into the marketplace. In the short
term we are evaluating the sale and use of ‘climate neutral’ products and services.

QUESTIONS

1. 1 How does Interface demonstrate that competitive advantage and sustainability are not
mutually exclusive?

The Interface Ltd have replaced petrochemical based carpets with carpets made from
renewable biomass with little loss of quality, which is certified climate-neutral. In doing so, the
Interface is placing itself in the right position to become the first genuinely sustainable
corporation on the planet. With strong leadership from their CEO, it then identified
opportunities for win-win eco-efficiency initiatives, resulting in gains that were quick and
effective. Through its profitable operations it is demonstrating that a sustainable business can
also make money. It is appealing to a whole new range of stakeholders affected by business
practices, not only the shareholders but the workers and the wider community Through its
‘green marketing’ it has drawn considerable attention to its products.

2. What system of complementary activities contribute to Interface’s competitiveness?

A company does not get sustainable advantage simply because it has some unique product
design or a unique sales force. Sustainable advantage comes from systems of activities that are
complementary. These complementarities occur when performing one activity gives a company
not only an advantage in that activity, but also provides benefits in other activities such as
marketing, service, design and customer support. Interface is making great strides in first of all
eliminating waste from its production, procurement and shipping. It aims to use renewable
energy sources as much as possible. It is measuring its emissions and aims only to generate
benign emissions. Using a cradle-to-cradle approach it is seeking to close the product loop and
thus make waste from one process to be input for another process. Additionally, through
location of manufacturing and use of transportation, it is striving to achieve energy-efficient
transport. Obviously one of its missions is to convince people of the need for sustainability.

3. Which other Asia–Pacific countries would be the next candidates for Interface’s sales team?
Companies need to be strategic in deciding where to invest. The Interface Ltd can strategically
position itself in the Asia Pacific Region to lead and consolidate in countries where there are
market drivers for sustainable solutions like Japan and Australia. The Interface’s sales team
would focus on the region or countries that has a strong track record in waste elimination such
as the and that are moving toward sustainability and which have a domestic customer base
desiring modern carpeting. The candidates would likely be China, Korea, Taiwan and Hong Kong.

Case Study 2

Serial Entrepreneur, author and founder o f t h e Entreprenaissance M o v e m e n t, Creel Price, r e c o u

n t s a time when creativity it was needed to fake it to make it. Within months of opening our marketing
business, yet without a client, we secured the opportunity to pitch to one of the major Australian banks.
After a well-received presentation in their office, they indicated we could have their business but first
they wanted to check out our operation. We had 18 hours to miraculously convert our exhausted,
dishevelled office into something that could even remotely back up our loose-lipped assertion of ‘state
of the art’. We needed a makeover...fast! A plan that has since been dubbed was swung into action.
We couldn’t pass up the opportunity for our two-bit company to achieve a major bank as a client, so we
decided to roll the dice and spend every last remaining dollar to hire all the furniture and technology we
needed to look huge. We’d either get rich, or go broke. Delegating the tasks, we sent someone to buy
second-hand computer monitors for all the desks. This way we’d at least look like we had a technology-
enabled business, albeit we hoped they wouldn’t notice there were no hard drives attached. Someone
else started hiring enough temporary staff to create the buzzing atmosphere of a thriving business. Next,
we had to make the place look less drab and dingy. Someone was assigned to hire plants and paintings
to take the bank team’s eyes away from the holes in the carpet and the tangle of cables dangling down
everywhere. Our masterstroke was commandeering the vacant office next door and turning it into ‘our
boardroom’. A huge, shiny new mahogany-coloured table and plush black leather chairs were ordered
for the day and my grandfather’s battered old dining table was relegated to the scrap heap. The next
day, our adrenalin levels were off the charts. You could smell the electric excitement in the air. Van after
van after van arrived to deliver our props and we felt like the directors of a blockbuster movie about to
start filming. With our set ready and our extras in place, all we needed now were the stars – our
prospective client team. Welcoming them into our ‘call centre’, the illusion looked perfect. And with the
confidence it gave us, we secured the deal. It took us a few years to fess up to our client that we had
conducted ‘Operation Hollywood Set’ in their honour. He responded without surprise: ‘I figured as much
because the next time I turned up to your office the cool furniture had disappeared!’ Yet, putting our
best foot forward had worked for both of us. We helped our client build a significant client segment over
a decade and they morphed into a twenty-million-dollar-a-year client for us. In business, it’s times like
these – when you back yourself and gamble everything on one roll of the dice – that become your
fondest memories. Yes, we used a hell of a lot of front to win a client, but we had complete confidence
in our ability to deliver a fantastic job providing they didn’t judge us merely on our looks. Now with
more grey hair than youthful enthusiasm, I think the key to ‘faking it until you make it’ is much more
than staying within the lines of the law. There is a moral code in business that must be obeyed so that
you can build a brand and culture that has lasting integrity. For me, the key is to satisfy the self-mirror
test. If you are confronted with an opportunity to express some overzealous front, first look yourself in
the mirror and only proceed if you can be sure that you will have respect for the person who looks back
at you now, as well as in the future.

QUESTIONS:

1. What model of opportunity was this venture following and what was creative and innovative
about their actions?
The case uses the alertness model of market opportunity which emphasizes on the knowledge
of the entrepreneur. It assumes that the opportunity are out there already in existence and
waiting to be discovered. Their creativity enabled them to get their first client by using a bit of
window dressing to show that they were more established than they actually were. This created
the right first-impression and helped to secure the client.
2. What would define the creativity in this case as lateral thinking?
 Lateral thinking is concerned with the generation of new ideas. It is also concerned with
breaking out of the concept of prisons of old ideas and use information not for its own sake but
for its effect. In order to achieve an innovative and correct solution, looks for what is different,
makes deliberate jumps, welcomes chance intrusions explores the least likely directions. They
welcomed this challenge and welcomed ‘chance intrusions’ that were seen not just as a
problem, but an opportunity to tip the job their way. They made deliberate jumps and changes.

3. What arenas of creativity are exhibited in this case?

The path to creativity begins by first recognizing all of the ways in which we are or can be
creative. People in organizations can channel their creativity into seven different arenas such as
idea, material, organization, relationship, and event, inner and spontaneous creativity. In the
case the following arenas of creativity manifested:
• Event creativity – producing an event, such as décor of the event
• Organisational creativity – organising people to do the temporary redecoration
• Idea creativity – having an idea to redecorate quickly and temporarily

4. Is this case creative or just plain deceptive? Justify your answer and discuss any ethical
dilemma.

This story is one that can be heard from many entrepreneurs – particularly at the start of their
business life-cycle. Often, businesses are run from home – the lounge or bedroom is the ‘office’
for the company. They then try to make the business appear more legitimate by using things
such as a PO Box number, or various job titles for different roles, even though it is often one
person doing everything. Some people would argue that this may be unethical, entrepreneurs
would argue that this is just necessity.

Case 3

Thanaphol Virasa is a salesperson for a large Thai company. He has a bachelor’s degree in marketing and
is one of the company’s best salespeople. It is likely that Thanaphol will one day become a sales
manager if he stays with the company. However, he secretly hopes to start his own business. Since he
was hired seven years ago, Thanaphol has managed to build a nest egg of 5 million Thai baht (about
170000 Australian dollars). He is now looking for a business that would require no more than 2 million
Thai baht to get started. The rest would be used for operating capital and to keep him going until the
company turns profitable. In the past, Thanaphol has gathered ideas by reading magazines that report
new types of businesses. Last week, Thanaphol read a story that intrigued him. A man on the Malaysian
border has been building ‘bird houses’ so that anyone can get into the lucrative Chinese Bird’s Nest
business. These bird houses are purpose-built, reinforced concrete structures designed for swifts or
swallows to build their nests. The white swiftlet’s nest is a Chinese edible delicacy. Bird’s Nest is a
centuries-old Chinese medication ya n wo or ‘swiftlet’s nest’ ( yan ¼ swiftlet, wo ¼ nest). Swiftlets weave
their nests from long, gooey saliva strands that come from glands under their tongues. The birds coil the
threads of saliva into nests shaped like half a teacup. They attach them high off the ground against the
walls of caves, abandoned apartments and now even small custom-built concrete bird houses. A bird’s
nest factory can now be run by any peasant as long as they are situated near the sea. Although the
benefits of edible bird’s nests are still scientifically disputed, Bird’s Nest has been used for thousands of
years in traditional Chinese medicine and cooking. Bird’s Nest is one of the most valued commodities on
the market today, typically costing about AU$4000 per kilogram. Currently these Bird’s Nest ‘factories’
sell for 300000 Thai baht each. Thanaphol knows that few people can afford to pay this much for a bird
house. He believes a market may exist for cheaper bird houses, in the range of 20000 Thai baht each.
Thanaphol has done the research and believes it would not be too difficult to differentiate his product
from the standard bird house with all the same functionality. The two biggest obstacles will be
marketing and production; that is, getting people to order bird houses from him rather than copying the
design and building it themselves. Thanaphol believes that, with his background, he can handle the
marketing and it should not be too difficult to find someone to handle the construction. Moreover, until
the business takes off, he believes he can continue with his sales job.

QUESTIONS

1. Is anything unique about Thanaphol’s idea? Explain.

Thanapol has a unique idea in the sense that he is finding a niche in the market he wants to
enter. An entrepreneur is making custom bird houses. These draw on centuries-old traditions
and have a high profit potential. The idea has potential.

2. What is the first thing Thanaphol should do to follow up on his idea? Explain.
Thanapol needs to study the market and the buying behaviours of its customers. Is the 20 000
Thai bhat prices affordable to the target customers. What would they be willing to pay more
for? What features matter most to them regarding bird houses? A profile of these buyers would
be useful.
3. When this is done, what else should Thanaphol do? Outline a general course of action for him.
Once Thanapol finds out whether the market has potential, he then must determine if it’s
feasible for him to pursue. A bird house that is insulated and washable would probably be more
expensive. Thanapol must begin to work with the concept to make it appealing to consumers,
both with regards to features and price, while still being profitable to him. At this point,
Thanapol might consider writing a business plan to examine the different elements of his
business that must be in place for him to be successful.