But Berry says he countered the powers at Target by saying, "Look, this is about choices. If you walk into your grocery store tomorrow, you're going to see a choice of organic produce or nonorganic produce. They're not saying, 'Don't touch that carrot!' If you want to make a difference to the environment, you'll spend a little more. Here's a choice. That's all it is."
Berry can make a passionate argument about why and how Target could make the shift to organic right now. How then does he reconcile that with his decision that it's too risky for his company to make that shift?
Especially when, as it turns out, the Apparel Source could afford to change its shirts. When pressed, Berry admits that on the $6.99 cotton shirts that the Apparel Source sells to Target for $3.70, his company makes a gross profit of 5% to 18%, depending on where the shirts are manufactured. (The cost is lower on those made in Pakistan.)
If Berry and Clark wanted to, they could earmark a portion of the most profitable of those $6.99 shirts for introducing a blend of 3% organic cotton like the one used by some large companies. The additional cost of using a 3% blend would amount to 10¢ a garment, Berry says. If the company ate that cost, it would still be left with a slender profit.
Such a shift is indeed theoretically possible, as Berry acknowledges. But he also admits that he's never fully explored it. Had he done so, he might have discovered other advantages--though far from certain ones--to surrendering some of his profits. By acting on his own initiative, for example, the company might find itself first in line if Target eventually decides to jump on the blended-cotton bandwagon. The Apparel Source would certainly be better positioned than other vendors, who would need time to line up organic suppliers. That readiness could translate into extra orders. Granted, that's only a prospect, and a long-term one. For now there's no guarantee that the company's profits would ever recover.
At breakfast at a restaurant overlooking the Seattle skyline, Berry comments that he tries hard to engage in a "right livelihood," the fifth step of the eightfold path in Buddhist teachings, which advises that we should "earn our living in such a way as to entail no evil consequences. To seek that employment to which we can give our complete enthusiasm and devotion."
"That step has got me stuck," says Berry.
But Berry isn't stuck. Not really. He's decided that the riskiness of making the shift to an organic-cotton blend outweighs the importance of his environmental mission. It's a reflexive part of the entrepreneurial mentality to see profits as untouchable, so it's no wonder that "the bottom line" becomes the ultimate defense for any uncomfortable decision . Nobody's going to fault you for wanting to make money, after all. But the question is more delicate: Are there times when an entrepreneur's personal passion justifies putting profits at substantial risk?
If Berry doesn't want to take that risk, he shouldn't be surprised if Target doesn't want to, either. And he also should understand why customers may not want to foot the bill for his environmental conscience. But Berry could put his margins where his mouth is, cut into those margins, and change the company's course.
Berry says that his wife, Melany , places the environmental priority "right up there with our children." A shift to organic cotton might help him more easily answer the question she posed when she first learned of the environmental damage the industry was causing: "What do you want your lasting impact to be?"
Jeffrey L. Seglin is a fellow at the Center for the Study of Values in Public Life at Harvard University.
Readers' debate
Did a CEO 'place the company's reputation in jeopardy' by helping a troubled employee?
The most recent Black and White column, " The Savior Complex" (February), argued that a CEO who had stepped in to aid an employee with a personal problem might have been motivated more by a desire to "feel better about himself" than he was by a sincere intent to help out. The CEO explained why he had sent an alcoholic employee for treatment--not once, but twice--despite the fact that the employee's failure to show up for work cost the $14-million company more than $100,000. In making his decision, the CEO admitted that he had sidestepped advice from people who were knowledgeable about substance abuse--namely, that the employee would have a better shot at recovery if he were fired. Readers agreed that CEOs must draw a line in such situations, but they didn't agree about where that line should be drawn.
"The CEO had a good heart, but at times the head must rule," wrote Yvette McManus, owner of Yvette's Designs in Sterling, in Lufkin, Tex. "He enabled the alcoholic with support and placed the company's reputation in jeopardy. No winners in that ball game."
Not that there wasn't something "noble and wise" in what the CEO did, as Dick Gray, president of Xtension Technologies, in Laguna Hills, Calif., put it. "But at some point," he added, "every executive must weigh the option of cutting loose an employee who can't adapt to a life without a crutch."
But where is that point? Peter Johnson, president of a technology-consulting firm in Bethesda, Md., believes that a business owner should "try to show a human touch, but not a hug." He admits, however, that making that distinction requires straddling another fine line. "I think of the shareholders, and I think of why the business exists, before spending its time and money on employee disasters. Never take one of these 'helping' campaigns off the business playing field and start helping the employee with your personal time or resources. That is not help."
Indeed, the CEO's mistake was in believing that he knew what would help, offers Stephan Cludts, a student at the Centre for Economics and Ethics at the Catholic University of Leuven, Belgium. "It's possible to help one's employees, even if this has a cost," he says. But "the CEO should have taken advice from people who know how to deal with this kind of problem."
