Green Mountain Coffee’s Bob Stiller Shares His Best Advice From 4 Decades of Business-Building

Bob Stiller, the longtime CEO of Green Mountain Coffee, always had an eye for offbeat opportunities. In the 1970s, he launched E-Z Wider rolling papers to cater to marijuana smokers who wanted wider rolling papers than what was already on the market. Stiller’s timing was good, and when he sold the company in 1980, he personally pocketed $3.1 million.

As Stiller recounts in his forthcoming book Better & Better: Creating a Culture of Purpose, Excellence, and Transformative Human Engagement (out September 6 from McGraw Hill), during a ski trip in Vermont, he discovered Green Mountain Coffee Roasters. The cafe in Waitsfield, Vermont, roasted its own beans long before specialty coffee roasters were common, and Stiller’s first sip of Green Mountain coffee was eye-opening. He spotted his next opportunity in Green Mountain’s premium coffee beans and grounds, and bought and reincorporated the business in 1981.

Under Stiller, Green Mountain made environmental sustainability and community engagement a priority from the start–embracing the principles of corporate social responsibility (CSR) before many people talked about them. In 2000, the company became one of the first major coffee companies to join the Fair Trade movement, and it had a longstanding practice of donating 5 percent of its pretax profits to charitable causes.

But that didn’t get in the way of success: The company went public on the Nasdaq in 1993, and as the stock price soared in the 2000s, many employees became millionaires. In 2006, Green Mountain bought single-serving coffee machine company Keurig. One year later, Stiller handed the CEO reins over to Larry Blanford, who had been an executive at large consumer brands.

In Stiller’s telling, the pressures of rapid growth and a leadership transition seemed to erode the company’s culture and values. The company was later subject to a short-selling campaign and criticized for the environmental impact of its single-serve K-cups. Stiller left the board in 2013, and in 2016, the company was bought for $13.9 billion and taken private by JAB Holding, which owns Peet’s Coffee, among other brands.

In this conversation with Inc., Stiller explains what he wishes he’d done differently, and why CSR still matters.

When Green Mountain was starting out in the 1980s, people weren’t really talking about the environment and sustainability. How did you realize this was something that needed to be part of the business?

In the late ’80s, a bunch of the employees wanted to start an environmental committee. They redesigned the shipping boxes and were much more conscious of energy. It created a passion in them, and they were much more engaged in the business and wanting to make a difference in the world. Later, our drivers developed a no-idle policy so we would save gas. If that was handed down from the top, how many people would do it? It’s a different thing when it comes from the employees.

I always felt it was important to co-create something. If somebody shares in the deciding of what to do, they’re much more bought into its success. I also saw that, when I had a great idea, whenever I shared that idea with someone, we improved it. The more people that you involve in something, the more creative the solution is going to be. The trick is having everybody understand what the mission is and the strategies of a company so that they realize they’re a part of that and make a contribution.

When we started giving 5 percent of our pre-tax profits to causes, it became: the more money we make, the more good we are doing in the world. That was a lot more motivational to improve our processes and organization.

CSR goals and other things you pioneered became mainstream in the 2000s. Now they’re under attack. What advice do you have for entrepreneurs trying to navigate this world right now?

If you look at CSR, what is it? It’s taking care of your employees, your stakeholders, and the environment. A lot of these initiatives just make business sense. We donated coffee to nonprofits. Was that CSR or marketing? People who were tasting our coffee developed a relationship with it. If they like it, they go buy it, but they also appreciate that we care about what they’re doing.

We looked through our supply chain for efforts that would help our business. There had to be some indirect connection, [such as] donating to a local food bank or working with the farmers and their communities. We gave everybody an hour off a week to volunteer. Some people built that up. This one guy took a week off and went to Costa Rica to work in a coffee community.

Look at areas your business touches and what can be done with that. You might help make your industry more effective. If you’re starting a business, you depend on a lot of people in the community to support you. How can you support the community in return?

We got little pushback in the early ’90s, when we went public. But I would make the case that it really drove our success. Torrey Project looked at companies for 20 years, and the ones that engage their stakeholders outperform the S&P by 100 percent. Somebody might say in the short term, this is a little more expensive, but the long-term benefits are dramatically better.

Green Mountain was known for generous education benefits. Why was that important to you?

Wages are generally one of the bigger expenses of a company. People always look for ways to cut the expense. I’m much more, yeah, it’s your biggest expense, let’s make it as effective as it can be: give them training, teach them meditation, teach them budgeting. I remember we even had babysitting classes.

What does that have to do with the business? It helps them be much more creative, a better person, and a better employee. There’s no leaving your troubles at home and coming to work. I think really supporting of your employees, and then your stakeholders, it all makes sense. If you don’t care about somebody, why should they care about you?

When the Keurig coffee makers took off, there was a lot of backlash to the trash generated by single-serving K-cups. Is there anything you would have done differently?

There was certainly an impact on the environment. We did everything we could to minimize that impact. We did a study to see what the impact was. If you looked at coffee waste, and the ramifications of that coffee waste with energy, crops, and transportation, it really was less of an impact.

I feel overall we made a positive impact with the company. It reminds me of when we were doing a lot of Fair Trade coffee. We got pushback from some Fair Trade companies: How could we sell regular coffee? I think you need to be successful as an organization, first and foremost. We needed to have a complete coffee offering. We got into [food services company] Sodexo with our regular coffee, and then a couple of years later, they switched to Fair Trade. You’ve got to do what’s right to build the strength of your company.

Succession is a big concern for many founders. You write in your book that Keurig Green Mountain, as it was called at the time, lost its way when you brought in a new CEO. What should others do differently?

We were growing to be a multi-billion dollar company, and we wanted somebody with that experience. I was kind of burned out and very naive [to think] that the person I hired would work with me and do things my way. It didn’t really occur to me they would want to take their own path. I never really did a search or figured out what the competencies should be.

In hindsight, I would do an Appreciative Inquiry summit with the company leadership and board, and ask everybody, why are we successful? What is it that drives our success? What areas might we do better? Really come up with a plan of how we want to go forward, and then get somebody that will accept that and believes in what we were doing versus having these practices being foreign to them.

It’s amazing how often it doesn’t work as well as you’d think. I would say onboarding–understanding what works and getting them to be really part of the team–is as important as finding somebody with the right experience. You need to be sure your company works for that person as well. Often people will just focus on what needs to get done and do it, versus thinking, I have to do it with this organization. The organization is the tool to do it.