ICE CREAM SOCIAL
The Struggle for the Soul of Ben & Jerry's
By Brad Edmondson
Berrett-Koehler Publishers, Inc. Copyright © 2014 Brad Edmondson
All rights reserved.
"We're Completely Insane, and We Need Your Help!"
Jennifer Henderson can't forget the day in 1988 that she met Ben Cohen, Jerry Greenfield, and Jeff Furman. "Ben and Jerry were famous, and I was a young community organizer, so I was excited," she said. "They were starting a new organization, and they wanted a bunch of people to get on board.
"We met in a big room that had a thin wooden divider down the middle. They started talking, and pretty soon Ben got all excited. He was waving his arms and saying all kinds of things, like how he was going to prevent war by printing up a million bumper stickers. He was shouting and getting red in the face and I was thinking, this guy needs professional help. They all had long hair, Ben and Jeff had big wild beards, and they were wearing old T-shirts. Jerry was just sitting there beaming. Jeff was very calm, like he knew some secret reason why this was actually going to work. It was not at all what I expected.
"We took a break, and I went to the other side of the divider and called a girlfriend and told her that I had met these crazy people, and she just wouldn't believe what they were like. I forgot that the divider was really thin, so everybody could hear me. When I came back in, Ben rushed up to me and said, 'Yes! You're right! We're completely insane, and we need your help!' Then they took us down the street to where they had a store, and Ben scooped us all ice cream cones. He didn't introduce himself to the people there or anything. He just walked behind the counter and started in, with everybody staring at him.
"I thought about them all the way home. Jerry was really sweet. Jeff was smart and funny. Ben scared me, but he was also funny, and he said something I couldn't get out of my mind. He said that businesses are the most powerful institutions in the world, and they could become the world's most powerful forces for social change. It seemed to me that they were on to something, so I signed up."
Jennifer started consulting with Ben & Jerry's just as they committed to a radical vision of business. She stayed with the company through an epic struggle, including a change of ownership, as it kept trying to live up to that vision. Although Ben & Jerry's has been a wholly owned subsidiary of the world's second-largest food company since 2000, it is still committed to a different way of doing business. This book is about that difference.
Jennifer has been on the board of directors of Ben & Jerry's for eighteen years. The company's annual sales were $167 million when she showed up; now they are somewhere around $500 million, and the company has devoted customers on every continent except Antarctica. It is the kind of company that might consider setting up a shop there, too.
A few years before Ben Cohen met Jennifer, he decided that scooping ice cream wasn't enough. Ben and Jeff Furman led the company through several years of experimenting, sometimes painfully, with the idea that business could be a force for progressive social change as well as a machine for making money. Ben & Jerry's became a leader in the movement to make businesses more socially responsible, and the company pursued what it called a "double bottom line" while operating as a publicly traded company from 1984 until 2000. They were among the first companies to adopt policies that are now widely known, such as paying a living wage, publishing audited reviews of social and environmental performance, and teaming up with not-for-profit organizations, to name a few.
Ben & Jerry's took radical, crazy-sounding ideas and proved they could work. It made it easier for other companies to try these ideas. And behind all its efforts was one big idea the company called "linked prosperity." As the company prospered, it said, all of the employees, suppliers, customers, and other living things that had contributed to its success should prosper as well.
The company's mission had three parts that were equal and interrelated. It wanted to make the world's best ice cream, to pursue progressive social change, and to provide fair compensation to employees and shareholders alike. Ben & Jerry's stuck to these principles as it became an international brand with passionately dedicated customers. But the company eventually grew beyond the managerial abilities of its board, and after years of struggling, the board was forced to sell the company to Unilever. Ben walked away from the deal with $41 million. Jerry got $9.5 million. Jeff got about $1 million. Yet Ben and Jerry have also said that losing control of their company was one of the worst experiences of their lives, and they still don't want to talk about it. It's a hard subject for Jeff, too.
The social mission did survive the sale, however. The founders and the board accepted Unilever's offer only after negotiating a detailed agreement that guaranteed them a continuing role in the company and gave them legally enforceable powers. Under the agreement, Unilever is the sole shareholder of Ben & Jerry's, and it controls the company's economic and operational decisions. But Ben & Jerry's also has a separate board of directors that is not controlled by Unilever. This board elects its own members, and it exists in perpetuity. It acts as a watchdog and has the legal authority "We're Completely Insane, and We Need Your Help!" 5 to block proposals that lessen product quality or the social mission. As sales increase, investment in the social mission must also increase.
The story of the company's endless pursuit of linked prosperity offers answers to the questions Ben put in Jennifer's mind: What would the world look like if businesses got serious about pursuing social and environmental justice? What if a business was directed toward several equally important goals, with profit being only one of them? And what would happen if social justice activists controlled the board of directors of a large, global enterprise? Could that work?
There's a second, related question. It's the question of legacy. Thousands of business owners do value their employees, the natural environment, and the community at least as highly as their own bank accounts. But investing in these areas rarely produces an immediate financial return, and many investors see social investments as unnecessary costs. So how can socially responsible businesses retain their progressive values after the founding generations retire? Or, to put it another way, how can someone give up control of a successful enterprise without throwing away its purpose?
In this story, the good guys and the bad guys are not always where you might expect them to be. For example, Ben Cohen and Jerry Greenfield are widely known as pioneers of socially responsible business. But the people who wrote the sale agreements that preserved Ben & Jerry's as a socially responsible business were elite corporate lawyers, about as far from Vermont hippies as you can get. Several Unilever executives have become so enthusiastic about the drive for linked prosperity that they have said and done risky things to promote it. And the social mission's most steadfast champion —the only person who consistently fought for it at every stage of the story—describes himself as an activist first, and adds that he has little interest in being a business executive.
Jeff Furman's coworkers often describe him as "the ampersand in Ben & Jerry's." He became friends with Ben and Jerry years before they scooped their first cone. He helped them write the company's first business plan in 1977 by borrowing a similar plan from a pizza joint and substituting the word "cone" whenever that plan used the word "slice." He did a lot of different tasks for the company as it struggled to get going; he joined the company's board in 1982, and he was a key contributor during its decade of rapid growth. He is still on the board in 2014, and since 2010 he has been its chair.
Jeff really is a lawyer and an accountant, but not in an ordinary sense. One Unilever executive refers to him as "a lawyer in disguise." He is a balding guy with a fringe of long hair that he tucks behind his ears. He smiles a lot, trims his beard only occasionally, wears a T-shirt every day—no matter how cold it is—and spends his time working with not-for-profit groups and businesses that have progressive values. And he didn't even meet Ben or Jerry until he was thirty.
Jeff got a degree in accounting in 1965 and a degree in law in 1969, but as the 1970s began, he was not exactly on a career track. In fact, he couldn't keep a job. He was a parole officer until he was given a gun and told to prevent a suspect from fleeing out the back door. He couldn't even bring himself to load the thing. Boston University fired him for spreading the word about an antiwar protest. What he did like was working for the Workers Defense League, representing blue-collar folks and conscientious objectors. That experience gave him strong feelings of compassion for people who hold entry-level jobs. It was a big reason why he later suggested that Ben & Jerry's adopt the policy of paying the company's top employees no more than five times its starting salary, and it is why the company continues to pay a living wage to its employees today.
"We're Completely Insane, and We Need Your Help!" 7 Jeff met Ben Cohen at Highland Community, an innovative school for twenty-five emotionally troubled teenagers near the isolated mountain town of Paradox, New York. Jeff did administrative work, and Ben taught pottery. Naomi Tannen, the school's founder and director, was a powerful influence on both of them. Jeff says that they were Naomi's employees, not her students, but it could have gone either way. "She had a dream, and she pursued it relentlessly," said Jeff. "She was also tolerant of eccentric people, as long as they were pointed in the right direction. I think Ben and I both learned a lot from her example."
Jeff was raised in a Jewish family, and so was Ben; Jeff grew up in Queens, and Ben grew up on Long Island, less than twenty miles away; they both had been cab drivers; they both liked to laugh and do silly things; et cetera, et cetera. Hilarity ensued. Ben soon introduced Jeff to Jerry Greenfield, who had been Ben's best friend since they struggled through the seventh grade together. Jerry was cut from the same cloth. The three men shared ideals that were formed in the 1960s and tempered by Vietnam and Watergate. They were smart and creative but ambivalent toward government, suspicious of big business, painfully aware of injustice, and looking for better ways to live.
The business Ben, Jerry, and Jeff built sprang from these values. Selling ice cream wasn't their real purpose. If it didn't come from the heart, they weren't interested. As the years went by and the business got bigger, they kept pushing for ways to make things more interesting, more political, and more fun. They went farther than they ever thought they would. Calvin Trillin wrote that Ben represented "one of the people who carried the style of the sixties into consumer businesses aimed at their contemporaries, and whose response to success is to express not gratitude for living in a land of opportunity but astonishment at a world so weird that people like themselves are considered respectable businessmen."
For the first five years of their ice cream business, Ben and Jerry found themselves working a lot of eighty-hour weeks, a lifestyle neither of them enjoyed. The money was not that great, either. They briefly decided to sell the business in 1982, when it might have been worth $500,000, and they asked Jeff to help with the legal and financial questions. Jerry moved away from Vermont then, but Ben changed his mind and decided not to sell. (Jeff persuaded Jerry to hold on to 10 percent of the company's stock and stay on as a consultant; Jerry returned to the board of directors in 1990 and stayed until the company was sold in 2000). And then the broker that Ben & Jerry's had hired to sell the business sued for breach of contract and won $100,000.
The moment the judgment was announced, Jeff ran down the street from the courtroom to Merchants Bank in Burlington, Vermont. Ben and Jerry followed close behind, with the county sheriff literally on their heels. The guys persuaded the banker, a friend of theirs, to let them withdraw the entire contents of the company's accounts and give it to them in cash. Then Jeff flew home to New York, where the court couldn't get at the money, with $90,000 on his lap in a paper bag. When he got home, he dumped the money on the bed, turned to his girlfriend, Sara, and said, "Look what I found!" (Maybe he was trying to impress her; in any event, she later married him.) Jeff kept the money in a safe-deposit box until the lawsuit was settled, and then sent it back to Vermont. Ben and Jerry never doubted that he would.
Stories about the early years of Ben & Jerry's are often funny because these guys did not do things the way normal businesspeople do. For example, Jeff shared his Ithaca office with several others, including me and the not-for-profit group that owned the ice cream shop downstairs. Jeff called it a "PartnerShop." He came up with that idea when the board of Ben & Jerry's asked him to manage the franchising of stores. Some of the stores were just normal franchises, where the company licenses its logo, formulas, and other valuable property to someone who uses them to make a profit. But Jeff also thought it would be cool to franchise some stores to not-for-profit organizations that give young people job experience. As a side benefit, Jeff's Ithaca office occasionally filled up with teenagers who were trying to organize a skate park. It wasn't part of a grand design. It was just Jeff's way of using a creative twist to combine two of his interests.
Another World Is Possible
One summer day in 1999, Jeff came into the office above the Ithaca store and made a call on his grimy telephone. I didn't listen to his side of the conversation at first, but then I noticed that he seemed to be getting more serious, and he was using lawyerly words like "share price," "suit," "counter-suit," and "fly to Amsterdam." He also stared at the ceiling after he hung up the phone, the way people do when they've heard upsetting news. He told me that things were not going well at Ben & Jerry's, and that he couldn't go into the details. Then he left.
Ben, Jerry, and Jeff did not want to sell their company. Although they still regarded a lot of their duties as chores, they also enjoyed their success. They were responsible for the jobs of about eight hundred people, many of whom they counted as friends. The business had come from their hearts. They struggled for a year and a half to find some viable alternative to giving up control, but they failed. They settled for Unilever.
In 1999, Ben & Jerry's was rooted in the idea of linked prosperity. It was making progress in a campaign to reduce the environmental impact and increase the sustainability of its business at every stage of its operations, from reducing the nitrogen and phosphorus output at its dairy farms to eliminating bleached paperboard in its containers. It was doing all kinds of things to improve conditions in its factories and its suppliers' farms, and it paid employees a carefully calibrated "living wage" that was well above the market rate. It was trying to "lead with progressive values" in all phases of its business, according to a statement the board adopted in 1997. Jeff feared that all of this might be lost, and the thought was agonizing.
Ben ended up having quadruple bypass heart surgery a few months after the sale went through; the stress of losing his company might have had as much to do with his heart problem as had decades of taste-testing ice cream. Unilever offered Ben and Jerry seats on the post-sale board of directors, but they never took them. Both men are technically employees of Unilever today, but they do not have job descriptions. And Ben can be sharply critical of Unilever—although, as the founders and brand icons, he and Jerry still have some influence on the company that bears their names.
Jeff, on the other hand, stayed on the board. He wanted to try to keep the company's social mission alive. He had invested a great deal of time and effort in the social mission, and he felt responsible for the welfare of employees. In fact, the sale agreements had given him the power to sue Unilever if it didn't live up to its promise to pay a living wage. The agreements also empowered the board to block any changes in the product formula and to ensure that the company would continue to invest in social initiatives. Jeff couldn't just walk away.
In the years that followed the Summer of the Grimy Telephone, Jeff and the other board members of Ben & Jerry's struggled to find effective ways to pursue linked prosperity within the strictures of a huge multinational corporation. They traveled a dangerous, twisting road. They didn't always live up to their responsibilities, and the whole thing almost ended up in court. But after a decade of struggle, Ben & Jerry's and Unilever found ways of working together.
Excerpted from ICE CREAM SOCIAL by Brad Edmondson. Copyright © 2014 Brad Edmondson. Excerpted by permission of Berrett-Koehler Publishers, Inc..
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