If I were Jeffrey Hollander, CEO, at that meeting on the baby wipes dilemma, I would begin by taking a mental note of the failure of Seventh Generation’s to deliver a product of the quality our business was built upon. There should be a mechanism to deem unacceptable placing a product on the market containing ingredients we identified as not responsible. How did this product get through our value filters? How can we make sure that never happens again? Those questions are to be answered at the right place and time.
Once those thoughts about making sure we don’t fall into this trap again pass, it’s time to face the problem with the cards we have in our hands. We can’t change the past. We must acknowledge that the conventional ingredients baby wipes product is currently on the market. This dilemma in fact requires 2 decisions to be made. First, whether to take the conventional wipes off the shelves right away or not. Second, when the stocks of conventional wipes run out, what should the next product on the shelves be?
The quality of a decision is only as good as the information you based yourself upon. I focus on getting the right data from the right people first. Next, when making the decision, many focus on choosing the best end result. The end justifies the means goes the saying. In this case, the end results are protected revenues or protected business values and reputation. Choose your priority and you have an answer. But what about choosing both?
Business decisions are never quite so black or white. As Rodger Martin writes in his book “The Opposable Mind”, most often there are means to reconcile both conflicting ideals in a single integrative answer. So the way to respond to this particular dilemma, is more about figuring out what will allow 7th Generation to cater to both seemingly opposite choices between revenues and values.
With respect to this baby wipes case, the first question is: should we take the products off the shelves now? My response would be to ask the proponents for the immediate removal (Marketing and Consumer relations) to study the financials. I would ask them: “Do you think we can afford to take the products off the shelves now? How many days do we have to keep them on the shelves to maintain acceptable revenues and good relationships with our vendors.” The team should agree with the head of Sales and the head of Finance and Operations timeframe ranging from 0 to 30 days for a minimum of revenue to be made with the conventional wipes. Inversely, I would ask the proponents of insuring revenues, what would this mean to the reputation of the business in the long term? Maybe the could even put a financial value on that?
If there is no financial revenue requirement nor any major consequence with vendor relationships, then I would reinstate the importance of our value based mission at 7th Generation. And, how it should influence decisions such as this one. Then I would ask if my team agrees with the idea of taking the conventional product off the shelves as soon as possible. Furthermore, I would personally write a simple mea culpa letter on our website to reassure clients that the right mechanisms to insure our high product quality standards and values will be improved and upheld. That said, a well founded public company like 7th Generation should have enough financial reserves to take a short term hit in baby wipes sales and recuperate it with higher sales in another product line. Live, learn, move on. End of story.
For the sake of the discussion, let’s suppose that the team realized that they absolutely needed the revenues all the way through to maintain the business afloat or to maintain good product placement on the vendor shelves. Both unlikely, but possible. The answer to the first question thus requires the conventional product to remain on the shelves to generate revenue until the timeframe is passed. By the way, recycling or throwing out the products on the shelves and the logistics implied in taking the products back could also justify letting them on the market not to create a bigger environmental impact.
Nonetheless, we are now to answer question number two: what’s the next product to be put on the shelves when the 30-60 days left of conventional product runs out? Many pieces of information remain missing. In this scheme of things, we have to ask the timeframe questions again. What is the latest time at which we can make the call to have more products on the shelves? Do we have 30 days to work on integrative solutions, such as producing the existing natural ingredients formula or the new formula?
The case leads on that there is some time before choosing to reorder conventional wipes. In fact, no matter what the financial or given timeframe, we should seek to understand the source problem with our manufacturer producing our blend of baby wipes. Why did the manufacturer choose to produce only conventional wipes? Is it a production problem or their supplier’s problem? Can we help? Could the original manufacturer be persuaded into running our natural ingredients line again? Could we simply solve this production problem with better planning on our part? What if we were to present the idea that we would no longer buy conventional ingredients wipes, would that have an impact on their business income? Should our financial terms make it more interesting for him to continue our product line? What’s the business case on investing in his capacity to insure our production runs? Basically, can we find terms to agree on making the natural ingredients baby wipes?
In parallel, we should also have multiple manufacturing resources for our products. Are there any other manufacturers that are capable of making the baby wipes with natural ingredients? Could we make sure to have a mix of supply coming from different manufacturers to reduce the risks in case of stoppage? Insuring a better relationship with our manufacturers or suppliers is key to getting the 7th Generation quality product on the shelves. And in the best of cases, working with manufacturers could solve the dilemma by putting back the natural ingredients baby wipes on the shelves. That would give our product development team time to come up with the next formula.
As you can see, I would proactively do everything possible not to have to buy more conventional ingredients wipes. Again, let’s postulate that there is a definite need to make revenues on baby wipes or else the company faces bankruptcy (seems impossible with 50 product lines), and that there is absolutely no chance that negotiations with our current manufacturer nor future manufacturers could bring back natural ingredients production. No way, no how (unlikely). And worse of all, we have to make the decision to reorder the conventional wipes right now (improbable). This is where integrative thinking ideas run out, and I would buy more conventional ingredients wipes because that would be the only way to save the company. Sidestepping our values in providing a lesser product is possible if the product is legal and safe. But let’s make sure to be transparent about it and never let it happen again.
Let’s recap. Step zero, create mental note to find a place and time to figure out how we got here so it doesn’t happen again next time. Step one, get the team to agree upon the financial severity of the dilemma and the timeframes for action. Step two, reinforce to employees and clients the values and principles by which our company bases its decisions, i.e. our mission: “We are committed to becoming the world’s most trusted brand of authentic, safe, and environmentally responsible products for a healthy home.” Third, work towards creative integrative solutions such as better manufacturer relationships and multiple production options. These two elements are at the heart of the problem and could be part of the solution in the short term not to have to reorder unwanted products. Step four, if all else fails, keep the company alive and keep working on the solutions to regain revenues and client trust.