This is Part 2 of a series for Fortune.com by Jim Stengel, former global CMO of Procter & Gamble and author of Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies. In today’s Guest Post and in four more over the next four Fridays, Jim digs into the best practices of the best ideal-based companies and explores how they outgrow their competition.
FORTUNE — Method designs and markets naturally derived cleaning products. It is a David in the land of Goliaths like P&G, Clorox , S.C. Johnson and Unilever . Method’s chic packaging and colorful displays at Target , its key retail partner, make some consumers think Method is Target’s store brand. Mention that if you want to annoy Eric Ryan or Adam Lowry, the buddies from childhood who founded Method in their hometown of San Francisco 14 years ago.
Today, Method employees embrace a Brand Ideal, or Brand Purpose, as central to their enterprise. Method’s Brand Ideal is to champion healthy cleaning in the home while working to alter what its founders call “dirty” business practices.
An ideals-based business philosophy is not about trading off traditional indicators of success in lieu of pursuing an ideal. It’s about pursuing success and an ideal. And a new plant and distribution center that Method is constructing on the south side of Chicago reflect that. Until now, all Method products have been made by contract manufacturers. For its first manufacturing facility, Method, now owned by Belgium-based Ecover, is investing more than $25 million. That’s an enormous bet for a business with less than $200 million in annual sales.
The new venture, which will double the size of Method’s workforce, speaks volumes about the company’s Brand Ideal. In planning its first manufacturing facility, Method identified 150 potential sites in the Midwest — then eliminated most of them in order to follow its mantra: “No cornfields.” Co-founder Lowry explains: “What’s the point of building a world-class sustainable manufacturing facility if it’s not also contributing positively to the community around it and helping to revitalize an urban environment?” Lowry, 39, says he wants to create a model for “what manufacturing and urban renewal can look like in the 21st century.”
Method eventually chose Chicago’s Pullman neighborhood. The large empty tract at the intersection of East 111th Street and I-94 has no glamor, but it allows Method to be part of a community on the rise. The Method team was also inspired by the legacy of George Pullman. In the 1880s, Pullman developed this area into the first planned industrial community in the U.S.
To foster community engagement, Method is creating a park-like area around the plant. Greenhouses on the roof will have Method partners growing fresh vegetables to sell locally.
Meanwhile, awnings in the parking lot will be actual solar panels. So, about half the power needed to run the Method plant will be self-generated.
Method could have done this giant project much more cheaply by paving over a cornfield. But now the company has advocates like Chicago Mayor Rahm Emanuel, who has hailed Method’s arrival as one of the most significant economic events in the recent history of the South Side of Chicago. And Unilever CEO Paul Polman says this about Method’s bold undertaking: “Don’t mention them as being bigger or smaller, by the revenues they have. Measure them by the influence they have.”
For seven years until 2008, Jim Stengel was the chief global marketing officer at Procter & Gamble , where he oversaw an $8 billion advertising budget and 7,000 employees. Now heading a consulting firm/think tank aptly called The Jim Stengel Company, he advises companies on how to grow globally by driving ideals. He’s the author of Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies, which uses a 10-year study involving 50,000 brands to show how at the best companies, financial performance relates to an ability to connect with fundamental human emotions, values and greater purposes. Stengel, 58, is also an adjunct professor at the UCLA Anderson School of Management and on the board of directors of AOL . He’s writing this series for Fortune.com with Chris Allen, the Arthur Beerman Professor of Marketing at the University of Cincinnati.
