Seventh Generation co-founder Jeffrey Hollender is, in our opinion, a model green business innovator. The subject of a Fast Company article and one of the Fast 50 honorees from 2004, Hollender transformed Seventh Generation from a small green cleaning products company into a mainstream cleaning player with $150 million in annual revenue. This week, the Seventh Generation board voted to kick Hollender out of the company. What happened?
Marc Gunther of Greenbiz got a hold of a letter recently sent to Seventh Generation shareholders and employees. The letter explains:
To a large extent, present circumstances mirror those at many other companies whose founders have made the decision to turn over the reins to someone else. As organizations grow, so do their managerial requirements. Eventually these increasing layers of complexity demand the recruitment of experienced professional leadership whose abilities and experiences are required to move forward. This is the crossroads at which Seventh Generation now stands.
It's a vague explanation, to be sure, and Hollender hasn't yet given his side of the story. But Seventh Generation has recently shown signs of plans for major expansion. Chuck Maniscalco, a former executive in charge of the Quaker, Tropicana, and Gatorade businesses at PepsiCo, was hired by Seventh Generation as CEO in June 2009 as part of a plan to grow the company's revenue to $1 billion (Hollender stepped down from the position). Maniscalco resigned in September, but stayed at the company to help manage the transition to a new CEO. Now, in a complicated twist, Maniscalco is a candidate for ... his own job. (He has reportedly clashed with Hollender in the past.)
This all raises the ever-present issue of whether growth can ever be sustainable. Seventh Generation has maintained its integrity as an environmentally responsible company even as it has grown to the point that its products can be found in your neighborhood drug store. But in order to expand further, Seventh Generation seems to think that it needs to dispose of the man who infused the company with the green business values that it champions. Whether Seventh Generation can retain those values after Hollender's departure remains unclear.