Inside Seventh Generation's Firing of Founder Jeffrey Hollender

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I was both shocked and saddened when the news broke yesterday that Seventh Generation's longtime co-founder and ex-CEO Jeffrey Hollender had just been fired by the company's board of directors. A little more than a month after the green cleaning products company's new CEO, PepsiCo expat Chuck Maniscalco, quietly and abruptly resigned after only a year-plus on the job, "the Board has decided to end the company’s employment relationship with Jeffrey," wrote Seventh Generation chairman Peter Graham in a letter to the company's stakeholders.

My initial reaction was that it was Hollender's mouth that put the final nail in the coffin. In all my years as a business journalist, I have never met a chief executive as refreshingly candid as Hollender.

Last fall, when I traveled to his adopted hometown of Burlington, Vermont to report a story on ethical capitalism, I was impressed with his ability to be so ruthlessly transparent about his own shortcomings, his willingness to be self-critical, and his appetite for political incorrectness. Over the course of our many discussions he told me things he probably shouldn't have: how Seventh Generation, under his leadership, didn't make money for 13 years because he was perpetually torn between doing the right thing and the company’s bottom line. How until corporate money stopped polluting politics, our country's economic and environmental issues will be never be resolved. How short term gains on Wall Street needed to be taxed 99%. How companies like PepsiCo were trotting out healthy eating programs while simultaneously making the public sick with its products.

"Almost every day I ask myself, 'Am I devoting myself to the right thing that will make the biggest difference?'" Hollender posed to me back then, several months after hiring Maniscalco to take over his post. After two decades in which he grew his crunchy company into category game changer—and himself from a Park Avenue kid who sold seminars on "How To Lose Your Brooklyn Accent" to an industry pioneer—Hollender's interests were starting to drift elsewhere as the country's environmental and economic problems continued to spiral out of control. "We really need a movement to address these systemic issues," he told me, clearly feeling the urges of an activist, more than a business man. "It will require a full scale social movement like the civil rights or women's equality movement."

As he got more involved with other activists—combating the Chamber of Commerce's aggressive lobby against global warning legislation, helping to propagate the Business Alliance for Local Living Economies—his day-to-day focus on cleaning up the cleaning products industry was getting pushed to the sidelines. "There might have been a time where I deleted a financial report without reading it," he conceded to me. "That was a telltale sign that that's not what you want the CEO of your company to be doing." After rummaging through some 70 candidates to take his post, he finally handpicked PepsiCo's Maniscalco. While Maniscalco could take the $150 million business to its ambitious goal of $1 billion, Hollender—now executive chair of the board of Seventh Generation—had the time to immerse himself in activism. "After an hour of being together we knew this would be the right thing," Hollender told me back then of his new replacement. "It's like a little love story."

Unfortunately, it appears the love affair didn't last long. While Hollender isn't talking yet and Seventh Generation is sticking to its company line, it turns out it most likely wasn't Hollender’s unmuzzled voice that got him fired after all. According to Seventh Generation, it was a classic changing of the guards scenario. "Letting go of something you've been vested in completely is extraordinarily difficult to do," Chrystie Heimert, Seventh Generation's spokesperson told me yesterday. Evidently back in September when Maniscalco resigned after a mere 15 months, the board also told Hollender to take a leave of absence—before making that leave permanent. "It's been a very difficult period of time where there was some ambiguity around accountability and authority," says Heimert, inferring that the door is open for Maniscalco to potentially come back, now that Hollender is gone. "Our business demands one decision maker at the top."

Last fall, Hollender admitted that passing the reins would be a dicey move. "Fifty percent of people who stepped into a founder role failed within the first 12 months, so I had to be very mindful of how to do this the right way," he told me then. He's not talking yet, but knowing Hollender, he's most likely devastated his transition became the latest proof point in that statistic. But whoever ultimately takes the helm of Seventh Generation—Maniscalco is staying on until they find a new CEO—will hopefully find a way to scale the company with Hollender's ethos intact. As for Hollender, who's still an equity shareholder of Seventh Generation (and whose wife Sheila is an employee and is still on the company's board of directors), I have no doubt this may ultimately be a blessing in disguise. The umbilical chord has finally been completely cut so Hollender can begin his next chapter. With his convictions and his chutzpah, I hope it's on the front lines of that next social movement that is so urgently necessary.

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6 Comments

  • Lisa Nirell

    When I interviewed Jeffrey in 2008 for my latest book, I, too, was impressed by his candor and approachability. Seventh Generation's values drove their strategy and marketing decisions on a daily basis.The latest whitewashed blog post on the Seventh Generation site certainly emanated from a different voice: http://tinyurl.com/7genblog

    I especially chuckled at this comment: "Jeffrey Hollender's employment relationship with the company has ended." Are you kidding me? He was an early founder, not a staff member with an employment relationship.

    Ladies and gentlemen, Jeffrey has left the building and the corporate legal beagles have arrived.

    I wish Jeffrey all the best in his new endeavors. He has much to give to the world.

    Lisa Nirell
    Author, EnergizeGrowth NOW: The Marketing Guide to a Wealthy Company
    http://blog.energizegrowth.com

  • Mary L. Poor

    I have been a customer for many years and appreciated the ethical philosophy that Jeffrey gave to the company. I have seen other companies go bad when they change hands and I hope this doesn't happen here. I wish Jeffrey the most success in his new ventures...we need people like him in the business world. However, I worry about the company..having someone from Pepsico in charge?? We shall see.

  • Allison Manley

    I think the world needs more Jeffreys. Contact me . . . I'd love to work for you in your new adventures!

  • vermontfarmtable

    The world can use Jeffrey's passion, experience, and thought leadership in so many ways - it is exciting to envision where this new opening will lead! I once read that the ingredients for success are: working hard, being lucky and staying alive - Jeffery still has all three.

  • Carol Sanford

    As a shareholder in Seventh Generation, who heard about the decision after the fact, I am not worried about Jeffrey. I am asking to have full transparency on the event. It does not feel like a traditional transition of Founder to new leadership. I have supported such transiitons with many companies as a consultant and did so in this case, working with SVG for almost five years. For the company to keep the Ethos in tact as you say, Danielle, it must have full transparency; just as you speak of how Jeffrey brought such for himself— warts and all. Show me the warts please.
    Carol Sanford, The Responsible Business, which includes many stories of the extraordinarily openness and transparency of Jeffrey and SVG in recent years. Thanks for the story

  • koann Skrzyniarz

    I concur that this will be the best thing for Jeffrey. He has done a remarkable thing in building Seventh Generation as a business and brand to the point he has taken it, and will do more to have impact in shifting the shape of 'business as usual' now that he is freed up of responsibility for this one business. As a mother of two teens, and an entrepreneur, I understand how hard it is to let go, but that is the nature of life, and I look forward to seeing what shape Jeffrey's activities take in his next chapter.