Walking the Walk

Jeffrey Swartz, the CEO of the Timberland Co., strode purposefully into a New York office packed with McDonald's executives. Dressed in a blazer, jeans, and Timberland boots, he was there on this mid-August day to convince the fast-food behemoth that it should choose his $1.5 billion shoe and clothing company to provide its new uniforms. The executives waited expectantly for him to unzip a bag and reveal the sleek new prototype.

"We didn't bring any designs," Swartz said flatly. Eyebrows arched. Instead, he launched into an impassioned speech that had virtually nothing to do with clothes or shoes. What Timberland really had to offer McDonald's, Swartz said, was the benefit to the company--and the world at large--of helping it build a unified, motivated, purposeful workforce. "Other people can do uniforms," Swartz said, his Yankee accent asserting itself. "This is about partnership. We can create a partnership together that will be about value and values."

As unorthodox as it sounds, what Swartz was pitching was not Timberland's creativity or craftsmanship, but rather its culture, and the ways that culture could rub off on McDonald's. Growing more and more animated, Swartz talked about how Timberland's employees get 40 hours paid leave every year to pursue volunteer projects. He discussed Serv-a-palooza, Timberland's daylong paroxysm of do-goodism that this year would host 170 service projects in 27 countries, covering 45,000 volunteer hours of work. And he talked about City Year, the nonprofit that Timberland has supported for more than a decade, which brings young people into public service for a year. As for McDonald's, it was part of practically every community in the country, Swartz explained, but was it helping every community?

The room was silent. Swartz couldn't tell whether they thought he was a touchy-feely freak or whether what he said had struck a deep chord. (McDonald's won't make a final decision for many months to come, but Marlena Peleo-Lazar, McDonald's chief creative officer, says she appreciated "the passion he had for his brand.") Yet Swartz was elated all the same. "I told my team to find me 10 more places where I can have this conversation," he said. "No one believes in this more than we do, and that is our competitive advantage."

The "this" that gets Swartz, a third-generation CEO whose grandfather founded the company in 1952, so fired up is expressed in Timberland's slogan: "Boots, Brand, Belief." What Swartz is really trying to do--no kidding--is to use the resources, energy, and profits of a publicly traded footwear-and-apparel company to combat social ills, help the environment, and improve conditions for laborers around the globe. And rather than using his company as a charity, he's using the hard financial metrics of profit, return on investment, and, oh yes, shareholder return, to try to prove that doing good and doing well are actually self-reinforcing notions. The idea of helping others, Swartz believes, is a vision around which he is creating a more productive, efficient, loyal, and committed employee base, which in turn helps produce real results.

So far, Swartz has done a more than respectable job of proving the point. Over the past five years, the company, which sells outdoor-themed clothes, shoes, and accessories, has seen sales grow at a compound annual rate of 9.7% and earnings per share of 20%. Its stock price has risen 64% over the same period. The company is also looked at as a trailblazer by companies many times larger when it comes to corporate social responsibility. "Timberland has one of the best business cultures of any retailer I know," says Kevin Martinez, Home Depot's director of community affairs. "It's because many pieces of that culture are built around service." But Swartz's big ambitions also draw doubters who question whether Timberland's drive for sustainability is itself sustainable in a profit-driven world, whether the amoral world of capitalism and the spiritual world of service can be merged.

Those who think Timberland must choose between profits and passion have not spent much time with Swartz, an earnest, funny, hyperkinetic 45-year-old who can barely sit still, so anxious is he to discuss the beautiful--and profitable--nexus between, in his words, "commerce and justice." Dressed in a wrinkled short-sleeved plaid shirt and a baseball cap turned backward, this CEO of a $1.5 billion company looks and acts in some ways like a kid--albeit one with a lifetime's worth of homework. His words spill forth in a jumble, dotted with self-deprecating jokes and references to literature, the Red Sox, and Judaic texts. "I can see things that are so clear, so desirous, so compelling that I can't be as rational as I should be about them," he says, squirming in his chair. "I see what the outcome should be, and I'm not as good at figuring out on my own how to get there."