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Pure Profit : For Small Companies That Stress Social Values as Much as the Bottom Line, Growing Up Hasn't Been an Easy Task. Just Ask Ben & Jerry's, Patagonia and Starbucks.

February 05, 1995|Peter Carlin | Portland, Ore.-based Peter Carlin is co-author, with Stacy Allison, of "Beyond the Limits: A Woman's Triumph on Everest," published by Little, Brown

Schultz's worker-friendly notions would seem to make Starbucks' kudzu-like growth a source of happiness for those who consider themselves patrons of ethics-driven industries. But on the wings of its success, Starbucks has taken on the features of a particularly vicious bird of prey. Humane businesses do not flourish at the expense of their competitors, some observers insist: The higher you go, the lower you are. But if free-market competition is unethical, does that mean every successful company is by definition socially irresponsible? Is it possible for any company built on small-business ideals to grow into a big business without sacrificing its integrity?

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A few days before the stockholder meeting last year, Ben & Jerry's held a press conference at its Waterbury, Vt., headquarters to announce Ben Cohen's resignation as chief executive officer. As he acknowledged, the daily machinations of a $150 million company had grown too complex for any "multi-college dropout and failed pottery teacher" to run. But before the mood could become too dour, Cohen's partner, Jerry Greenfield, appeared, holding a poster that showed the two ice cream moguls scowling under top hats and pointing their fingers like chubby Uncle Sams. "Yo!" read the tag line. "We want \o7 you \f7 to be our CEO!" In order to find a new boss, Cohen explained, the company was holding an essay contest. Whoever wrote the best 100-word essay describing why he or she would make a good Ben & Jerry's CEO, he swore, would win the job.

Everyone got a good chuckle out of that one, but behind the frivolity lurked a much more traditional business story. Confronting internal management problems, a shrinking domestic market and aggressive plans for international expansion, the Ben & Jerry's board of directors (of which Cohen and Greenfield are, respectively, chair and vice-chair) had hired a corporate headhunter to find an experienced chief executive. And when the time came to extend a salary offer, the board intended to break B&J tradition by proffering a package worth more, maybe much more, than the $150,000 salary of President and Chief Operating Officer Chuck Lacy, which sum adheres to the company salary cap of seven times the $8 an hour paid to entry-level workers. To some members of Ben & Jerry's extended family, this shift toward traditional corporate behavior was nothing less than an outrage. And when the media finished chortling over the essay contest, some reporters cast a dark eye on the dismantled 7-to-1 ratio, asserting angrily that the once-lovable ice cream kings had not only broken a promise to their own people but also betrayed a kind of public trust.

Which, on one level, seems ludicrous. As long as Ben & Jerry's continues pumping out New York Super Fudge Chunk and Wavy Gravy, why should an ice cream lover ponder the ethics of internal corporate machinations? Maybe because Cohen and Greenfield have spent the past 17 years pondering ethics. And as they are discovering, it's not always easy to be the real-life subject of a folk tale.

The Legend of Ben & Jerry is recorded in a promotional film shown on tours of the company's hilltop factory (the 250,000 annual visitors make Ben & Jerry's Waterbury plant the most popular destination in Vermont). Combining still photos, clumsy home videos and giggling dialogue by the founders themselves, the film tells an inspirational story of alternative entrepreneurial triumph: In 1978, two boyhood chums from Long Island, N.Y., send away for a $5 correspondence course to learn how to make ice cream, then open shop in a converted gas station in collegiate Burlington, Vt. Success comes quickly, thanks to the boys' commitment to quality and their ability to mix wild flavors with wacky promotions and giveaways. By 1981, Ben & Jerry's is honored by Time magazine as "the best ice cream in the world," and Cohen and Greenfield expand their horizons, hand-packing pints for sale all around New England. Evil Big Business threatens when corporate behemoth Pillsbury, owners of the leading super-premium ice cream, Haagen-Dazs, tries to do in the aspiring hippies by forcing grocery distributors to choose between the leading brand and the upstarts from Vermont. But the puckish Cohen and Greenfield take their case for fair play directly to the people with the war cry, "What's the Doughboy Afraid of?" Pillsbury backs down, and the barrage of favorable publicity rockets Ben & Jerry's into every market in the nation.

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