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Interface's Evergreen Services Agreement

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Oliva Rogelio, James Quinn

Harvard Business School 

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Interface's Evergreen Services Agreement

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Last year covered in case 


In an attempt to reduce its ecological footprint, Interface Americas, a leading manufacturer of commercial carpet tile, has launched the Evergreen Services Agreement (ESA)--a lease agreement that provides would-be carpet purchasers with comprehensive floor-covering services (color, texture, warmth, beauty, acoustics, and safety). Under ESA, Interface retains ownership of all carpet material, thereby ensuring proper recycling. Despite active media attention and a lot of interested calls from potential buyers, Interface is having difficulty selling ESA. CEO Dan Hendrix is at a crossroad and must decide whether to continue support for ESA or to focus on other initiatives. This case, grounded in a failed negotiation with the University of Texas, Houston, details a discussion of the difficulties of structuring a long-term lease agreement, defining a new service value proposition for the customer, and developing a sustainable business model for product-related services.

Teaching note

  • N/A

Key Management Reading

  • Ambec, S. & Lanoie, P. (2008). Does it pay to be green? A systematic overview. Academy of Management Perspectives. 45-62
  • Reinhardt, F. (1999). Bringing the Environment Down to Earth. Harvard Business Review. July; 149-157 

    Other Readings

    • Senge, Peter & Carstedt, Goran. (2001). Innovating Our Way to the Next Industrial Revolution. Sloan Management Review, 42(2): 24-38.
    • Illustrating the Financial Benefits of Green Chemistry; Larson, Andrea. Darden Business Publishing, 2006. 

      This technical note forms the basis of a discussion on the economic value added of green chemistry principles. Students can learn how to: (1) increase net profit operating after tax (NOPAT) by increasing sales; (2) increase NOPAT by decreasing operating expenses; (3) reduce weighted average cost capital (WACC), driving down risk by decreasing risk perceived by capital providers; and (4) reduce invested capital. A grid showing green chemistry principals and how adhering to each might affect the bottom line provides an excellent context in which to discuss business strategies.

    Audio/Visual Material

    Discussion Questions

    • N/A 

        Green Chemistry Principle

        • Principle 1 Prevention
        • Principle 3 Less Hazardous Chemical Syntheses 
        • Principle 6 Design for Energy Efficiency 
        • Principle 10 Design for Degradation

        Textiles and Fibers

        Teaching Topic
        Corporate citizenship
        Corporate governance and accountability
        Environmental issues
        Organizational design and change
        Social marketing
        Social needs as business opportunity

        Management Discipline

        Business Logic
        Redefining markets
        Product differentiation

        Environmental Issue

        North America

        Self Identified as Green Chemistry?

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