How Elliot Hoffman and the REV Revolutionized the consulting model to include businesses of all sizes.
Elliot Hoffman has been working in the sustainable business industry for more than 40 years. In 1974, he and his wife Gail Horvath founded Just Desserts bakery, which became a model for demonstrating that sustainable practices and community engagement were good for business and also able to make impactful, positive change.
Hoffman’s journey continued with the nonprofit Business Leaders for Sensible Priorities, the business advocacy group New Voice of Business, and now REV, a company he co-founded that provides sustainability education and training to companies of all sizes.
Together, Hoffman’s experience and REV’s cutting-edge model for sustainability consulting have had tremendous results. We sat down with Hoffman to discuss everything from designing new consulting models to the need for disparate groups to come together in the sustainable business community.
Can you tell us about your transition from Just Desserts to REV?
Elliot Hoffman: After Just Desserts, I got involved with Ben [Cohen] from Ben and Jerry’s, and we did Business Leaders for Sensible Priorities for a while, which Ben founded. It was really about mobilizing the power of business to move money from the military to kids and social needs, which was a great thing to do. We worked on that for a couple of years.
In the end, I decided it was important work, but for me, engaging businesses has far more power than moving money from one pocket to the other — especially during the Bush years. We were at a board meeting and I said, “It feels like we’re shooting wooden arrows at a battleship; it’s just not going to happen.”
Basically, I said to Ben that I wanted to create a new organization called New Voice of Business, which would be an NGO that would gather the voices of businesspeople — not just CEOs, but everybody. It would be about creating a business voice that was for positive public policy. A counter-voice to the US Chamber of Commerce, if you will.
So, in 2004, we actually did that, and we were asked to engage with the California Solar Initiative to see if we could help. At the time, it was a $1.8 billion, 10-year rebate program to put 500,000 solar installations up in California. Basically, it was stuck in the [California] Assembly and wasn’t going anywhere; I was asked to engage.
I contacted the San Francisco Chamber of Commerce and the Bay Area Council and got 10 major business organizations to engage with us by saying, “Look, climate change is real. If we don’t do something, we — and our kids — are screwed. This is probably the largest opportunity human beings have ever had to really change the whole energy systems and the whole economic paradigm.”
We continued to get these large business organizations to sign on, and then we got the Committee on Jobs — CEOs from the 30 largest corporations in San Francisco — to all sign on. I went to the president of the Public Utilities Commission, Michael Peevey, and said, “Mike, business wants this. Here are signatures from 200 CEOs of small, midsized, and very large companies, including one conservative Republican.”
Mike said, “Elliot, this is fantastic. We should put more money into it.”
I said, “You’re right — let’s make it $5 billion.”
He said, “Great, let’s make it $3.5 billion.”
And that is how this became the largest solar-power initiative in the history of the United States, and it still is. When businesspeople speak up for positive things, it can seriously move the needle.
I really believe in business. I believe business can be a real power and a force for positive change. I joined the board of Presidio Graduate School back in 2004 or 2005 and got very engaged with the students and faculty. At some point, I decided to design a business to bring the benefits of sustainability to small and midsized enterprises in a way that was affordable, accessible, impactful, and very scalable. This was not about a nice little consulting gig; this was about creating something that could eventually have the power to help move the world. Why else are we here?
That was probably 2009. We took a year to design it — creating a model takes time. We launched our first two beta circles in 2010, which blew my mind. Then, in 2011 or 2012, I said to our team at the time, “Knocking on one door after the other to have them come and sit in these circles is no way to scale a business. It’s been great because we’ve learned a lot, but now we need to think of the right channel to scale.”
How did you develop the model for this? If there were a 20-year-old who had a great idea to change the world, what would you recommend in terms of creating a model to explore it?
EH: First, I listed out a number of criteria that were important to me to bake into this model. It needed to be affordable. What does that mean for a small or midsized company? I hadn’t quite defined that yet, but I had a range in mind. I wanted it to be very profitable. I wanted it to be very inspiring. I wanted it to make a real difference for companies and people. I wanted people who work at REV to be paid very well, and there was something about a shared model. I really started playing with numbers and asking a lot of questions.
First I said, “OK, so how do you make this affordable?” I knew that the one-on-one consulting model wouldn’t work for a small or midsized company. What would it look like if we had eight companies come together and they each paid their own certain amount of money to do this in a group?
So I kept doing iteration after iteration, and then I just said, “OK, let’s give it a try,” after about a year. It was amazing. When we saw the results these organizations got from the first program, I knew we had something.
For the next group, I was having brunch with Mark and Gaye Quinn and I told them what I was doing. Gaye asked if I would have a cup of coffee with her and the CEO of the San Leandro Chamber of Commerce, which then turned into having lunch with the mayor, who said, “We think this is so important for our community and for our smaller businesses that the city of San Leandro is willing to cover 50 percent of your fee for any San Leandro business that goes through your program.”
So, we had what we call a “Circle Preview” where we invited businesses to have a conversation and ask questions about the program. There was one guy in there — Joe Santana, vice president of operations for Mi Rancho Tortilla Factory — who asked great questions and was a total skeptic. He said, “Look, this is going to cost me money. I just have to make a return on the investment.” We went back and forth, and after talking to the owners of the company, Joe finally told me they were in.
Within three months, Joe Santana and Mi Rancho were the poster children for this program. It blew his mind and mine too; we had no clue that the results that we could achieve in such a short period of time would be so stunning. As a small, 80-person company, they saved $165,000 from the bottom line with zero capital expenditures, just by looking at specific parts of their operations.
The city of San Leandro also offered to cover 50 percent of the cost for any company that did energy efficiency improvements as a result of the program. So, Joe and Mi Rancho decided to do a lighting retrofit as well. Their total investment in this entire program, including the $3,000 fee and $14,000 of their investments in the lighting, was $17,000. They dropped $210,000 a year from the company’s bottom line. That is a payback of 29 days with a 1,300 percent ROI, and that was just the second circle that we had ever done, which was in 2010. That $210,000 in savings was an out- of-the-park home run at the time. Now that number is below average for the program; our average savings is closer to $315,000.
So what do you think is driving the success of the program? Why hasn’t anyone else figured out the secret sauce?
EH: I believe the success so far is a combination of things. First, there is a great group of people at REV and the results we are producing are phenomenal. Second, I would like to believe that this is the direction the world is moving in. It has to.
But I’ll also reverse the question and ask, why isn’t it moving faster? I’m really baffled by the lack of uptake in the whole field. Why are people just going about their day-to-day lives when we are facing truly existential issues, from climate and energy to water?
Why is it that we’re not engaging much more quickly? And on the other side of the coin, why aren’t we acting on the reality that the solutions to these challenges are enormous opportunities for a better world and a better economy?
What do you think are the critical elements to actually shifting that paradigm within an industry?
EH: I once had a conversation with a senior-level person in our federal government, and I asked, “What is it going to take to get people on board, to awaken people to the nature of these times, both the challenges and the opportunities?”
He just looked down and said, “You know, I’m sorry, but it’s fear or catastrophe.”
I said, “I’m sorry. I just can’t accept that. We have to be able to inspire people. We have to be able to show them what’s out there from a positive point of view. It will be a sad day if it has to be fear and catastrophe.”
So I don’t know if it’s going to be fear and catastrophe, or if we can inspire people to move, or perhaps some combination of those two that will get people to take action.
Many people and organizations, for-profit and nonprofit, are part of this. But we need to begin to see ourselves as members of the same movement. We need to demonstrate that to policymakers.
This goes back to why it’s so important that companies like ours are quite profitable, because I believe business is absolutely vital to making this shift. Policymakers and others listen to business, and right now they hear mostly from the US Chamber of Commerce, the American Enterprise Institute, and the Club for Growth, which is ready to club us over the head, right? This movement and its individuals need to speak out to their elected officials and to their companies.
What advice do you have for mission-driven entrepreneurs who are just breaking into this?
EH: I believe more deeply than ever that young people ought to really think about, and meditate on, what they are called to do in this lifetime. What would give you real, deep meaning in life? Then, follow it and go create it.
It’s not about being an entrepreneur. There’s no 11th Commandment that says, “Thou shalt own thine own business,” right? That’s not part of the deal. It’s great for some, but I also applaud and hold up as models those we call intrapreneurs. I think intrapreneurs can have an impact in a large entity. What I do as an entrepreneur and what you do as an intrapreneur are both very important.
So wherever it is you land — whether it is your own business or somebody else’s — whatever you do, don’t go there and just march time, because then you’re dying. Do whatever’s going to really bring you joy, happiness, meaning, and fulfillment, because it is there.
I really deeply believe that there is no reason why every human being can’t be engaged in something that gives them meaning and purpose in life. It cannot be about maximization of short-term profitability for a few; that is what’s killing the planet.
Some people take those kinds of statements and say, “Well, you are against capitalism.” You know that’s bullshit. It’s really the way we do capitalism that is destroying the planet. It is designed — unintentionally, I believe — to destroy life, but it can also be used to enhance the well-being of all life. I have no doubt about that.
What is giving you hope?
EH: What gives me hope is that more and more people are waking up to all this stuff we’re talking about. I also know that the forces of “business as usual” are extremely powerful, and they will do whatever they have to do to keep this new paradigm from emerging. We have to show up as a movement, and we have to do whatever we can as individuals, too.
When I see my own kids, who know what’s going on, they’re fearless. There is no whining. They’re like, “We’re in there kicking ass as best we can.” I love the idea of Boomers, Gen Xers, and Millennials working together as a movement to show up and make this happen.
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