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Religious CEOs: Timberland's Jeffrey Swartz


"Doing well and doing good" comes naturally to a leader as devoted to Judaism as he is to the company.

When your Timberland (TBL) boots hit the ground, whether that's in far flung locales or the nearest concrete jungle, CEO Jeffrey Swartz hopes the footprints left behind reflect a company dedicated to ideals beyond just buttressing the bottom line.

Swartz, whose grandfather Nathan founded Timberland in 1952, imagines a company that manufactures premier shoes and accessories, but also strives to better the world in which its company operates: improving the environment as well as the conditions of workers the world over.

"Commerce and justice don't have to be two different ideas," the 50-year-old executive told Stephen Colbert of The Colbert Report. "You can make a living, create wealth for shareholders, and you can have a positive social impact. You don't need to destroy the environment."

Swartz, often dressed simply in a baseball cap and jeans, wasn't always so committed to this touchy-feely, eco-friendly approach to business. In fact, for most of his life, Swartz was a self-described over-educated, watered-down entrepreneur.

He had attended the nation's finest schools -- Phillips Academy, Brown University, Dartmouth College -- and inherited a powerful retailer to run, but felt, as he told Fast Company in a December 2007 profile, like little more than "a trained seal."

But that all changed with a simple decision to volunteer some of his time. In 1989, along with nine employees, Swartz helped clean up a residence for troubled teens. There, he met a young man who asked the pedigreed executive what, exactly, he did to earn a paycheck.

"I'm the COO," Swartz told the teenager. "He says, 'What do you really do?' I say, 'I'm responsible for the global execution of strategy.' Then I say, 'So what do you do?' He said, 'I work at getting well.' That was an answer that sort of trumped mine."

The brief conversation had a fundamental impact on Swartz's sense of purpose and perspective, as he became convinced that a truly fulfilling life involved lending a helping hand to those less fortunate than himself. "It wasn't frightening; it was, in fact, exalting and exhilarating," he remembered.

During that period of his life, Swartz, who had replaced his father Sidney as CEO of the New Hampshire-based company in 1998, was already undergoing a kind of spiritual re-awakening: Raised in a the more secular Reform tradition of Judaism, Swartz had become an Orthodox Jew, who spent just as many hours a day studying Torah as he did captaining the company.

Today, Swartz, who reportedly rises every day at 4 a.m. to read Scriptures, says that religious ideals and values guide his decisions. For him, that has meant a renewed sense of responsibility as a corporate citizen.

"I can't show you the Scripture that relates to the rights of a worker, but I can show you text that insists upon treating others with dignity," he says. "It says in the Hebrew Bible one time that you should love your neighbor as yourself, but it says dozens of times that you shall treat the stranger with dignity."

Swartz is described as a leader in Boston's Jewish community, where he and his family work as advocates for day schools and Jewish education. Sometimes that concentration on his Jewish heritage, including an open commitment to Israel, has erupted in controversy, such as when The Jerusalem Post in April 2002 published comments he made about the Israeli-Palestinian conflict, which motivated a boycott of the company.

Swartz, though, is also credited with helping to shape Timberland's corporate mantra of "doing well and doing good," which has meant an effort to go green.

According to a profile in the Guardian, the CEO recently banned bottled water at Timberland's headquarters on environmental grounds. In 2004, Timberland started offering its employees $3,000 stipends to purchase hybrid cars. The company hopes to become carbon neutral by the end of 2010, and secure 60% of its energy from renewable source by 2015.

Of course, for all his do-good intentions, Swartz, at the end of the day, is also running a public company where investors are looking for black-and-white results.

Research analysts tracking Timberland, whose competitors include companies like Wolverine World Wide (WWW), write that the company has underperformed its rivals in recent years partly due to shifts in fashion -- a trend exacerbated, they say, by the challenging macroeconomic environment.

Swartz takes responsibility for any hiccups the company he steers has suffered: "It was a failure of leadership, fundamentally," he has said, adding, "I said yes to everything when I should have said no to some things. I set us up to reach for more than we could achieve and that's my failure."

However, says analyst Mitch Kummetz at Baird, Timberland still has the opportunity to leverage its very recognizable brand strength and recapture lost revenue. Moreover, the analyst told clients, he sees no reason why the company shouldn't benefit from a rebounding global economy.

Timberland's footprint is truly transcontinental with $1.3 billion in fiscal year 2009 sales, 48% derived in North America, 41% in Europe, and 11% in Asia. (Kummetz rates Timberland Neutral with a price target of $27).

For his part, though, Swartz, who still refers to himself as a "middle-aged boot salesman" continues to seem as dedicated to doing good as churning profits. He recently returned from a trip to help victims of Haiti's devastating earthquake.

"I'm a boot-maker," he wrote in a Huffington Post column. "I'm the last person on Earth qualified to be organizing any sort of relief mission, even one that's as small as half a dozen people. But absent leadership, what else can you do?"

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