I am pleased to address the Rotary Club of Seattle, one of the largest and most respected Rotary clubs in the world. The relationship between Weyerhaeuser and the Seattle Rotary goes back to the early days of both organizations, and I’m pleased to continue that lengthy collaboration.
In particular, I’d like to thank Scott Vokey, who’s been a dedicated member of Rotary for many years. I’ve had the great pleasure of working closely with Scott at Weyerhaeuser since he joined me at Weyerhaeuser Real Estate Company a couple of years ago as our general counsel. He’s a respected and dedicated member of our team.
Scott’s been involved for some time in helping identify speakers for these Rotary lunches, and he’s been suggesting to me for some time that I come and speak to the group — kind of a “take your boss to lunch day” — and I appreciate the opportunity to address this group that is dedicated to service to the community.
When I accepted this invitation, I promised Scott that my talk wouldn’t be an advertorial for Weyerhaeuser. However, I had a recent experience that made me think that a little public relations may be in order.
In the course of a conversation with a young downtown professional in her 20’s who grew up in Seattle, the young woman confessed that she had never heard of Weyerhaeuser. As a 33-year Weyerhaeuser employee that was a wake-up call for me.
Because we’re headquartered in Federal Way rather than in downtown Seattle, or perhaps because you don’t go into a store specifically looking for a Weyerhaeuser product, many young people are surprised to know that we’re a Fortune 150 company — or that, based on revenues, we rank right behind Costco and Microsoft on Fortune’s list of leading companies headquartered in Washington. Yes, our sales put us ahead of Amazon, Starbucks or Nordstrom — all household names in Seattle.
And as longtime local companies Washington Mutual and Safeco have been sold to other firms, speculation about Weyerhaeuser’s future has been raised in the local press in the aftermath of some recent business divestitures and job cutbacks announced at our company.
Yes, we do have a smaller footprint than we did a couple of years ago as we’ve undergone some strategic changes to our portfolio, but we’re hardly going away.
Today, we are one of the largest forest products company in North America. The foundation of our business is our timberlands — with 6.4 million acres owned and leased in the United States, leases to another 15 million acres in Canada, 375,000 acres owned in Uruguay, and a small but growing presence in China. We’re generally considered to the world leader in ownership and management of sustainable, managed timberlands.
Our Timberlands strategy begins with the way we manage those lands. Whether it’s through our application of innovative silviculture practices; utilizing low-cost, high-value harvesting; or making timely adjustments to our land portfolio, we seek to maximize the return on our timberland investment on a long term, sustainable basis.
We then add value from the products we make from those trees.
We’re one of the largest manufacturers of wood products in North America-- products such as lumber, panels, and engineered wood for new home construction and remodeling.
We use our extensive research and development and manufacturing capabilities to make high value pulp products for use in absorbents and premium towels and tissues — with industry-leading customers such as Procter & Gamble and Kimberly-Clark.
And, we’re the nation’s 17th largest home builder, with six homebuilding-related businesses, operating as distinct local brands in high-growth markets throughout the United States. In the Puget Sound region, you know this part of our company as Quadrant Homes.
Though smaller today than we were two years ago, we’re still big from the standpoint of employment, with more than 21,000 employees in North America. Nearly 5,500 of those people work here in Washington, but they do more than just work here. Like Rotarians, our employees are committed to serving our communities. Our employees call our company’s community volunteer program “Making WAVES.” — like your own “Service Above Self.”
The program speaks to the core values of our people and our company. Dollars from our Weyerhaeuser Company Foundation have much greater impact when coupled with the time and talent of Weyerhaeuser volunteers.
At the same time, employees who volunteer develop skills important to their jobs, increase their professional visibility, and benefit from the opportunities to work together in a setting outside of their normal workplace, helping to remove barriers and build friendships that enhance our overall employment value proposition.
In addition to employee volunteerism and matching grants, Weyerhaeuser has donated nearly $20 million over the past five years to organizations in Washington, Oregon and Idaho.
Weyerhaeuser people have always been actively involved in our communities. It keeps employees engaged, energized, and connected. I think you can relate. It’s the reason many of you are here today.
Now — let’s shift gears.
When Scott signed me up for this luncheon earlier this year, I planned to talk about the housing market and its impact on Weyerhaeuser. Instead, inspired in part by the recent presidential election, I’ve decided to take a step back and offer some perspective on the need for leadership moving forward. I’ll offer some perspective on how each of us can make a difference —as business leaders, as community leaders, as members of Rotary, as individuals.
That theme is: Anticipate. Change. Adapt — in order to Release Our Potential.
To do so, we must understand that the answer to any question is not an “either/or” proposition. Instead, the answer usually lies somewhere in between — a position that’s reached by accepting some of what the other side says, while staying true to important core values. That’s not always an easy spot to get to today, because we’re surrounded with so many “either/or” examples.
In the recently completed election season, states were divided into red and blue on maps, yet most of them are actually a mixture of the two. In our legal system, there is a plaintiff and defendant. One must win, one must lose. We see it in journalism’s notion of balance, where there are ONLY two sides to every story. Or, we see it in my industry — where the question is whether you use a tree or save a tree.
I suppose in many ways, this has always been our fate. Many anthropologists and sociologists suspect that the human brain is wired for dividing the world into oversimplified halves for survival in a non-civilized world — fight or flight, sleep or wake, eat or wait.
But we have examples of the great things that can happen when conflicts are resolved after heated debate, and compromises are reached.
Just think of the American Revolution. Adams, Hamilton, Franklin, Jefferson and Washington. All great minds, but also minds that came into conflict. Luckily for us, they also were minds wise enough to know that give and take was important to achieve a higher purpose. As a result, they effectively channeled their differences into bold ideas, like the Declaration of Independence and the Constitution.
Later in a critical chapter in our country’s history, Abraham Lincoln welcomed political rivals into his cabinet. Lincoln’s leadership effectively marshaled their sometimes bitter differences into a team that worked cohesively for the benefit of the nation during a time of great national crisis. The book Team of Rivals, by Doris Kearns Goodwin, offers insight into Lincoln’s leadership style. Just in the last week we’ve heard President-Elect Obama make numerous references to Lincoln and his “Team of Rivals” as he begins to form his cabinet which may include Hillary Clinton as well as at least one Republican. It’s a style we might all learn from.
To do so, we must move past the pre-wired polar opposites, to seek out the third or fourth alternatives. Often, such solutions come from a “Team of Rivals.”
We can move past the entrenched camps to create new ideas, new approaches. Innovation starts with an ability to see the possibilities. It’s up to us as leaders to bring polar opposites together to face a challenge, rather than face-off against our challengers; to define alternatives, rather than define only an “A” and a “B” choice; to spark ideas rather than spark a fight. It means setting the right expectations and then empowering our teams to find solutions.
Let me give you a brief Weyerhaeuser example. The wood and forest products industry presents many hazards that contribute to a potentially dangerous work environment — big trees, big saws, big trucks, and more.
At our safety program’s core, we call on employees to have the courage to intervene. We empower every employee to think and act on their own behalf, and on behalf of others. This has led to creative solutions and dynamic problem solving in ways unimagined and impossible to proscribe through rules alone. Today, our safety record is one of the best in the industry.
It’s that spirit that drives the recent changes at Weyerhaeuser. As I said earlier, we’ve become a smaller, leaner, more focused company. We’ve shed businesses in paper and packaging that are capital intensive, and whose long-term potential we felt were limited compared with those we have retained. Timberlands are our core. The segments that we currently operate in — wood products, home building and cellulose fibers — support that core, and give us the opportunity to grow again when the time is right.
For us to truly deliver on our potential, however, we need to help the public see beyond the idea that the easiest answer to saving the environment is to save a tree. Many of you have probably seen companies that use tree-saving metrics in their sustainability measures.
At Weyerhaeuser, we know we can’t save individual trees. They’re not immortal. They will rot and die — or die and rot. Either way, they decompose, returning nutrients and their stored carbon to the earth and atmosphere. The answer really lies with a third choice, which involves using trees to save a forest. We can’t save a tree, but we can save a forest — a forest can last forever.
A forest can be "saved" in two ways. It can be set aside from commercial use, foregoing economic value, but serving other purposes such as recreation or refuge or watershed. The public may choose this forest use for public lands, and will pay for its care through taxation. But 57 perent of our U.S. forest land is owned privately.
There’s a way to save private forest land, too. It is to ensure that the trees have economic value. If the trees have value, the landowner will retain the land for growing trees. Land and water will be protected, and new trees planted after harvest to begin the cycle again.
If people do not use forest products, timberland values are diminished. If the highest and best use is not tree growing, the land will be developed for other purposes. The forest is not threatened by cutting down a tree. It is threatened by lost value in the marketplace.
Therefore, to save a forest, one must grow, cut, use and re-grow the trees. Through this cycle of growth and renewal, we remove carbon dioxide from the atmosphere, save energy, and improve the well being of people and the planet.
Managed forests themselves store a “pool” of carbon, preserve habitat, and shelter a diversity of plant and animal species. In the United States, this carbon pool is growing at the rate of 200 million metric tons of carbon per year, offsetting more than 10 percent of U.S. greenhouse gas emissions — a fact rarely discussed in the global warming debate.
Homebuilding, remodeling, and home improvements are collectively the largest single use of lumber and wood products, accounting for about two-thirds of domestic wood-product consumption. Lumber is the “right” — “green” — choice for the sustainability-seeking consumer.
Approximately 45 percent of the carbon from a forest remains stored after a tree is manufactured into products. And about 10 percent is stored for more than 100 years, which is the emerging standard for tradable carbon credits. We estimate that the products our company made in 2007 will keep 11.2 million metric tons of carbon dioxide out of the atmosphere for the next 100 years. This is the approximate equivalent of eliminating 2 million cars from the road for a year.
This base of trees, businesses and a sound environmental footprint forms a solid foundation. The Weyerhaeuser team is focused on moving forward and building on it.
I’m sure you’ve read about the changes we’ve undergone as we build our future. Some have even speculated on additional changes we may undergo. As we’ve demonstrated over our 108-year history, we’re not afraid of change, and we’ve embraced it whenever it made us a stronger company. To be open to changes, we’ve needed to remain open to all possibilities and to be flexible. Today, we retain that mindset.
To us, thinking of the third and fourth alternative leads to sustainability. It’s a word used often in business today. Each one of us here in this room might benefit from Weyerhaeuser’s broad view of sustainability. It’s about moving forward despite the obstacles. It means weighing short-term decisions with their long-term consequences. It all starts with a vision for what the world can be. It means standing up for something you believe in.
As a highly regulated industry, we do a great deal of work in Washington, D.C. One of the great axioms in Washington is that to succeed you need to be for an issue — rather than against.
We offer much to be for in modern forestry. Sustainable forest management, carbon neutrality, biodiversity preservation. We’re working to release the tremendous potential in trees to solve important problems for people and the planet. We’re committed to sustainability in all our interactions with nature. We’re using human ingenuity to drive our efforts.
We’re also working continuously to evolve our practices. Many of you have probably seen the newspaper accounts of the flooding last year in the Chehalis Valley. Many blamed Weyerhaeuser harvest practices as a contributing factor. We couldn’t have predicted the impact of a once-in-500 year storm on the communities where we operate.
What’s important is that we’re sitting down with our critics. We’re listening. We’re working with the state and those in the local communities. And our scientists are learning from this unprecedented experience and adjusting our practices accordingly. It’s in our best interest to manage this resource in a sustainable fashion for the long term. Our focus is on the next 100 years — not just today.
Alan Kay, who helped invent the laptop computer, says that the “best way to predict the future is to invent it.” At Weyerhaeuser we are excited about the future we’re inventing.
We envision a world where biochemicals from trees replace many of the petroleum-based compounds in use today. Where carbon fibers made from the lignin in trees are used to build parts for cars. Where fuel from the complex chemical properties in trees powers those cars. Where textiles made with fibers from trees clothe us. And where wood from trees continue to shelter us.
In this way, the concept of forest regeneration and renewal spread to a much broader view of how we run our business. For us, sustainability is a holistic view of how we manage our business for the long-term.
Success measures include a range of metrics from people development and employee diversity, to investing in the communities where we operate, to reducing our environmental footprint, to ensuring that we are good stewards of our shareholders’ investment, now and into the future.
This broad view of sustainability is essential for making any decision at Weyerhaeuser. It’s about prudent management for the long-term. It’s about ensuring that short-term profit doesn’t have a detrimental impact on long-term prosperity. It’s about moral and principled decision-making.
It all starts with a vision for what the world can be, and we’ve been recognized for this commitment as the only forest products company in the country to be included in the Dow Jones Sustainability Index.
Yes, our nation’s current economic challenges are tremendous and unprecedented. But we’re confident our economy will recover. Based on population growth and the creation of new households, the long-term fundamentals are sound for our businesses.
So, it is with a sense of optimism that I’d like each of us to leave today. We’re all capable of rising to the challenge in front of us. To do so, we must move past the polarizing dichotomies of over-simplification. We must all work hard to release the potential in ourselves and each other.
Whether business leaders, community leaders or political leaders, in today’s economy we all need to come together to work constructively to uncover new truths, and create new beginnings.
Human ingenuity and innovation must lead the way. That means focusing on results, and channeling our differences into creative solutions that would make our nation’s founders proud.
I am confident that my colleagues at Weyerhaeuser are up to the task. I am equally confident in our friends here at Seattle Rotary.
Thank you.
I welcome your questions about the economy, the housing market, Weyerhaeuser, or anything else you’d like to ask
