Tom's of Maine: “Doing Business” Means “Doing Good”
Tom's of Maine was one of the first natural health care companies to distribute outside normal channels. The company holds fast to the values that got owners Tom and Kate Chappell started more than three decades ago, providing insight into how a small firm can grow while staying true to its founding principles in the midst of competition. Now that Tom's has been sold to Colgate, one wonders if those principles can be sustained in a large corporate environment.
Getting Tom's of Maine Going
Tom and Kate Chappell, dreaming of a line of all-natural, environmentally friendly household products, started Tom's of Maine in 1970. The company's first product, a phosphate-free detergent, was environmentally friendly, Tom Chappell says, but "it didn't clean so well." But consumers were interested in environmentally friendly products - and the toothpaste and soap that followed were more successful.
All of Tom's products were made with all-natural ingredients and packaged in recycled materials whenever possible. New personal care products, including shampoo and deodorant, were developed without animal testing. But the road to success wasn't always direct or fast. Tom's stand against "business as usual" made the company wait seven years longer and spend about ten times the usual sum to get the American Dental Association's seal of approval for its fluoride toothpastes. And mistakes were made. At a time when deodorant made up 25 percent of the business, Chappell reformulated the product for ecological reasons. Later, he realized that the new formulation "magnified the human bacteria that cause odor" in half its users. After much agonizing, Chappell took the product from his shelves at a cost of $400,000, 30 percent of the firm's projected profits for the year. Dissatisfied consumers were sent refunds and a letter of apology.
One pivotal event was the introduction of baking soda toothpaste. The gritty product had none of the sweetness of commercial toothpastes, and the marketing manager told Chappell, "In all candor, I don't know how we're going to sell it.” Tom insisted that the product be test-marketed. It became a best-seller and was quickly copied by Arm and Hammer and Procter & Gamble.
As the company moved from experience to experience it gained strength and customers, but Tom was still unhappy, saying he was tired of simply "creating new brands and making money." He felt that something was missing. It seemed to him that sales potential was becoming more important than product quality. “We were working for the numbers, and we got the numbers. But I was confused by success, unhappy with success," said Chappell. He later wrote, "I had made a real go of something I'd started. What more could I do in life except make more money? Where was the purpose and direction for the rest of my life? Following this line of thinking, Tom Chappell entered Harvard Divinity School.
Sharpening the Company's Focus
The years that Chappell spent as a part-time divinity student gave him a new understanding of his role. "For the first time in my career, I had the language I needed to debate my bean-counters." He realized that his company was his ministry: ''I'm here to succeed ... according to my principles."
Tom's new mission statement reflected both business aspiration and social responsibility, spelling out guiding values for the company that included natural ingredients and high quality. It talked of respecting employees by providing meaningful work, as well as fair pay. Concern for the community and the world required that Tom's of Maine "be a profitable and successful company, while acting in a socially responsible manner." The company began donating 10 percent of pretax profits to charities - from arts organizations and environmental groups to curbside recycling programs - and supported the Rainforest Alliance.
Tom's also urged its employees to work with charitable causes...
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