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This is the draft of a case under construction--it may not be used or disseminated without the written permission of William McDonough, Michael E. Gorman and Patricia Werhane.

The contract textile business is about offering choice, not volume.

-- Susan Lyons

Developing an Environmentally Intelligent Fabric [2]

Susan Lyons, Vice President of Design at DesignTex, a firm specializing in the design and manufacture of interior textiles for commercial interiors, knew the importance of looking ahead to the next design breakthrough. In February of 1991, she had helped launch a new line of fabrics called the Portfolio CollectionTM, a design collaboration with very famous architects, Aldo Rossi, Robert Venturi, Denise Scott Brown and Richard Meier. This collection was provocative in its aesthetic sense, and it also demonstrated that well-designed fabrics could be marketed at reasonable prices.

While Ms. Lyons was proud of the new collection, she wanted the next design to focus around an issue, not just be changes in aesthetics. The issue of environmental responsibility seemed perfect. "Green" was popular in the trade literature and in the general media, and she had been receiving inquiries from DesignTex's customers, who were requesting how environmentally responsible DesignTex's products were; however, her consideration to pursue an environmental agenda was not simply the result of customer demand. The idea resonated with some deep personal beliefs about environmentalism. She said her mother was "way ahead of her time," since her mother was recycling trash and other items as well as being conservation-minded back in the 1960's when Ms. Lyons was growing up. These childhood experiences made Ms. Lyons sensitive to environmental concerns her whole life, and she had a strong impulse to act upon them.

Such a breakthrough, thought Lyons, would maintain DesignTex's leadership in the commercial fabrics design market. At the time, DesignTex was at the boundary between being either the largest or second largest member in the Association of Contract Textiles (ACT), the industry trade organization. Located in New York, DesignTex also worked with over forty (40) different mills around the world, many of which completed the manufacturing of the designs created by DesignTex.

Also, DesignTex was a member of the Steelcase Design Partnership, a collection of design industries purchased in 1989 by Steelcase, a giant office furniture and supply manufacturing corporation located in Grand Rapids, Michigan. Steelcase formed this partnership to capture a market that otherwise eluded them. While the company was able to turn out a huge amount of its products very profitably, it was not responsive to customers, such as architects, who demanded specialty or custom designs. For this growing market, small, nimble and entrepreneurial companies were able to meet such demands better than Steelcase, and DesignTex was such a company.

In order to maintain DesignTex's ability to respond to the rapidly-changing, custom design market, Steelcase permitted DesignTex's management to operate autonomously. In fact, DesignTex sometimes competed against Steelcase for contracts as a fabric supplier; however, Steelcase typically brought in DesignTex as a consultant in matters involving specialty fabrics design. As Susan Lyons summarized, "DesignTex is very profitable, and Steelcase receives a large amount of money from DesignTex's operation with no oversight, so Steelcase is happy to let DesignTex do its own thing. However, this situation could change if DesignTex's profitability began to decline." By taking the lead in the still volatile environmental market, she wanted DesignTex to maintain its autonomy.

To launch her project, she began researching on her own. She surveyed the trade literature, contacted yarn spinners who claimed to be environmentally "correct," and paid attention to competitors who were also attempting to enter this market. It was difficult, because she was also looking at approximately forty (40) other new designs and product design improvements.

Ms. Lyons pursued this information search for about two years, from 1991 through 1993. In addition to focusing on the environmental issue in her design, she required that the product look like other products in the DesignTex line and be durable. What she found was a jumbled mass of information. She noted there were "conflicting claims about environmentally safe materials." She found that cottons were often heavily bleached and that most manufacturers were reluctant to talk about what was in their dyes. She considered using foxfiber with vegetable dyes, but the combination was available in only two colors. She considered using a yarn that was made from PET recycled soda bottles. In fact, she said, this appeared to be the most promising option; however, the vendors were unreliable. These problems made it difficult for her to reconcile her assertion that the "contract textile business is about offering choice, not volume."

The Climatex^® Option

Since DesignTex also worked with over forty (40) different contract mills around the world, Ms. Lyons contacted some of them to probe their environmental efforts.[3] In December of 1992 she became interested in a sample of a fabric product line called Climatex^®. Mr. Albin Kaelin, Managing Director of Rohner Textil, a mill located in Switzerland, sent Ms. Lyons a sample. He and Rohner had been pursuing an environmental agenda of their own, and was willing to team up with Lyons and DesignTex in developing a new product based on Climatex^®.

The fabric, a patented combination of wool, ramie, and polyester, was unique because it wicked away moisture from a person who was in contact with the fabric over long periods. It was intended to improve comfort in wheelchairs and transport lorries (trucks), since those applications involve extended periods of contact between people and fabrics. Exhibit I contains additional information on Climatex^®.

Lyons originally inquired into the recycling possibilities of Climatex^®. Kaelin informed her that recycling of fabrics was possible only if the fabric was pure, i.e., 100 percent wool or cotton, but not in combination. Since Climatex^® was a blend of wool, ramie and polyester, no recycling was possible. In addition, he mentioned that the recycling aspects of any commercial fabrics are questionable, since they are typically glued as upholstery, and the glue itself makes recycling difficult; however, he went on to add, "there is a far more important argument on the aspect of ecology to Climatex^®." Since the fabric was created without any chemical treatments, "...the yarn in the fabric can be burnt [sic] without any damaging chemical reaction and are consisting [sic] of a good heating factor." By good heating factor, Kaelin meant that the fabric released a large amount of energy when burned, and he proposed using this energy in the operation of the mill. He also mentioned that Climatex^® was being tested in Germany by an independent institute OEKO-Tex.[4]

Both Kaelin and Lyons were pleased when Climatex^® passed the inspections of the International Association for Research and Testing in the Field of Textile Ecology (OEKO-Tex) in May of 1993. The institute, concerned with human ecology issues, tested for pH value, content of free and partially releasable formaldehyde, residues of heavy metals, residues of pesticides, Pentachorophenole (PCP) content, carcinogenic compounds, and color fastness. Since it passed these tests, Climatex^® could bear a trademark of OEKO-Tex and was certified to be allergy-free. Exhibit II contains the English translation of the OEKO-Tex Standard 110, which discusses in greater detail the criteria used in the certification process . [5]

By the middle of 1993 Susan Lyons had several options to consider for an environmental design. The most promising option seemed to be the Climatex^® fabric from Rohner; it was certified to be manufactured within the OEKO-Tex specifications; however, she was worried that since the fabric was not recyclable, and since it was difficult to make a grand environmental statement using the OEKO-Tex label, that option may not be as good as it seemed. Additionally, the product was not cheap. It was priced competitively within the worsted wool market niche; however, that particular market existed on the expensive end of the overall competitive market spectrum. She still considered using the PET recycled soda bottle yarn, but was not confident that the vendors could deliver reliably. Her research produced promising options, but each had difficulties and risks.

In July of 1993, Lyons, DesignTex's Owner Ralph Saltzman, President Tom Hamilton, and Consultant Steve Kroeter, met to consider what the next generation of the PortfolioTM Collection would be. Launched in 1991, PortfolioTM had been a highly successful, major product line. By mid 1993, however, the product's peak demand had just begun to pass, and the team began to consider what the next generation of PortfolioTM might be. At this meeting, the team decided that the next PortfolioTM collection would have the same major impact on the market if its design focused on the green issue.

During the meeting, Lyons brought up another issue that could not be neglected: aesthetics. The next PortfolioTM collection had to be as beautiful as the last, in addition to being environmentally friendly. As was the case for the original PortfolioTM collection, Lyons hoped to collaborate with a prestigious designer in producing beautiful fabrics. At the meeting, Steve Kroeter suggested that they contact Suzy Tompkins of the Esprit^® Clothing Company, which had just released a unique line of clothing based upon organic cotton. Lyons suggested an architect who was well-known for his environmental philosophy and his architectural design accomplishments: William McDonough. It was agreed that they would contact both designers and invite them to participate in the next generation of PortfolioTM.

Suzy Tompkins of Esprit^® declined to participate, since, as Susan Lyons explained, "clothing manufacturers and commercial fabric designers just do not often work together." Lyons did, however, receive a more enthusiastic response when she contacted McDonough.

The Influence of William McDonough[6]

During her environmental literature search, Susan Lyons came across the name of William McDonough in two places. She read the issue of Interiors[7] magazine that was dedicated entirely to McDonough and his projects. She also saw an article about him in the Wall Street Journal.[8] She came to view him as the most high-profile person working with environmental concerns in the design industry.

At the time, McDonough had no immediate plans to develop sustainable fabrics; however, he responded quite enthusiastically when she made the suggestion to him. He was looking for opportunities in which he could make his design philosophy work. The fabric design project fit into his plans perfectly.

McDonough came to visit DesignTex in early October 1993. During their meeting, Susan Lyons explained to McDonough their options for the environmental project from their literature and marketplace searches. She suggested the PET soda pop bottle fabric idea to him.

McDonough reacted by giving them a presentation of his design philosophy, which followed closely what is printed in Exhibit III, Design, Ecology, Ethics and the Making of Things: A Centennial Sermon, presented at The Cathedral of Saint John the Divine, New York City, 7 February 1993.

"Two key principles hit home really hard," Susan Lyons said, "the idea that waste equals food and the idea of a cradle-to-cradle design, not a cradle-to-grave design." She said that these two principles influenced her thinking more than anything else that McDonough presented.

McDonough stated that in order to meet the waste equals food and cradle-to-cradle design criteria, the product must either decompose completely as compost with no negative environmental impact after the useful life of a product is over, thereby becoming food for other organisms (organic nutrients), or become raw material for another industrial product (technical nutrients.) Furthermore, one should not mix the organic and the technical, else one would end up with a product that could neither be used as food for organisms nor raw materials for technology. Furthermore, "the product should be manufactured without the release of carcinogens, bioacumulatives, persistent toxic chemicals, mutagens, heavy metals, or endocrine disruptors." McDonough discouraged the use of "environmentally friendly" and instead proposed "environmentally intelligent" for describing this method of design, since design involved having the foresight to know that poisoning the earth is not merely unfriendly, but unintelligent.[9]

"The key to the project", McDonough stated, "was getting the fabric mills to open up their manufacturing processes to inspection to see where problems arise." In addition, the mills would have to examine the processes of the mill partners, the farmers, yarn spinners, twisters, dyers, and finishers, so that they could also meet the design protocol. McDonough suggested that his close colleague, Dr. Michael Braungart of the Environmental Protection Encouragement Agency (EPEA) located in Germany, could help with this project, since Dr. Braungart was closely involved in the implementation of the design protocols with McDonough in past collaborations.

In addition to the environmental criteria, McDonough's proposal addressed the aesthetic component of the fabrics. "The fabrics needed to be incredibly beautiful as well." He suggested that they use the mathematics of fractals to generate the patterns. Fractals were appealing to McDonough, since "they are like natural systems... the smallest component is the same as the whole." He was interested in natural harmonic proportions throughout nature, and he felt that the designs should reflect the natural harmony in the protocols and in the esthetics.

Forming the Network[10]

Susan Lyons contacted Rohner Textil the day following the McDonough meeting to see if Albin Kaelin would be willing to participate in this project. He was encouraged by Lyon's report and looked forward to meeting McDonough, who traveled to Rohner within two weeks of his meeting at DesignTex. McDonough was encouraged by the initial start they had achieved in the Climatex^® project based on the OEKO-Tex protocols; however, the Climatex^® fabric was far from compostable, since the OEKO-Tex standards fell far short of "knocking out," or excluding all harmful chemicals that would be released during composting. In addition, McDonough was concerned about the use of polyester, since it came from a fossil fuel instead of from current solar income. He explained to Kaelin his design protocols, which, according to Lyons, was like asking Kaelin to "reinvent his mill."

Kaelin reacted enthusiastically to McDonough's "Sermon," and eagerly awaited for Dr. Michael Braungart of the EPEA to show up to begin the assessment of the manufacturing processes. Braungart, whose profession was chemistry and used to lead the chemistry department of Greenpeace, traveled to the mill in December of 1993. He looked very closely to determine what needed to be changed in order for them to meet the design protocol. Susan Lyons stated that Braungart was "pleasantly surprised" by Climatex^® and its OEKO-Tex approval. He was also impressed with the mill, which, he thought, had dealt with ecology issues in an advanced way and was ahead of everything he had seen up to that point. Braungart's early suggestions were in expected agreement with McDonough's: produce the Climatex^® product without using polyester so that all natural fabrics would be used, in effect making the fabric fibers compostable. The problem with Climatex^®, from McDonough's perspective, was that it mixed organic and technical nutrients, which meant the fabric could not be composted nor could the technical nutrients be recovered.

Braungart's evaluation required examination of all stages of the fabric construction process. Since the mill was involved with the fabric weaving, his examination required inspection of the mill's suppliers/subcontractors as well. These subcontractors consisted of farmers, yarn spinners, who create a cord of yarn/thread from the pieces of individual material fibers, such as wool; a yarn twister, who takes two or more cords of thread/yarn and twists them together, producing a much thicker and stronger piece of yarn; a dyer, who adds the colors to the yarn, and a finisher, who adds chemicals to the finished weave to make it more durable, flame resistant, static resistant, stain resistant and such, if they are required.

Susan Lyons, acting as the main project coordinator as well as being responsible for creating the "construction," or generalized set of weaving patterns and color palette based on McDonough's designs, said that "everyone on the project knew that getting the mill contractors to open their books for Braungart's inspection would be difficult, and keeping track of the fabric's production would involve complex management well beyond the normal levels of supervision."

In fact, she stated, "the more we could control, the better," meaning the more they could do themselves, the easier it would be to produce the product. Acting on this philosophy, they intended to have the mill perform the role as the dyer as well as doing the weaving. Kaelin agreed: "We need as few members in the pool as possible."

The Project Underway?[11]

In January 1994 Albin Kaelin was able already to eliminate polyester from ^®Climatex. He produced a new blend of ramie and wool that still preserved the fabric's moisture wicking properties. He called this new fabric Climatex^® LifecycleTM. This meant that the route to producing a compostable fabric seemed easier than one that reclaimed and reused polyester and othertechnical nutrients. Braungart also gave initial approval for the flame retardant finishing chemicals Rohner had already been using on Climatex^®. By the end of January, Kaelin had sent Braungart all of the information pertaining to the chemicals and dye substances used in the manufacturing of Climatex^® LifecycleTM. Such information consisted of security data sheets and production details. It was hoped that this information would be enough for Braungart to make recommendations on how to proceed by the end of February 1994. It was hoped that Braungart's examination could be completed totally by the end of March 1994.

At the beginning of March 1994, Braungart had some bad news. The chemicals used in the dye materials did not meet the design protocol, or questions involved in the manufacture of the dye chemicals could not be answered by examining the security data sheets, even though they had passed the OEKO-Tex standards. As a result, Braungart needed to examine the production processes of the chemical dyes, which required the dye suppliers to open their books. Kaelin contacted Rohner's dye suppliers and requested their cooperation with Braungart's inspection and their answers to the open questions.

By the end of March, such cooperation was not forthcoming. According to McDonough, Braungart contacted over 60 chemical companies worldwide and asked them to open their books for his inspection on how they make fabric dyes. No company agreed to do so.

Another concern was project cost-- someone needed to pay Braungart and the EPEA as he studied the manufacturing processes. Kaelin of Rohner agreed to hire Braungart and the EPEA initially, since Rohner expected to acquire the patent rights for the development of the next generation of Climatex^®. The whole matter, Lyon's and DesignTex's next Portfolio Collection, McDonough's fractal patterns and design protocols, and Kaelin's and Rohner's next generation of Climatex^®, depended on Braungart's ability to gain access to the manufacturing processes of the dye suppliers. By the end of April, Braungart had already expended the EPEA's allotted budget paid by Rohner and required an additional extension. Rohner was willing to consider this additional payment, but only after the product had been introduced into the marketplace. It was uncertain how much this additional cost would be.

Susan Lyons reflected on the situation. She knew that DesignTex had made a large commitment to this project and hoped it would propel them into the lead of the environmental market of commercial fabrics. It had already been three years since the first Portfolio CollectionTM was launched, and she was aware of the pressure to get a product out the door. She recognized that the route to creating either the compostable fabric or one that reclaimed its constituents as technical nutrients required knowledge of what was in the dyes. Waiting on Braungart to gain access risked the whole project either way if he failed and would dramatically increase its cost even if he succeeded. Perhaps it would be better to relax McDonough's and Braungart's standards a little and test the results of the manufacturing process without inspecting the actual dye production processes of the dye suppliers. After all, Climatex Lifecycle was already a major improvement over what was currently available in terms of environmental design. However, this whole project was about making a breakthrough in environmental design, and it was not clear that anything short of the McDonough/Braungart approach would represent a sufficient leap.

2 The information in this section was obtained during an interview with Susan Lyons on 31 July 1995. [back]

3 Lyons Interview, 31 July 1995. [back]

4 Kalin quotes from correspondence, Kalin to Lyons, 3 December 1992. Supplemented by Lyons Interview, 31 July 1995.[back]

5 Correspondence, Kalin to Lyons, 28 May 1993.[back]

6 The material in this section was developed from interviews with William McDonough, 29 June 1995, 16 August 1995 and 21 Sept 1995 and Susan Lyons, 31 July 1995. [back]

7 Interiors, March 1993.[back]

8 Wall Street Journal, Vol. CCXIV, No. 79, Monday October 23, 1989. [back]

9 The concepts "cradle-to-cradle," "waste equals food," "current solar income," "environmentally intelligent," and the design protocol discussed in this and the preceeding two paragraphs are proprietary to William McDonough and are included in this document with his permission. Otherwise, this information cannot be implemented, reproduced or disseminated without his explicit consent. [back]

10 Lyons Interview, 31 July 1995.[back]

11 The information in this section was developed from correspondence, Kalin to McDonough, during the period of December 1993 through March 1994. [back]