Seventh Generation sweeps out its founder

Here’s some sad and shocking news: Jeffrey Hollender, the pioneering co-founder and longtime CEO of Seventh Generation, has been forced out of the company.

Details on what happened and why are scant—I hope to tell you more, before long—but Jeff has told friends that his ouster came as a surprise. It evidently followed months of tension with his board and  with Chuck Maniscalco, the former senior exec at PepsiCo who was brought on as CEO of Seventh Generation in June 2009.

Maniscalco, who previously ran the Quaker, Tropicana and Gatorade businesses at PepsiCo,  resigned as CEO in September. But he remained on to manage a transition and is now once again a candidate for the position, according to a letter to Seventh Generation shareholders and employees from Peter Graham, the company’s board chairman. The letter — dated October 26 — said that the board has “reluctantly voted” to put Hollender on leave of absence from the company and remove him from the board.

The board action “came as a surprise to me,” Jeff told a friend, via email. “My sincere hope and intent was to have resolved these issues with the company.”

I emailed Jeff today, requesting an interview.

“Not much I can say,” he wrote back. He did share with me the company announcement and an email he sent out, both of which are pasted below.

Seventh Generation, as most of you know, is a leader in the “green” household products arena. It makes green cleaners, laundry detergent, dishwashing soap, diapers, baby wipes, tampons, recycled toilet paper, tissues, and paper towels. As a private company (though it was publicly traded for a time), Seventh Generation doesn’t report sales or earnings. In a June 2009 blogpost, Jeff said the company had sales of about $150 million. The board hired Maniscalco to drive sales to $1 billion. (See: A new CEO for Seventh Generation)

Jeff’s impact has been felt far beyond the walls of Seventh Generation, which is based in Burlington, Vt. He’s co-author of an excellent book, What Matters Most, about the corporate responsibility movement. He speaks frequently about business and sustainability, and has  been politically active on behalf of climate change, among other issues. He sits on the board of Greenpeace USA. He recently formed a joint venture with the Kpalan education company called the Sustainability Institute. His Inspired Protagonist blog is a model of corporate transparency.

Speaking of transparency…. there’s not a word (as of Monday Nov. 1) on the Seventh Generation website about his departure.

Interestingly, Peter Graham, the board chairman, is a childhood friend of Jeff’s. They attended Riverdale Country Day School together and several years ago traveled to India. It’s not clear whether Graham backed Jeff in the power struggle at Seventh Generation, or turned against him. [Disclosure: My wife Karen Schneider went to high school with Jeff, who I’ve known for years, and Peter Graham, who I’ve never met.] Obviously there’s more to this story than we know; if any readers of this blog have insight, by all means, be in touch.

In the meantime, here’s an email that Jeff  shared with me:

More than two decades ago, I founded Seventh Generation with the idea of creating a different way of doing business.  Since then, the company has established new benchmarks for ethical and sustainable corporate behavior, grounded in the principles of employee ownership, pay equity, environmental responsibility and transparency.  At the same time, Seventh Generation is a recognized pioneer in its category and a successful business enterprise.

On Monday, October 25th, the Seventh Generation Board announced to it’s shareholders and employees that they have “decided to end the company’s employment relationship” with me “. . .without cause”.   Though I cannot discuss the circumstances that led to this, I wanted you to hear this news directly from me. [I have also attached the letter that was sent out by the Company.]

Over the past twenty years, I have had the privilege to work with an extraordinary group of committed, talented people — and I thank them all and wish them the best. I plan to remain fully engaged in the work of creating a new paradigm for justice, equity and corporate responsibility through my new book, Planet Home that will be published by Random House in January 2011; my work on the boards of Greenpeace and Veritee; and in my role as the co-founder of the American Sustainable Business Council.

I greatly appreciate your support and friendship over the years.

And here is Graham’s letter to shareholders and employees:

October 26, 2010

Dear Friends and Shareholders of Seventh Generation,

In the life of every company, there comes a time when the most difficult of decisions must be made. These moments are rarely deliberately sought but instead thrust upon us by unexpected circumstance and by events, which demand that hard choices be made.

Recently, the Board of Directors of Seventh Generation faced such a decision and was forced to act in what we firmly believe to be the best interests of both our company and you, its shareholders. First, I want to offer you some context. In mid September, Chuck Maniscalco, our CEO since June 2009, resigned after a very difficult period. Following lengthy discussion the Board convinced Chuck to stay to lead the company at least through a transition while the Board immediately commenced a search for a new CEO. Chuck is personally committed to and focused on leading our company through this transition period, and is considering applying for the job of leading Seventh Generation as part of our search process. We are all committed to having the best leadership we can for our company.

With that as background, I want to share with you that, following our September meeting, the Board of Directors reluctantly voted to put Seventh Generation co-founder Jeffrey Hollender on a leave of absence from the company and to remove him from the Board pending further discussions about his future role. Since that time, and after further deliberation, the Board has decided to end the company’s employment relationship with Jeffrey. Importantly, when Jeffrey stepped down as CEO, he negotiated an agreement with the company that allowed for the termination of his employment and provides him with generous severance and other benefits were his employment to end. We have honored that agreement to date, and we intend to honor that agreement going forward. And, I want to assure you that the board, in making these decisions, did so with the best interests of the company, as well as fairness to Jeffrey in mind.

All of this was difficult, and I must emphasize that these decisions were not taken lightly. As the leader of the company since its very earliest days and its philosophical guiding light for over two decades, Jeffrey has been an integral part of our brand and an obvious lynch pin of our success, our unique corporate spirit, and our much acclaimed emphasis on equity and justice in the way we conduct our business. It is no overstatement to say that without his unwavering dedication to our cause and his tireless efforts on our company’s behalf, we would not be the company we are today, and indeed might not be here at all. His is a legacy worthy of the highest respect and admiration, and nothing in our recent decision should dim that in any way.

Nevertheless, recent events have forced us to choose between divergent paths. We have elected to set the company on the one we strongly feel has the very best chance of fulfilling the commitment we’ve made to all our stakeholders to achieve the greatest possible lasting success, financially but especially in terms of making our world a better, safer place for our children and the following seven generations.

To a large extent, present circumstances mirror those at many other companies whose founders have made the decision to turn over the reins to someone else. As organizations grow, so do their managerial requirements. Eventually these increasing layers of complexity demand the recruitment of experienced professional leadership whose abilities and experiences are required to move forward. This is the crossroads at which Seventh Generation now stands.

And that is an important point that must be made: Though our leadership has changed, our aspirations have not. It remains our objective to continue to grow Seventh Generation while staying true to the strategies we’ve previously shared with you over the years. We believe deeply in our business and its model, and will continue to do all that is within our power to drive our business, our social mission, and our global imperatives forward.

Despite this period of executive transition, the Board remains confident in the company’s ability to continue to grow its business and social mission for long-term success. Our accomplishments over the past year are numerous, and each reflects the company’s ongoing commitment to corporate responsibility and to growth. These important milestones include:

–Achieving three consecutive quarters of growth despite an extraordinarily challenging economic and competitive landscape. Year-to-date, our sales have grown at a double-digit pace, which would be the envy of many of our competitors during this extraordinarily challenging economic landscape.

–Successfully introducing the first ever EPA-registered botanical disinfectant cleaner.

–Launching our first-ever national advertising campaign, which more than doubled awareness of toxic cleaning product issues as well as our brand itself.

–Expanding our already extensive distribution base to include Safeway and also Wal-Mart, a partnership that accelerated our commitment to make green products affordably accessible to more consumers.

–Increasing our involvement with Women’s Action to Gain Economic Security (WAGES) in order to more effectively address our economic equity concerns.

–Marshalling public support for reform of the badly outdated Toxic Substances Control Act.

–Engineering the first cleaning product packaging made from 90% post-consumer recycled content.

–Successfully completing a $30 million equity capital raise with a group of investors aligned with existing shareholders as responsible, long-term stewards of the Seventh Generation brand.

Change is always difficult, and this particular evolutionary moment has certainly been more challenging than most. What matters, however, is not what has happened but what will happen. On this count, the Board is confident that it has taken the steps necessary to ensure that Seventh Generation’s untapped growth potential is fully realized in the years ahead. As we move into that promising future, we continue to express our thanks for everything Jeffrey has done for us and for the company he has built. That company has a rewarding road ahead of it indeed, but this success cannot and does not depend on any one individual. Instead it springs from the unique synergy that comes when many act together to realize a singular ideal. That’s the task before us now, and with your continued help and support, I’m certain we’ll achieve it.


Peter Graham



  1. says

    I always wonder why an organization ejects a visionary founder just at the point when the organization is poised for exceptional growth. I sure hope that this is not a signal that 7th Generation is going to make compromises to the incredible value system that has built its brand into what it is today. What we don’t need is another “light green” offering at shelf. This company has been a trailblazer and a standard setter for decades under Jeffery’s leadership.

  2. says

    Oh, this is not good. I know Jeffrey, know that he stands for integrity, transparency and a genuine commitment to sustainability. Yet another example of corporate imposed management stripping the heart from an organization.

    Well, that makes it easy: the dollars I’ve been spending on Seventh Gen products will go to Method

  3. says

    Well said Catherine. This is unfortunate news. From what we’ve seen occur in these kinds of transitions, it’s challenging for an outsider to the space to understand its values and how seriously we hold to them. Jeffrey also used his voice as a key business leader to support the betterment of key issues like safer chemical reform. I’m sure we’ll see him continue to champion major environmental concerns, but we will miss having such a powerful and diplomatic voice of industry lend its influence.

  4. Dave says

    This issue led me to some internet searching. Wow, the web is amazing. Here’s an article I found from some time ago

    This passage is particularly interesting but people should really read the whole thing. The notion of ejecting ‘a visionary founder’ apparently isn’t new to this company…

    “In fact, Alan Newman, the man who had founded Seventh Generation in 1988, was somewhere near irate. A few weeks before the book party [he] composed an e-mail to Hollender:

    “I’ve been aware that you’ve been referring to yourself as the founder of Seventh Generation for some time now. Frankly, [I] have been ignoring it. That part of my life is long over and I am happily onto the next phase. But it is a problem for me when reporters show up to discuss Seventh Generation, which happened recently, and they are surprised that: (a) I clearly was the founder, and (b) you were not around or involved until well after the name change to Seventh Generation, the positioning, the product direction, and (multiple versions of) the first catalog had been produced and mailed.” He went on: “While we may always have a different point of view about what happened at the end of our relationship, the founding of the company is a matter of record and not subject to ‘personal perspectives.’ I only hope you do not take this opportunity to present yourself as being the founder of Seventh Generation….It just isn’t so and can only lead to embarrassment for both of us.”

    Hollender responded immediately, changing passages in his book and editing Seventh Generation’s marketing and press materials.”

  5. says

    Drive sales from $150 million to $1 billion? Greedy much? More product equals more waste and requires more resources, I don’t care how eco-friendly you make it. This is disheartening and I hope more voices in the CSR movement don’t get silenced because they don’t contribute to the bottom line fast enough.

    Thank you for this in-depth account. I also recommend reading this piece in the New York Times, “Another Pioneer in Green Business is Fired”:

  6. andrea simmons says

    Although I no longer live in Vermont and have relocated to Sweden, I must say it hurts to hear of Jeffrey´s dismissal. I know that his interests have always been for the whole of the community and not just for himself. Good luck to him and his next adventure, which will certainly be a success. Again, he is on the positive front. Dismissing him is NOT in the best interest of Seventh Generation.

  7. says

    Thank you for this article and for highlighting the pioneering work, dedication and courage of Jeffrey. His tenacity and fortitude are unparalleled, and he is a beacon of light in corporate America that will, no doubt, continue to shine.

  8. Steven says

    “Despite this period of executive transition, the Board remains confident in the company’s ability to continue to grow its business and social mission for long-term success. Our accomplishments over the past year are numerous, and each reflects the company’s ongoing commitment to corporate responsibility and to growth.”

    Sustainability and Growth have reached a point of mutual exclusivity. As humans, we have exceeded the carrying capacity of this planet. We cannot continue to grow and sustain the planed in it’s current form. In fact, many are recognizing the need for humanity to shrink it’s consumption of the planet.

    Any company that claims to be “Green” and has Growth as part of its business plan is out of touch with the environmental and economic realities of the world. How big is big enough for Seventh Generation? My support for their products is slipping.

  9. says

    I wonder what relevance the company’s governance structure has, here. It’s a private company, i.e., not traded on the stock market. That means its finances are not public. It also means it doesn’t have a lot of shareholders (I saw somewhere that there are 20, but I can’t verify). Would a wider shareholder base have made this sort of move more, or less, likely?

    Also: In big, publicly-traded companies, my understanding is that the Board cannot, on its own, eject someone from the Board — that’s the prerogative of shareholders, technically, though they typically make such changes on the advice of the Board. So I wonder if it’s literal or not when Seventh Generation’s board says “it” is moving Hollender off the board?

  10. says

    Some great comments here, thanks, all. Chris, I will look into those questions–interestingly, Seventh Generation was a public company back in the 1990s. I agree with you that it seems unorthodox for a board to be able to vote off one of its members, especially since Jeff and his wife are major shareholders of the company.

    Another reaction to several comments: Growth, per se, was not the problem here. Jeff wanted to grow the company. So do most mission-driven entrepreneurs. (I’m thinking here of people like Seth Goldman of Honest Tea and Adam Lowry of Method, who I’ve spoken to lately about this.) If you believe your company is making good products and treating its people and communities well, why wouldn’t you want it to get bigger.

    My guess–and it is only a guess– is that this is either about some fundamental disagreements over strategy or an old-fashioned power struggle.

  11. Steve says

    I was shocked and disheartened to hear the news of Jeffery’s departure. I have known Jeffery for over 20 years and have relished in his success with the company which has not come easily. Success came with a great deal of effort from many people, investors, board members, and, most importantly, customers that know there are few choices for purely green and effective products. There still remain few choices that regard. Method? Please. Heavy on concept and light on substance. So, before you throw the baby out with the bath water, you might consider the follow.

    We environmentalist have a difficult time understanding that our missions in life don’t come free of charge. Missions require capital. Seventh Generation is no different and their stakeholders expect a balance between good organizational culture, competent leadership, organic growth to sustain itself against much bigger competitors, and yes, profits. Make no mistake, this is not a charity. Seventh Generation started as a mission, with a business, and has now transitioned to a business, with a mission — never losing sight of the mission’s goals. Is that a violation? I think not. Business takes some difficult and unexpected turns, but these business decisions are made with the Gestalt in mind as painful as they might be.

    What happened behind closed doors that led to the resignation of their CEO as well as the removal of its co-founder is not known to outsiders. We know what happens when we assume. Once thing seems very clear, however, the board took no delight in accepting Chuck’s resignation and most certainly no pleasure in Jeffery’s departure. Sad indeed.

  12. says

    Jeffrey Hollender in so many ways was Seventh Generation. An amazing pioneer with deep committment to a new way of doing business, a CEO from PepsiCo and Quaker, good manager that he may be, could not possibly have Jeff’s sustainable vision. It is sad indeed for a socially conscious “sustainable” company to turn its back on a “conscious” leader for a mainstream profits-first model. Integrity is a long-term policy, not one that pushes the revenues from $150m to $1bn in a quick fix. 7th Gen represented a movement, not just a bottom-line. Profiting for people & planet with purpose was the MO of the Old 7th generation. No, we cannot know what occured in the board room. Yet it is pretty clear that profits came before people. I for one, a loyal customer, will not buy their products anymore. I encourage Jeffrey Hollender to start a new company based on his principles and give his alma mater a run for the money.

  13. says

    Very sad news on multiple levels. Yet, it will be interesting to see what Hollander is up to next. I have a feeling he still has lots more to contribute in the world of sustainable business.

  14. Dave says

    These situations (i.e., “founder” steps aside for new person) are always tough. I like this characterization of the issues at 7th Gen….

    “According to Seventh Generation, it was a classic changing of the guards scenario. “Letting go of something you’ve been vested in completely is extraordinarily difficult to do,” Chrystie Heimert, Seventh Generation’s spokesperson told me yesterday. Evidently back in September when Maniscalco resigned after a mere 15 months, the board also told Hollender to take a leave of absence–before making that leave permanent. “It’s been a very difficult period of time where there was some ambiguity around accountability and authority,” says Heimert, inferring that the door is open for Maniscalco to potentially come back, now that Hollender is gone. “Our business demands one decision maker at the top.” As for Hollender…I have no doubt this may ultimately be a blessing in disguise. The umbilical chord has finally been completely cut so Hollender can begin his next chapter.”

    And in Mr. Hollender’s own words…””I have successfully guided Seventh Generation from infancy through its adolescence, but now is the right time for me to step aside so the company can transition to the next level of growth in its journey,” said Jeffrey Hollender. “We were looking for a special leader — someone who maintains a rare combination of unparalleled business acumen with an innate philosophical grounding in line with our vision — and Chuck was the natural choice.”

    It is tough to “step aside” and cut ‘the umbilical chord’. But the growth and long term viability of the company demands it. For those who believe this is some evil corporate plot against the sanctity of sustainability, I can only say that with P&G, Clorox, SC Johnson and all the others ‘playing in your sandbox’, you better hope somebody is at the helm who knows the rules. Without him/her, 7th Gen will be crushed like a Birkenstock left in the middle of I89.

  15. Sam says

    “Growth” in an of itself is not a value. Growth needs to be achieved through the right principles or not at all.

    In fact the idea that growth must happen no matter what it costs, is precisely the sort of value that a company like this needs to avoid. That said, hiring a CEO from Pepsi is for me already a sign that this company was struggling with values. Pepsico is great at analysis, great at superficial marketing, great at distribution, but let’s face it they are not a bastion of values, otherwise they would not be selling expensive sugar water in countries where people dont even have enough clean water to eat, drink or wash their hands. They also have a pretty aggressive and cutthroat corporate culture internally at HQ.

    So having seen this company set on that path and put a Pepsico exec at their wheel, this sort of catastrophe comes as no surprise to me.

  16. says

    I’m going to write again about Jeff and Seventh Generation, as soon as I have a bit better sense of what’s going on. But I do want to challenge the idea expressed in several comments above that Pepsi = Bad.

    Remember, first, that Jeff hired Chuck Maniscalco, and did so with great enthusiasm. He wrote about this in his blog and in Harvard Business Review. If Chuck is indeed the “heavy” in this story, which I doubt–these things are rarely black and white–then Jeff made a very bad misjudgment. I think that’s unlikely although you never know.

    Second, just for the record, Chuck oversaw Quaker, Gatorade and Tropicana for PepsiCo. Those are among the healthier products (well, except Gatorade) sold by the company. They are all part of my daily life. He was not in the “sugar water” business, at least not at the point when he left to go to Seventh Generation.

    Again, more to come…

  17. Dave says

    Hi Sam,

    Just to clarify…I do not believe that “growth must happen no matter what it costs”. I understand the importance of the ‘right principles’. My point is simple: without growth, Seventh Generation and its platform for sensible environmental concern, the ‘goodness’ it provides its customers, and critically, the jobs it provides its employees and those of its suppliers will be gone. The is the harsh reality of the consumer packaged goods business in which it competes. So, the balance of the ‘principles’ with the ‘business issues’ becomes, as it has always been, the key.

    And, to Marc’s point above, suggesting that all former Pepsico execs are ‘bad’ seems a bit harsh. Kind of like ‘all environmentally concerned citizens are tree-hugging wackos’…which of course, is not true.

  18. Sam says

    You cannot change or even improve the world if you plan on doing so by the same defective premise under which it is currently operating.

    By this I mean that even the idea that “growth” must happen is itself unture to the principles of sustainability. You should produce what you need and not more. You cannot “push” consumption ake “drive growth of consumer products” and claim to be sustainable.

    Rather the premise should be that we make good products and we set off on a path to help the customer understand why this product is better for them and their world. We should not be trying to make them use more toilet paper or buy it because it is “cool”.

    If there are periods where we dont sell more of these products, because customers have not yet digested the insight, then so be it. You regroup and try to improve your communication and your processes.

    But never never, can you adopt the idea that “we are making consumer packaged goods” and we “have to grow”. No, you dont have to anything. Such a mentality means you are simply taking the same old failed ideas and greenwashing them.

    As to the comment on Pepsico, you should experience the culture there. As I said, it’s pretty cuthrroat and aggressive. And at the end of the day this is a company that generates money by means which are NOT healthy for much of the world or the people there. A personw who would be comfortable in that environment, well let’s be honest – is not likely a person who is going to challenge the premise of consumer packaged goods.

    And as long as a company like seventh generations thinks its going to beat these kind of companies at their own game, good luck. That’s tilting at windmills. The “growth” game is poison and it is precisely a game you should be setting yourself up NOT to play.

  19. Dave says

    Hi Sam,

    I think we’re gonna’ have to ‘agree to disagree’.

    Your comment,

    “If there are periods where we dont sell more of these products, because customers have not yet digested the insight, then so be it. You regroup and try to improve your communication and your processes.”

    seems somewhat unrealistic to me. Who pays the employees, the suppliers, the electric company, et al. while this digestion takes place? There is not a pot-o-green from which funding springs eternal in Burlington…it takes sales and god forbid, profits, to make SG a viable leader in sustainability.

    And, re Pepsico…neither of us know the work history of the other. ‘Nuff said.

  20. Dave says

    A fantastic and well-informerd post on the Seventh Generation site…Thanks to EMFO!

    And people move on…
    Posted by EMFO | Wed, Nov. 10, 2010
    Jeffrey Hollender grew an amazing company and then, as is logical, responsible and appropriate for a big company’s CEO, he hired his ultimate successor. Whether or not he was ready to go when he exited is something we might not get to know.

    But here’s something to consider: Maybe Jeffrey wants to move on and do something different. Having worked with entrepreneurs most of my professional life I can attest to the fact that there’s a certain exhaustion that can come from always growing, always risking. And there’s also a point where the person who started the company says, “I don’t know how to get this company to the next level…and if it gets there I don’t know if I want to stay.”

    Leadership transitions change companies and there are always people who want the company to remain what they know. I hope that Seventh Gen keeps its product integrity and that it’s able to bring its prices down to be more competitive with the nasty products that pass as cleaning products thru this transition.

    To my mind bringing fabulous products into the mainstream as replacements for poisons in the waste stream (and our bodies) is the ultimate goal of Seventh Gen. Let’s watch and hope that integrity remains, regardless of who’s leading the charge.

  21. Sam says

    Dave, re: your comments Nov 10th at 1:12pm, I think maybe you dont understand what I am saying. I’ll try again: the idea that a company can demand to “grow” sales every quarter is itself NOT a sustainable idea.

    You cannot just consume resources and make STUFF to sell, just to keep the wheels churning and your suppliers fed. You need to have a core staff and flex the rest. If your mission cannot progress within a specific time frame, those people need to go and work on what is actually NEEDED at that time, which may not be your product.

    Until people actually get this, I think we will waste a lot of time doing the same old same old consumption game, disguised as “green” this or “green” that. The game itself has to change for anything to be different, and that includes subscribing to the Wall Street mantra that a company must grow every quarter. That concept is just flat out a dinosaur concept. Its fine for an analyst who care not a whit about anything else but money to say that. But if you plan on having a planet for your grandkids to enjoy then we are going have to get past the misguided idea that we ALL must consumer more resources every day than we did the day before.

    Its unfortunate that one has to actually be educating people on a social responsibility blog in this way. But then again maybe that’s what’s wrong in the first place.

  22. Dave says

    Hi Sam,

    Thanks for the ‘education’.

    If Seventh Generation does not make products that people want to buy, it will go out of business. Period.

    Another voice in support of precisely the view you prescribe will be silenced.

    Have a great day!


  23. Mark Newton says


    When CSR-focused companies like 7th Generation move into mature, established markets like cleaning products they are not contributing to the “produce more stuff” paradigm rightly criticized by you, David Suzuki et al – they are in fact, if financially successful, transforming, informing and improving the overall sustainability of the segment.

    If 7th Generation stays true to its values and generates $1B in sales its good for all of us. It will not do so by creating more stuff, it will do so by providing more responsible alternatives that cut into the market established by “unconsidered designed” products produced by less principled manufacturers. The net result is the same amount of stuff – but with an average improved sustainability profile for the industry.

    Monika nailed it – profiting for people and planet is directionally correct. It raises the bar by using the same tool typically used to lower the bar. Marc – thanks for kicking off and continuing to moderate this important thread.

    Austin TX


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>