The art of Forestry

There are lots of difficult questions in the idea of 'sustainable business' that from some angles seem contradictory.   This would cause some people to find it such a hard sum to balance that any kind of action is too challenging. There is some truth in their fears. There are really hard conceptual issues that could take up all of your time if you had to engage with them every day. This creates a huge responsibility on the proponents of the thinking to grapple with them until not only they can fully understand them, but they can also explain them clearly to others.

The route of the problem in my mind that creates all of the smaller inconsistencies and tensions that sprout up here and there is as follows:

-A smaller economy is the quickest route to reducing the total impact of human activity.

-Companies are defined by growth. This is core to their existence and the pursuit of this represents the only way they can survive in the face of competition

-Therefore sustainability interests and business interests are set in critical opposition to each other from the off.

The best resolution of this that I have ever read was on John Grants blog and is based around a useful metaphor - the idea of forestry. It states that we should think of the economy as a whole as a huge forest that has been growing in all directions for a while now. Trends towards reducing excessive consumption through government intervention, consumer choice or scarcity of resources can and should make the forest shrink in its totality. It would also change the rules of how the many forms of life inside win and lose. What would not change would be the fierce competition for the scarce life sustaining resources available inside. Each species and individual would have to adapt to this change in conditions in order to succeed. This will definitely mean that some of the biggest oldest oak trees (on present form lets say the American car industry) might fall. But this in turn would free up resources for other more suitable forms of life in their place. Other well established life might be able to change and mutate quickly enough to stay strong with a lesser or even highly coverage. However the most noticeable thing would be some bamboo shoots or other nimble fast growing life, totally suited to the new environment, growing up before our very eyes.  

In other words even in an economy that is shrinking overall, the growth drive of companies does not and can not subside. What’s more important is the transitions that will take place between better suited, more able, more sustainable forms of business, and older less flexible institutions.  

But despite this those in both scenarios need help. The newcomers need resources and guidance to become established. While the incumbents need help to modernise and learn new methods. If ultimately the latter are sat on an unsustainable business model and are not prepared to address this despite any smaller steps they take around the edges then they may not make the distance. But all deserve the chance.

So if it seems complicated sometimes the task can be reduced to something pretty simple… two tasks in fact. The first is making big or established companies become more sustainable. The second is making newer or smaller more sustainable companies big. The race for the future happens in-between.

Companies are ecosystems so think like a gardener

Am making my way through this at the moment.  Its basically about the idea that in the new interconnected and interdependent structures of life our own ordered understanding of the world does not work. In pretty much every cultural discipline there will be a set of structured rules in use that basically can be reduced down to the following belief… that if A happens then B will be the outcome. It’s a way to bring order and simplicity to disordered and complex things. It’s also the reason why the experts get to call themselves experts – we can ask their advice because they know what’s going to happen, they have an equation to solve problems. This book says that these rules no-longer apply. That in the new world you need to find a way to plan for the unthinkable. One of the recurring metaphors is a pile of sand which is constantly growing due to new grains of sand falling from above onto the pile. When will the pile stand firmly in place and when will a landslide reshape this little mountain? Scientists once thought this is the kind of thing that they will be able to use logic to predict. Now they know that they never will – all they can bank on is its randomness i.e the relationship between every single grain of sand to all the reast, relative to every other variable creates complexity that we will never be able to iron out. This book increasingly sees politics, the environment, business, as well as science, in this light. 

One of the things that I like about it is the idea is that it is a way of un derstanding the world that you can apply to a vast array of different situations. My last blog blogged on about the idea that there are blurred lines between all types of culture such as arts and sciences or business and personal etc… etc… and that truly big ideas should stand up against the context of each of them (even if they get tested and reshaped a little along the way.)  

I have been thinking about this in the context of sustainability and see it as pretty useful. One of the most useful ideas it uses is the notion that we need to change our mindset to think in terms of systems rather than objects. For example we tend to think about a country or a company or organisation as a thing that can think and act collectively. In actual fact they are more like complex systems or balanced ecosystems in a constant state of flux.  

This idea is especially interesting when thinking about companies and how they need to see themselves in the modern world. It used to be that you could manage in a vacuum. You could communicate single mindedly and you could control your external perception. Now it makes much more sense to think of the company as an ecosystem… the things that happen inside are connected to the things that happen outside and the whole framework for decision making needs to be set in context.    Not only understanding the forces within the internal company structure but  viewing this in the full farthest reaching context in which it sits. Your brand, your environmental impact, your employees, your material use, your consumers, the media, the people who live close to your factory… they are all part of your corporate ecosystem. It can’t be run or managed it can only be cultivated or as I think the book said somewhere… think like a gardener!

Making less into more

This is the trailer for a film about the process of turning resources into objects through the eyes of the designers who change the stuff of thought into the stuff of material goods.  According to fast company a large section of the film is dedicated to the designers contemplation of the fact that most of what they create ends up  in landfill and a little less time to the process of marketing and business strategy that arguably focuses on making this happen at faster and faster speeds.

I am sure that designers can do great things to prevent the life of objects ending so frequently in giant holes in the ground or causing harm when they do end up there.  There are lots of different ways to do this which go under the heading of 'life cycle thinking.'  I.e. make the product last longer, make it recyclable, make it less energy intensive,  using sustainable non-toxic materials.

The implication of much of this is to brief the designer using the notion of less; that 'less is more.'  The designer will not have much of a problem getting their heads around this.  It actually has the makings what seems like a great design brief.  Its more the business and also the end consumer who will struggle more with this idea.  Generally for business the idea of 'more is more' makes more sense.  Bigger products, bought more often, in higher numbers to fulfill ever more undiscovered needs = more profits and growth.  If the designer is working within the rules of this environment then their hands are tied.  

Of course its not quite this straight forward and there are lots of different progress scenarios such as selling more of a product with more sustainable credentials so that less of a 'bad' product is sold, and selling more of a product but making the overall material and energy use less.  In these two examples there are some useful 'less' concepts attached to the notion of more from a sales perspective.  However one of the scenarios must also be the idea of less consumption of the products that companies make and designers design - radical stuff!  Fine for people to talk about outside of companies but a pretty risque idea to discuss within the corporate environment.  However its the people inside companies that create the design brief more than the people outside and so its an important question.  Companies are legally bound to maximize profits for shareholders and so proactively acting against the interest of profits is off limits.  So its this that is the real design brief - designing the company and the business model where less consumption is good for business thus giving the product designers the opportunity to use their skills sustainably.  I plan on dedicating a number of posts to collecting some of the thinking in this area.

Capitalism & Enough

Is that an oxymoron? I am currently listening to ENOUGH by William J. Bernstein from audible. I did not expect that it was by one of Wall streets foremost leaders when I ordered it. Nor did I think that it would spend so much time talking about the problem with the Mutual fund industry or the soaring costs and diminishing returns of the finance industry in so much detail - not exactly easy listening a few miles into a run. Having said that if there is anybody who can talk about the concept of ‘enough’ without seeming naive or in some way weak or conflicted from a business perspective it would be a Wall Street finance business leader.  

The key principles as I see them in my half baked over simplified interpretation are...

-The finance system has grown almost exponentially to become the biggest sector in the economy
-Despite the many justifications the finance industry extracts value from the productive part of the economy rather than creates value
-It creates a fake reality based on share price rather than intrinsic company value.
-In this fake reality it needs and promotes instability; otherwise the value of shares could only ever grow in line with the overall growth in GDP - For all of the artificial peaks and troughs the true performance of the market is highly predictable.
-It does this through a number of self serving activities...
 -Focusing on speculation which detaches the financial market from the real world of business
 -Creating a myriad of confusing products that investors cant understand
 -By encouraging investors to keep moving their money around detracting them from any real interest in stock that they buy.
 -Focusing on sales and marketing for money alone rather than acting like a professional industry offering stewardship to its clients.
-The result of this is that companies focus on short term stock price strategies to play the game created by this artifical situation. 
-This is compounded by rewarding CEO’s through share options that are linked to stock price.
-Accountability is removed as shareholders have little interest in corporate governance as their stake is so transitory. 
-This in turn means that management is driven by numbers and accountancy rather than leadership and business character. Everything is reduced to a number that could be used to affect the short term share price up or down.
-For this reason the unmeasurable qualitative life of business is largely ignored - the value that can not be measured on a balance sheet like Ethics, principles, vision, character, spirit of innovation, professionalism, etc... 
-These are the things that are far more likely to affect the intrinsic value of the company over the longer term rather than the share price in the short term despite the wider benefits to society
-Due to this investors as well as other stakeholders are actually getting ripped off.

In other words the failing of the finance industry is far more profound than causing booms and busts i.e. making the numbers shoot up and then shoot down. It is to miss-direct the energy of business as a whole to chase those numbers despite their illusionary nature. Or if you want the really quick version then it would be this.... When the finance industry embraces the concept of ‘enough’ reality will set back in and business at large can start to think about the concept of what really matters for real success on every measure.  

The big lesson learned is that its not really a question of for profit or not for profit but its more a case of the real world which is likely to help everyone versus the phoney one that helps noone bar the finance industry.