Leadership, Success, and The Answer you've all been waiting for...

I’m at the end of another very long day, after a couple of very long weeks. This work is extremely draining and demanding, and the emotional strain is high. It’s difficult for the human brain to deal with these kinds of problems, comprehend the complexity of the systems and the daunting nature of the task. An article I just read by Peter Senge (MIT prof and founder of Society for Organizational Learning – SoL) pointed out that the human brain has evolved to deal with problems on the individual, family, tribe and local society levels, and conditioned that way for thousands of years. Someone put forth the analogy that it’s like trying to run brand new software on 50,000 year old hardware. It’s very difficult to get people to all of the sudden start thinking on a global scale, with the biosphere as the system. We just got our first picture of the Earth in the ‘60s. And we are just starting to realize the true implications of our actions. Just a reminder…

...So I’m due for some “success stories” – some feel good stuff about how businesses are profiting from sustainable initiatives and inspiring their employees and everyone “doing well while doing good.” I think I’ve sort of taken for granted that people know about some of the stuff that is going on, because it is these types of stories that have kept me going in this field and brought me to this program. There are a slew of stand-up companies doing good things at different levels of course. But the ones that have really internalized the true concept of sustainability – defined on the principle level – are fewer, but more exciting. They are invigorated and creative organizations. The big ones that come to mind are Interface, Scandic Hotels, Electrolux, and IKEA. The last three had great success after working with The Natural Step, and Interface’s CEO, Ray Anderson picked up the concepts from Paul Hawkin’s The Ecology of Commerce.

I’ll get to a lot of the success stories but just start with a bit about Interface, because we just watched a documentary called The Corporation, which Anderson was in a few times (please go rent that movie by the way, it’s long and a bit heavy, but entertaining, so important and worth the watch). So, basically, Interface is an old carpet company (Anderson founded in the 70s), very big, from the US. As you can imagine, but if you’re a normal person, probably rarely ever think about, carpets are a huge problem from a sustainability view point. They use a lot of materials, usually synthetic made from a mix of petroleum based products as well as man-made compounds, not found in nature, often toxic, with a host of adhesive, glues, etc. I’m no expert, but we all have a basic idea of what carpet is when we think about it, and can sort of imagine the process of laying it down and making it look all nice and flat, and soft, etc.

And carpets wear out rather quickly, in the scheme of things – how long does it take for a carpet to start looking dingy in the places it gets walked on all the time? Like 5 years, maybe? And they can go out of style quickly. I have no idea the average active use of a carpet, I’m sure it varies, but I’d think you can see when a carpet is 10 years old, and it’s usually not a very hot look. Office remodels and new tenants moving into spaces wanting their own look and a fresh start are pretty common events. So this all adds to a lot of turn over, a lot of resource use in the carpets, energy in production, and heaps of carpets in landfills (with all those toxins, etc not disappearing (1^st law of thermodynamics) and dissipating into the biosphere (2^nd l.o.t.).

So in the early 90s (or thereabouts) some customers started asking about the company’s environmental policy, and they didn’t have one, and the employees started a task force to deal with it and asked Anderson to come give a speech at the task force kick off to the members (employees from the company’s operations around the world). And he didn’t really want to do it, because the company didn’t have an environmental policy or vision or any concept really of its role in the biosphere. And that’s when he found The Ecology of Commerce in a desperate search for guidance, and was really struck by the concepts.

He’s since revolutionized the carpet industry and his company. They’ve shifted their entire operational paradigm from “selling carpets” to “providing the service of comfortable, attractive flooring.” Essentially they lease carpeting to companies. That way Interface has the incentive to build long-lasting, durable, high quality carpets, because they own them. They have the incentive to minimize waste of the carpets. So they’ve done things like creating carpet tiles that cover a whole room, but when the high traffic areas get warn out, they replace those tiles, instead of the whole room, saving them a lot of money. Because they now have the incentive to bring back the warn out parts and refurbish/reuse the materials, they don’t want them full of toxic compounds that are hazardous, difficult to separate, and generally hard to deal with – things that really weren’t any of their concern under the previous model where they washed their hands of it the minute they left the factory.

And as you can imagine, when those incentives are there, the innovations follow (like the tile-carpets). They’ve also brought in emerging experts to help them with developing safer alternatives in terms of dyes and adhesives – natural alternatives, or chemicals that are safer and more easily managed in closed loops, less persistent, etc. I know they’ve done some work with Bill McDonough’s (author of Cradle to Cradle, and another Dartmouth grad) MBDC group (http://mbdc.com/) to develop some of these alternatives.

I think the real key here though, beyond the significant cost savings and opportunities to improve margins through the new model, is the huge revolutionary and exciting change that the culture of that company must have gone through, and is still going through. I mean, how often do you hear in management and business literature about the importance of corporate culture, core-values, and clear, shared vision? In most businesses labor is the huge cost factor, far outweighing all of the physical and material inputs. And can you imagine how exciting and rewarding it must be to work for a company who’s goal is “sustainability by 2020”? The improved productivity, the innovation that this approach has sparked at the company and in the industry as a whole must be immeasurable… [I apologize for not doing more research on the facts and stats of the story, but you get the idea (and a google search on any combination of “Interface, sustainability, success” etc will pull up a ton of info on their story).]

And that brings me to a point I’ve been meaning to make for a long time. A lot of very supportive friends have asked me half in jest, when I’m going to figure out things like how we can have wind power without killing birds, how to get the water out of New Orleans, when I’m going to hire them at my futuristic sustainable business, how long it’s going to take me to structure the new-world-economic-order, etc etc… Well, as much as I like to fantasize that I am, I think we all know, that I’m not nearly smart enough to do any of that. But what I’m hoping I can do on some level is lay-out the current problems that we face as a species, along with a simple, shared framework that we can all agree on, to enough people that they can then use that perspective, and those tools to save us. It’s going to be those CEOs that inspire those middle-managers and engineers and designers that save the world. It’s going to be anyone who reads this and starts applying it to their lives, to their organizations that their involved with (employers, local governments, schools, whatever) that really makes this possible. And the beauty of it is, that once that leap is made, that confrontation with the reality of our situation (the funnel, if you like) and the shared, scientifically irrefutable framework for success (the 4 principles) are understood, the possibilities for solutions are limitless. The potential for creativity in working together to conquer this challenge, the artistry that will get us there, is just incredibly exciting.

… As I said, we’re moving on to a leadership and organization learning module of the course, and it’s really exciting, powerful stuff (and of course, as usual, daunting, overwhelming and challenging). Tomorrow we’ve got lectures from David Cook – head of TNS in the UK. He’ll be talking more about applications in business, and I’m hoping some about what the organization is doing to make in-roads into China (speaking of daunting, overwhelming, powerful challenges).

On a more personal note...

Here is the link to my girl Michelle's blog.

She's way better at covering the day to day of life in Karskrona, the good times with the people in our program and those we've met here, and all of those things that are actually really important. (Although, she did get some nerd-envy when she saw my blog and has started dorking it out a bit more as well).

The pictures are great as well, on the right hand side - all of the albums that say "karlskrona" or "friends" or some combination there of are mostly from her time here. Also, I live in the same building, so the pics of that and the bikes and her room are all pretty much the same as what mine look like (except my room's a little neater and better decorated). Enjoy...

And congratulations to Wakefield for pitching a stand-up game this afternoon, to get us at least half of the double header. Six games to go. Need a big one out of Schill tonight.

Isn't It Organic...

I’m coming off a thrilling weekend digging into some of the finer points of the Carbon Cycle. But the internet research led to a lot of interesting websites on climate change – a debate I’ve largely avoided for the past few years, as it seemed fruitless to spend time bickering about what might happen, when that is inherently unknowable in such a complex system (for evidence of this, see your local weather report’s success rate).

But I was surprised by how much we do actually know at this point and how much consensus there really is among scientists. The IPCC (Intergovernmental Panel on Climate Change, http://www.ipcc.ch/), The Pew Center on Global Climate Change (http://www.pewclimate.org/), and The Global Carbon Project (http://www.globalcarbonproject.org/) are a few organizations trying to tie together all the data and tackle the daunting task of establishing some policy measures that will address this problem.

It also became clear the huge impact the media has on this debate. Not to say that they’re politically motivated one way or the other, but it just makes better TV to have the “dissenting” view expressed. Maybe they think they’re being fair and balanced by giving the view of 1% side-by-side with the view of 99%, but I think too often it comes across as sounding like it is 50/50. Not to say that view should be ignored, but it’s a bit skewed right now. And then of course there are some political-economic interests that are pushing that 1% view, and making sure it’s louder than it probably should be.

Another cool aspect of having to sit down and actually look at the Carbon Cycle was really learning / relearning how it works and how little we understand about it. Many of you may have heard of the mystery “land sink” that has come up in the CO₂ emissions debate. It’s essentially a missing flow of carbon on the order of about 1.8 Giga-tons C per year, from the atmosphere and we are not really sure where its going – it’s probably a combo of various factors (like increased fertility from climate change and run-off fertilizers), and the impact of some time-delayed flows (like fires from forest clearing that release a bunch of CO₂ in the short term, but actually capture some in the form of black carbon that’s left behind and doesn’t breakdown). Anyway, some of the other interesting numbers in it from the most recent data I could find were: land-use changes (paving, deforestation, reforestation, etc) produce a net addition of 1.2 GtC/yr to the atmosphere, fossil fuel emissions and cement give-off 5.9 GtC/yr, and over-all (including exchanges b/n the air and ocean, and photosynthesis and respiration, etc) a net flow of about 3.5 GtC is added to the atmosphere each year. (Mostly in the form of CO₂ … 1 GtC is about 3.7 Gt CO₂).

The searching also led to some sites on Emissions Trading – a more “market based” approach to creating incentives for lower emissions. The process essentially securitizes emissions as credits that can than be traded between companies. It seems like a useful tool for companies that either (a) don’t have the long term strategic vision to see the benefits of sustainable operations (avoiding the funnel walls) or (b) are hindered from implementing long-term investments with difficult to quantify ROI due to shareholder demands, need to meet quarterly numbers, etc.

Anyway, I’m going to look into all of this more, including trying to figure out where policy watchers are placing bets as to the odds of the US signing on to Kyoto post-Bush. (That Forbes article on GE made it sound like businesses were gearing up for the possibility of that happening after G.W.’s time is through). Regardless, it looks like there are already some lucrative opportunities there for visionary companies, as well as people set up to get in the mix and trade the credits.

So, we’ve finished up this basic science section, and have another section on Organization Learning & Change and Strategic Management coming up this week – so I’m sure I’ll get some more stuff up on the business side of all this. HUGE week for the Sox though, so the blog might take a backseat… Hope everyone’s doing well -

The Posse:

Here's a link to a pdf of the bios (with pictures) for all the members of this year's Strategic Leadership Towards Sustainability program. As you'll see quite an impressive group and ridiculously diverse range of backgrounds in terms of nationality, experience, etc., which has provided for an amazing experience so far. A real solid crew in terms of hanging out and having a good time as well...

Class Brochure

Presenting...

Last week was busy with group presentations and exams. Most of the work consisted of group meetings, where we came up with and gave presentations individually on the ABCD Model, and then as a group created a hypothetical case study where we hypothetically went through the ABCD with an organization, and put together a presentation that was somehow a report on how that case study went.

Our group went with a cell phone company, and pretended we were a group of consultants presenting the results to our newly hired consultants in training. Another group went with a fictional local restaurant, one did a funeral business / mortuary, another did Absolute vodka, and my personal favorite was the one group that chose a real-life topic, which was Pierre’s (a great guy in our program from Rwanda) coffee plantation. Looks pretty nice, eh?

All of the presentations followed pretty much the same format, in that they started with a quick overview of “A” – that is defining (1) the system (that particular organization within society within the biosphere) and how that system is akin to the funnel metaphor; (2) success in terms of sustainability (not violating the 4 sustainability principles); and (3) some strategic guidelines (in particular the concept of backcasting, which is what the group would be doing in steps “B” and “C”).

Then they described how “B” went – and there were a lot of assumptions and generalizations, because the point wasn’t really to get a full handle on the topic, but to learn the process. Also, when you do it for real, you let the group of experts do all the talking, so you don’t really need to know specifics of the operation. So all of the “B” sections had a bunch of examples as to how the present operations violated the 4 principles. So the Vodka group, for example talked about CO2 (from energy in buildings and distilling processes, transporting the product, etc) (violating Sustainability Principle I) and about the farm land used for the grains (SP III) and the pesticides and fertilizers used in the farming (SP II) as well as problems with alcoholism (SP IV) and drunk driving (SP IV). Our group’s slide for B looked like this:

Then on to “C” where the hypothetical groups started brainstorming about solutions and an ideal vision of the future, without regard for what might not actually seem possible or feasible today (due to limitations in cost or technology, etc). So the coffee plantation group talked about a chemical-free farm, and a bean-cleaning operation that used recycled water and renewable energy, and a living wage for workers ($1 per day vs. the $0.60 they currently get, which is already higher than the $0.40 average for the area). Some of the examples for our cell phone company were:

Then we got to “D” where you start prioritizing immediate actions the company can take (keeping in mind that those actions need to be in the right direction towards “C”, they are flexible enough to adapt to unforeseeable changes on the way to “C” and they provide a good ROI so the company does well and has extra $ to reinvest in more challenging sustainability options down the road). The funeral group talked about biodegradable caskets, vertical burying, alternative embalming techniques… (this presentation brought up a lot of interesting talk about cultural considerations and the importance of traditions, and how they can change – our current land-use intensive burial practices haven’t really been around all that long). Here's our D slide:

And that was that – good practice to go through the steps again, and play around with different examples and very interesting to see how it works with any organization and application, even weird ones like funeral operations.

Dose of Doomsday

So, already I’ve fallen way behind on keeping up with the program on this blog. This week we’re going a bit more in depth on science – still fairly basic, most of the math is straight up calculus and most of the concepts I remember from undergrad Environmental Studies.

It’s a little involved and tough to keep up with for us non-engineers, but the real challenge is not getting depressed and giving up as we get into the most recent science on why there is a problem, how complex it is, and how catastrophic the consequences could be.

We’ve been dealing a lot with thermodynamics and global change. The CO2 issue is central to this, basically the chart below tells the story. It is incredibly unsettling and probably one of the most significant, and under-acknowledged research findings of the 20^th century, in my humble opinion…

As you can see, over the past 450,000 years or so, the concentration of atmospheric CO2 has been stuck in a pretty steady range – you’ve got your ice ages and warmer periods (global average temp correlation with CO2 not shown here), but the various ecosystems kick into gear and balance out the greater biosphere system. As you can also see, in the past 50-100 years (just a blip on this time scale!!) we’ve fired that level through the upper range by an alarming degree. (the red part of the “projected” obviously includes a lot of assumptions about rates, etc – and while it looks dramatic, I think it actually just takes away from the really dramatic picture the known data paints of the breakout through the 290 level to the ~400 ppm level today).

I’ve been having those thoughts about why everyone isn’t totally freaking out and screaming from the rooftops and stopping the use of any fossil fuels whatsoever. It is mind boggling to think how quickly and easily we could transition to a sustainable energy system if we just all got on board and did it, even with today’s technology – solar, wind, biomass and improved efficiencies – not to mention what we could develop very quickly if we had a fire under our ass and some funds for it. We’re up to about $300 billion or so in Iraq, and people talk about solar being ‘not economically viable.’ Meanwhile, a recent study out of Princeton estimated that a $10 billion boost for the solar industry could make it an economically viable alternative to oil ($10B ~ 5 days of oil revenues… this study was quoted in an early lecture, I’ve been meaning to find it and check out the details)

Anyway, the fact remains that for the most part people aren’t freaking out. Maybe we’re starting to a bit with wars on a few fronts related to oil, American refugees from New Orleans (and now maybe Houston??), gas prices “skyrocketing” (still well below most of the world) – but it’s just natural to not want to deal with such frightening realities, especially when they’re difficult to conceptualize, and easy to explain away. I’ve understood that for a while and shied away from the doomsday approach to promoting sustainability, instead focusing on practical solutions and alternatives. But after days like this, I realize we need some doses of doomsday reality, because it’s there, it’s true, it’s frightening, and we need to do something about it.

If it’s not too late… in looking at natural systems, you find that the collapse thresholds often are not preceded by much in the way of forewarning. So if you’re polluting a small pond for example, and that poisons some of the small fish, and the vegetation gets a bit out of whack, but for the most part, you look in and see plants and fish and things look fine, until that line is crossed, and very quickly a certain key fish or plant can’t handle the stress on the system any more, dies off and disrupts the balance to a point where the whole pond system quickly “dies”.

Anyway, hopefully we’ll get it worked out before that all happens. No lectures tomorrow so hopefully I’ll have a chance to get realigned and catch up on a bunch of half-written postings, so look out for flow on the blog… and please keep some perspective on what’s really important here: the Sox are only ½ a game up on the Yanks and it’s coming down to the wire. Guide your prayers appropriately.

Elephants at the table...

Wanted to thank my old man for alerting me to the cover story in the latest Forbes on GE going green. I'm sure you've all seen the new Ecomagination ad campaign - the article's a pretty good concise look at what they're actually doing.

Definitely some good stuff going on, certainly some PR smoke and mirrors and misguided initiatives that will probably create more problems than they solve (a lot of ‘dealing in the leaves’) – but all in all its encouraging to see the big dogs address the issue with their wallets in hand. I also think Immelt's been doing a hell of a job through some tough times in general (and he's a Dartmouth alum and damn good man).

The article also speaks to the importance of the political process in all this with the companies gearing up for a post-Bush, Kyoto-reality world. Those with the competitive advantage when that breaks will be pretty psyched as they make the market for their competitors to buy credits from them.

Here’s the link - http://www.forbes.com/business/forbes/2005/0815/080.html

You might have to go to Forbes.com and register.