Recently, in an essay called The Consequence of Failure,
I described what many scientists see as the consequences of not halting
our exploding population and resource consumption . My good friend Jon Husband has pointed out, in his inimitable subtle way, that this portait is missing an ingredient -- a possible energy crash before the ecological crash. One of the best links he provided on this is from the venerable BBC, which has a whole series
of articles on this possibility. Current consumption is running at
about 28 billion barrels per year (see chart above, from the ASPO
site), and growing precipitously because of the skyrocketing demand
from China and India, while new finds are averaging only 5-10 billion
barrels per year, and many companies, like Shell, are actually reducing
the estimates of their reserves because new surveys found them
overstated by up to 30%. Even though there is, theoretically, 40-100
years' worth of hydrocarbons left in the ground at current consumption
levels (depending on whose numbers you use), much of this oil cannot be
extracted with current technology, or will cost 5-10 times as much as
today's oil costs to extract, and current consumption levels are rising.
The model above uses simple supply/demand economics to project a
soaring price per barrel (quadrupling to $160) over the next few years
as the consumption/discovery ratio worsens and new Asian markets bid up
the price for what's available. The combination of soaring price and
simple unavailability of supply will push down consumption, starting as
early as 2008.
Most of what I've heard, from alarmists and skeptics, about the consequences of all this, is of one of two extreme viewpoints:
Civilization will collapse, so buy your Montana subsistence farm now, or
Technology will rescue us, so there's no cause for alarm, or to pay any more than we do now for oil.
Both of these positions seem unrealistic to me, and represent more
wishful thinking than true scenario planning. So let's look at what
might happen if the chart above holds true, the price of oil jumps to
$160/barrel by 2008, then to Osama bin Ladin's "reasonable" price of
$200/barrel by 2012, and by an additional $10/barrel/year thereafter.
First of all, what do we use hydrocarbons for now? The top 10 uses are:
Food (it's the main ingredient in fertilizers, pesticides and
herbicides), transportation, heating, plastics and chemicals, asphalt,
medicines, clothing, furniture and carpets, cosmetics and household
products, and protective coatings and dyes. That's a pretty broad list.
So let's assume that the cost of each of these products will quadruple
in the next decade (the cost of materials may not quadruple, but add in
the cost of transporting it and the total cost to the consumer probably
will). I say a decade rather than four years because there's always a
time lag before price increases driven by the supply/demand curve reach
the consumer level, and because there will be fierce political pressure
to prevent or at least delay these increases. A 300% rise over a decade
is roughly 25%/annum inflation. Interest rates need to be adjusted, as
they were most recently in the 1980s (remember 18% mortgages?) to
provide a modest return to lenders beyond inflation, so we should
expect interest rates to jump to around 30%. That's what you'll pay on
your mortgage-secured loans (on unsecured consumer loans like credit
cards it will be even higher). This will cause a stock market crash, as
investors cash in to cover debts and as leveraged companies become
unable to pay their debts. It will cause a real estate crash because no
one will be able to buy houses with 30% mortgages. It will bankrupt the
US government, which owes trillions to foreign lenders, and force the
end of future military adventures (even those intended to secure more
oil), the virtual cessation of public services, the collapse of the
pension system, and massive increases in emergency taxes. This will
bring on a worldwide depression, because the rest of the world depends
on US imports, and on the US paying its bills.
What else? The other bad news is that, in a desparate and myopic move,
the US will pull out all the stops to find new energy sources, which
means arctic, offshore and wilderness drilling everywhere, strip mining
for coal, burning a lot more coal, with its catastrophic impact on
global warming, huge increases in nuclear power use, with its
horrendous dangers and insoluble waste disposal problems, and in some
countries, massive deforestation to provide wood for burning. The
impact will be especially bad in Northern areas like Canada and
Scandanavia, where the alternative to burning fuel is freezing to
death. These countries will need to completely restructure their
economies quickly.
Now let's look at the possible scenario for the top 10 uses one by one:
Food, already heavily subsidized in the West by massive
government subsidies, will be even more subsidized -- to do otherwise
would be political suicide. In the US however, those subsidies will not
be affordable due to the massive debt load, so food prices there will
skyrocket. There will be a huge move to self-sufficiency (home
gardening, especially by the massive numbers unemployed due to the
depression), and to lower-cost foods (unprocessed fruits, vegetables
and grains that require relatively little fertilizing). Because of the
lack of resilience in the food industry, suppliers of more expensive
foods (meats, diary products, processed foods and those that must be
transported over long distances) will simply stop producing them,
leading to rationing and black market activities, and even food riots
in some countries.
Transportation will become a luxury. Urban sprawl will stop
dead, as people move closer to work to reduce and even eliminate
commuting cost. Airplane travel will collapse. The auto industry will
collapse. Global trade will slow to a trickle as goods become too
expensive to move. The trucking industry will be bankrupted, and
governments (except the US, which won't be able to afford it) will turn
to more efficient rail transportation as the primary means of moving
both goods and people. There will be a huge black market for gasoline.
And gas rationing of course. Expect long lineups.
Heating will suddenly become very innovative, since, unlike
in transportation, there are already some major viable alternatives to
hydrocarbons for heating -- solar, wind, geothermal, and biomass will
become huge industries. Millions of buildings will be re-insulated. The
value of large, inefficient suburban homes, already hit hard by high
mortgage rates and the exodus back to the cities, will be further
lowered by the difficulty in making them energy-efficient. In Northern
areas, heat will be both rationed and subsidized, through two-tier
pricing (low price for the first X BTUs per household, many times that price for the excess).
Plastics will go from being the cheapest components and
containers to the most expensive. Reusable glass, paper and metal
containers will replace most plastic and recylable containers.
Computers and other electronics that depend on plastic components will
become unaffordable to most people. The trend to miniaturization, doing
more with less, will accelerate. Some chemicals we take for granted,
like lubricants, waxes, flavours, colours, stabilizers, preservatives,
aromatics, solvents, ammonias, chlorines and other cleaners, alcohol
products, latex, synthetic rubbers, phosphates, acrylics, polymers and
hundreds of other common ingredients in consumer, industrial and
agricultural products and processes will be replaced with natural
alternatives or eliminated altogether. (Even modern paper-making uses
petrochemicals to make the paper cleaner, smoother and whiter).
Asphalt, upon which we all drive, is basically an oil
product. We're going to have to go back to cement, brick or gravel. But
with many fewer cars on the road, and other priorities for government
spending, most existing roads will probably fall into disrepair anyway,
at least until the depression ends. Asphalt is also heavily used in
roofing, so we may need to take a cue from other cultures and use straw
(there's a new, leak- and rodent-proof way of doing this) or tile
instead.
Medicines and medical technologies for both humans and farm
animals will become much more expensive. Petroleum-based solutions and
ingredients will be largely replaced by biological and
non-petrochemical (e.g. ceramic) equivalents.
Clothing made of polyester and other petrochemical fibres
will become uncompetitive compared to cotton and other natural fibres,
but clothing made from heavily fertlized plants will also become very
expensive. Innovation (e.g. the large-scale use of hemp and cellulose)
will transform the materials we wear.
Furniture and floor-coverings will have to go 'back to
basics'. Most furniture today is made fire-retardent, dyed and coated
with petrochemicals, and stuffed with plastics. Floor coverings are
almost all either made with or coated with petrochemicals. We're going
to have to re-learn how they made furniture before oil came along, and
develop innovative ways to protect, fire-proof and (if we must) colour
it.
Cosmetics and household products, at one time, copied and
used ingredients from nature. With petrochemical ingredients becoming
so expensive, we'll have to re-learn the old ways, at a commercial
scale. Or do without.
Protective coatings and dies: Solvents, mineral oils and
pigments have dramatically reduced the maintenance that used to be
needed on exposed walls, outdoor furniture, and high-traffic surfaces.
We're going to have to learn to appreciate the weather-beaten look, use
natural materials that don't weather, or put more time into naturally
cleaning and replacing worn surfaces.
Taking these all together, I think the greatest hardships are going to
be surviving the economic depression (which I've argued is coming
anyway) and coping with high interest rates. Some of the needed
behaviour changes -- rediscovering old pre-oil ways of doing things,
doing with less, doing more with less, using more natural ingredients
and processes, and being innovative -- will actually be good for us,
and for our environment. So I don't see the oil crash, even under the
gloomiest scenario, being the end of the world or even of modern
civilization. At the same time, it's time we woke up to the reality
that we've been paying far too little for oil, and living on borrowed
time, for far too long.
Once we survive this disaster, maybe we'll be alert enough to realize
the much greater one that lurks behind it, and at least try to take
action to reduce our population, and our consumption of other
resources, in time to prevent it.
(Eighth article of a series on Natural Enterprise, and eighth chapter of a book-in-progress on the same subject)
A few months ago I was taking
our dog, Chelsea, for a walk in the local park. The park has a sizeable
playground, and as we entered, Chelsea, who loves kids, trotted over
and licked the leg of a little boy who was standing near the sandbox.
The boy immediately smiled, turned around, put down his toy bulldozer
and dump truck, and petted Chelsea enthusiastically. As we went on our
way, I noticed the boy was watching three bigger kids in the sandbox.
Given that he obviously wasn't shy (at least with animals) I wondered
why he looked reticent about joining the others, since his toys were
clearly intended for the sand. When we returned back the way we came,
we saw the boy playing by himself in a large park garden that had been
excavated and filled with topsoil, but not yet planted. He had clearly
decided that the sandbox was too crowded, and, although it was
unconventional, the much larger, unoccupied garden was the perfect
place to play. He smiled and waved to us. That, I said to myself, is the very picture of an entrepreneur.
Not to strain the analogy too far, the kids in the sandbox had three
competitive advantages over the enterprising boy: They were bigger than
him, they were there first, and they appeared to know each other and be playing together.
The economy that has emerged in the last generation looks very much
like this sandbox. Size counts, being first into a market counts, and
oligopoly (a few large 'players' cornering the market for some product
or commodity) creates a nearly impossibly high entrance barrier for new
players. I often feel sad for new immigrants to the West who invest
their money in franchises that are cookie-cutter imitations of each
other, in saturated markets, because they don't understand the rules of
the new economy. It's capitalism, and you still can beat the odds and
succeed, but it's a closed system, heavily biased in favour of those
with great wealth and influence. The best, simplest road to success for
the entrepreneur is to make your own sandbox.
In a previous chapter, I pointed out the critical differences between
what I call Natural Enterprise and the traditional business:
Where the traditional business develops its product, mass
produces it, and then advertises to create demand for the product,
Natural Enterprises start by identifying unmet customer needs,
developing customized solutions, then delivering to the pre-qualified
customers, and marketing virally.
Where the traditional business has a hierarchical
organization structure and common shares, with control of the business
often wielded by corporations or people other than those who run it,
Natural Enterprises are flat and unincorporated, controlled equally by
their members.
The economy is always changing, always evolving, and the New Economy, the one that was supposed
to be powered by information, 'intellectual capital' instead of
physical and financial capital, is still a work in process. Two
overarching economic trends of recent years have largely stalled its
evolution: Globalization, which accelerates the concentration of power
in the hands of the oligopolies which control most industries in the
economy, and privatization, which views the dismantling of government
as a positive step towards efficiency, free markets and individual
enterprise, but which is in fact a sell-out of essential public assets
to large oligopolies, an abandonment of the responsibility of
government to regulate irresponsible corporate behaviour, and a huge
disincentive for innovation. As Adam Smith said, "the real purpose of
government is to protect those who run the economy from the outrage of
injured citizens". This has become discouragingly true over the past
half-decade, at least in North America.
So here are the grim facts facing entrepreneurs at this mid-point in the evolution towards a new economy:
Oligopolies rule. No matter what industry you're in (or trying to enter) it's probably dominated by a small, ruthless oligopoly with very deep pockets, armies of lawyers, and governments in their back pockets.
It's already patented. Governments (greased by campaign funding) are allowing large corporations to patent not only products, but very broad processes and concepts
as well. Established businesses are attempting to preclude any
innovation that could disrupt their control of the market. No matter
what you try to do, no matter how novel or imaginative, it's probably already patented or copyrighted by a large corporation. With an army of lawyers.
Big guys buy cheap.
Large corporations are able to bully governments to lower standards and
taxes and provide them with subsidies, and bully suppliers, usually in
third world countries, to sell to them at rock-bottom prices, and lower
these prices every year. This gives them a substantial cost advantage
over the entrepreneur.
Prepare for impact.
The economy is currently in serious trouble, thanks to reckless levels
of debt incurred by the Bush government, horrendous trade imbalances,
excessive debt loads of many large corporations, artificially
suppressed interest rates, and absurdly overpriced stock markets and
real estate markets. Personal debt levels are already at record levels,
and when the economy goes into deep recession consumer buying power is
going to disappear.
That's the bad news. Here's the good news:
You can be (nearly) recession-proof.
If you establish a Natural Enterprise, with the two critical
differences summarized above, you will be selling something you know
meets a need, so you are much less likely to be affected by an economic
downturn than a company producing something frivolous, fashionable,
cyclical or otherwise non-essential. And because you're not relying on
outside investors like most businesses, your business won't collapse
when those investors suddenly decide or need to cash in their holdings
to cover other losses in an economic downturn.
Four industries still have lots of room in the sandbox.
The information economy has still barely begun. Of the four industries
that are poised for the most explosive growth in the next decade, as
baby boomers move into their retirement years, three of them -- health
care, education, and the 'connections' industry (personal networking
and communications) -- are driven more than anything else by
information and innovation. [The fourth is recreation, largely an 'old
economy' industry, at least for baby boomers.] These industries are
going to face such enormous growth, such extraordinary new needs, and
such breathtaking change that they will probably be unrecognizable in a
generation. There is huge opportunity in these industries for
entrepreneurs, and these 'sandboxes' will be just too immense for even
the most vicous and reactionary oligopolies, with all their lawyers, to
control or dominate.
You're agile, they're not.
Consumers are becoming more demanding, and starting to flex some of
their economic muscle. The Internet is providing a place for them to
convey their needs and obtain and share information, and for agile
suppliers to meet those needs. Large corporations are inflexible and
depend on volume and 'economies of scale' to be profitable. As hard as
they may try to 'mass customize' their products and services, they will
be at a disadvantage relative to the millions of entrepreneurial
businesses that can produce one-off solutions with almost no lead time.
As consumers learn that entrepreneurs can give them exactly what they
want, and large corporations can only give them standard off-the-shelf
brand names, consumer preference will inevitably shift in favour of
entrepreneurs.
You can offer better value.
There is a growing consumer backlash against globalization and its
consequences -- outsourcing, offshoring, shoddy quality, lost jobs,
poorer jobs, ruined communities and environmental carnage. Consumers
are beginning to favour small, local businesses that can (and must, to
survice) provide quality and service that has become too 'expensive'
for large multinational corporations to offer. And although Wal-Mart
may sell something cheaper, the three inherent inefficiencies of large
corporations (bureaucracy, exorbitant management salaries, and massive
profit margins demanded by shareholders) mean that Wal-Mart's price
isn't that much cheaper, and is actually poorer value-for-money than what the small, local business can provide.
So what are the rules for entrepreneurs to succeed in this new, still not-fully-formed economy? Here are some of them:
Don't try to play in the big guys' sandbox.
You may have a great idea for a new pre-moistened window-cleaning,
eyeglass-cleaning wipe, but do you really think Proctor & Gamble
will let you make any money at it? You have to find a need that the big
guys, for whatever reason, can't fill. Take advantage of their lack of
agility, their focus, their disinterest in niches and specialization,
their inability to customize, their physical distance, to find needs
that they wouldn't even think of trying to satisfy.
Don't borrow money or give up equity.
When the economic recession hits, or interest rates spike, those in
debt, or with expensive equity, will fall like flies. Of course
organically financed businesses are harder to get started, and they
grow more slowly. But financial leverage is a double-edged sword. In
bad times, it can kill you.
Avoid lawyers, and the need for lawyers.
If you get into a legal fight to defend your intellectual property from
a bigger guy, or because a bigger guy has sued you over your alleged
infringement, you're going to lose. It may not be fair, but in court
the most expensive team of lawyers almost always wins.
Be careful lying down with elephants.
Many entrepreneurs find that the Business-to-Business niche is more
lucrative, easier, or better suited to their competencies than a
Business-to-Consumer business. Often that means your customers are much
bigger than you. If you're careful, attentive, provide something unique
and make a healthy margin with these customers, that can be a formula
for great entrepreneurial success. But watch out if the elephant rolls
over -- if it gets sold, or decides to change suppliers, or decides to squeeze suppliers, you could be squashed.
Do what you know.
And know what you're doing. When times get tough, or new, disruptive
innovations start creating waves in an industry, experts survice and
dilettantes flounder. You must always be the best at what you're doing.
If the idea of being in a particular business intrigues you but it's
not in your area of competency, go work for someone else who is competent in it first. Then when you're an expert, go on your own.
Follow the money.
The four big-opportunity industries noted above are going to explode
because they are aligned with the needs of baby-boomers, who (by sheer
numbers) have much of the disposable income in our society. Read books
like Boom, Bust & Echo to find out who has the money, and then follow it -- find out what they're spending it on and why, and what they'll need next. This is especially true in a fragile economy, because the rich are the last to stop buying and the first to re-start.
Know your customer.
Next to running out of cash, and making bad management decisions, not
knowing your customer -- what they need and why they buy -- and not
investing social capital in relationships with customers, is the
biggest cause of entrepreneurial failure. The reasons why customers buy
what they do, and don't buy what they don't, aren't always logical or
even informed. You can't understand this from a distance -- surveys and
studies of buying patterns won't tell you. You have to spend time with
customers (real and prospective) and get inside their hearts and minds.
These relationships also help recession-proof you, and, if you use them
properly, they will provide most of the fodder you need for continuous
innovation (rule #9 below).
Network with other entrepreneurs.
The big guys network constantly with their suppliers, other corporate
executives and even competitors. They leverage their contacts and,
without the need for a LinkedIn or a Ryze, they know who to call for
information and advice on anything that can happen that affects their
business. They don't need to have all their expertise on staff or on
retainer. Entrepreneurs, for some reason, seem to do this less
(probably they're too busy trying to do everything themselves). Most
entrepreneurs need to do it more, especially one-on-one.
Innovate. The big guys don't want to innovate (they think it's expensive and risky), they don't have
to innovate (in today's economy it's easier for them to litigate,
pre-emptively patent and buy out innovators than to develop anything
radically new themselves), and they're no good
at innovating (they're too big, too inflexible, and too risk-averse and
cost-conscious). That's your competitive advantage as an entrepreneur.
And innovation isn't just about products and services, and about
pre-start-up activity, it's about every aspect of the business --
products, services, processes, distribution channels, technologies,
organization, structure, strategy, everything -- and it must be continuous. There's a simple, intuitive process for doing it:
Economies can change quickly, and if this one can get past its current
difficulties we might get back on the very healthy track we were on in
the 1990s, when investment in innovation and information was on the
upswing. At that point, some of these rules may change again, as new
economic developments and changing demographics and buying preferences
present new opportunities.
It's important that the entrepreneur understand the economy -- how it
works in theory, how it works in practice, and what are the trends
right now. The business press is generally focused on the needs of the
investor, rather than those of the entrepreneur, and when they actually
talk about what's happening in business, it's almost always about large
corporations -- information and advice that's often not translatable,
and sometimes even dangerous, in the entrepreneurial world. There are
some excellent entrpreneurial magazines, the best in my opinion being Fast Company (which also has an excellent blog), Business 2.0, and Wired. There are some good blogs by economists too, like Globalize This and MaxSpeak.
What every entrepreneur needs, though, is someone to help them think through what these changes in the economy mean
to their business, and to their customers' needs and buying habits.
Intelligent, informed conversations on this subject -- with customers,
with network colleagues, and with advisors, paid and unpaid -- can
provide this context and this insight, and help entrepreneurs
understand and navigate the economy -- the old one, the new one, and
whatever is coming next.
Five years ago, at the age of
48, I decided it was time to stop complaining and being depressed about
the state of the world, and start doing something about it. I began to
read voraciously, an average of two books a week, and gradually put
together a picture in my own mind of the current state of the world,
how we got here, and what we needed to do about it. In February of last
year I started a weblog, in part because I wanted to share what I had
learned, and in part to discuss it with others and find out if they
felt the same way that I did. At that time I wrote an essay
that described my learning journey to that point. Since then, I have
read a great deal more, and engaged a lot of very bright and perceptive
people in discussion of these issues. I intended to update the essay,
but I have come to realize that the sequential story of discovering the
unprecedented crisis this world is in today is essentially what the 'environmental philosophy'
category of my weblog tells already. What is needed now instead is a
recapitulation, much shorter and not necessarily in the order in which
I learned it, of what I have learned and what I believe we need to do
to stave off ecological catastrophe. That is what this essay is about.
It is my way of 'signing on' to the 1992 World Scientists' Warning to
Humanity signed by 1600 senior scientists from 71 countries, which
stated:
"Human beings and the natural world are on a collision course. No more
than one or a few decades remain before the chance to avert the threats we
now confront will be lost and the prospects for humanity immeasurably diminished.
A great change in our stewardship of the Earth and life on it is required
if vast human misery is to be avoided and our global home on this planet is
not to be irretrievably mutilated."
At the root of my environmental philosophy is a growing belief that
just having everyone 'do their best' to make the world a better place
will not be enough. In other words, we need to bring about a dramatic
change in our world in this century, a much greater and faster change
than any culture can achieve organically. A change this drastic and
this sudden has occurred four times before in human history:
about 30,000 years ago, with the invention of the axe, the flint arrowhead and the spear
about 10,000 years ago, with the invention of catastrophic agriculture and animal domestication
during the Renaissance, with the invention of modern science
during the industrial revolution, with the invention of automation
Each of these revolutionary inventions utterly changed the way humans lived. None of them, I think importantly, came about because of political or social actions or revolutions -- they were all (in the broad sense of the term) technology-based.
What we need urgently today is another such revolution, every bit as
radical as these four. We need to find, and rapidly implement, a
better, sustainable way to live.
This essay is organized around ten 'arguments'. I am not smart enough
to be able to distill the entire logic supporting these arguments into
this essay, but I will refer the reader to sources that do. The Bibliography
at the end of this essay contains the full list of these sources. Some
of the books and articles in this Bibliography contradict each other in
places. I freely admit to being selective in what I've taken from each.
I trust my instincts in that selection. My purpose is not to persuade
you, dear reader, but merely to show you what persuaded me.
The essay also contains a systems chart of 'How Nature Works' and another of 'Why Civilization Doesn't'.
These charts are my attempt to capture the interrelationship of the
forces that allowed the world to function as a self-managed system so
effectively for millions of years, including the first three million
years after the appearance of man, and the forces that have largely
replaced these natural forces since the dawn of civilization, driven
largely by the changes wrought by the four human revolutions noted
above.
Here are the ten Arguments:
The Truth About Nature: What We Have Forgotten
Man is not Special, not the Crown of Creation, or a Species
Apart, but rather a fairly minor evolutionary adaptation to one
ordinary branch of the tree of life on Earth. The impact and 'success'
of this species is no more an indication of greater importance,
predestination or divine will than is the impact and success of the
mosquito, HIV, bacteria, cancer cells or the Plague.
Our planet is a single self-managing organism. All life on
Earth exists to sustain, nourish and support all other life on Earth.
As with a human body or any other organism, that is only possible when
each component of the organism does its part, in balance and harmony
with the rest. In that sense the Earth is sacred, it demands and earns
respect and obedience to its 'laws' because that is essential to the
survival of all life.
The Earth is full of sentient, intelligent, communicative,
emotional creatures. Most human moralities and religions seem to hold
that creatures with these attributes deserve freedom from harrassment,
suffering and enslavement, and the right to exist. Therefore much human
activity, which deprives all non-humans of these rights and freedoms,
is an atrocity no less despicable than human genocide, holocaust,
torture and slavery, and must be stopped.
Small is beautiful, and place gives us identity: The
community as the basic political unit and
Natural Enterprise as the basic economic unit work best because they
can be self-selecting and self-managing, and are extremely adaptive. In
nature, the community teaches you what you need to live, it defines you
and gives you purpose, it anchors and connects you.
And though we are all part of a web, a mosaic, and we
all travel, ultimately we have our own place, our 'home'. If
you're not totally connected with everything and every creature that is
part of your place, then it isn't your place. If you don't have a
place, then you don't yet really exist. It is your community, your
ecosystem, all of it, that is your place -- not the isolated,
nuclear-family,
locked house on 'private' property. Larger political units (states) and
economic units (corporations)
are inherently unwieldy, inflexible and less democratic. Because of
their sheer size they are detached, remote, and cannot possibly
understand or respond to our needs. Forged from both idealism and
cynical greed for power, these abominations serve no useful purpose
except to protect us from other large political and economic units (and
they do that poorly).
We learn what we're shown, not what we're told. Our senses
provide us what we need to learn, to really understand, to be happy.
When we live in our minds, we close ourselves off from so much. Formal
education is
futile. To bring about change we need to show people something that
works better, and reconnect them with their senses, their imagination, the Earth.
The Truth About Civilization: The Problem and Its Root Cause
Civilization was a well-intentioned response to a sudden
drastic shortage of human food (possibly arising from overhunting of
large game and/or the last ice age). But it was not an instinctive way
to live, and needed a lot of artificial constructs and controls to
work. Our civilization systematically brainwashes us into staggering
cultural homogeneity and imaginative poverty, and to believe ours is
the only way to live -- that there is no other human way. To do so it
must get us to forget or deny the 5 truths above, and teach us these
great myths:
That our instincts are unreliable (what nature 'tells' us
to do), and logic and morality are infallible (what human codes tell us
to do);
That life is a struggle of 'good vs. evil', and that we are inherently weak, selfish and lazy;
That it's good to be 'normal' and to be like other
people, and that we're all part of society and not ultimately, terribly
alone;
That we must be unconditionally obedient to our
'superiors', their hierarchy and their laws, or society and order will
collapse;
That our well-being is appropriately measured by our material possessions and our ability to acquire more;
That disparity of wealth, health and dignity is necessary
and inevitable and that with hard work 'have-nots' can become 'haves';
That we must all work long, hard hours at unsatisfying jobs or we will all suffer and starve;
That humans have an inherent right to all the land and all the resources of Earth (and even beyond);
That history began with civilization, before which life
was short, fearful, nasty and brutish (and in nature and tribal
cultures, it still is).
We
are instinctively responsive to, and responsible for,
everything we have control over. In nature that is the immediate
community -- what goes on outside is not one's business. But now that
we, as a 'global community' control the whole world we cannot respond,
cannot bear the commensurate responsibility. This conflict between our
instincts and reality, along with the stress of overpopulation and
separation from nature, has made us all mentally ill. This illness
manifests itself in violence and war, hatred, abuse, greed, jealousy,
and fear. We are helpless to do what we 'know' we must. It is like
facing 'Sophie's choice' (being asked by the Gestapo to decide which of
your children to spare from the gas chamber) over and over and over. We
cannot bear to know, so we turn off, we hide inside, we distract
ourselves. It is only when we don't know, and cannot even imagine, that
we can go on, and tolerate the world we have created. This makes it
easier for us to accept the brainwashing that ours is the only way to
live, to tolerate the abuses and outrages that weknow are going on
behind closed doors, and to accept the arguments of skeptics and
apologists and holocaust denyers that it's not really
that bad, or perhaps it's even good, or at least it's divine will so
it's beyond our control, there's nothing we can do about it, we're not really responsible
As a consequence, we are poised, by the end of this
century, to create a world that contains one billion Americans and
fourteen billion people, and uses eight Earths worth of resources (at
current regeneration rates) just to meet human needs. A world that
will, as a direct consequence of this overcrowding and unsustainable
consumption, be preoccupied with catastrophic famines, epidemic (new)
human diseases, crop failures, cannibalism, crop failures, nuclear and
biological wars, water rationing and desertification, economic
depression, catastrophic terrorism, cascading weather disasters, and
the decline of democracy, constitutional liberalism, and the rule of
law. A world, arguably, not worth living in.
Forward Not Back: The Solution Process
Solutions are needed that either directly address
overpopulation and unsustainable consumption, or address the causes of
these problems (see the Why Civilization Doesn't Work
chart). Or, alternatively, we could resign ourselves to the inevitable
crash of this horrible world (probably as a result of a new
catastrophic disease or nuclear or biological holocaust), and start
designing a post-apocalypse world that will allow the survivors to
carry on and perhaps learn from our mistakes. Solutions, throughout
history, have come in four 'flavours': innovative (new technologies),
social (changing people's minds), commercial (changing the economy) and
political (changing laws and regulations). Innovations have been,
throughout human history, by far the most effective and enduring.
Revolutionary change requires radical solutions -- solutions that
undermine, replace and ultimately destroy existing systems,
technologies, ideas and beliefs. But they must represent bold steps
forward, not nostalgic steps back to a pre-civilization world that is
no longer possible or desirable.
If we hope to impose change on a world unready and unable
to save itself, enough of us must be informed, aware of the
consequences of our actions, skeptical, willing and able to learn from
nature, fully committed, confident we can do it, passionate in our
search for radical solutions and courageous in following through on
them.
Next Week: Part Two of this
essay will support and elaborate on the first 5 arguments, and show
that the answers to today's problems are right in front of us -- we
need only relearn what we have forgotten and open ourselves to the
truths we can no longer see.
Week of August 16th: Part Three will conclude the essay by establishing
the sense of urgency for change, explaining why continuing to do what
we are doing now, no matter how valiantly, will only get us where we
are currently headed, and prescribe not solutions but a process for
those who are ready, caring and courageous to find and then implement
creative solutions.
The best thing about Anne Lamott's Bird by Bird: Some Instructions on Writing & Life is, even when the thought of sitting down and writing is about as appealing to you as root canal work, she inspires you to want
to write. That alone is worth the investment. The book is full of
mostly well-established wisdom about the art of writing, but it's
written intelligently and with great humour and passion. She really
practices what she preaches.
She takes you through the standard rules: Write every day at the same
time, always write something each day, no matter how brief, or how hard
it is; break the job into manageable tasks ("take it bird by bird");
start with short assignments and "shitty first drafts" that just get
everything down, and edit later; avoid perfectionism; write about what
you know; use your own authentic voice and style; use index cards as reminders, phone friends and experts to
get background material you need quickly and authentically, and use
writing groups and trusted readers to keep you going and honest. She
explains how to deal with writer's block, agents, publishers, and
jealousy of other (successful but clearly inferior) writers.
What I liked best about the book were some of the humbler, lesser known rules of good writing:
Stories tell themselves through you, so it's critical to find means to silence the noise in your head and let them come out
Flawed, hopeful narrators are great voices, and points of view, from which to tell your story
Plot need be nothing more than the discovery of what each of your characters cares about, revealed vividly and continuously
Characters must show strength or courage to be sympathetic
Dialogue must be authentic and individual, yet concise and fast-moving
Good writers must be observant, reverent, and even startled by life and its lessons
Great stories are about great truths, things the writer
cares passionately about that come out in the writing: "To be a good
writer you not only have to write a great deal, but you have to care."
You must trust yourself and your intuition, especially with first drafts, not self-criticize and second guess every step
You have to give the best you have always, not save it up for the next story
Writers have a duty to the reader to be honest, to make
things clearer, to help heal readers' "gaping wounds and dazed
expressions", to soothe
The book includes an extraordinary 2-page story by the author that
illustrates these and other points: It is charming, heartbreaking, full
of surprises, imbued with the author's great love for two very special
characters, imbued as well with a bit of wonderful, spare, dialogue,
some stunning imagery and an improbable analogy. But mostly, the story moves, and in so doing it takes the reader along for the ride.
Until you can read Bird by Bird for yourself, here are two quotes by other accomplished writers about the art of writing:
"The greatest writing is done on the edge of what you know and what you
don't know."
-- Beth Nielsen Chapman
"The skill of writing is to create a context in which other people can
think."
-- Edwin Schlossberg
I'm going to
do today what I
almost never do, and that is talk about another blogger, one who I've
never met and, until a few days ago, had never heard of. Mark Brady at
Fourobouros (the name is a play on the alchemist's symbol of a dragon devouring its own tail, representing
a
state of constant flux and reinvention, and the search for value and
values) came to my attention while researching my post on
Corporate
Anorexia. Recently he has been writing
about this and also
about -- surprise! -- George Lakoff
(as have
I), and the Wal-Mart
Dilemma (as have I).
His recent post on Lakoff included the phrase "Don't
tell me, show me", while my recent post on teaching
children about nature included the phrase "we learn what we're
shown, not what we're told".
What intrigues me is that I'd never heard of Mark or his blog, I
suspect he's never heard of How to
Save the World, and our blogrolls have only two common links.
And when I looked at his bio, I found this remarkable passage:
After 2 years of ulcerated
struggle, I left the last [ad] agency and helped cofound a boutique
business development consultancy called Alchemy LLC, consisting of an
architect, an organizational specialist, and me--an ad guy, along with
a few alliance relationships in finance, process management,
head-shrinking and cultural anthropology. We're problem solvers, what
the French call Bricoleurs,
cerebral when we have to be, but ferocious simplifiers when at all
possible. We help small to mid-cap companies get healthy, and push
healthy ones to get outrageous. It's great fun and very rewarding. Our
clients are usually up aganst the wall and looking for fresh thinking.
We aim to please. People have come to us looking for a business plan or
marketing and we designed them a better distribution system or sales
approach, instead. We get angry neighbors to find common cause with
commercial real-estate developers, we help get VC's to see beyond less
than attractive balance sheets, and we teach kids in elementary schools
how to think creatively and middle schoolers to become balanced
leaders. We design work places, make TV commercials and help people
make nice and make money. People say we do these things well. One
long-time client introduced us to a CEO retreat by saying we're "at the
top of an industry that doesn't exist--yet." We like that. We're
immensely curious and, humble. We speak very candidly. We don't take
our selves too seriously. If you'll notice, all these things have one
element in common: moving people, figuratively and literally. That's
the real stuff. The rest is just tactics. I love what I do. I like to
share, hence this blog. Life is good.
Great, eh? Wouldn't you just love to work with these guys?
All of this, besides letting you know about a great blog and a
fascinating company, is my round-about way of making a point that I'm
going to blog about next week: The Next Economy, whether that be a World of Ends Economy or a Support Economy,
in which entrepreneurs will find and associate with each other to
provide innovative, deeply valuable services to customers in a way that
multinational corporations can never hope to match, depends utterly on
the Internet providing us with a powerful means to find like minds and
experts on anything under the sun. The bit of serendipity that I
described above that allowed me to find Mark is a perfect example of
how impossibly difficult that is with the tools, and shortage of
knowledge, we struggle with today. The issues are:
How do we get people to post to the Internet (and keep
up-to-date) sufficient information about themselves in an appropriate
format to allow us to find them, easily, when we need them?
What kind of tool is needed to filter, qualify and leverage
that information and (ideally, proactively and organically) connect us
with like minds and needed experts, kind of a context-rich audited
Yellow Pages of millions of people's individual interests and
expertise. We know that search engines and first-generation social
networking tools aren't up to the job. We need something completely different.
Time for some creative, very innovative thinking. Time to think how
nature would solve (or does solve) this complex problem -- I'm thinking
of the thousands of spring peeper frogs in my pond all calling out for
the perfect mate. The solution probably lies in that place where
parallel paths converge.
(Off for the long weekend -- back Tuesday. Take care of yourself.)
I
deliberately waited a couple of weeks after my dreadful experience
trying to get my new Dell 5150 fixed, partly to calm down and partly to
make sure the problem has in fact been fixed. This is a long and
convoluted story but because it's embarrassing, and not particularly
amusing, I'm not going to tell it in detail. Suffice it to say that it
involved:
Four courier trips by two different courier companies delivering parts between my house and the Dell Parts Depot
Four trips by me to a company called Solectron, located North ofToronto, to which Dell subcontracts technical service work
Six lengthy conversations with Dell India, which handles the diagnosis of technical problems for non-corporate customers
Thirty bewildering e-mail messages trying to get answers
online, only to be told to RTFM, and then that Canadian non-corporate
customers cannot get service by e-mail, and must instead phone Dell
India
One infuriating conversation with Dell 'Customer Care', a
total oxymoron, with a guy who spoke English with no accent but I have
no idea where he was located (he refused to say)
The final diagnosis was that a defective $5 AC adapter shorted out not one, but two motherboards. Total cost to Dell for parts, delivery and labour: about $2,000, and even that is less than the value of my
time spent trying to get the problem fixed. My computer was out of
service for a week. IF I had been simply instructed to take the PC into
Solectron and wait for them to check it out, I would have been in and
out in 30 minutes and the cost would have been minimal.
Since I'm copying Dell on this (that is if I can actually find an
address of someone in authority to send it to) rather than tell you all
the things that they did wrong (and that, acting on their instruction,
I did wrong), I'll describe instead how Dell could dramatically improve
their customer service processes.
But before I do, I want to be clear about something: The
people working at the grassroots level at Dell and its outsourcers are
all hard-working, polite people doing their best to do their job. All
the fuck-ups (and they were legion) were directly caused by Dell
management policies, and can only be rectified by Dell management.
OK. Here's what Dell needs to do to change the 'customer experience' from ghastly, interminable nightmare to quick-and-bearable:
Provide single-point-of-contact for each service issue.
Solectron was wonderful -- far more knowledgeable than those
disembodied voices at the end of the telephone. The first time I
phoned, or e-mailed, with a problem, Solectron should have handled the
issue. Yeah, I know Dell doesn't trust their outsourcer not to pad the
bill, especially on warrantee work. That's one of the problems with
outsourcing.
When you tell the customer to take/send in their computer, tell them to send it all
in. I was told by Dell India to take everything out and just send in
the shell. This is the lawyers talking, and more distrust of the
outsourcer. This is just plain bad policy.
If you're going to use people in India to do diagnostics, for pete's sake trust them. More than half
of the very long time that these telephone conversations took was dead
air -- while the tech service people apologetically put me repeatedly
on hold to get 'permission' to send me a $5 part, or to check with
their boss that it was OK for me to take/send in my computer for
warrantee service. It's outrageous that customers have to wait on line
while employees are treated like children and second-guessed by their
superiors.
Educate your people about the individual policies of your
outsourcers. Solectron Canada has an in-by-10, out-by-5 same-day repair
policy. The people at Dell didn't know about it, and that cost me an
extra day.
Give your outsourcers a full supply of repair parts, and
let them sell parts retail as well. When the outsourcers have to
requisition parts from Dell and then wait for them to come in, that
unnecessarily delays customer service. If Dell had the decency to
provide loaners to customers who are without their machines more than
24 hours, this might not be so bad. But they don't, so delays just add
insult to injury.
Just get rid of 'Customer Care', and provide a proper complaint department instead. The so-called Customer Care department has absolutely no authority to do anything for customers. Their sole job is to explain and apologize for Dell's idiotic policies, including the five above. They are instructed never to give out their full names, and never to give out names, addresses or contact information of anyone higher up in Dell.
In other words, these lackeys are paid to run interference, stonewall
and prevent aggrieved customers, and customers who have ideas for
improvement, from any contact with the people in Dell who could resolve
or act on them. Staggering arrogance, disgraceful and classic
corporatist contempt for customers. Every customer has the right to
complain, in writing, about bad service or bad products. And in the
process to copy the regulatory authorities so that if the complaints
are frequent, the conduct of the company will be investigated.
Dell just reported record earnings last week. Michael Dell and his
fellow executives each raked in over $3 million last year, excluding
the huge value of their stock options. Meanwhile, according to Consumer
Reports, about one laptop in four has a serious problem in its
short shelflife -- that's about 100,000,000 units with at least one
important defect. One in twelve has problems in the first month of
ownership, and one in eight has a problem that makes the computer
completely inoperable -- that's 25,000,000 people per year temporarily
unable to do their job while the tech support people fiddle with
defects in their employers' products. Customer satisfaction ranks just
around 50%, the second lowest ratings of any consumer products the
magazine tracks. There is a large increase in complaints about
offshored tech support in the past year.
The big seven produce about 200,000,000 new computers each
year, which on average end up in landfill sites in four to five years
(the fastest growing and one of the most toxic components of our
garbage problem). The vast majority are made from shoddy materials in
third world countries like China, Malaysia and Singapore, by workers
who get paid a few dollars a day, using components that wreak
environmental havoc from slipshod and reckless mining and refining
techniques. Why bother making a quality product
when it will be garbage so soon anyway? And if you work with Microsoft
et al, you can guarantee that even if it isn't technically obsolete by
the time it falls apart, it will be unable to power the next bloated
versions of the software by then anyway. I would have added a point 7
above -- "build a high quality product" -- but even I'm not that naive.
My new AC adapter works fine, but still fits loosely in the slot at the
back of the machine, and usually falls out when I lift up the machine
to put it on my lap. If they built cars this sloppily we'd all be dead.
This is what happens when a company gets big,
and is rewarded for 'maximizing profit for shareholders' instead of
producing a quality product and providing quality service. It's what
happens when a company's management becomes removed, and then isolated,
from its customers. It's what happens when an oligopoly of seven
companies corners the market and offers essentially identical,
mediocre, overpriced products. It's what we get when we fail to hold
corporations accountable and responsible for what they do. It's what we
get when we accept the corporatist propaganda that the unregulated
'market' will always produce the best possible solution and value for
customers, and that government regulation is inherently bad.
We should know better. We should expect better. We deserve better.
Think of a corporation like a
human body. To be healthy, the body needs to take in sufficient and
appropriate nourishment, exercise, and avoid behaviours known to cause
disease and injury. Likewise, a corporation needs to 'invest' in
people, technology, infrastructure and innovation -- the nutrients of
business growth -- 'exercise' that investment to generate revenue, and
avoid the behaviours (bad decisions, bad acquisitions, letting the
competition inflict a beating on you) that lead to corporate 'illness'
and 'injury'.
By this analogy, the corporate model of the 1990s was the body-builder
-- investing heavily in food, and exercising to build muscle and
strength and speed and resilience. The catchwords of the day were
innovation, knowledge, human and intellectual capital. There was even
talk of a 'war for talent', an acknowledgement that bright, creative
people were so valuable that companies would fight over them.
Investments with long-term value are called assets, and the corporation of the 1990s generated wealth and growth by investing in assets.
By contrast, the corporate model of this decade is the dieter
-- staying healthy by eating as little as possible, spot-exercising and
using diuretics to reduce every visible ounce of fat, forgoing muscle
and strength and speed and resilience for the appearance
of health. The catchwords today are cost-management, outsourcing,
offshoring, and risk management. Focus is on short-term,
quarter-over-quarter bottom-line change, and the corporation of today generates wealth by eliminating costs.
Both mechanisms, carried to an extreme, are unhealthy. The body-builder
can cheat and create artificial 'assets' with steroids. Enron did
exactly that, puffing up its balance sheet with non-existent assets.
The dieter's extreme is called anorexia,
and it's an insidious and self-perpetuating disease. You lose weight,
and for awhile everyone tells you you look better. So you lose more,
and eventually you get obsessed with your weight, and then you reach a
wall where you can't lose any more, and it starts to affect your mind
so you can't function properly anymore. Then it gets worse.
I believe what we're seeing in the corporate world today is corporate anorexia. I described last week
the horrendous 9-step race-to-the-bottom that has driven corporations
to abandon quality, sacrifice domestic workers, and gouge and sue
customers in the never-ending, desperate attempt to keep in the good
books of insatiably demanding shareholders. You can see the unhappiness
in the faces of today's executives, and the weakness and vulnerability
of the depleted corporations that they lead in their financial
statements and forecasts. Meanwhile, fawning consultants, instead of
warning about the shortage of innovation, investment and long-term
strategy, are making excuses
for it. It's insane, it's unsustainable, it's bad for consumers,
workers and the economy, and it's irresponsible. You can no more cut
your way to corporate greatness than you can starve yourself to health.
The cure for corporate anorexia is as difficult as the cure for the
human illness. And as with the human illness, it's going to take a
'support group', people beside corporate managers who will be patient
and understanding as the patient at first may get sicker before they
get better. That means shareholders will have to abandon their absurdly
unrealistic expectations of perpetual double-digit profit growth, and
recognize that the real value of the stocks they hold is probably only
a quarter to a third what they're currently valued at -- a bitter pill
to swallow for which greedy brokerage firms also share responsibility.
It also means shareholders must learn to think, and assess their
investments, over the longer term. Innovation takes time to generate a
return, especially when many corporations are essentially starting from
zero -- much of today's R&D expenditures are spent on incremental
and copycat products that produce safe but paltry revenue improvement.
Innovation also entails risk, and that means spending money on ideas
that fail in order to learn and to generate the blockbuster successes
that draw on those failures, which in turn means some short-term
adverse earnings trends (which are currently brutally punished in the
marketplace). It also means deferring profits to build back the
infrastructure and 'muscle' that can once again start generating new
revenue from new products, new channels, quantum-leap process
improvements, new technologies and other true innovations.
While investors will need to be patient, the professions that advise
and monitor corporations and their management -- consultants,
investment analysts, accountants, and government agencies -- need to
take the lead and lay out a roadmap back to sustainable corporate
health, and explain it and 'sell it' to managers and investors.
Consultants need to
stop apologizing for their clients' anorexic investment in innovation,
dig out the work they did a decade ago on the innovation process and
its business case, and start showing executives what needs to be done
and how to do it.
Investment analysts
need to develop much longer-term horizons for forecasting and
evaluating public companies. The myopic focus on quarterly earnings,
and the absurd demand for steady, uninterrupted profit growth
short-changes companies that make long-term investments and think
ahead, and needs to be replaced with longer-term perspectives on
companies' ability to generate sustainable profits and earnings growth.
Some people have advocated eliminating quarterly earnings reports
entirely, which would be a good start. But analysts need to develop
models that will generate reliable
longer-term forecasts, based on an in-depth appreciation of a company's
ability to invest intelligently and realize a superior, measured return
on its investments, to create future wealth, managing risk and uncertainty as assets and not merely minimizing them as liabilities.
Accountants need to develop new methods of assessing corporations' longer-term
health and viability, not just focus on increasingly convoluted and
meaningless measures of last year's 'paper profit'. These measures are
needed to inform investors, but more importantly they're needed to
guide management. We all need to get serious about the value of
intellectual, human, customer and social capital.
Government needs to
use tax law to encourage longer-term investments in research and
innovation and to encourage corporations to take calculated risks and
strive for quantum improvements in products, processes and
technologies. Government also needs to work in partnership with
corporations to make joint investments in innovations that can produce
Future Wealth both for the company and for the society as a whole.
Corporations in turn need to be encouraged to 'get out more' and think
about ways they can make the world better, and governments can and must
offer incentives to do so, in return for a stake in the value of the
wealth created (not just a give-away to corporations). Unfortunately,
in countries like the US with near-bankrupt governments, this
assistance will have to take the form of manpower and intellectual
investment rather than financial incentives.
Recovering from a debilitating disease is a slow and difficult process,
especially when the patient is still in denial. But before Western
corporations infect the entire economy with anorexia -- as the current
wave of myopic downsizing, outsourcing and offshoring threatens to do
-- we need to recognize the illness for what it is, and start working
together to nurse the patient back to health.
(The Innovation Incubator pictured above is a service of my consultancy, Meeting of Minds)
MADE IN CANADA
trust your
instincts 
The best thing about Anne Lamott's 
I'm going to
do today what I
almost never do, and that is talk about another blogger, one who I've
never met and, until a few days ago, had never heard of. Mark Brady at
I
deliberately waited a couple of weeks after my dreadful experience
trying to get my new Dell 5150 fixed, partly to calm down and partly to
make sure the problem has in fact been fixed. This is a long and
convoluted story but because it's embarrassing, and not particularly
amusing, I'm not going to tell it in detail. Suffice it to say that it
involved:
