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What goes up must come down

By Pete Burden
July 7, 2009 //
1

Stimulated by reading something in a discarded newspaper by Jonathon Porritt, standing down this month as chairman of the government’s Sustainable Development Commission, I dug out their report “Prosperity without Growth“.

It’s long, over a 100 pages, and could do with a bit of editing. I think it was Greg Dyke who when faced with a difficult decision would ask “What would it mean for my mother?” My view is that if a bit of technical writing can’t be presented clearly and simply, then they may be a waste of all that brain heat.

I only managed the summary (pages 6-13). But the frustration and confusion leaps off the page. The author (Tim Jackson of Surrey University) seemingly can’t understand why others simply don’t get it, and he isn’t happy about it.

His point is that economic growth, in the way we commonly understand it now, is completely at odds with living on our planet in a way that gives all 6 billion or more of us a decent life.

The current macro-economic model doesn’t work socially (letting us all be happy people), environmentally (keeping our ecosystems alive), and economically. Economically it fails when it peaks and troughs, leading to the kind of financial “meltdown” we have experienced recently; but then neither does reversed growth, leading as it does to increased unemployment and so on.

I don’t pretend to understand the complexity of all this – I am no economist. But I do think it’s sad when minds are closed, as Porritt suggests they are, at some of our leading institutions.

Porritt claims that, in the Treasury, for example, there is “no readiness to interrogate the macro-economic model”.

I sometimes come across businesses who aren’t ready to interrogate their own local economic models. But after a bit of to-ing and fro-ing, the realisation comes that without a sustainable economic model, the business won’t be around long. There simply has to be some kind of effective balance between what goes in and what goes out.

Anybody can see that, especially my mother. And I don’t want to live in a world with a broken economic model.

Maybe Porritt’s plan is to embarrass the Treasury into change. Whatever it is, I’d rather hear the news that all the intelligent people out there are working together, facing the facts, doing a bit of brainstorming, and coming up with some new, practical ideas about creating a new model that really does work.

I know it takes courage to challenge the status quo. But people are full of courage. So come on.

Categories Change, Failure, Growth, Profitability

What IS a sustainable business?

By Pete Burden
December 1, 2008 //
0

So what is a sustainable business exactly? Surely we must know by now.

  • Is it a green business?
  • Is it a business that is good at environmental management? That follows an ISO standard?
  • Is it a business that’s good at CSR? At accountability? With a good human rights record?

I have a more simple definition. A sustainable business is one that lasts for ever.

OK, you’ll jump on me now and say that simply lasting for ever isn’t the right definition. Some of the companies on the list of the oldest companies in the world aren’t really green and they may not be specifically concerned about their impact on human rights.

And they almost certainly don’t conform to ISO 14001.

But I believe that lasting for ever is an excellent aspiration for a business. No business (and no human) will ever achieve it. But it’s a really good goal.

It’s a good goal because to achieve it a business has to become really good at a number of things:

  • Being a learning organisation. Fancy words that mean that a company develops and grows – not necessarily in size, but like a person, becoming wiser with age. Stronger perhaps, but stronger with compassion, not violence.
  • Caring for the environment. If a business doesn’t care for the environment, then eventually the environment will hit back. Whether it’s fuel prices or raw materials – any business that is ultimately dependent on depleting these resources will eventually run out of them – or find itself  uncompetitive.
  • Caring for the people it employs. Businesses are people. Businesses can’t learn but people can. And if people aren’t cared for then ultimately they will walk or give less than they can.
  • Caring for human rights more generally. If a business breaks this rule, sooner or later people including customers and investors will figure it out. Ignoring human rights is a violation so huge that most people will eventually, when faced by the facts, turn away. Without customers and investors no business can survive.
  • Really understanding and fitting into the market. The market is all these things: customers, investors, people, resources. It’s more than that too – it’s the complex interactions between these things, the system that makes up the world we all live in.  It’s the connections, the inter-dependencies, the limits, and the whole.

Understanding the market means understanding our world and our place in it.  Understanding that if our goal is human sustainability then we need to address all the complex issues of poverty, war, greed, species destruction, resource depletion, climate change and so on. And find a way to really fit in.

Unless a business gets really good at these things it simply won’t last.

And neither will we.

Categories Business, Conscience, Conscious, Environment, Growth, Marketing, Sustainability, Sustainable

Stop working, stop spending and start living

By Pete Burden
May 5, 2008 //
2

I read a chapter by Tom Hodgkinson in “Do good lives have to cost the earth” last night. He wrote one of my favourite books of the last few years – “How to be idle.” His article is a variation on that theme – ending with the suggestion that in order to save the planet we should “stop working, stop spending and start living.”

I have huge sympathy with this idea and in our own small way I think this is what my wife and I have been trying to do for some years. I try to work as little as possible (although I fail lots of the time), and we have also down-shifted quite a bit.

Making this step is about attitude as much as anything else. And often my attitude is less than the best. I am still plagued by the same socially driven desires as most other people (Hodgkinson is clearly a saint). Security drives me, sometimes status drives me, and the desire for the easy, perfect, TV-like-life drives me.

But I agree with Hodgkinson, it’s worth the effort. Maybe I am getting better at it too. There really is more life with less spending and less work.

But what does that mean for businesses? Hodgkinson rails at business because he believes the whole system depends on greed. That 0 percent growth means death to business. And that “business” therefore drives us to work and spend.

I think he is talking about big business. I don’t see why small business (and he is the owner and operator of a couple of small businesses: publishing a magazine, writing books) has to be just about growth in terms of scale. It’s also about growing in strength. Perhaps it is easier to grow your small business if the economy is booming. But I don’t see why it has to be that way.

For example, a small business can get stronger by changing from a dependence on one large account to a larger number of smaller accounts. The latter business is stronger and more resilient. But its income (and profitability) may not change at all.

A small company can get stronger when one of the team learns some new sales skills. And then finds it easier and simpler to close a piece of business – using less time and less effort. If that sales person spends more time playing and doing nothing (and definitely not shopping) revenue won’t rise. The company won’t grow in conventional terms. But it is stronger and more resilient. So it has grown in that sense – like a piece of bamboo.

Categories Downshifting, Growth, Motivation

To grow or not to grow?

By Pete Burden
April 10, 2008 //
2

One of the debates that seems to be threatening to ignite is the one about economic growth and how it fits with sustainability.

Is it possible to have an economy that grows, and be sustainable at the same time? Some say yes, some say no, some say maybe.

The issue to me seems to be partly one of definition. Wikipedia defines GDP as “the total market value of all final goods and services produced”. The article also suggests that GDP represents a measure of “the sum of value added at every stage of production (the intermediate stages) of all final goods and services produced within a country in a given period of time”.

There’s a well-known saying in business: “Turnover is vanity, profit is sanity”.

What I take this to mean is that any fool (more or less) can increase turnover, by for example, selling more products and services. The path to sanity is to focus not on turnover but on profit – because profit is a better measure of the value that an individual or an organisation adds to other people. It’s a measure of what we give, and, crucially, how well we do it.

If we accurately meet really important needs, and we do it really efficiently, the more profit we’ll earn.

I am not an economist, and so am probably making a idiot of myself here. But from my reading, GDP seems to be measuring something analogous to a country’s turnover, not profit.

Plants and animals (and people) grow – so I can’t see anything inherently wrong with growth. Small businesses seem to understand that growth and development isn’t just about size and scale. Profit seems to me to be an excellent way of measuring what we give to other people, and measuring our progress at getting better at that.

By the way, Wikipedia also lists 14 or 15 separate criticisms of GDP. It lists five alternatives to GDP and I heard about another one the other day: Gross Peaceful Product.

Perhaps as the sustainability/economic growth debate develops, we’ll agree some more useful measures of growth?

Categories Environment, Growth, Sustainability
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