Sustainable Business Learning Community Conversations, Mar 2015 - Apr 2015

Sustainable Business, March 4, 2015 Topic: Return on Sustainability

This week, we continue the discussion about the “return on sustainability”. In this discussion we’re seeking a deeper understanding of the difference between investing and spending and how sustainable business leaders might apply this understanding in their workaday world.

• Before beginning, everyone recognized John’s business, Earth Stones, for their winning the Best of Services Award, 2015, from the on-line home improvement and general contracting buying portal houzz.com. Congratulations to John and his team!
• To get things started, Tom suggested that, quite often, entrepreneurs tend to have “false intuitions” about adding features or services to enhance their business idea; in so doing, the entrepreneur believes he or she is somehow making the business more appealing. This tends to be a trap, because it distracts the entrepreneur’s focus from developing the core or seed of the business. Most often, the effort to add features simply dissipates the team’s energies, which can be especially problematic when the business is first getting started.
• One of the benefits of doing new things is learning: the experience of doing the new thing provides learning opportunities for those involved. So, whenever energy is expended and learning takes place, there’s an increase in people margin, which is a return on investment, versus simply an expenditure. There is, of course, a point of diminishing return. As noted above, the point of diminishing return can come quite quickly; this is especially true when the business is still in its germination stage. Too many new experiences (e.g., by attempting to add additional features) does not afford room to develop expertise. This can be thought of as the difference between someone who knows his or her particular field very well, versus a Jack-of-all-trades.
• When we consider how one might tell the difference between investing and spending, the answer may not always be clear. For a small or emerging business, one litmus test will lie in judging whether the energy is being expended on the seed of the business, or something else. Expending energy on developing competencies directly related to the seed of the business is investing.
• Darryl related his experience, wherein as when he began proposing the idea of developing Black Art Theater, certain folks suggested it was limited and he should consider expanding the scope. The seed of the business is Black Art Theater. To expand, or change focus, before expending energy on the seed itself, would risk the seed, and likely kill it before it started to grow. Some amount of energy must be expended to grow the seed before attempting to change its nature.
• Advertising may be seen as spending, whereas making potential customers aware of the product or service, and then somehow gaining their feedback about it, would be an investment, since a higher degree of learning will take place, versus simply advertising.
• Human beings tend to be attracted to bright shiny things; they are also subject to the phenomenon of complexification. All of nature is, in fact, subject to complexification, which is the act or process of making something more complex.

In The Phenomenon of Man, Fr. Tielhard de Chardin, SJ states, “This fundamental discovery that all bodies owe their origin to arrangements of single initial corpuscular type is the beacon that lights the history of the universe to our eyes. In its own way, matter obeyed from the beginning that great law of biology to which we shall have to recur time and time again, the law of 'complexification'. From the primordial, long before any complex molecules were formed, we see a continually increasing complexity to all of life. For more than 4.0B years, life on Earth has been evolving as a result of the phenomenon of complexification. Human beings are the crowning achievement of this phenomenon. As creatures with the most highly evolved central nervous systems and the ability to reflect upon the transcendental, human beings tend to complexify their existence – quite often, in ways they hardly understand. Because we’re attracted to bright and shiny things, and are subject to complexification, we tend to acquire stuff we don’t necessarily need and we create processes and systems so complex we lose sight of their original purpose.

• Susan related her story of producing and selling Christmas ornaments made from hops, which could be seen as a distraction from the seed business of growing hops for making beer. Yet, in this example, the selling of hop Christmas ornaments, is a business that – quite literally – has its roots in the seed business. The hops used to make the Christmas ornaments were excess product that otherwise would have gone to waste. It would be one thing if selling hop Christmas ornaments was diverting product that otherwise would be sold into the core market – in this case to brewers. Since this wasn’t the case, the Christmas ornaments from hops can be seen as “complimentary” to the seed business, which is growing and selling hops for making beer.
• Building upon Susan’s example, an alternate business might be to grow hops specifically for producing Christmas ornaments. Christmas ornament hops could be grown on land that otherwise would not be used for anything else because of its level of toxicity. This business would be integral to the seed business of growing hops for beer. If the “hops for Christmas ornaments” business was supported by a highly effective marketing strategy, one that would realize an explosion in hop Christmas ornament popularity, the business would have the potential of becoming highly profitable as well!
• The lure of quick sales can sometimes become the bright and shiny object that attracts entrepreneurs; this is especially true in this age of easy access to online sales. For brick and mortar retailers, wherein the customer experience is extremely important, being distracted by on-line sales can be a significant detriment.
• The story of a person who is working in the non-profit realm came-up; apparently, this person has a number of marketable skills that would benefit a non-profit organization. The trouble is, the person spends much of her time volunteering her services, which takes time away from her finding employment and has led to a number of non-profits, who otherwise might pay for her skills, gaining the benefit of what she offers without cost. She has made great connections, and has gained a reputation for doing excellent work, yet she’s struggling to keep-up.
• Tom related his experience as a business consultant, wherein a person’s skills and experience are “marketable commodities”. A general rule of thumb for a business consultant is that it will take roughly three years to gain a “regional” reputation, and a total of five years to gain a national reputation. In other words, as one grows in competency, his or her reputation as a business consultant will spread across a given geography.
• The term “juicy rewards” came up as being something that can distract us and take away from our awareness of things – this is a derivation of our inclination to be attracted to “bright, shiny things”. A couple of examples of this phenomenon were given; they come to us from the public realm.

One is the tendency for some municipalities to develop costly infrastructure that cannot be funded without incurring huge sums of debt. The costs are simply passed on to future generations. Another example from the public realm is the investment municipalities will make to host the Olympic Games. Time and again, we see large sums of money invested in building the infrastructure required to host the Olympics, only to see the debt burden being passed on to future generations. Before being awarded the chance to host the games, officials will extol all sorts of benefits to be derived from them. They’ll talk about how the games will bring prestige to the city and how the apartment buildings and sports venues will serve the public for years to come, yet these wondrous prognostications rarely materialize. What happens instead is the debt load of the host city is increased by orders of magnitude, and future generations are forced to pay the price. This is what happens when some have the opportunity to “spend someone else’s money”.

• We then heard the story of a family owned business – a meat packing company – that’s been around for more than seventy years. It’s a successful, local business; back in the ‘60’s, it was a supplier to McDonald’s. The owner at the time was approached with the opportunity to be an exclusive supplier to McDonald’s. McDonald’s was undergoing explosive growth; the opportunity would have meant the same sort of growth for the meat-packing company.

The owner turned-down McDonald’s offer and chose to keep the business local; the business would remain customer focused and build resiliency in its relationships, rather than going after potentially lucrative monetary results. This meant helping employees develop as people and being a reliable and customer intimate supplier.

• John related his experience of entering into an exclusive supplier relationship with a large national retailer. His business underwent tremendous growth within the tristate region as a result of the relationship; then, the financial collapse of 2008 hit and the retailer decided it was too risky to have an exclusive relationship. The retailer proceed to take business away from John’s business. It was a very difficult time for John and the folks he was forced to lay-off as a result of the loss in business.
• The idea that growth is not necessarily a reliable measure of a business’s long-term viability is beginning to gain attention. We’re now beginning to hear the term “resilience” as being a better measure of a business’s long-term stability. Having the capacity to weather storms, because the business is resilient, versus simply being big, is becoming attractive to entrepreneurs.

If one is passionate about his or her business, then making money is not the objective, nor is it the reason the business exists. Because we’re attracted to shiny things – and money buys shiny things – we can get caught-up in going after money for the sake of having more of it, rather than going after the thing that fuels our passion. Sustainable business leaders should never lose sight of why their particular business is alive.

• Grant writing can create distractions. Because grants are a source of much needed financing, especially when a business is just getting started, there is a tendency to compromise the seed business to gain the grant award. Rather than staying true to the seed business, we sometimes see the tendency to change the seed business, or somehow adapt it, to satisfy the requirements of a grant and thereby gain the funding. This, of course, can be a dangerous thing to do.
• David brought-up the idea of Investing in the people around us as a means of building relationship and resiliency. Another way of looking at this concept is to ask: Do we have relationships with people who invest in us?
• Dave related the story of a young man he knew many years ago who was having trouble. He called Dave and they talked; it seems the man was having trouble at work: he was underperforming. The man was in a sales role and David suggested he take a Dale Carnegie course and that he ask his boss to pay the cost. The young man was convinced there was no way his boss would pay; for a time, he wouldn’t even ask. He eventually did and was surprised when his boss readily agreed; it turns-out, the boss thought it was a great idea.

After taking the course, the young man’s life was changed forever. His performance at work improved significantly. The point is, if we don’t take risks – and step-outside our comfort zones – we run the risk of missing-out on so much of what life has to offer. And when people make an investment in others, they’re taking a risk too, but there’s no telling what might happen.

• When it comes to buying decisions, we have the power to affect change: we can choose to purchase from local suppliers, versus large multi-national producers. This becomes difficult for some, though, because they rely on certain inexpensive products that tend to come from low cost, overseas suppliers.

We need to pay attention to these things; if the local business is making a difference, we ought to find a way to support that business. Our buying decisions can be informed through a different value paradigm. We do not need to justify every purchase on price or attractiveness alone. We can look deeper and support businesses who have as their mission making our world a better place.

• Business leaders make real sacrifices to see their ideas become a reality. Passion, creativity and artistry, poured about in an authentic bid to make a difference, is the stuff that makes for an enduring business. It’s this sort of stuff that goes beyond the profit motive; it defines what it means to be human and represents a portion of the people margin of a sustainable business.
• Some successful business leaders will “cash-out” and place their money in trust funds, or pass the wealth on to future generations in some other way. Looking at these sorts of things from a different perspective might see passing a thriving business on to the next generation, a business that provides jobs for people and fulfills a need in society, to be a far greater legacy than a pot of gold.
• Darryl related his experience of the difference between investing and spending. Over a period of several months, Darryl’s been building a relationship with a particular person; when the relationship started, Darryl wasn’t exactly sure where things would lead, but in faith, he’s continued to invest energy in developing the relationship. An opportunity now seems to be emerging from the relationship that will benefit Darryl and the things about which he’s passionate.
• There is this sense of seasonality to our experiences. In other words, who we are, what we’ve been through and the wisdom we’ve gained through life will place us at a certain point in time and space that can be thought of as a “season”. Not unlike the difference between the seasons of the year, and the difference between a particular season from one year to the next, our experiences can be thought of as seasons. Tom is going through a season now with the start-up of the El Moore: he’s enjoying the experiences of hiring people, working with the team and seeing everyone evolve as the project continues to unfold.
• Susan talked about her experience with the historical preservation project on which she is currently working. She’s learning about farming techniques from long ago; as a result, she’s gaining insights and coming-up with ideas that can be applied to her hops growing business.
• The idea of the “old-school” approach comes to mind here. We quite often have the tendency to discount older ways of doing things, when, in some cases, there’s much we can learn from the ways things were done in the past. Sarah’s experience with her family’s meat-packing business is an example of this. Upon reflection, there’s much about the direction the business has gone over the years that has led to building lasting value.
• The entrepreneur wears many hats; this necessitates developing an awareness of relationships and the connectivity they bring. Building lasting relationships is foundational to success. Without them, the entrepreneur will struggle under the weight of the sheer volume of things that must get done. In every person lies “greatness”; being aware of what this greatness is, and building lasting relationships in a way that will somehow manifest themselves in TBL value creation, is the stuff of which sustainable businesses are made.
• Julian reflected on images that came to his mind during the conversation. He had an image of a vine, which adapts to its surroundings – it grows in whatever direction is available to it; he also had an image of a rock, which presents a dialectic of sorts. The rock is not adaptive to its surroundings: it simply sits in one spot creating an obstruction.

Julian also had an image of a toad, which is an exceedingly old creature. Toads are, however, rather fragile creatures. So, over the long-term – they’ve been around for a long time – toads are resilient or “anti-fragile”; whereas in the immediate term, they can succumb to disease and extreme temperature shift, which renders them fragile as well.

A few ideas emerged from what was discussed:

• Time is a factor when we consider the difference between investing and spending: making an investment may take a relatively longer period of time to show results, whereas spending may show results quickly, but the result is not the same. There’s a parallel here between “delayed” and “instant” gratification. In the former case waiting for gratification often affords a richer experience, whereas in the latter case, the experience may be exciting, but dissipates quickly.
• Investing in learning and relationships offers a return that’s likely to be of greater value than the energy expended in the first place – this goes back to the fundamental difference between investing and spending.
• Simplicity is a word that seems appropriate in this context: Once we have an idea, it’s best to expend energy in a focused space and keep things simple in the beginning, when things are just getting started.

Sustainable Business, April 16, 2015 Topic: Communicating Sustainability, Part 2 - Actions:

Review of last week’s comments on Building Awareness Around Communicating Sustainability: Communication about sustainability was the topic of discussion at last week’s meeting. During that meeting, participants discussed being aware of the importance of communication as it relates to sustainable business leadership. This week, the group focused on practical means of advancing ideas, concepts and learning as it pertains to the sustainability movement and sustainable business leadership.

• Darryl gave an example of what is sometimes a struggle for people: the sense what they have to say is not important. All of us must overcome thinking in terms that limit our abilities; believing our voice is unimportant is one of these areas that limits our abilities.
• Julian talked about the tools we have in this age to help us understand the nature of the material with which we work; MSDS are a good example of this.
• Having the desire and interest in learning are important, because without them, very little will actually “sink-in” and become transformative – Stephanie
• Being intimidated by things, such as how to use the library, is sometimes a barrier to good communication – Michel
• The mildew problem with hops growing: not having access to the “technology” that supports pesticide free mitigation of such problems can be an issue – Susan. Tom recommended Elaine Ingham as an expert in the area of pesticide free farming/gardening.
  • Focus on the customer: People might prefer beer made from hops that are grown free of pesticides because the taste is better; if this is the case, there’s the potential to create a market niche for this sort of product.
• Another focus on the customer concept has to do with catering to the way in which the customer likes to communicate; if he or she doesn’t like e-mail, then the business owner/leader will need to find some other way to communicate with his or her customer.
• Effective communication means understanding where the fear resides and dealing with that first.
  • We heard a story about a person who said, “Stop e-mailing me! My inbox is full!” Sometimes folks react to a given reality in a way that doesn’t make sense, such as blaming another for one’s e-mail box being full. When this happens, there’s not much that can be done except to be patient and understanding.
• Encouraging people to use public transportation is more about “showing” than “telling”
  • We heard the story of people who made a trip to Copenhagen to see a robust system of bicycle travel; in so doing, they understood – much more deeply – how a bicycle system could be implemented in Detroit.
• We discussed the idea of “Peak Auto” as a parallel to “Peak Oil”. Getting folks to see what the trends mean and how to behave accordingly, rather than struggling against them, is important to communicating about sustainability.
  • Reinforcing habits, versus changing them: Getting people to see overcoming habits and fear is not insurmountable. It takes one step at a time.
• Sean related a story about seeing the Proposal 1 issue for what’s really at stake, instead of clinging to a singular worldview, one that sees everything in black and white terms.
• What’s needed is an understanding of systems thinking and the interconnectedness of all things.
• There’s a website, within the Yale University system, that speaks to the idea of “communicating sustainably”.
  • There is the notion that people will fall into one of six categories and that there is only a small segment that are strongly camped on one side or another of a particular issue.
  • The majority of folks lie in the middle; they’re the ones who can be persuaded one way or another.
  • The key is to gain alliances with those who share one’s worldview, and then moving from there.
  • 67% agreeing on one issue is a MASSIVE number.
  • If one is working to advance an issue, the focus of effort must not be on those who are violently opposed to the concept. The most effective effort is on those who are in the middle.
  • It’s also important to listen carefully to what the other “believes” and to not react to it. Rather, we are better-off trying to completely understand what the other is thinking or believes.
• Public transportation benefits everyone, yet it’s overcoming mindsets and preconceived notions of what it means to use public transportation that’s necessary before it will be widely adopted. Baby Boomers are – by and large – stuck in a singular mindset about driving cars.
• It’s OK to be poor! Being poor is OK and not something to be feared. When we fear another because of appearances, or economic status, we lose our capacity to communicate effectively.

Sustainable Business April 23, 2015 Topic: Earth Day Reflections

Review of last week’s comments on Communicating Sustainability, Part 1 - Awareness (see notes from last week): This week’s topic concerns “topics for the future”. Before getting to it, though, we conversed about a number of matters related to awareness of, and communicating about, sustainability and sustainable business leadership.

• David mentioned a project in Detroit that’s based on the concept of bringing back the garment industry as a way of creating jobs and reinvigorating the sewing segment of the region’s automotive supply base.
• The El Moore project is coming closer to its next season of existence: this past week those who will be residents there gathered at Green Garage as part of an effort to get to know each other. Tom noted who wonderful it is to see people –relative strangers – who will be living in an apartment building getting to know each other. It seems this sort of thing rarely happens anymore (i.e., that residents of an apartment complex make it a point to gather and get to know each other or welcome new residents).
• The knowledge we possess – the sum of our experience and things we’ve learned – has value and is worth passing along. We never know what effect doing so might have.

Today's Topic: Reflecting on Earth Day 2015 as a means of building awareness:

• • One could look at Earth Day, and its effect on building awareness, from a somewhat cynical perspective: with the way things tend to go in this age, Earth Day will eventually become the “second busiest shopping day” behind Black Friday. Yet Earth Day affords a vast majority of people the opportunity to reflect on the health of the planet and give some consideration to doing something about improving it. What emerges from this sort of thing is anyone’s guess, so from that standpoint, commemorating Earth Day is a good thing.
  • A U of M student is credited with being the person who initiated Earth Day; it has evolved over the years. In 1970, when it started, there was unanimity about the need to recognize the damage humans are causing Earth and to start doing something about it. This was the time when the Nixon administration instituted the EPA and launched a number of other forms of legislation designed to codify protection of the environment.
  • At the time, there was a chasm between social action for the environment and the civil rights movement: those who supported protecting the environment found themselves at odds with those who sought civil rights. Today, these two arms of social justice tend to be seen as being equally important.
  • During the 70’s, there emerged a train of thought that saw the green movement, racial equality and the feminist movement, not as separate problems of social justice, but one in the same.
  • Quite often, it seems, things such as Earth Day, Black History Month and the Lorax get lumped together as “nice fluffy” things that make us feel good – for a moment. Once there over, or out of mind, it’s back to consuming as usual. It’s interesting to note that Black History Month is February, which happens to be the shortest month in the year. Now, why is that?
  • The foregoing points to an existing reality, yet it makes no sense to ignore or vilify things like Black History Month, Earth Day or the Lorax. For many, these things constitute “entry points”, points at which a person may be awakened to the deeper realities of the struggles for justice these commemorative things represent.
• We’re back to seeing Detroit instituting water shutoffs for non-payment of water bills; this is an odd sort of problem, since access to water would seem to be fundamental – at least in the developed world.
• Many non-profits spend significant portions of their budgets to build awareness, which points to the importance of awareness as a means to the success of a movement. Without having some level of consciousness for a particular issue, there’s no way to advance and develop a sense of commitment to the cause.
• With the evolution of technology, there’s an emergent transparency in how non-profits allocate money and there’s much greater ease in the way money is donated; this leads to greater agility on the part of the donor. If the way in which a particular non-profit allocates money does not suite the donor, that person can much more easily apply his or her money to some other non-profit.
• Generally speaking, there are “forces” that influence or co-opt the effectiveness of things such as Earth Day (e.g., engage people to do something about the degradation of Earth caused by consumerism etc.).
  • When a coffee shop makes some sort of “deal” on Earth Day, which allows the shop to leverage the event for increased profitability, the result is a reductive process that causes the message of Earth Day to become ambiguous.
  • Harriet reflected on her being at MIT for the first Earth Day and how water was an issue then. When we look back over the years, the regulations have been – by and large – ineffective in dealing with the water problem. Additionally, many organizations, such as the UN, simply don’t have the teeth to be effective.
  • Gaming the system is much easier in this age. Entities such as the Koch Brothers, who have access to large amounts of capital, can influence public opinion quite significantly. This is a significant factor in the disinformation about climate change and the devastating effects this problem is beginning to have on the poor. The reality of climate change is, by and large, ignored in the US.
  • In many instances it becomes a matter of trying to decide what information to believe.
  • There’s an economic reality about regulations: large corporations can influence legislation in ways that will increase profits, and others, such as labor unions, can influence bodies such as the NLRB in ways that unduly advance their cause or flow money their way. When matters are considered from a strictly economic perspective, rather than a TBL perspective, systems are likely to become “sub-optimized”.
• With the emergence of the Internet, there is cause for hope. In the past, it took significant amounts of capital to get a message out. Today, the Internet has created a level of access to communication that’s never been seen. Each of us, as individuals, now have the capability to communicate – across the globe – whatever message we chose, and we can do so at the speed of light. This is a truly amazing development, one that points to an emerging shift.
• Michel related the story of a friend who is working for a large corporation; this person’s job is to monitor and track the extent to which the company’s supply base is acquiring raw materials in an ethical manner. Because there is such greater transparency in this age, corporations must put resources into monitoring these sorts of things as a hedge against loss of reputation and possible litigation.
• Tom related his experience with investment options. Certain financial institutions now provide information about a corporation’s corporate social responsibility initiatives (i.e., what the corporation is doing to become sustainable).
• Consumers’ access to information is now having an effect on sourcing practices. The clothing retailer, Gap, has made significant changes to its sourcing strategy as a result of this heightened awareness.

Upcoming Topics For Discussion: The following highlights a number of the suggested topics for sustainable business leadership discussions:

• Voting with Our Money: How can this be addressed both individually and as businesses?
• Public Transportation: Sustainability, the M1 Rail project, walkability and how public transportation can be viewed as a means to communicating sustainability are of interest in this realm.
• The Restorative Economy: Establishing what Paul Hawken envisions is a difficult thing to do. We seem evermore engaged in a consumption economy, where the next new gadget is even smaller and more difficult – if not impossible – to repair and refurbish. What sorts of things can we do to advance the restorative economy?
• Schools and Education
• End of life of electronic products - what issues revolve around this concern and what choices do we make either personally or for our businesses?

Sustainable Business, April 30, 2015 Topic: Voting With Our Dollars

Recap of Earth Day reflections: Good and bad things were more clearcut in the 70s and 80s. Environmental issues became more important around then. Social justice issues (civil rights, anti-war) were sometimes seen as competing with environmental issues.

Today's Topic: Voting with our dollars

• Changes are taking place in large companies:
  • Tyson foods is planning to do away with antibiotics in chicken over the next few years.
  • Loews is planning to stop selling pesticides with neonicotinoids (chemicals linked to honey bee colony collapse disorder) by the year 2016

• Buying choices reflect identity for people. In this area your car says a lot about you. Some of us don’t want a car – or want to keep an old car running, even if family members put pressure on to buy something new. A hybrid car costs more and the payback period is long.

• A lot more information is available these days to help with choices. MSDS sheet, organic labels, gluten free, 100% recycled. However decisions become hugely complex. I want to buy US-made – but is it lead free? Are there genetically modified organisms (GMOs)? What are factory conditions?

• Is single serve coffee (Keurig K-cups) a good thing? With big coffee pots at home, lots of extra coffee gets thrown down the kitchen sink. Much less waste with single serve. Old Keurig machines took refillable pods – but new machines are designed so you have to buy a new pod for each serving – so more waste.

• Some of us shop local when possible. Small bookstores such as Source Books or Pages offer a connection to community and are worth supporting.

• Don’t be flip about negative comments for local restaurants or hotels. Fair and constructive criticism can help. It’s good to keep people employed.

• Choosing to repair broken appliances instead of buying new ones helps keep a local person employed. Money circulates around the local economy – and trying to fix everything yourself can be too much stress. Find contractors at a good local hardware store. After World War II, marketing was done to encourage throw-away products, especially plastics. It was marketed as modern and convenient.

Some of the things we like to do:

• Shop resale for clothing. Status symbol brands are less important.
• Buy and sell on Craigs list. There’s a buyer out there for everything!
• Shop on the internet (especially Amazon)– access to a worldwide market.
• Buy socks in a small town store (Petosky).
• Look for Michigan-made items and things made locally.
• Spend money at places with philosophies I agree with. Also go to stores with a commitment to helping customers.
• More choice is not necessarily better. Too many choices can cause stress.