face up to reality, do it with a smile, make money

Book review: The Necessary Revolution by Peter Senge et al.

Xerox, early 1990s. On their way back to a New Mexico retreat centre after a day of ‘solo’ time, a group of employees was intentionally led past a landfill. Going down to take a peak, they found the remnants of an old Xerox machine.

One person said ‘let’s stop’; someone else asked ‘what if nothing we ever make ever ends up in a landfill again?’ And ‘Zero to Landfill’ was born – a crucial turning point in Xerox’s corporate history.

No side dish, Zero to Landfill has become core to the company mission. Over a fifteen-year stretch, Xerox reduced the number of separate pieces that make up a copier from over 2000 to about 200. Designing the machine with disassembly in mind, 93% is now suitable for direct remanufacture, while 97% is completely recyclable.

And for the numbers surrounding the machine: since 1991, Xerox has diverted more than 1.9 billion pounds of waste from landfills, saving the company an estimated $400 million in manufacturing and component costs – every year.

But more importantly, and this illustrates one of The Necessary Revolution’s main points: Zero to Landfill isn’t just about copiers. It extends to waste-free manufacturing plants, and to many of Xerox’s primary suppliers, induced to adopt similar measures by this company’s leading example.

‘Nature, to be commanded, must be obeyed’

Francis Bacon said these famous words well before the industrial revolution kicked in. But with factory chimneys came lots of smoke, choking a very simple truth: to command nature, one must act according to its rules and identity.

Bacon dishes out a reality-check with the ‘Primacy of Existence’. Our natural environment isn’t subject to wishes, whims, prayers, or miracles. To change something means to accept reality and act accordingly. Evading it won’t bring you what you’re looking for. Eventually, you’ll be caught up by ‘Metaphysical Justice’, or ‘reality sneaking up and biting you on the ass’.

We know this, yet most of us today live by wishes and whims. Actually, that’s not true: we know, but we just don’t care. Our commanding seems to be working pretty well for us, so never mind those less fortunate because of it. And since nothing’s come to bite us in the bum yet, we don’t bother with the obeying.

But Bacon is sizzling, and not because Al Gore told everyone so. There are individuals (some even the big corporate world) who practice what Bacon preached, for a while now, and very successfully. They obey the physical laws of nature, use them to their advantage, and they outperform businesses that don’t.

Instead of brushing reality under the carpet, these people accept what’s in front of them – and they embrace it as a positive design challenge. Knowledge is power, reality’s constraint a source of creativity.

Oh No Not Another Inconvenient Truth

Peter Senge, ‘learning organization’ visionary and co-author of ‘The Necessary Revolution’, avoids the trap most sustainability advocates walk right into: he’s not out to make us feel guilty.

Guilt remains the defining emotion that ecological advocates throw at us, and this works its way right up to government levels. As a consequence, policy-making tends to be about punishment: those who do bad have to pay, those who do less bad don’t.

But these writers recognize that when regulations are impossible to implement economically, they’ll have no effect whatsoever. If anything, they’ll drive businesses into the ground, making everyone a loser.

And of course, the same goes for most of us: unless your sustainability has something tangible to offer (guilt-riddance being the intangible return), you just can’t get people – let alone businesses – to care.

So the Necessary Revolution doesn’t waste paper spewing about our horrible environmental conduct. Well okay, it’s a necessary revolution – not an optional one, so it spews a little. But the main point is economic: there’s a business rationale behind sustainable entrepreneurship. And this rationale doesn’t end with corporate reputation and compliance (which Internet won’t have anyway: ‘today, there’s truly nowhere to hide’).

The Convenient Truth

In short: ‘businesses need to wake up to the simple fact that the economy is the wholly owned subsidiary of nature, not the other way around.’

In line with McDonough and Braungart’s ‘cradle-to-cradle’ concept: those who think they’re working towards sustainability often miss a crucial point. Being less bad doesn’t make us good. For the most part, we’re stuck in narrow-minded thinking patterns: reduce carbon emissions, install double-glazed windows to reduce the loss of heat, shift to 4th gear at 50 kph to reduce fuel consumption, etc. ‘Reduction’ is just more of the same, only slower; it’s not going to change the end-result.

Reduction, this book argues, is a first step. Reconsidering your assumptions, changing the way you look at what you’re selling, to whom, and how, is a leap; having the courage to face up to the idea that you might just be selling the wrong products – and to take the strategic plunge, is working towards true sustainable growth.

Circular Economies; Living Systems Business Models

So what does all this mean? Abstract theory alone won’t cut it, so the book provides plenty of touch-points. Consider again Xerox: ‘Were we designing products for customers or just organizing the assembly of lots of materials, almost all of which had been extracted from nature, for a brief visit to a customer on their way to a landfill?’

The business model that defines most industrial age companies is one of “selling stuff”. It shifts the burden of waste disposal to buyers, who then happily leave it for politics to solve.

When we talk of a product’s ‘life cycle’, we mean to say – among other things – that products have a limited life. But there’s nothing cyclical about that. In fact, most products break the very cycle on which growth depends. Where natural waste equals food, our waste equals – in every sense of the word – rubbish: no person, no animal, and no eco-system has any use for it.

When a fleece sweater is just a stopover between PET-bottles and the garbage pile, it’s not a recycled product. As ‘cradle-to-cradle’ will have it, it’s a downcycled version of the original, one very difficult to break down into its elementary components. So, as William McDonough wonderfully summarizes, ‘waste is basically stupid’. Check one of his keynotes here – he’s very dry, very witty, very funny – and he has a point:

Plug Power, never set out to sell fuel cells, but to lease them. Retaining ownership makes service life and reliability their problem instead of the consumer’s. And that makes creating genuine value more important than pushing the sale of as many products as possible. So Plug Power’s business model is one of a ‘living system’: there is no end to the life of their products; it just moves from maker to user, and back.

The Tragedy and Opportunity of the Commons

‘Give a man a fish and he will be fed; teach him how to fish and he will feed himself; give him a fishing business and he will overfish.’ By referring to ‘the commons’, an old custom of grazing livestock on a common pastureland, The Necessary Revolution explains where tragedy meets opportunity.

Businesses guided by their own limited view – ultimately – dig their own grave. But those willing to step back for a bird’s eye view will see a system – one in which they form part of a set of interconnected elements.

To turn metaphor into example: fisheries are under greatest stress when revenues are the highest – more in the net make less in the sea. What companies need to do in such a situation is resist the temptation of further growth – and cut back. This allows the system to regenerate, securing a future for themselves and the industry as a whole.

Unfortunately, most don’t think like this. Those quick to the draw, outdoing others in harvesting a system’s resources, are rewarded with immediate competitive advantage. So why should they pool their resources and share their information with the very companies they’re trying to beat? This is the ‘tragedy of the commons’.

With the aim of inspiring people to identify this tragedy – and turn it into opportunity, this book is as much a psychological, step-by-step guide to innovation management as an introduction to a different economic paradigm.

Thankfully, there’s no claim to a novel concept. Many of the writers’ examples far predate the recently hyped-up ‘cradle-to-cradle’ concept, showing that – as with the commons – ‘there’s nothing new under the sun’.

In addition, they argue, sustainable growth is not just about the long run. There’s short-term cash to be had, but demonstrating this first is – nearly always – a crucial stepping-stone. Below some of the book’s main how-to’s.

The Imperative to Collaborate

For those seeking to overcome the barriers of the status quo, The Necessary Revolution draws valuable lessons from people who failed before they triumphed: don’t climb up to a rooftop to advocate your beliefs through a mega-phone – at least don’t do this if you actually want to achieve anything.

Instead, look across boundaries, identify opportunities in the constraints of the system in which you operate, find and organise like-minded people around you – those who want to work with you, and create momentum to build a critical mass – both within and outside of your immediate working environment.

Get the System in the Room

People are most driven when they act upon something that irritates them, when something around them bugs them personally. So rant, scream, and kick something (not someone), but turn this irritation into a positive statement before you go and seek out company.

The problem in gathering a group is never that no one’s interested; the problem lies in finding those who are. And the biggest problem is often management: people at the top tend to be bent on preserving the status quo they fought so hard for. Execs may at one time have been the ones on the barricades, but once comfortably up there as number 1 they tend to switch over to a low-risk, short-term payoff mode.  (Berkun calls this the ‘innovator’s dilemma’, and he explains it simply and with a lot of laughter in The Myths of Innovation). Also, they tend to be too far removed from day-to-day happenings.

This means you need to identify ‘strategic microcosms’, which is a very expensive way of saying that you need find out who really wants to work with that positive statement of yours, and bring them together. And that calls for purposeful instead of personal networking. Never underestimate your environment: good people are to be found where you least expect them. Finding them requires that you let go of your preconceptions, resists the temptation to try and convince those not interested, and connect with those who are.

Once you get a diverse crowd in a room, from diverse levels and with diverse views, there are two traps to beware of in the ensuing discussions: ‘smoothing over’ happens when people kiss each others arses – and put politeness ahead of the subject; ‘speaking out’ will have people firmly upholding and fiercely defending their views – sparing no room for input. Both have the same result: a silent death of your big idea.

Create a Safe Haven, Seek Agreement, and Go

To get things moving, you need to get yourself and others to question your and each other’s assumptions (‘what would our options be if we’re wrong about our thinking up till now’). So instead of advocating, those in the room have to inquire. People only move when they co-create and when the project feels as their own, not when they’re instructed to follow your program. You help them become winners, and they’ll help you achieve your objective.

In addition, no one’s going to align completely with a single view, so ‘seek agreement and go’. Identify those areas on which you agree, and move with actionable items. Going ahead inspires and nurtures aspirations,and  you can still throw chairs at each other once in a while – just to keep it spicy and remind yourself on what you still don’t agree.

Make it Something People Can Touch

Per Carstedt, a Swedish Ford dealer who managed to lift Sweden’s ethanol cars from  a measly 3 pieces in 1995 to a 15% national share in 2007: ‘A lot of my talks about biofuels, climate change, and the whole-systems approach were too theoretical for most people’.

Some have it in them to imagine alternative futures with little help; others will only be convinced by something they can put their hand on before they too move up to a more abstract level. That’s why market research won’t help you either: it pretty much always says the same: ‘there’s no market for this’.

So instead of debating or not there’s a demand for something, you need to prototype. Set up pilot projects, create something tangible, even if it’s far from perfect. (a funny example of this in Bill Moggridge’s Designing Interactions, Jeff Hawkins walked around at Palm Computing with a hand-crafted, pocket-sized Palm computer – carved from wood, just to arouse designers’ interest).

Create momentum towards the tipping point

The trick is choosing the right pilot at the right time. If, as a small group within a larger working environment, you can demonstrate a tangible benefit, you may be able to enthuse those initially uninterested (and that’s energy well preserved & not spent on futile arguments). At this point, Senge et al. argue, more ‘mavens’ – influential because of their perceived knowledge, and ‘salesmen’ – people good at selling something to others (both within and outside companies) may want to become involved.

Then, when you reach Malcom Gladwell’s ‘tipping point’, you’ll have gathered a critical mass that’ll start doing the work – getting more (potential) stakeholders involved – for you. An example: by 2002 Sweden had 40 ethanol-serving petrol station, and in 2004 Carstedt inaugurated number 100. After that the snowball started rolling, and Carstedt didn’t have to try and win over individual station managers anymore: the 2004 figure had doubled by 2005, doubled again in 2006, reaching 1000 in 2007 – 25% of the Sweden’s network.

And let’s not forget that second group of constituents: the consumers. Tapping into early enthusiasts, helping them see why what you stand for matters to them as well, is critical in fostering critical mass on the consumer side.

Sustainability Drivers

Using a ‘sustainable value framework’, Senge et al. provide insight into companies’ different kinds of drivers – and the strategies related to those drivers. Depending on where you position yourself, pay-off ranges anywhere in between immediate, often cost-reducing benefits, and aligning a company’s mission and values with sustainable growth trajectories.

Many never take a step beyond low-hanging fruit because it takes courage and imagination to face up to the idea that you might just be selling the wrong products.

British Petroleum underwent a major re-brand, discarding its name in favour of a simpler ‘BP’, and adopting a green and yellow sunburst icon to signify it was moving ‘beyond petroleum’. However, with more than 98% of their business still coming from oil and gas, BP started to get tagged with ‘Beyond Pathetic’ and ‘Beyond Plausible’. ‘“We were still investing more in advertising than in developing renewable energy”’.

In 2005 BP turned the wheel and set out to go for more than low-hanging fruit. Since then, BP Alternative Energy has become one of the world’s biggest players in renewable energy. And although the margins of renewable energy are significantly lower than those of oil and gas, they are viable businesses worth pursuing: ‘”people could see that there were 10-14 percent returns in wind”’.

More importantly, BP’s changed its view on what it makes and how it sells its products. Combining new partners with new markets gives alternative energy a necessary “social function”. It means growing a decentralized business, leaving it in the hands of more people, distributing control to an interactive network of smaller players. So BP has started to move away from being a centralized oil and gas company, to becoming a decentralized energy network.

A Necessary Read?

For me, to read about what it means to move from the easy pickings of low-hanging fruit, to tackling fundamental, strategic design challenges, is where this book excels. No abstract, evangelic message is going to help you achieve your goal – unless you start by making it tangible. Moving towards sustainable growth is an iterative process: it requires small groups of people with the power to leverage their ideas, prototypes to demonstrate these ideas, and early adopters to convince the rest.

But it’s not all praises. For its evasion of one trap, there are three, typically guru-infused traps The Necessary Revolution falls headfirst into. Number one, words like ‘remarkable’, ‘magical’ and especially ‘savvy’ (a terrible replacement for someone who ‘understands’ something) are littered all over the text. This sugary prose I can easily forgive – I’ll just take it as a token of how just so damn inspired Senge and co. really are about all this.

But endlessly echoing the mantra (number 2) turns an inspiring read into an annoying one. About halfway through, the book’s message gets stuck on repeat-mode, and I started flipping through the pages. And with this, the writers fail to put into practice a lesson they could and should have drawn from Xerox: 406 pages are easily reduced to 200 – with plenty of white space left. Too much paper, even if it’s good (FSC-certified), is just being less bad.

Finally, if you’re going to be using images to clarify what you’re saying, at least try to make your images clarify (I would have taken a photo to clarify this – but I’ve lent my copy of the book out).

Nevertheless, for its uprooting of sustainable drivers and innovation management processes – all supported by examples, case studies and interviews, The Necessary Revolution is a worthwhile sit. And if that doesn’t convince you, maybe this will: Peter Senge is one the 24 people with the greatest influence on business strategy over the last 100 years (according to the Journal of Business Strategy anyway, cited on this book’s back flap).

Where This Book Stops, the Story Continues with Internet

Much more than just a PR-nightmare from which no dirty company can hide, Internet has become a powerful means of involving potential consumers. In redesigning value, companies can now more easily reach out to those they’re doing it for, and ask them for help doing it more effectively. Such people, if enthused by your product/service and your story – may act as the best marketing resource you could wish for.

Better still, early adopters can be made into full-fledged sales partners, going out in search of demand and receiving rewards for generating leads and sales. Clay Shirky says that ‘the average user doesn’t exist’. So why bother to find that user yourself?  Tell your core group they can ‘Make Noise, Make Money’, and some of them will gladly help you unchain your revolution.

But Senge is pretty old, and he probably doesn’t want to write about all this new-age technological, crowdsourcing, co-creation mumbo-jumbo. And he’s right, because several already have

Clay Shirky’s Here Comes Everybody and Lawrence Lessig’s Remix excellently and wittily delve into these subjects. Wikinomics – apparently – is a must-read, and Jeff Howe’s Crowdsourcing is waiting for me on my bedside table.

Photos (in order of appearance):

• Casa Santo Domingo by patrn
• Weee Man… by law_keven
• life cycle exceeded by lounger
• market research by bornazombie
• BP leave Lake Michigan alone! Artnotoil.org by Vlad Lazerian

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