Sustainable Business Systems: Stop Killing Kittens!

Posted July 21st, 2011 by The Environment Site with No Comments

A little bit of full disclosure here: one of my previous professional lives was in IT and business operations.  In short, it was part of my job to ensure there was enough technical robustness built into companies’ operations to ensure that if there was an IT failure business could continue uninterrupted.

In other words, if one server crashed another would be able to take its place; if an ISP or telephony supplier went out of business another would be able to take over .. etc etc.

In other words, it’s about making the system robust enough to take external shocks.

Which is why I find the current “discovery” of systems thinking a bit of a laugh.  Been there, done that, got the T-shirt.  What the world’s now waking up to is, in fact, the biggest flaw in our commercial and financial systems.

 

It’s the system, man!

So, let’s start at the top of system theory.  It’s not rocket science, in fact it’s pretty obvious and straightforward stuff.  Everyone relies on everyone else and we’re all happy together.  Join hands, dance around, and sing “Ring a ring of roses”.

That’s not to say that these individual nodes are all homogeneous clones.  Office IT systems have all sorts of weird and wonderful beasties within it, from mail servers to gateways, printers to iPhones.  They all unite to create a whole.  You wouldn’t have all of these systems hosted one one server, that would be madness!  And for every server you had running live, you’d make sure you had at least a bare bones backup in case it went down.

The same goes for systems of business in general and subsectors specifically.  Different companies provide different services and products within a unified whole.  When one company or sector becomes dominant it works against the system as a whole because you are introducing a single point of failure … a company (or server) which is so large and important that it’s failure could bring the entire economy down.

Only the very smallest companies have al their IT systems hosted one server and one server alone.  Why is it that we think it’s the mark of a mature and developed economy to allow such points of failure to flourish?  Seems more than a little odd to me.

“OK OK,” I can hear you cry.  “I’ve got it and you’re right.  But you promised us Kittens …”

What about the kittens?

This morning, after dropping the kids off for school, I stopped off at my local shop to pick up a few supplies for the day.  We’ve lived in the area for over 10 years so they know me pretty well and before long the shopkeeper and I were chatting about old cats and how she had to put two of hers’ down within a matter of weeks.

“I’m amazed,” she said (paraphrase!), “How many people don’t think and don’t care for their pets.  The trouble is when you take them to leading animal welfare charities (the RSPCA and Blue Cross) they have to put them down.  They’ve simply got too many to cope with now.”

This, I realised, is a travesty.  There is a whole kitten and puppy producing industry out there, yet so many are produced and found to be surplus to requirements.  Is this any model for a business .. to produce something you know is not needed?

But then I thought, well this is a wonderful sustainability metaphor.  Over supply leading to waste.  You couldn’t put it in a more fluffy, anthropomorphic way.

Then I had another thought and it struck right at the roots of what we believe business to be.

Stop Killing Kittens!

There’s a myth in business that companies welcome competition.  On the whole, they don’t.  What most companies try to do is dominate and then eliminate the opposition.

This is commonly called “the buy out”.  So if you’re selling widgets and a company comes along which has an innovation which threatens you you have one of to options: compete with them, or buy them out.

The thing is that there are entrepreneurs all over the country with bright ideas about how to make a newer and better widget.  Many of these ideas should be allowed to flourish full maturity.  On the whole they don’t because those businesses are then bought by bigger companies.

Such buyouts are, in effect, killing kittens and destabilising business systems by introducing single points of failure.

The second point is more easy to understand.  If no small businesses are allowed to grow and thrive then how is resilience supposed to be built into the marketplace?  All that’s happening is that the older, stronger companies are killing off potential competitors in order to eliminate their competition.

This actually increases the likelihood of a single point of failure being created.  So our economic model encourages us to create unsustainable businesses.

The first point is just as salient.  In order for pet owners to have cats in their homes, hundreds if not thousands of cats are put down every year.  In the same way, hundreds or thousands of businesses are bought up in order to eliminate competition or acquire new technologies, services or customers.

Is this a sensible or sustainable way of doing business .. to kill the kittens in order to ensure the old, flea bitten tom cat survives?  I don’t think so.

 A new monopolies and mergers law

So I’d like to propose a new twist to corporate law, one which I hope will bring a new resilience into corporate activities.  The proposal is very simple … to allow new companies to register as independent companies which may not be bought out for a given period (say, 5 or 10 years).

The principle is sound.  Some US states already allow “B corps”, businesses whose corporate governance can take more into account than just shareholder value.  This is just an extension of the principle and says a company, on establishment, may be protected from predatory action for a number of years.

To be clear, I have no problem with entrepreneurs nor do I have an issue with those who wish to set up a business to be sold to a larger concern in the future.

But I do question whether this should be the norm for a small or micro business.  why can’t these enterprises survive and flourish in their local communities .. why should the norm be that they become an arm of some huge Murdochian (TM) empire?

That helps no-one .. it doesn’t help the social community and it doesn’t help the business community.  If we want a sustainable business environment we have to face one simple fact … we have to let the kittens live.

Picture Credit: http://www.flickr.com/photos/ki4gmb/4625279455/

Why business is wrong about Sustainability

Posted April 26th, 2011 by The Environment Site with No Comments

You know, I used to love Laurel and Hardy.  I’m one of that generation who grew up with them regularly on BBC2 in the afternoons, along with other black and white classics.  This, of course, was in the days when there were less than a handful of channels and all broadcast quality instead of commercial pap.

Recently I got into a debate with members of the business community about CSR and sustainability.  It’s a subject which really motivates me and if I have a weakness it’s the need to rake over it time and time again.

However, what got me in this debate was the view which was being expressed about the difference between CSR and sustainability.  It was, I have to say, a little Laurel and Hardy.

The consensus seemed to be that CSR was all about the short term actions a company took while sustainability is all about the long term strategy a company employs.  Other than that the two were indistinguishable.  This is like saying Laurel the tall one, Hardy’s the fat one, but other than that they’re both white men in bowler hats.

While this may be true about Laurel and Hardy, it’s not true of CSR and sustainability.

CSR *is* about the actions a company takes.  However, these actions are made according to how the company believes it can add value to its positive impact and mitigate its negative impact.  What is considered valuable, damaging and responsible will vary from industry to country to culture and it will also vary over the short to medium term.

Sustainability is all about resource use: mineral, natural and human and the rate at which we’re consuming those resources. This does not vary: using something more quickly than its replaced is universaly unsustainable, just like borrowing more money than you’re making is.

To have a viable long term company you have to think about sustainability, yes, but sustainability can be addressed just as immediately as CSR.  For example, our scale of oil and mineral use it utterly unsustainable.  Companies can address that today just as they are addressing issues of social inclusiveness or environmental degredation.

A CSR correspondent of mine recently noted that they were distraught by how few companies and consultants in the area who still don’t get CSR.  “It’s not about giving to random organisations and NGOs,” this person said in paraphrase, “It’s about shaping the corporate strategy around social and environmental goals as well as financial ones.”

Similarly, I’m distraught about how companies and consultants still don’t seem to get sustainability.  It’s not about aligning your strategy to the changes which will happen tomorrow; it’s about ensuring you don’t over consume today, which in turn makes tomorrow viable.  Leave it until tomorrow though, and there simply won’t be one.

So CSR and sustainability both address the same spectrum of issues represented broadly in triple bottom line economics.  However they’re not a double act like Laurel and Hardy: much more like Dudley Moore and Richard Prior.  Comedians, yes, with the same aim of getting people to laugh and examine themselves.  However, there the similarity ends.

Picture Credit: http://www.flickr.com/photos/tom-margie/1536404154

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