Business Blog: Hoover’s Business Insight Zone

In May of last year the Wall Street Journal ran an interesting interview* with George David, the highly regarded chief executive of United Technologies Corporation:

Transformer in Transition

(Note that the whole story is available only to WSJ subscribers.)

David is one of the all-stars of the corporate world: in the fifteen years that he’s run UTC, the company’s value has grown tenfold. Today its offerings include everything from Pratt & Whitney aircraft engines to Otis elevators.

One of the things that struck me in David’s comments was his insistence on the importance of energy efficiency and conservation.

I think the solution to the energy problem is actually not alternative energy. To me, the solution immediately is conservation by greater efficiency. Too much in the mind of the public is this idea that conservation means deprivation. You’ve got to be cold at night, shut off the lights, stuff like that. That’s simply not true. The bottom line is that energy is wasted in the world to a phenomenal extent. There’s enormous energy savings potential in the conservation agenda where you do it by efficiency. In our own internal operations, we dropped the energy consumption at UTC by 19% over a decade at the same time the company doubled its size. All of America can drop its energy consumption by 20% in a decade easily. We’re now working with the World Business Council for Sustainable Development to come up with a building that uses zero net energy.

This is music to my ears, especially considering its source. I happen to think that the solution to our energy problems must also include alternative sources of energy, but I also welcome mass adoption of David’s views about the current level of waste in our human operations.

The truth is, an abundance of cheap energy over the past century, while enabling huge strides in technology, global travel, and trade, has also instilled an ethic of waste in many of us. It has become incredibly easy and cheap, relative to the prior course of human history, to make more things, to ship them quickly, and then to whisk away the leavings. In other words, it has been incredibly easy to build pockets of waste into our systems simply out of habit, or for want of better forethought. It has become normal to waste. Indeed, in some cases it seems like we’ve come to see wasteful habits as our birthright.

George David isn’t buying it. He sounds like he wants a revolution in efficiency.

Mr. David: You can’t walk through life with a trained eye and not see the opportunities for productivity. Every time you sit in traffic, that’s a productivity loss. Every time you go to the doctor and fill out a bunch of forms and he refers you to somebody else and you fill out the same forms all over again, that’s a loss of productivity. Whenever you wait for something, that’s waste. I believe you can have 10 times more. I really do.

WSJ: Ten times more of what?

Mr. David: Everything. Everything. Just look at the differences in personal productivity between people, educated versus not educated. Or people in good, really productive labor environments, versus people who are kind of struggling because they’re in disorganized or ineffective companies.

Why am I thinking of this? Because this morning I pulled up to a light that had just turned red. Ah, well, what’s the rush, right? Then I waited . . . and waited . . . and waited while no more than a handful of cars passed on the cross street. It’s a busy street at rush hour, but not at the time I was trying to cross it — yet the technology we’re using so far isn’t smart enough to tell the difference. More sophisticated timing in the lights or, even better, sensor-based technology that tells the light when it should change patterns, would mean less wasted time all around.

If it were just me, and if it were only a couple of extra minutes in the car, it would be no big deal. But the truth is that it’s not just me, and the problems of waste extend far beyond the time, productivity, and fuel wasted sitting in traffic. As George David suggests, we surround ourselves with patterns of waste and call it normal. But it doesn’t have to be that way.

What’s the biggest source of waste you face every day?

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UPDATE, Thursday morning: I forgot that, back in May, my friend Dan Markovitz wrote something in the same vein in response to my initial thoughts on the subject:

The Normalcy of Waste

Worth a read.

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* Does it seem strange to anybody else that the date of the story doesn’t show anywhere on that page?

[Photo by Rivertay.]