Business Insight Zone

Interior of a Sea Leopard yacht.

Dematerializing (parts of) supply chains

James Governor of Greenmonk Consulting is doing fascinating things to help businesses build more sustainability into their operations. His research takes him to many companies, including some of the biggest (IBM, Microsoft, Sun, etc.), to study their approaches to these challenges.

For instance, earlier this summer he got to visit the Bristol, England labs of Hewlett-Packard. He wrote up the findings of his visit in this post on the Greenmonk blog:

On HP Labs, Sustainability, Energy Demand Management and Bit Miles

HP most obviously impacts the 2% of global energy use — and greenhouse emissions — associated with IT hardware. Smart design of future servers and data centers can help reduce this impact. But IT’s 2% can also go much further when it helps to “dematerialize” other aspects of business supply chains. As James puts it:

I like HP’s narrative of dematerialisation, whether we’re talking about printed pages or processors. Don’t make things manifest unless you actually need to. That’s a key to sustainability.

The past luxury of waste

The Greenmonk/HP logic hardly prevailed in the past. From the Industrial Revolution through the 20th century, the fundamental cheapness of energy meant that you could “make things manifest” with regard mostly to the cost of their materials and labor; this often went along with limited regard for energy use, and no regard for emissions and other “footprint” metrics. But that was before energy got expensive and stayed expensive, and before concerns about climate change and other environmental problems became widespread.

In other words, we had more than 100 years of being able to think, “Ah, let ‘er rip — we can afford it.” So that’s what we did. But now we’re constrained like never before.

If we want to successfully navigate this fundamental change, it’s going to take much more of the kind of thinking that HP and Greenmonk are doing.

Designing a yacht means working with constraints

Here’s the metaphor that’s guided my thinking about these changes:

• The past century of widespread, unconstrained wealth-building has been like designing and building a house.
• This new century of globalized, constrained wealth-building is like designing and building a yacht.

Whether you’re building a house or a yacht, you can do it across a wide range of budgets. You can include or exclude a huge range of features based on what you want and how much you can afford to spend.

But when you’re designing a boat, your fundamental considerations don’t stop at “Do I want it?” and “Can I afford it?” You also have to consider “How much space will it take up?” and “How much will it weigh?” These concerns are often trivial for an architect designing a mansion; at the worst, maybe you build up the foundation to accommodate the weight of a flagstone fireplace. But on the yacht, you rule out the flagstones altogether, simply because you can’t afford to warp the whole design to accommodate one nice-to-have-but-inessential feature.

When you’re done building the boat, it could be cheap, it could be luxurious, it could be makeshift, it could be elegant — just like a house. But it can’t be indiscriminately large.

Now, when you transfer this metaphor into the world of sustainable design and business, you’ll run into plenty of folks who dig in their heels. They don’t want to admit constraints, even when you show them the math for why the constraints are beneficial, and show them all the wonders that are possible as we build this new giant luxury yacht of the global economy. They want that flagstone fireplace.

Time will tell whether they can afford it, I guess. My money’s on those — like James — who are figuring out how to achieve environmental sustainability while also doing very well for themselves and their customers.

What the boat-building mentality could mean

How will they achieve this hybrid success? Spelling it all out would take forever — after all, this is the stock in trade of Greenmonk, green building firms, profit-seeking solar energy companies, and so on. But here are a few points of reference to start us off:

• Savings. Years ago, Pasquale Pistorio of STMicroelectronics started the giant European chipmaker on the path of reducing its effluents — not, primarily, for environmental reasons, but because as an engineer he realized that exhaust gases and fluids represent waste in manufacturing processes. And waste costs money. Other big manufacturers like DuPont have jumped on the same train — and reaped huge financial rewards, not to mention good press and lower compliance costs.
• Innovation. Inspired by Kathy Sierra, I’ve written several things about how constraints can bring out the best in us. Just think of all the innovations that have come about in electronics by the desire to make radios, televisions, computers, etc. handheld, portable, and wireless. Constraints fuel creativity.
• Entrepreneurial opportunities galore. We’re already seen waves of startups in non-fossil-fuel energy. Likewise, there’s a long, rolling boom in many fields (green design, efficiency engineering, etc.) that will contribute to better sustainable practices in the long run.

Nautical versions of land-based amenities tend toward the compact and the nifty, and there are plenty of specialist firms that supply the world’s boat makers. I wager we’ll see the same thing happen — on a much larger scale — around sustainable materials, computing, supply chains, and on and on.

I’m not saying that this future will be easy to navigate — but if you’re a fan of innovation, what’s not to like?

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Related posts:

• The greatest challenge of business: Both/And thinking.
• Not logic, but culture.
• Proof of Concept for carbon-neutral futures.
• Expectations of waste.
• An ethic of waste.
• What we waste without worrying.
  

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(Photo by kidsire.)

Category: Green & Clean, Innovation & Entrepreneurship, Technology