Where’s The Harm?

It has been pointed out to me that I’ve been hammering on the theme of people being credulous idiots lately, and at least a few people have asked me what the big deal is. It’s hardly as if willful ignorance is an invention of this new Century; people have been doing things that they know to be harmful to themselves or to the world at large for millennia, and the planet and the human race are both still here. But there were two stories that turned up on the news aggregation sites this week that I think demonstrate that our world really is getting more dangerous – and the penalties for refusing to face the truth are no longer limited to an increased chance of public embarrassment…

First, there was the story on Gizmodo (also mentioned on the Cracked website) about a line of stickers being sold through Gwyneth Paltrow’s website that are purported to somehow promote your health. The ad copy for these things originally claimed that they made use of a material used by NASA for space suits, but once the folks at NASA called shenanigans on that it was toned down to a more generic new-age pseudoscience word-salad. I’m calling this product an extraordinary example of harmful and malignant nonsense, not because there is any reason to believe that affixing stickers to your skin is actually harmful, but because this product sells for up to $120 USD for a package of 24. You could buy quite a lot of vitamins and nutrients for that kind of money, whereas these “health” stickers will do you approximately the same amount of good that you would get from just taking 120 dollar bills and setting them on fire…

The second story was a great deal less light-hearted: CBS News is reporting that the state of Maine has just confirmed its first case of measles in twenty years. There’s no word yet on how many people in the region may have been exposed to the disease, or how many of those people may have refused to vaccinate their children against this completely preventable and potentially fatal disease because a bunch of celebrities appear to have latched onto a single completely-discredited study. We are justified in asking whether any of this would be happening if people weren’t more afraid of a supposedly possible side-effect of the vaccine than they are illnesses that are known to have a non-zero chance of lethality, however…

Now, I will be the first to admit that I have no credentials in medicine or the life sciences, but as a management professional and a student of failure analysis I’ve learned more than I really wanted to about people doing things for the wrong reasons. The fact is that working out and eating well is difficult and time-consuming, whereas slapping a sicker onto your skin is easy. Learning about disease, immunization, public health concerns or statistical probability is hard; taking the word of some celebrity clown on television is easy. Working to make yourself better informed, better equipped, or more capable of dealing with problems is difficult; just believing what you want to believe for no apparent reason is much too easy…

It has been said by people much wiser than I am that belief in conspiracy theories is one of the ultimate ways of dealing with life as just one person among billions in the midst of a world that does not care about any of us. It you believe somebody is trying to trick you, then you believe that they care about you, you see. I would submit that embracing the belief that you know better than people who have spent years in medical school and decades in research is the ultimate way of declaring yourself a person of importance in a faceless society. But it’s also what gets you epidemics of obesity, opiate addiction, poverty, illiteracy, malnutrition, and diseases that were all but eradicated decades ago…

And if the same idiotic principles are applied to Global Climate Change, Civil Rights, International Relations, Wealth Inequity, Renewable Energy, Nuclear Proliferation, or artificial damage to other aspects of the Earth’s biosphere, then we really could be looking at the end of life as we know it on this planet…

Sweet

Some years ago in this space I brought you the story about Coca-Cola selling bottles made entirely out of ice on beaches in South America. At the time, I noted that the whole idea was a stunt, and not a very well-chosen one, either. While it is certainly interesting and memorable to have a product package that just melts when you are done with it, the actual ice bottles were problematic both because ice does not make a good, contaminant-free package, and because it’s much too expensive to keep your entire supply of product refrigerated at all times. Even worse, though, was the fact that in many of the countries where they tried this stunt, clean drinking water is hard to come by…

To be fair, the ice bottles were never really intended as anything more than a publicity stunt, and once it was pointed out the company that this was actually much worse for the environment than relatively clean and easily-recyclable glass would be, they abandoned the idea. But this week there’s word of a new type of Coke packaging that looks to be quite a different matter. If the story available off the Fortune website is correct, the new bottles are made from plastic derived from sugar cane…

I’m not enough of a chemist to understand (let alone explain) how you can make plastic out of plant matter, but the business implications of this article are staggering. Coke started experimenting with plant-based plastics back in 2009, and initially released a bottle that was 30% plant-based plastic later that year, but the new version does not use petroleum plastics at all, and the company claims that just over the last six years they have already saved the equivalent of over 36 million gallons of gasoline – and even more importantly, kept 315,000 metric tons of carbon dioxide out of the atmosphere…

It’s not clear from the article, or from the original source on CNN Money’s web page, how well the new packaging will hold up for other kinds of products, or if the process will be commercially viable for companies smaller than Coke. The company is apparently being a bit cagey about the process, but CNN reports that they are using sugar cane from Brazil and waste products left over from sugar cane refining operations in India to make the new plant-based plastic. This may require a global logistics base beyond the reach of some organizations, but any chemical company that can develop a similar process shouldn’t have any problem finding a wealth of customers who will want to order packaging in the new plastics. Assuming, of course, that the new material is actually as economical as Coca-Cola is claiming it is…

Now, one could reasonably ask why companies wouldn’t want to use a more environmentally friendly packaging material, even if it was slightly more expensive than conventional plastic. Surely the knowledge that you are helping to save the planet – and the positive public relations you can realize by doing so – would be worth the smaller profit margin. Unfortunately, this isn’t always the case, especially in industries that do not feature a large profit margin in the first place. When we consider this development from a business standpoint, it is important to remember that not only does Coke already have a massive international infrastructure to make the operation less complicated, and vast amounts of capital (and income) available to cover the expenses, they also have one of the highest profit margins in the world – two or three cents worth of water, sugar and flavoring that one can sell for $1 at McDonald's and $5 at a football game…

I don’t know if this is a game-changer, or something that will flame out and disappear as quickly as the ice bottles did. But if plant-based plastics turn out to be viable in both a financial and a manufacturing sense, then things are about to get interesting – and we’d all probably be well advised to start paying more attention to agribusiness…

Was That a Goat?

Over the years I’ve written a lot of posts about Amazon for much the same reason that a sports blogger would write about the New York Yankees – love them or hate them you can’t ignore them, any more than someone in the business community can ignore Amazon. We’ve all spent time pondering Amazon, and watching them as they diversified from an online bookstore to a retailer of other kinds of media to a retailer of practically everything. Now it appears that the company has moved into providing random home and personal services as well, which appears to be taking them into some very strange waters indeed. Who would have imagined, back in the old days, that this modest Internet bookstore would one day grow up to be a place where you can rent a flock of goats?

I got the story off of the Business Insider website, but it looked too fantastical for words, so I went onto the Amazon site and looked for myself. Sure enough, there is an Amazon Home Services page which lists services available through the auspices of the company. Some of these include things that make perfect sense as a value-added adaptation for a retail company, such as service personnel who will come to assemble the outdoor grill you just purchased, or install the wall-mount for your new plasma-screen television. Some are just mundane things, presumably for people who don’t want to deal with Sears, get referrals off of Angie’s List, advertise on Craig’s List, and so on, like gutter cleaning and pressure washing services. And some of them are quite eccentric indeed, such as aerial yoga classes (yoga done while hanging from the ceiling on loops of soft fabric), language lessons (currently in Spanish, French or English, but keep checking back!), musical and vocal performers (hire a band for your next big event!) or hiring a goat grazing service…

As I have mentioned in some previous posts, goats are an extremely efficient and cost-effective way of clearing brush, or unwanted vegetation in general, from almost any terrain. They don’t require gasoline or electricity, don’t make much noise compared to chainsaws and wood chippers, dispose of the cut vegetation (except for the occasional goat dropping, which the Amazon page points out make excellent fertilizer), and can actually work faster than some human brush-clearing services (depending on the terrain and the number of goats, presumably). How much the service will cost depends on how much land you want cleared, whether it is fenced in or whether goatherds will be needed to keep control of the flock, and how many goats you want, but unfortunately I can’t tell you how it compares in price to other methods or contractors…

When I pulled up the Other Services page it was immediately clear that none of these services were available anywhere near my zip code. There weren’t any offers on the Lessons page, either, which is disappointing to anyone who wanted to learn aerial yoga in the Lansing area. Nor did I find anything under the Home Improvement or Lawn and Garden pages before I gave up. As was the case with Angie’s List and Craig’s List, there are no listings for services of any kind anywhere near where I live…

Now, in fairness, we should probably note that Amazon Home Services is a fairly new area for the company, and it may take them a while to get enough contractors listed to cover everywhere. We should also note that East Lansing is kind of a backwater – it’s a nice enough place, but it is somewhat remote when compared to Seattle or Chicago, for example. It’s quite possible that if you live in or around a major city that you would find plenty of offerings in every one of these categories (although I suppose the goats might be a challenge in urban areas). A much more serious point is that every other business referral service out there should probably take notice of the fact that Amazon has now entered their industry, because if they aren’t careful the same thing that happened to all too many local bookstores could also happen to them…

Coming Soon to an Auto Mall Near You!

Over the years we’ve discussed a number of the emerging technologies that promise to one day produce cars that don’t require gasoline or other fossil fuels in order to run – including some which are already in use, like the biofuel diesel projects and the Tesla Motors all-electric vehicles. There’s one I keep bringing up which has, so far, failed to produce any street-legal production cars, despite its popularity in science fiction and the fact that the actual technology has been around since the 1960s: the fuel-cell power plant. This is the same device that was used to generate electricity onboard the Apollo missions; a relatively simple device that uses compressed hydrogen and a catalytic reaction to generate power, leaving water as the only by-product. They also have the advantage of not needing large batteries filled with lead and other heavy metals like the electric cars, or using food crops to make fuel, like the E85 projects…

From a technical standpoint, the big problems with fuel cell vehicles have always been the weight and bulk of the units, the difficulty in storing and dispensing pure hydrogen safely, and the cost of making the cells in the first place. From a business standpoint, the much larger issue has always been that no company with the resources to mass-produce such a vehicle has ever been interested in making one, which means there has also never been a financial incentive for anyone to produce service stations capable of refueling one. Tesla Motors has experienced some of the same issues with its electric cars; while they are still developing a network of charging stations, unless there are enough customers to keep such stations in business, no one is going to operate one. So far, there are only a handful of stations that can provide hydrogen for fuel-cell vehicles, all of them in California – but that could be about to change…

A story last week in the Washington Post describes a new offering from Toyota called the Mirai, which is being described as the first production car to use a fuel-cell power plant. This may be a bit of an exaggeration, in that the Mirai is only going to be produced in limited numbers (700 this year and 2,000 next year), but the same Post story mentions that Hyundai has already started producing a fuel-cell version of the Tucson-class SUV, and Honda’s first fuel-cell type will be available next year. If these vehicles perform as well in a business sense as they perform in the physical sense it seems likely that we will gradually see production increase, as it did in the case of the Prius-class hybrid and as it is starting to with the Tesla electric products. And there is reason to believe that these vehicles will take off and sell, given their advantages over all previous technologies…

Some of the advantages are practical, of course. A fuel-cell type like the Mirai will have significantly greater range than the Tesla electric cars, and will require three minutes to recharge, rather than the 30 to 60 needed by an electric vehicle. Toyota is also pricing them at about 70% of what the primary Tesla car is selling for. But the big difference should come in terms of industrial base and infrastructure. I will yield to no one in my respect for Elon Musk and the folks at Tesla Motors, but for all of their technical and financial brilliance, they do not begin to have the industrial resources of Toyota, let alone the Honda and Hyundai corporations, and who’s even mentioned access to capital or distribution channels yet? Toyota has the ability to build up the number of fuel-cell vehicles gradually over time, exporting them to more and more states as the fueling stations to support them come on line. If two or three major competitors are also dumping hydrogen-powered vehicles into the US market, it will very rapidly become economically viable to support and fuel these cars, and the whole cycle will begin to pick up speed…

There are still problems to work out, of course. It remains to be seen if the oil companies will pick up on the opportunity to sell hydrogen through their existing infrastructure (at the moment, most of the hydrogen is being delivered in various hydrocarbon storage media, and could be distributed through slightly-modified gas stations), or how long it will take to educate the public about the potential of hydrogen-powered vehicles. But if production volume starts to rise, and the price continues to drop, fuel cell vehicles might take off in exactly the same way gasoline-powered cars did a century earlier, and for almost exactly the same reasons…

How Stuff Works: The Triple Bottom Line

The Triple Bottom Line is another one of those concepts that everybody has encountered at least once, in some management text or business news article, all about better ways to run your business and save the world in the process. Many, if not most, of these screeds tend to get ignored because, let’s face it, most businesspeople are more concerned about selling product, paying expenses and turning a profit than they are about warm and fuzzy concepts that people make up to fill management textbooks. What they’re ignoring the Triple Bottom Line is more than just an academic buzzword; it’s a way to accomplish multiple worthwhile things while potentially making more money than you would with a conventional approach…

Most people are already familiar with the First bottom line; it’s the one that appears at the bottom of your financial statements for the month; the amount you made or lost as the result of business operations. This is occasionally derided by the sort of idiots who believe that a world with a barter economy or a socialist utopia are actually achievable in our time, or for some reason believe that success in a commercial enterprise is somehow wrong. I have often pointed out in this space that there really isn’t anything wrong with turning a profit, providing jobs for your employees, business for your suppliers, a good return on investment for your stockholders, and offering a useful product or service for sale – all of these things help worthwhile people to have better lives and potentially better futures…

I’ve also spoken in this space about the Second bottom line, although I haven’t usually called it that. Consider for example that if our company makes money it will contribute to the local economy, both from taxes paid on income and sales, but also through the amounts it spends on goods and services and the amounts all of its employees and suppliers (and their employees) spend on goods and services. This increases the funds available to the local government, and allows for better police protection, fire service, public healthcare and education, libraries, parks, and social services, just to name a few. Some people may dismiss this as nothing more than a side effect, or complain that the business doesn’t really care about these effects, but I have to ask: if your community is gaining all of these benefits, do you really care why the people who own the company are providing them?

The Third bottom line is all about the environment, and doing business in a way that is environmentally sensitive – or, even better, has a positive effect on the environment. The best example I’ve ever seen – the one I teach in my management classes – is a garbage-collection company that started composting the organic waste it was being paid to collect. Not only did this keep millions of tons of trash out of the landfills, it also created the world’s best organic fertilizer (that’s what compost is), which enabled local farmers to achieve better crop yields while at the same time avoiding harmful runoff from chemical fertilizer. The farmers made more money, the local water and air were cleaner, the landfills didn’t fill up as fast, and the company eventually realized they were making more money selling compost than they were being paid to collect the garbage in the first place…

Now, I realize that I’m not going to change anyone’s business philosophy, let alone strategy, with a 600-word blog post. But I have to ask you to consider a situation where people are paying you to come and haul away the raw ingredients for your most lucrative product: is that not beautiful? If you could benefit your employees, your stockholders, your community, and the whole world while making more money doing so, why would you not want to do that? The key point of the Triple Bottom Line isn’t that there is more to life than making money (although there certainly is). The point is that sometimes doing the right thing and doing the smart thing involve doing the same things, and it would be a shame to pass up a chance like that – especially since it’s probably already there, waiting for you to find it…

I’d Buy That For – Actually, No, I Wouldn’t…

There’s a new product coming out this winter from GM that has great potential, both in bringing the company into new product categories and selling a lot of units, but about which I find that I’m dubious. All hype aside, it’s basically a Cadillac version of the highly controversial Chevy Volt hybrid – with all of the elaborate body-styling, leather interior and other optional extras that implies. But the guts of the vehicle are virtually identical to those of the Volt, including the troublesome (and occasionally incendiary) battery pack, performance should be similar in all categories, and without the Volt’s hatchback the design may look better, but is significantly less practical – all of which is a problem given that the Cadillac version is priced at over twice the MSRP of its Chevy progenitor…

You can read the Wired online story about it if you want to, but they’re not that positive about the car either. For one thing, the $75,000 GM is asking for the Cadillac ELR is high enough that you could purchase a number of highly-regarded competitors for the same money, including the Tesla Model S, the Mercedes-Benz E-Class Hybrid, the BMW 5-Series Hybrid, the Acura NSX and the Porsche Cayenne Hybrid instead. For another, the ELR has a number of optional features that remain unreliable, even apart from the power plant, like the CUE entertainment system. But mainly what they are questioning is whether adding the Cadillac nameplate and logo will be enough to double the price people are willing to pay for the vehicle – and there is historical justification for questioning that…

Some of our older readers (assuming I have readers) may remember a product called the Cadillac Cimarron from the 1980s’ – it was the compact car in the Cadillac line at that time, and the company had difficulty selling them because the Cimarron looked almost exactly like the Chevy Cavalier of the same period, only with some chrome bolted on and double the purchase price. This was, of course, because that’s exactly what the Cimarron was; the majority of the car’s parts were interchangeable with the Chevy and Pontiac versions (the Sunbird, in the later case), only at twice the price or higher. The ELR has all of the same problems, including the legacy of cars like the Cimarron to muddy the waters, but from where I’m sitting it has at least one problem that is even worse…

Consider the traditional customer demographic for the Cadillac line. Developed by GM specifically to create an up-market product for people who had grown too successful to drive Pontiacs or Buicks, the Cadillac has always appealed primarily to older customers from higher income categories, both as a demonstration of wealth and because they can afford the extra comfort of the car’s optional amenities. In recent years the brand has met with increasing popularity in several other segments, notably including the rap music community, because in addition to the established prestige associated with Cadillac, the vehicles can be easily customized to conform to the owner’s vision of status, showmanship and visibility. What I question is whether either of these groups will be interested in a small, cramped, under-powered and very expensive vehicle whose primary selling points are high gas mileage and low environmental impact…

There are environmentalists in both of these communities, of course. And we can easily imagine that at least some Cadillac buyers might find the idea of lowering their gas bill by as much as 75% to be intriguing. But such individuals have had access to other hybrid models for nearly a decade now, including the highly successful and relatively prestigious Toyota Prius; it’s difficult to imagine that anyone who is motivated by either lower emissions or higher gas mileage wouldn’t already have migrated into the hybrid market. If the ELR proves to be the equal of the Tesla, Mercedes or BMW offerings from a mechanical and efficiency standpoint it might be able to complete on value, but the company as a whole has been having difficulty competing for the luxury sedan market for some years now, and the questions about whether the bugs have been worked out of its systems will not help. Unless Cadillac can reach a new customer demographic with this product, or somehow convince their existing customers to start accepting the ELR’s strong points as being worth switching to, it’s difficult to imagine this ending well for GM…

Green or Not?

While we’re waiting to see how the new status-water from Nestle (see yesterday’s post) turns out, let me direct your attention to the bottle itself, just for a moment. Coke has a new packaging idea that may or may not add value and certainly appears to be drawing some debate in terms of whether or not it is in fact a green, or environmentally sensitive, packaging. This new bottle actually keeps the beverage inside of it ice-cold and completely dissolves after you’re through with it, leaving no garbage to clean up, nothing to recycle, and no chemical residue or energy requirements to do either. It does have a little problem of melting in any situation where the ambient temperature goes above 32 degrees F (0 degrees C), though…

A story on the Ad Week site talks about a new Coca-Cola offering being marketed in South America that consists of “bottles” made almost entirely out of ice (they have a little plastic label so you can hold the bottle without freezing your fingers, and so there’s someplace to put the product name and the nutritional information). When you’re done with your Coke, you can just leave it in the sink and the bottle will melt and run down the drain – or you can throw it in the trash and let thermodynamics take its course. This would be particularly useful in a public venue, such as a beach (where broken glass in the sand is a constant hazard) or a park; although I’m not sure it would be a good idea in a sports arena (where there will already be enough puddles from spilled Coke and beer on the floor) or an amusement park…

On the down side, while it does require less energy to freeze water into ice than it does to make a plastic bottle, it does still take some – and the energy requirements to ship the bottles in a refrigerated truck and keep them in the freezer until needed is potentially much higher than that needed to make plastic bottles. And as the folks over at the environmentalist site Take Part note, these ice bottles also require pure water – a resource that most of the people in the world, and far too many people in South America, don’t have in the first place. Using thousands or millions of gallons of drinkable water from a limited supply for this purpose seems heartless, and that doesn’t even consider the contamination issues from dirt, germs or insects given that ice doesn’t really make a good food container in the first place…

You could get around some of these problems by shipping the beverages and the bottles separately – which is to say, not shipping either one; you’d just send the Coke syrup to the distribution point and have your agent on site mix it with water and carbonation (to make the product) and freeze water into bottle shapes and fill them as needed. At that point the product was clean and pure when you handed it to the consumer, and anything that happens to it after that is not your responsibility. But at that point the delivery vehicle you’re replacing is more of a cup than a bottle, and you still have the same issues with refrigeration and clean water supplies. In the final analysis, I don’t think the ice bottle (whatever Coke ends up calling it) is going to work out – but I still think it’s less ridiculous than marketing tap water as a prestige item…

A Call For Action

I don’t usually editorialize in this space; I feel that I have a few worthwhile observations to offer on business and management topics, based on 20+ years in business and 6+ years in graduate school in Management, but outside of that specialty I don’t know that my opinions are any better than anyone else’s. However there are some social, environmental and consumer issues on which I feel very strongly, and after the experiences of the past few months I feel that I need to call one of them to your attention. This is a terrible scourge that has the potential to inflict massive financial and environmental damage on the United States, and indeed, anywhere else that this issue is left unchecked. I refer, of course, to flame-retardant junk mail…

I recently had occasion to round up the junk mail that had accumulated in various corners of our house, and I found myself truly appalled at both how much there was, and by how difficult much of it was to destroy. I typically use a small document shredder to reduce all of the junk mail to small, confetti-like pieces, and then scatter the pieces further by mixing them randomly together with the remains of many other junk mail pieces and other waste paper (also reduced to confetti). I will then attempt to find some way to re-use the paper (cat litter, bedding for pet rats or hamsters, fodder for critters that eat wood fiber, compost and such) or else recycle it. When neither of these options is available, I will usually just take the simplest route and use the paper shreds for kindling (they are an excellent way of starting a fire). Unfortunately, the recent trend toward plastic-coated and vinyl-coated mail pieces makes it unsafe for most animals, and many recycling centers are refusing to accept it either. Worst of all, however, the plastic coatings make these shreds unsafe to burn…

As I went through the piles of junk mail I was amazed at their variety. In some cases, a single monthly file would contain as many as two dozen offers for the same junk offer or credit card; some for Max Belin, some for Max P. Belin, some for Max Paul Belin, some for M.P. Belin, some simply for Mr. Belin, one or two for Professor Belin (which I am not), and in one remarkable case, one for Jqs G3o8h, which I assume was the result of somebody trying to spell my name while being one row above the home row on their keyboard (look it up). My wife’s name appeared in similar variations, including at least two or three cases with the wrong middle name, a considerable number under her previous married name, and one that misspelled her first name as well. This does not even consider the very large number of mail pieces addressed to people who do not live at this address, and as far as I can tell, never have….

Now, I don’t wish to appear insensitive to the junk mail industry. I know that printing and mailing such offers provides jobs to thousands of people all over the world, and that millions of Americans make their living extending credit that people can’t afford, charging them interest of up to 120% per year, repossessing their belongings, foreclosing on their houses, and garnishing their wages. And I realize that all of the people working in the luxury car, private airplane and yacht-building industries would be ruined if the executives and corporate attorneys working for these financial institutions were denied the chance to drive more people into soul-crushing, life-destroying debt. I’m just saying that they should have the decency to use environmentally correct junk mail pieces – and if possible, ones that can be used for fires as well. It’s going to be a cold winter, and a lot of people in this country are going to need all of the fuel they can get if they want to stay warm…

The Sound of Opportunity

There’s a moment in the classic comedy “My Blue Heaven” where Steve Martin’s crew of thieves has just discovered that the truck they thought was full of valuable merchandise contains nothing but empty five-gallon water bottles, and most of the crew is looking dejected. Martin’s character tells them that they’re not looking at things correctly; this isn’t a bust, it’s an opportunity. He then uses the empty bottles to set up what at first appears to be a simple “fake charity” scam (using the empty bottles to solicit donations for a non-existent fund to build a new Little League facility) but which eventually grows into a very sophisticated municipal scam that actually does produce a new baseball facility for the town – while providing huge amounts of rake-off funds and sinecure jobs for the criminals, of course. At which point it’s really hard to say if this is actually a criminal enterprise any longer; it’s certainly nowhere near as unethical as the no-bid contracts for Halliburton in Iraq, for example…

My point here is that no matter how unpleasant the situation happens to be, simply looking at it and bemoaning the misfortunes involved is both bad strategy and also bad business strategy. You already know that it makes more sense to respond by attempting to find a solution for the problem; what I’m driving at here is that it’s usually also more lucrative to do so. A good case in point is the adoption of the oil separation machines being produced by Kevin Costner’s Ocean Therapy Solutions to deal with the Gulf oil spill disaster. You can pick up the ABC News Story about it if you want to, but basically the things are highly-advanced centrifuge machines that can separate about 2,000 barrels of oil from seawater per day, depending on the concentrations involved. This may not sound like much, given that there are somewhere on the order of 30,000 barrels being leaked each day, but apparently these devices aren’t that difficult (or expensive) to build; if you had enough of them you might be able to keep ahead of the spill…

This is not intended to downplay the seriousness of the situation, of course. Left untreated, the Deepwater disaster has the potential to destroy the entire Gulf ecosystem; if enough oil gets into the currents and spreads into other parts of the world there is a non-zero chance that the resulting cascade effects could destroy all life on this planet. It’s an unlikely place to find a simple business lesson, but that’s why I’m calling it to your attention, of course. Mr. Costner didn’t invent the technology, he just purchased the patent for it and set up the company that has developed the present applications after seeing footage of the Exxon Valdez fiasco on the news. And there’s no guarantee that the United States or any other national or local government will respond to this situation by purchasing enough of these devices to defend its coastline, let alone that any other oil company will catch on to the enormous public relations and legal defense potential of these machines (you can use them to lower your legal exposure to damages from an environmental catastrophe AND improve your public image AT THE SAME TIME) and invest in a whole bunch of them…

But if even a small fraction of the people who ought to invest in this technology actually do, Ocean Therapy Solutions and Mr. Costner are going to end up being embarrassingly rich – which leads me to ask you if there are any problems going on in or around your company that might have lucrative solutions if you look at them the right way. Maybe you should go and look…

Was That A Goat?

What do brush clearance in Southern California and electrical energy generation in Coastal New Jersey have in common? Well, other than appearing in this blog post together, they're also examples of controversial attempts by local government to "go green" -- that is, to promote ecologically responsible operating strategies. The amazing part, at least from where I'm sitting, is that either of these things is actually controversial. I suppose we should keep in mind that nothing is simple when it really is happening in your metaphorical back yard...

First, let's consider the New Jersey wind farm proposal. We've been hearing a lot about wind farms, or large wind-turbine arrays, since the T. Boone Pickens ads started running earlier this year. It's an appealing idea; harnessing the power of the wind to generate absolutely clean energy in a completely renewable manner. As wind turbines become more common the price for building one (and for the equipment that makes it work) is coming down, and the break even point is getting closer and closer. With the relatively high cost of fossil fuels, the idea of a power plant that you don't have to buy fuel for -- ever! -- is only going to become more and more popular as we go on. In fact, the same market forces will probably bring solar power plants online before much longer, as well...

So why is this controversial? In a word, NIMBY. Alright; technically that's an acronym that stands for Not In My Back Yard, and not really a word. But it's an accurate description of the reaction from the resort communities along the New Jersey coastline, all of which are convinced that they will lose tens of millions of dollars each year if there are a bunch of giant windmills anchored into the sea bed three miles offshore. The commercial fishing industry isn't happy about it, either, but it's mainly the resort operators who think the windmills will be an eyesore who are screaming...

I'm not sure that a bunch of tall, white wind turbine towers three miles away constitutes an eyesore, but then I rather enjoy watching windmills spin. In any case, there are conflicting reports of how much actual business would be lost because of the windmills, but most of the experts agree that it would be in the tens or hundreds of thousands, not the tens or hundreds of millions, and only for a few years until everybody concerned calmed down and forget that those white things on the horizon are windmills. The experts also agree that this would remove over 400,000 TONS of particulate from the air over New Jersey each year...

I know that Los Angeles would give it's (metaphorical) eye teeth for that kind of per capital smog reduction, so let's shift over to our other story of the week: the City of Los Angeles is employing a flock of about 100 goats to clear the brush off of Angel's Knob, a hill adjacent to the famous "Angel's Flight" tramway. This is saving the city about $4,000 over employing human workers with gasoline-powered weed whackers and chainsaws and such. It's also saving gasoline, noise, and air pollution, all of which my birth city already has quite enough of. So why is it controversial? Well, apparently the goats smell bad -- and this project is only creating work for a single goatherd for a few weeks, not for a dozen or so laborers for the rest of the year...

Some days, you just can't win, can you?

Lay It On The Line

In addition to the Dean of Extension and the Mayor of Long Beach (and my boss and his counterparts), the opening session of our Green Conference included remarks by two leaders in the field of conservation and sustainable business: Ed Begley Jr. and Burton Hamner. When these guys talk, you ought to listen -- and I'm pleased to say that just about everyone attending the conference did, including the aforementioned dignitaries...

Mr. Begley probably doesn't need much introduction; he's a veteran actor who has been working in Hollywood for over four decades now (his IMdB entry has nearly 300 credits running from 1967 to present) and has been closely associated with the environmental movement for years now. What most people may not realize (I didn't until he explained it to us) is that Mr. Begley has been involved with environmental causes for nearly as long as he has been an actor. It all began in the early 1970s with the effort to improve air quality in the Los Angeles Basin, and a small electric car that Ed purchased because it was cheap AND green at the same time. Still largely unknown at the time, Ed needed an inexpensive means of transportation, and quickly discovered that it cost far less to charge up the car's batteries than it did to purchase gasoline. Using the savings from this vehicle, he then invested in a solar hot water system, and then used the savings from that to purchase other alternative power products...

Mr. Begley's point, which I think is very well taken, is that it took him decades to achieve the unusually "green" lifestyle that eventually got him his own show on cable; that he could not possibly have afforded the infrastructure to switch over all at once, but by finding "green" measures that were both environmentally responsible and lower in cost, he was able to use each step to build for the next one. Similarly, it would be extremely difficult for any city, state or nation to switch over to a completely "green" way of life all at once, but given time and the proper commitment, change IS possible, including some very large scale change...

In business, this is usually called "incremental change" and the improvement in profitability or net gains is called an "incremental increase" in funds. The idea is that while a few dollars may not matter one way or the other, doing something that saves (or makes) the company a few dollars millions of times every year will start to add up after awhile...

Burton Hamner isn't a celebrity in the same sense, although regular readers of this space will recall that I was once in partnership with his younger brother. Burt has been working as a management consultant, specifically in the field of sustainable business solutions, for nearly twenty years now, and he has helped companies and governments all over the world to become more efficient, less wasteful, and more environmentally responsible, while at the same time eliminating costly waste and improving profitability. I doubt if Burt has ever had a "warm and fuzzy" thought in his life; he's generally all business, and you could tell the crowd appreciated that...

Burt's address was about how sustainable business is reported on a company's financial statements -- and how much of the time, it isn't. Much of the time, the only information the CEO (and the Board of Directors) will ever see is the formal reporting, and therefore if sustainable business projects that increase profits and/or decrease waste are not reflected on those reports, senior personnel may never become aware of them, or the benefit being realized by the company. By the same token, the financial reports are one of the best places to look for waste and inefficiency in the first place. Burt gave us the example of a company that was paying for six times as much waste disposal service as they actually needed, and the counterpart example of a company that was paying to have tens of thousands of dollars worth of salable resources hauled away as waste...

In both cases, our speakers were urging the audience to stop avoiding the issue because looking for incremental ways to save natural resources and/or reading financial reports is difficult, and instead to start looking at the opportunities for change that are right there in front of them. Which, coincidentally, is what I'm urging all of you to do right now...

Follow the Sun

All right; this isn't actually a post about the Green Conference; it's more of a follow-up. But sometimes that's the way it goes for a blogger; you're all set to start blogging away about some nice event you attended last Friday and up pops a news story that ties directly into your subject matter, and off you go...

There's a speculative piece on the MSN Money pages about solar power, and how more large companies are becoming interested in this most renewable of resources. It seems that J.P. Morgan and Wells Fargo are teaming up to produce solar power plants; Chevron and Google are funding research and seeking to acquire the smaller players in the field; even investment bankers are getting into the act, buying up windy land for wind turbine farms and sunny land for solar plants...

For decades the primary barrier to solar power as a viable means of producing power commercially, at least from a business standpoint, has been the cost of building the power plants. Simple thermal systems, like the solar hot-water heater systems common in Southern California, are relatively easy (and cheap) to construct, but using solar thermal systems to heat steam and power turbines has never paid off, and the photoelectric cells needed to convert sunlight directly into electricity have been expensive and inefficient. The technology isn't new (it's been around since at least the 1960s), but it serves no purpose to generate a kilowatt-hour for $1 using solar power when the local power company can generate the same amount of electricity with 25 cents worth of oil (or a penny's worth of coal)...

With the price of oil doubling and re-doubling over the past few years, the economics of the situation are changing. As the cost of fossil fuels rises, the cost of solar power is becoming more competitive, and the idea of having a power plant that doesn't require expensive fuel (even if it cost more to build) is becoming more attractive. If the demand for oil continues to rise at a geometric rate while the supply rises only at an arithmetic rate (or even begins to decline), then solar, wind and geothermal energy may eventually become more cost effective than the older power generation systems. And if that happens, all of the same companies are going to want have controlling interests in these new sources of billable, consumer electricity...

Of course, there are other new technologies coming that will probably compete with solar power plants. Hydrogen fuel-cell technology has been around almost as long as the photo-electric solar power systems, and the folks at American Honda tell me they are only a year or two away from releasing the first fuel-cell powered cars for use in North America; they say they've also got the "gas station" problem worked out, although they won't tell me what the solution they've come up with is, or when they're going to start setting up locations where you can buy the hydrogen as fuel. At the same time, they're also working on several "clean coal" technologies (which might make an excellent stop-gap until the truly "renewable" power sources are ready), including one that would produce a liquid fuel that you could use to power cars...

Needless to say, none of these companies are working on any these ideas out of the goodness of their little black corporate hearts; they want to become the next OPEC (or at least the next Standard Oil) and rake in the same kind of outrageous profits the big oil companies are making these days. That this might also result in a higher standard of living, a cleaner environment, and a better way of life for everybody, not just those in industrialized and oil-producing countries, is just an added benefit...

Change The World?

"So why are you having another Green conference?" somebody asked me a couple of weeks ago. "By this point, anybody who believes in conservation probably already knows about it, and people who don't believe in it aren't going to listen anyway. What good is hugging an bunch of trees and telling everybody else to get out there and hug one going to do?" The same person also said some much more cutting things about having the conference on the Friday before Memorial day, charging $395 per person to attend it, charging extra for the tour of Long Beach Harbor, and so on, but their basic thrust was what good is it going to do if we all get together and feel good about ourselves if the rest of the world is never going to change?

I bring this up because that question lies at the heart of the decision to have a Green conference in the first place, as well as the decision every person attending made to give up their time (and money) and go to Long Beach in the first place. After all, every year on Earth Day (and usually a few other times as well) all of the so-called "Tree Huggers" and "Greens" get together and talk about how wonderful it would be if everyone in the world was living in harmony with nature, leaving no carbon footprint and creating no waste, greenhouse gas, or any other impact in the environment, but that doesn't seem to be lowering the number of giant SUVs on the road, the number of giant "McMansions" being built, or the amount of oil, coal, gas or wood being collected and burned...

The rather sad fact is that no amount of warm, fuzzy activity is going to amount anything. We can all get together, all 6 billion plus of us, and sit in a circle and sing songs about helping the planet get healthier, and it won't make a bit of difference -- unless we actually DO SOMETHING other than sitting around and singing. Showing people how they can make more money doing something in an environmentally responsible manner; demonstrating how throwing things away costs money and wastes things you spent money on, whereas recycling things can make you money; telling people about a better way and showing them ways to be more successful by doing it -- that WILL change world for the better...

Don't get me wrong; I'm all for idealism, sincerity and commitment to the cause. It's just that I like results a whole lot more. I'm not sure what the long-term results are going to be from our day at the Westin in Long Beach; all I know is that if there is ever going to be meaningful change in our world, it will not come at the expense of the people who live here. Telling them to give up their homes, their jobs, and their way of life in order to support an abstraction like the general health of the planet really is the sort of fuzzy-headed thinking the arch-conservatives always said it was. Telling them to make more money while saving on health costs, living longer, and enjoying the world more... Yeah, that might work...

Over the next few weeks I'm going to post a few ideas that came out of the Green conference last week; ways that your company might be able to use to make more money, waste fewer resources, improve community relations, and pay fewer fines. After that, maybe we can all sit in a circle and sing for a while, if anyone still wants to...

Going Green

This past week UCLA Extension held its first-ever conference on sustainable business topics, which we called "The Business of Green: What's the Payoff?" As is usually the case with new course offerings, this one needs a bit of work -- particularly on the marketing side, as we fell short of the 300 or so participants we had wanted to get. As a proof of concept event, however, it was quite impressive, proving that not only does there exist a market for programming of this type, but also that there is support for sustainable business practices and education on how to be more environmentally responsible from the business community, local governments, and higher education in Southern California.

Of course, most people do not associate business and environmentally correct practice; the common belief is that most business people are concerned only with maximizing profit, at whatever cost to the environment. This leads to a rather childish popular image of environmentalists as long-haired hippies carrying signs and staging protests, and business people as buttoned-down conservatives with big cigars wearing three-piece suits who never look beyond the next quarter's balance sheet. The reality is that not only is conservation a very big business these days, but more and more companies are coming to realize that there is more money to be made in going green than there was going things the old way...

To take the obvious example, factories (and offices and even retail stores) that use less electricity are cheaper to operate; compact-fluorescent bulbs, better insulation and more efficient heating and cooling all drop straight to the bottom line. Simple measures like putting floor mats by the entrance to the building (which keeps people from tracking dirt all over the place, and lowers your maintenance costs) or adding water-conservation equipment to the restrooms (low-flow sinks and toilets, waterless urinals and the like) can generate huge savings in money not spent, as well as improving your relations with the community as an "environmentally sensitive" business.

Then there's the question of waste, in both senses of the word. Anything your company purchases and then throws away is a loss straight off the books; not only are you not getting anything for it, you're probably also spending money to have someone take it away. Waste paper, metal, glass and plastic can be sold for reclamation; organic wastes can be used for making compost (or sold to a company that does). One disposal company that presented at the conference was using discarded wood to run a power plant, yard waste (like lawn clippings and leaves) and household organic waste (food mostly) to make compost, and then gathering up all of the metal, plastic and glass for recycling. They make money on practically everything they haul away, and the beautiful part is that for the most part, people are paying THEM to do the hauling in the first place...

Now, I'm not going to tell you that every business out there can make use of every scrap of material it purchases, with zero waste of any kind. What I can tell you is that almost any kind of business operation can save money, improve community relations, and avoid long-term health risks and fines by shifting to a sustainable business model. And that doesn't even address the best reason for holding such a conference in the first place...