One of the most controversial legal decisions to hit California in the past four decades was handed down a week or so ago, when the State Supreme Court ruled that the law against same-sex marriages violated the California State Constitution and struck it down. As a result, same-sex marriages were suddenly legal in California and thousands of people began making plans to either get married or else stage an all-out effort to amend the Constitution to make such laws possible in the future. I’m going to leave the social, legal, political, religious, civil rights, equality and historical aspects of this situation to those better qualified to comment on them; I write about business issues. Fortunately, this leaves us with over $370 million dollars in new business to talk about…
Various stereotypical images aside, it’s hardly surprising that ANY group of people who have been denied the right to legal marriages for centuries might be excited by the idea of finally gaining that right, or that in their excitement they might begin planning some incredibly elaborate weddings (complete with massively expensive cakes, costumes, meals, settings, floral arrangements and accessories). The scope of the upsurge in this business sector appears to have taken everyone by surprise, however…
A story in today’s Los Angeles Times estimates that the uptick in wedding-related services resulting from the legalization of same-sex marriages in California could reach as much as $370 million. If couples from other states in the Western United States start coming to California to get married, this figure could rise even farther. And if conservatives in other Western states succeed in blocking such unions in their own jurisdictions, this sort of migration is in no way far-fetched. Nor does this figure even consider the corresponding uptick in business for the Legal industry, as scores of attorneys stand to be hired to fight for or against the legalization of same-sex marriages and recognition of those unions by other States…
It’s almost certainly not something that the people debating the issue on legal terms had given much consideration; those who are for same-sex marriages are working on the basis of equality and civil rights, and those who oppose it are mostly bringing up religious, social and political factors. Certainly the political liberals who favor these unions were not intending to create vast commercial opportunities, nor were the political conservatives who oppose them intending to find themselves working against hundreds of millions of dollars in business revenue for the State. As so often happens, the Law of Unexpected Consequences has introduced a completely new set of questions into what was already a complicated situation…
Politically, of course, no conservative can expect to oppose $370 million worth of new business and survive, any more than he or she can expect to support same-sex marriages and survive. But by the same token, any liberal who attempts to cloak him- or herself in a mantle of defending the civil rights of the people entering into same-sex marriages can reasonably expect to be questioned about whether they are really in favor of liberty or merely in favor of increased business and tax revenues…
Personally, I have always taken the position that anything that you benefit from that does not unnecessarily harm another person is not evil, and that anything which creates jobs, stimulates the economy, allows people to earn a good living and maintain a good lifestyle, and does not unnecessarily harm anyone (including members of future generations who have to live on this same planet) is generally a good thing. But under the circumstances, I have to say that it’s probably just as well that I’m not a politician…
Tuesday, June 3, 2008
Monday, June 2, 2008
Strange Magic
"So, does Extension offer any classes that can help me to understand how investments work?" the Astrophysicist asked me. "I've always found Finance to be rather intimidating."
I was rather surprised to hear it, and said as much. "The science of financial management is just a set of mathematical models based on a limited amount of data, and the mathematics in question are much simpler than the ones you are already studying," I told him. "Trust me; I took Physics for Non-Majors and Astrophysics for Non-Majors as an Undergraduate, and the basic Finance class during business school. The Physics was definitely harder.”
“It’s not the math,” the Astrophysicist told me. “It’s the assumptions. Every one of these calculations assumes that the Prime Rate will do something, or won’t; that the Cost of Capital will be something, or won’t; inflation, foreign trade, consumer spending patterns, who gets elected to national office – all of it is based on assumptions, and none of those assumptions is based on anything! How do you build on a foundation like that?”
I’ve often encountered this same attitude in people without training in business, especially those with degrees in the humanities (or no college at all). This was the first time a scholar from a math-oriented discipline had ever asked me that question, however. “Human behavior is one of the keys to understanding Finance,” I agreed. “And it probably helps to remember that this is a new science; even two centuries there was no such thing as High Finance. But, that said, we’re still trying to predict future events based on past experience, and trying to take into account all of the factors we know about.”
“But you can’t ever be sure of those assumptions,” he objected.
“Neither can you,” I replied. “Everything in the Universe is moving all the time, and you never know when a previously undetected object is going to throw off an orbit you though you had pegged.”
“Well, to some extent that’s true,” he conceded.
“The misconception that most people have about Finance is that it’s just one set of computations – that you can run one simple calculation and know what a market or a specific company is going to do in the future,” I went on. “Theoretically, if you know every force acting on a body, you could tell me where it is going to go, and when, and how fast, and so on, right?”
“Of course,” he agreed.
“But if your first set of parameters was off, you’d never just throw up your hands and walk away,” I suggested. “This is essentially the same situation; we don’t know what’s lurking around the next corner, and we can’t just get out a telescope and look for it. But we’re only dealing with the actions of a limited number of people on one small planet; there are finite limits on what CAN happen. If you can figure out most of the things that MIGHT happen, you can plan for a whole range of different outcomes.”
“You can?” he asked, puzzled.
“Sure you can,” I replied. “Diversification can help you avoid being hit by failures in any one industry or region; International investments can help you avoid problems with natural disasters or popular revolutions; the right mixture of equity investments (stocks), debt investments (bonds), metals and commodities, real estate, and other investments can help you smooth out the effects of national economic and political events. Strategy is strategy; the means are always changing, but the science remains the same.”
“So you think I can do it,” the Astrophysicist said, smiling for the first time.
“Of course you can,” I assured him. “The only question is how much of your life you want to devote to pouring over spreadsheets. If it turns out that the science of money delights you, my colleagues on the Finance side can teach you everything you’re going to need. We can even teach you how to complete the Certified Financial Planner exam and become a CFA yourself. But if you’re like most of us, you’ll probably just want to hire one…”
I was rather surprised to hear it, and said as much. "The science of financial management is just a set of mathematical models based on a limited amount of data, and the mathematics in question are much simpler than the ones you are already studying," I told him. "Trust me; I took Physics for Non-Majors and Astrophysics for Non-Majors as an Undergraduate, and the basic Finance class during business school. The Physics was definitely harder.”
“It’s not the math,” the Astrophysicist told me. “It’s the assumptions. Every one of these calculations assumes that the Prime Rate will do something, or won’t; that the Cost of Capital will be something, or won’t; inflation, foreign trade, consumer spending patterns, who gets elected to national office – all of it is based on assumptions, and none of those assumptions is based on anything! How do you build on a foundation like that?”
I’ve often encountered this same attitude in people without training in business, especially those with degrees in the humanities (or no college at all). This was the first time a scholar from a math-oriented discipline had ever asked me that question, however. “Human behavior is one of the keys to understanding Finance,” I agreed. “And it probably helps to remember that this is a new science; even two centuries there was no such thing as High Finance. But, that said, we’re still trying to predict future events based on past experience, and trying to take into account all of the factors we know about.”
“But you can’t ever be sure of those assumptions,” he objected.
“Neither can you,” I replied. “Everything in the Universe is moving all the time, and you never know when a previously undetected object is going to throw off an orbit you though you had pegged.”
“Well, to some extent that’s true,” he conceded.
“The misconception that most people have about Finance is that it’s just one set of computations – that you can run one simple calculation and know what a market or a specific company is going to do in the future,” I went on. “Theoretically, if you know every force acting on a body, you could tell me where it is going to go, and when, and how fast, and so on, right?”
“Of course,” he agreed.
“But if your first set of parameters was off, you’d never just throw up your hands and walk away,” I suggested. “This is essentially the same situation; we don’t know what’s lurking around the next corner, and we can’t just get out a telescope and look for it. But we’re only dealing with the actions of a limited number of people on one small planet; there are finite limits on what CAN happen. If you can figure out most of the things that MIGHT happen, you can plan for a whole range of different outcomes.”
“You can?” he asked, puzzled.
“Sure you can,” I replied. “Diversification can help you avoid being hit by failures in any one industry or region; International investments can help you avoid problems with natural disasters or popular revolutions; the right mixture of equity investments (stocks), debt investments (bonds), metals and commodities, real estate, and other investments can help you smooth out the effects of national economic and political events. Strategy is strategy; the means are always changing, but the science remains the same.”
“So you think I can do it,” the Astrophysicist said, smiling for the first time.
“Of course you can,” I assured him. “The only question is how much of your life you want to devote to pouring over spreadsheets. If it turns out that the science of money delights you, my colleagues on the Finance side can teach you everything you’re going to need. We can even teach you how to complete the Certified Financial Planner exam and become a CFA yourself. But if you’re like most of us, you’ll probably just want to hire one…”
Saturday, May 31, 2008
Mad Cows in Korea?
We haven't been hearing much about "Mad Cow Disease" in the U.S. lately, although the debate about unsafe meat packing plants and lack of USDA supervision rages on. Most Americans are probably worried about more immediate (or at least, newer) problems, such as $4+ per gallon gasoline ($5.25 per gallon of diesel, at one station I passed this morning!) or whether a person of African ancestry will ever be President of the United States if he doesn't wear the correct lapel pin, or even who's going to win on this season of "So You Think You Can Dance." Unless you are actually employed by a company in the meat packing, cattle ranching or food wholesaling industries, you're probably not thinking about "Mad Cow" anymore -- although you may be cooking your meat a little more thoroughly than you used to. Unfortunately, the same can not be said for all consumers of U.S. beef products...
South Korea had actually enacted a complete ban on U.S. meat products after the 2003 "outbreak" was detected -- although there is some justification in asking if three detected cases really constitutes an outbreak. The ban was lifted briefly last year, but quickly reimposed after bones and bone fragments (prohibited under the trade agreement) were found in some shipments. Then, earlier this year, South Korea elected a new, highly pro-U.S.A. President, and suddenly everything is fine again and the shipments of American beef products can resume. Only, it seems that the Korean public doesn't see it that way...
It turns out that the average South Korean is much more afraid of a horrible, fatal (if relatively rare) brain disease than they are of having a negative impact on the U.S. beef industry. South Korea was, prior to 2003, the third largest export market for American Beef, and it's hard to imagine that losing all of those sales has been at all good for the meat packing industry (already being hit hard by increases in fuel costs, a weak economy and lower consumer spending in the U.S., the resurgence of Spam as a main dish alternative and so on). In fact, if the public outcry is any indicator, consumers in South Korea are much less willing to take chances with the safety of their food supply than American or British shoppers, and the fact that the renewal of American beef imports is being seen as a pro-American politician caving in to pressure from Washington really ISN'T helping...
It's another really good example of how the global economy affects you, whether you like it or not. In point of fact, even if you are not employed by any company associated with beef production in the U.S., this issue will still have some impact on your existence, at least in the sense that another industry experiencing poor sales will contribute to the ongoing problems with the U.S. economy. The international tension doesn't help, either; the last thing we need is more countries where the people resent America and try to avoid buying the few exports we still have. The combination could easily lead to even more unemployment, an even worse trade imbalance with South Korea, and additional hits to an economy that is already lurching toward disaster...
Now I'm not suggesting that anyone reading these posts would ever do anything as stupid as engaging in unsafe business practices that allow a frightening disease to cross over from cattle into human beings, or anything as corrupt and evil as maintaining such a practice (and even bribing government inspectors trying to prevent it) in the face of incalcuble risks to both human life and safety and to our country's international reputation. I'm not even suggesting that anyone reading these words would run for public office, become a Lame Duck, and then maintain diplomatic policies that would place foreign consumers at risk while trashing our international relations, all to make a quick buck and curry favor with powerful political allies...
I am saying that what you don't know CAN hurt you. And if you aren't already reading the International Business news, you should probably consider starting...
South Korea had actually enacted a complete ban on U.S. meat products after the 2003 "outbreak" was detected -- although there is some justification in asking if three detected cases really constitutes an outbreak. The ban was lifted briefly last year, but quickly reimposed after bones and bone fragments (prohibited under the trade agreement) were found in some shipments. Then, earlier this year, South Korea elected a new, highly pro-U.S.A. President, and suddenly everything is fine again and the shipments of American beef products can resume. Only, it seems that the Korean public doesn't see it that way...
It turns out that the average South Korean is much more afraid of a horrible, fatal (if relatively rare) brain disease than they are of having a negative impact on the U.S. beef industry. South Korea was, prior to 2003, the third largest export market for American Beef, and it's hard to imagine that losing all of those sales has been at all good for the meat packing industry (already being hit hard by increases in fuel costs, a weak economy and lower consumer spending in the U.S., the resurgence of Spam as a main dish alternative and so on). In fact, if the public outcry is any indicator, consumers in South Korea are much less willing to take chances with the safety of their food supply than American or British shoppers, and the fact that the renewal of American beef imports is being seen as a pro-American politician caving in to pressure from Washington really ISN'T helping...
It's another really good example of how the global economy affects you, whether you like it or not. In point of fact, even if you are not employed by any company associated with beef production in the U.S., this issue will still have some impact on your existence, at least in the sense that another industry experiencing poor sales will contribute to the ongoing problems with the U.S. economy. The international tension doesn't help, either; the last thing we need is more countries where the people resent America and try to avoid buying the few exports we still have. The combination could easily lead to even more unemployment, an even worse trade imbalance with South Korea, and additional hits to an economy that is already lurching toward disaster...
Now I'm not suggesting that anyone reading these posts would ever do anything as stupid as engaging in unsafe business practices that allow a frightening disease to cross over from cattle into human beings, or anything as corrupt and evil as maintaining such a practice (and even bribing government inspectors trying to prevent it) in the face of incalcuble risks to both human life and safety and to our country's international reputation. I'm not even suggesting that anyone reading these words would run for public office, become a Lame Duck, and then maintain diplomatic policies that would place foreign consumers at risk while trashing our international relations, all to make a quick buck and curry favor with powerful political allies...
I am saying that what you don't know CAN hurt you. And if you aren't already reading the International Business news, you should probably consider starting...
Friday, May 30, 2008
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...
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...
Thursday, May 29, 2008
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...
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...
Wednesday, May 28, 2008
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...
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...
Tuesday, May 27, 2008
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...
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...
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