‘Essential Value’ and Resource Intensity

It is now widely acknowledged that global resources are increasingly constrained, most recently on the 16th March by the US, where the president signed the National Resource Preparedness  Order

As resources become more constrained, we, as societies, organisations and individuals will decide what is the ‘essential value’ that gives us a satisfactory ‘Quality of Life’, within the affordable resources available to us. Spending on ‘non-essential value’ will of necessity fall; although in the real world it will not completely disappear as incomes will always be unequal. (luxury car sales to China for example)

We can see at  http://trailblazerbusinessfutures.wordpress.com/the-one-planet-equation/ that Resource Intensity decides the Consumption (Value) creatable for a given consuming population. Past circumstances that allowed a disproportional level of consumption in the West for given availability of resources no longer apply.

In the limit, most available resources will be used creating ‘essential value’ and we can thus define Resource Intensity as ‘the resource use per person per unit of ‘essential value’ created’.

Although there will always be transient niche markets; in this One Planet World, only organisations that create ‘essential value’ can hope to survive and grow over time.

What we can say is, tomorrow’s successful, sustainable organisations will help maintain the Essential Value Created on Energy Invested by

• Satisfying emotional and spiritual need rather than gratuitous wants – self-actualisation
• Satisfying the essential needs in the lower orders of Maslow’s Pyramid
• Employing people rather than energy
• Creating or using renewable energy and other resources
• Minimising water use or creating the technologies that do
• Creating/deploying climate stabilising and mitigation technologies
• Being increasingly local
• Providing a service rather than a product
• Practising life-cycle stewardship of their resources
• Managing value rather than cost
• Being able to operate at continually reducing resource intensity

Defining the ‘essential value’ you and your organisation add to society is the first step in deciding a viable business strategy and this is best seen as an organisational ‘Quality’ issue http://trailblazerbusinessfutures.wordpress.com/2011/10/26/re-defining-quality/

DD

 

The Magic and Misery of Exponential Growth

Exponential Growth is what we see all around us, it is what maintains life but spells the end of an individual ‘system’ unless a balance, steady state can be maintained.

Over the short run, in geological terms the Earth does this and mankind’s ability to influence this has been  minimal. We have now reached the near vertical part of the Exponential Curve in many areas of human activity.

Look at these two resources and decide for yourself if our ‘multi-planet world’ way of life is sustainable

DD

The magic and misery of exponential growth 97-03 v2

Arithmetic, Population and Energy- abridged)

 

Strategic Thinking in UK Governance

The UK Public Accounts Committee has recently carried out a consultation exercise on ‘Strategic Thinking in Government’. A link to the submission made by me can be found below.

dd

Background to the consultation

Reasons for the inquiry

 In October 2010 PASC published a report, ‘Who does UK National Strategy?’, which concluded: The answer we received to the question, “Who does UK Grand Strategy?” is: no-one … As things stand there is little idea of what the UK’s national interest is, and therefore what our strategic purpose should be.

 Background

 The global system is increasingly multipolar, with power shifting East, potentially diffusing to international institutions and to different non-state actors (like civil society, business, high-net worth individuals, cities and regions, sovereign wealth funds, Diaspora groups, international multi-stakeholder fora).

 The development in social media that harnesses the ‘wisdom of crowds’, cyber-advances, and other technological progress is transforming the context of policy making. This challenges the capacity and nature of government but also provides opportunities for both stronger engagements with the public and clearer national leadership.

 The complex and unpredictable nature of many global issues, which stem from multiple and interrelated problems, require systems-based and evidence-based analyses if emergent strategy is to be effective and efficient. Within this context, many countries (including the UK) face implicit, diffuse and unpredictable risks, rather than explicit and identifiable threats.

 In a previous report, we identified a deficit of strategic capacity across Government. In its initial inquiry, the Committee found “little evidence of sustained strategic thinking or a clear mechanism for analysis and assessment. This leads to a culture of fire-fighting rather than long-term planning”.

 We wish to assess what progress has been made since then.

 Response to the PASC Consultation on Strategic Thinking in Government v2

 

Reducing the ‘Resource Intensity of Society’ ~ the critical driver for HE and FE

“In the #oneplanetworld how do we continually reduce the #resourceintensity of society? Do we rethink everything, or do we let the Earth do it for us?”

Resource Intensity of Society – “the resource used per person per unit of ‘essential goods and services’ created”.

Two things flow from this

1. Non-essential processes add no value to society in a resource constrained world, their RI is effectively infinite
2. The least resource intense process is the one that doesn’t exist.

The Oil Drum 30^th July http://www.theoildrum.com/node/8210

It has been a constant theme in these columns that the global oil supply is under real threat. The facts to confirm this are everywhere if one were interested in pursuing the topic. (Google “Peak Oil” and see what comes up). A clear indication of a shift in supply is that Saudi Arabia, while it increased its output by 700,000 barrels per day, has kept more of its oil at home to benefit its own citizens with air-conditioning and desalinization projects.

So how do we confront a shrinking economy at work and at home? Brutal assessments will be the order of the day. Even though the top 10 percent of the population will manage to keep luxury businesses going for a time, the economy must shift away from businesses that feed the public’s desires to those that address what people need to survive.

Small enterprises will fare better. All businesses should start wondering whether their employees could get to work if they couldn’t afford to fill the gas tank. Is your business near a transit network? These are tough questions”.

“So how do we confront [and avoid] a shrinking economy at work and at home?” We do it by decoupling ‘service availability’ from ‘resource use’ as viewed from a ‘SystemUK’ perspective, by rethinking FE and HE to enable the creative reduction in the processes ’essential ’ to maximising our Quality of Life with the resources competitively available to us. We become continually more ‘effective’ as a society.

We don’t do it by trying to do what we are doing now more ‘efficiently’

Competitively winning constrained resources requires us to evolve and create organisations that can innovate as expressed in the presentation. Enabling the Future v1

Let’s not change a Challenging Adventure into an Impossible Challenge

dd

 

On our failure to understand External Failure Demand

The World Economic Forum has just released a report ‘From Risk to Opportunity‘ that looks at six different themes

• The challenge of a shifting balance of power
• The challenge of natural resource scarcity
• The challenge of inclusive growth and equality
• The challenge of economic uncertainty
• The challenge of fragile states and new conflicts
• The challenge of global risk management

This is a wide ranging Report that this Blog will come back to, but it includes this comment that is critical to the situation we find ourselves in, as SystemUK, and Globally

“There are commonalities between all sorts of
disparate risks: the BP Gulf disaster, the terrorism
incident in Germany, Wikileaks, the euro zone crisis.
The interconnectedness is that they are all out of the
flow of day-to-day events. They are low probability
but high consequence events.”

Axel P. Lehmann, Member, Group Executive
Committee and Group Chief Risk Officer, Zurich
Financial Services, Switzerland; Member of the Global
Agenda Council on Systemic Financial Risk

There was a time when organisations were increasingly aware of the work of thinkers in ‘Quality’ such as Deming, Juran and Crosby but those were simpler days and we have moved on to a confusing, reductionist world of CSR, Environment, H&S and Sustainability.

These ‘Quality Gurus’ understood the core concepts of Organisational Leadership’ and the costs of less than perfect ‘Quality’ of organisational and product/service performance , of not doing the right thing right, every time.

Central to this was understanding the risks and costs of external Failure Demand arising from actions that ignore the consequences of the economic, environmental or social downside of decisions. The News International disaster is a current example.

Unless we rediscover these eternal truths there is little possibility we can create ‘Sustainable’ organisations and societies, as Quality and Sustainability are just the two faces of the same coin and ‘Sustainable Development’ is the journey of continual improvement towards perfect ‘Quality’

dd 

 

Thinking Aloud ~ Meeting the exponential demand for creativity, ingenuity and Tacit Skills in the #oneplanetworld

An email to a friend

Hi Andrea

 It good to catch up again last night at the Lancashire Construction Best Practice Club event; This was a really interesting meeting and after  I mentioned Sugata Mitra’s new experiments in self-teaching. Here is the link to the TED Talk he gave last year. http://www.youtube.com/watch?v=dk60sYrU2RU

He has virtually proved that learning is an emergent property when small groups of students have access to information they can share.

I feel we are failing our learners if we do not lever the potential of social media and the internet to liberate the creativity all children possess and largely lose as they grow up with the educational model we have used since the beginning of the Industrial Revolution  . Ken Robinson makes this point in probably the most watched TED Talk at http://www.youtube.com/watch?v=iG9CE55wbtY

Alison’s ideas and work with her Classofyourown Project www.classofyourown.com  is similarly inspirational and a vital tool in engaging children in the STEM subjects.

The problem, of course, as Alison has pointed out, is not with the children, it is with the Teachers and the industry, simply because they were not exposed to this concept of ‘emergent learning’ and the unlimited expectations of their mentors as they grew up.

In reality this educational model never served, but in this time of exponential change, where more children will be passing through education in the next fifty years than have ever done, we cannot create inspirational teachers fast enough to liberate the necessary creativity that will enable us to solve the problems presented in the One Planet World we now inhabit.

The other key issue of course is the necessity we have to reduce the resource and carbon intensity of the built environment by considerable amounts. We must liberate the creativity to do this by design, or resource availability at a price we can afford to pay as a society, will do it for us.

In all this a key point is being missed and this is the need to maintain and generate the ‘tacit’ skills our society requires as my generation passes from the scene. These are not created by this ‘Mitra’ process, powerful and vital though it is. Initiatives like Classofyourown are key to liberating these tacit skills as well.

These thoughts apply to all sectors of society of course not just construction, but the built environment does consume 50% of our resources.

Attached are two articles  that were in the Professional Engineers’ Handbook in 2005 and 2006. There is no point in my being unduly modest at this critical time and I feel they are both prescient and could have been written last week.

The third article attached is from the May 2008 edition of the CIBSE Journal and addresses the other key issue, our need to understand, as an industry the concept that the sustainability journey is just one of continual improvement towards perfect quality.

Kind regards

Derek

 Attachments

Sustainability and the Energy Gap sustainability-and-the-energy-gap2005

Building Towards the Future Sustainability, Building Towards the Future 2006

The Double-headed Coin Double Headed Coin – unformatted – BS

 

Don’t let the future be a matter of luck! – CarbonAct Now

Don’t let the future be a matter of luck! – CarbonAct Now ~ Be Selfish & Help Save Civilisation

Two years ago I put together a presentation for Rotary International and this can be downloaded here

Save Civilisation- Rotary 2

This takes the stance that CarbonActing in your family’s interest is the same as acting for Society

Slides 1 – 12 are the presentation and the remaining slides are for possible use during questions

My view on the future of Rotary International, Rotaract and Interact

Rotary – leading in the One Planet World 

Interact & Rotaract – Learning to lead for the One Planet World

The magic and the misery of Exponenial Growth

Arithmetic, Population and Energy- abridged

Derek

 

The Earth Equation by Jolito Ortizo Padilla ~ my appropriated words

 They say that “Imitation Is The Sincerest Form Of Flattery” and I take Jolito’s appropriation of my words, below, in that vain and with thanks. 

dd

The Earth Equation by Jolito Ortizo Padilla

All around us we are bombarded with messages telling us that we need to change, that the the earth is warming up. The messages are insistent and shrill but diverse, incoherent and all about our symptoms rather than the addiction we suffer: the hugely ineffective use of the resources that our one planet provides.

Clearly the earth as a system is dynamic and complex. Any attempt to describe it quantitatively and accurately is unlikely to lead to any clearer picture of useful action. What we need is a mind model, something that is powerful and evocative enough to provoke the right questions of societies, communities and organizations. Such a conceptual or mind model is the earth equation.

We are told that we are enjoying a “three planet lifestyle”- a lifestyle that consumes so many resources that we need three planets in order to cope. This tells us that what we are doing is not a sustainable state of affairs , but it is not clear what we need to do. 

We have in fact only one planet. If we look at consumption as an equation, the left hand side of the equation in a resource -constrained environment is always fixed at one. The right hand side of the equation is made up of population (P), its consumption of goods and services (C) and the factor that balances the equation -the resource intensity (I).

So at our starting point we have I=P x C x I, or I=I x Ix I. As we move forward from this point , the one planet remains the same, which means that the right hand product always needs to equal one. The only way this can happen in a resourced constrained environment is if the resource intensity is never allowed to be more than I divided by PC. In round terms, on predicted growth scenarios, we will need to reduce resource intensity by a factor of between ten and 100 by the year 2050.

Genichi Taguchi inspirationally made the observation and processes without loss were of perfect quality and, conversely , that less than perfect quality created a loss to society. In terms of this article, that loss results in an increased resource intensity.

We have thought of over the last 20 years or so that we can treat losses in processes and systems as separate. We have looked at quality as a function within an organization , focused on the customer, rather than that which maximizes the value added to society that results from the creation , use and disposal of products and services. Losses in processes and systems can be environmental, social or economic and are best minimized by seeing the goal of resource intensity reduction as a journey of integrated , continual , quality improvement.

These are the drivers of virtuous circle that using an organization’s stakeholders and their combined knowledge and skills, will enable process learning. This will then drive the process in the direction of sustainability. As the process becomes more sustainable , the losses are by definition minimized , reducing the need for appraisal costs and eliminating the costs and risks of internal and most importantly , external failures.

The message is clear: we have to change, but how? Our symptoms are plain for all to see but our addiction, the ineffective deployment of resources to create, use and dispose of the products and services we consume, remain untreated. Our task is simple, if not easy to accomplish, and can be reduced to key questions:
- Is our business model relevant to such future?
- Does our leadership and management enable the liberation of the creativity
required to continually reduce the resource intensity of the goods and 
services we produce , consume and dispose of?

This will need the most massive effort of quality improvement the world has yet seen. The earth equation is immutable , it drives our futures whether we choose to ignore it or not, and e have no option but to enter the future, either by design or negligence.

http://joepads.blogspot.com/2010/12/earth-equation-by-jolito-ortizo-padilla.html

see also The Big Q http://trailblazerbusinessfutures.wordpress.com/2009/12/17/the-bigq-%e2%80%93-leading-for-competitive-advantage-in-the-one-planet-world/

 

The end of ‘conventional’ growth

While it is true that Economic ‘growth as we have known it is over and done with’ as Richard Heinberg states below, it is important to recognise that in the resource constrained future we face, growth is possible within the limitations of the ‘First Law of Sustainability’ – that – goods and services can only grow at the rate at which their ‘Resource Intensity’ can be reduced beyond that needed to balance the ‘One Planet Equation’; see tab above.

Viewing our position this way gives us a clear focus on the actions we must take

• Reduce the resource intensity of non-essential processes to zero – eliminate them
• Work to continually reduce the resource intensity of those essential processes remaining by improving the ‘Quality’ of their creation, use and disposal.

dd

The End of Growth

Posted Nov 12, 2010 by Richard Heinberg

This article is an excerpt from Richard’s new book which has the working title ‘The End of Growth’ and is set for publication in July 2011. Given the urgency and fragility of the global economic crisis, we will be serializing the rough content as Richard writes it. Additionally, Richard will be offering ‘live peeks’ at the events and information that inform his writing process through Facebook and Twitter accounts created expressly for this publication.

The article was originally published as the MuseLetter #222

Introduction: The New Normal

The central assertion of this book is both simple and startling: .

The “growth” we are talking about consists of the expansion of the overall size of the economy (with more people being served and more money changing hands) and of the quantities of energy and material goods flowing through it.

The economic crisis that began in 2007-2008 was both foreseeable and inevitable, and it marks a permanent, fundamental break from past decades—a period during which most economists adopted the unrealistic view that perpetual economic growth is necessary and also possible to achieve. There are now fundamental barriers to ongoing economic expansion, and the world is colliding with those barriers…………

Full article http://www.postcarbon.org/article/178709-the-end-of-growth

 

Corporate Sustainability should start at Business School

 

Zachary Shahan October 30, 2010

 

 As far as one can see, corporations aren’t going away and will continue to play an extremely important role in society. That makes their relationship to the environment a critical issue.

Too often, environmentalists are reacting to what corporations do. Rather, we need to advance a more holistic school of social change in the business world.

That means we need to go to the roots of the corporate world and understand where businessmen and women are coming from. You heard me: Business schools.

The inspiration for this post comes first from a tremendous book that nails this topic— The Sustainable Business (available as a free download from the European Foundation for Management Development). The author, renowned scholar and businessman Jonathan T. Scott writes, “to understand sustainability it’s essential to begin by first comprehending the big picture…Rather than building up from particulars to generals (the empiricist method), one must begin with generals—an in-place, intuitive wisdom of the logic behind thinking in the long-term, what it entails, and why it’s important.”…………….

Full story at http://ht.ly/326LM