Linking production and consumption

I attended the Sustainable North Carolina conference yesterday, where workshops and awards were presented. There was a much larger attendance than I expected and it was a very diverse group of folks. From lobbyist and lawyers, that were getting to know their adversaries, to the Birkenstock crowd that were pushing green products and services, it was evident that sustainable is of interest to a wide cross section.

What was not discussed yesterday, and what I find is hardly ever discussed in US conferences, are the links between consumption and production. I my opinion, this is the topic that must become the core topic of these conferences, because it is at the root of the matter of sustainable. .. And also a key issue for enterprise.

I keep coming back to the ethics of globalization of markets in the light of a complete lack of global social and environmental policy. Why are we so tolerant of inefficiency in government and policy and so intolerant of it inside of enterprise? We become excited at lower prices at the gas pump and at Wal Mart, but are apathetic when our government performs terribly after Katrina. The whole Katrina incident is indicative of how poorly the the government performs. I will also say that our military is also a key indicator. Give me an almost unlimited budget and the latest technology and I too can succeed militarily against an enemy 25 years behind me in battle tech. So could any other country in the world. One thing for sure the Bush government can do, is to through money at a problem...But this does not mean it is money well spent, it is just spent

I think the real issues are boundary issues. Can we agree on the objectives for our planetary ecosphere and then develop a life style to live within the boundaries? Does this have to be a life style of an austere monk? I don't think so.

I would hope that the next government will address two issues: The first is to achieve energy independence for the US. This will create millions of jobs and drive clean tech investment. The second is to socialize the medical system. If any incoming government will address and then achieve these two objectives, the country will be more stable, her people more productive, and we can spend some of this obscene military budget on domestic issues and make the US the most desired place to live in the world...And do it by creating opportunity within the boundaries of what is sustainable and important.

Change got to come soon.

Personal Mastery and Mental Models in Action-


At 51, I know that I am an accumulation of my education, genetic make up, experiences and environment. These attributes are what creates my personality or the skills I use to get by in life. Peter Senge calls this “personal mastery” and I like this metaphor. Senge also stresses the need for a person to always push, through continuous learning, the boundaries of one’s “personal mastery” so that it is ever expanding. As a life long learner and a person of much curiosity, I enjoy learning and experiencing new things. I have always thought that one of my strengths has been the application of my “personal mastery” to Society-Business challenges and developing inventive ways to approach these problems and make money.

For a person to see these challenges and find solutions, one must feel and understand how an individual’s “personal mastery” provides value into the world at large, i.e., where one sits and fits in the world. We all create what Senge calls “mental models”, which I can further define as the reality framework we all use to rationalize our place and value in society. Without mental models, we could all be really smart learners, but for what. Without personal mastery, we could all understand our place in the world, but be unable to change it or improve on it.

I think both of these attributes are important for individuals and organizations. These attributes are two of the 5 disciplines described in Senge’s famous book, The 5th Discipline. In this book, Senge discusses teams and organizational learning, etc., but I want to focus today these first two attributes, personal mastery and mental models, and how the interrelation of these two seem to be the yin and yang of personal happiness… at least for me. I have been much troubled lately about how technologically advanced we are in the US, but how we lag much of the rest of the world in relating our skills to the broader world. The song writer, John Prine, talks about people being forced to “live in their heads” and I think this means that as we internalized our personal mastery and lose mental models of how to build great things and provide value to society with our skills, we stand to lose balance.

When one of these disciplines weakens or is disrupted, this balance of learning for a purpose, or learning to maintain your mental model, is disrupted. If one is unable to continue to learn, one is certainly stuck in one place, for the world is always changing and requiring you to survive. What happens however when you do have the ability to learn and have a positive mental model for your place and value in the world, and then your external world of your mental model is disrupted?

I have seen several examples of this in my life. The first was when I was struck by a car in my 18th year and my physical world changed forever. One minute you are a fine specimen of a young man, and the next you have a damaged, gimpy leg for the rest of your life. This requires change in “personal mastery” to regain your mental model of where you are going to fit and find joy in life. Obviously, you cannot continue on to your college wrestling career and you must find a different route, through creation of a new mental model to create success and joy. At 18 years of age I was able to do this, thanks to my parents, Elon College, and due to the fact that at 18, we are all fairly pliable and the friction preventing change from your past is not so great. (With only 18 years, one is not so set in their ways)

The second example that I saw was my grandfather Rose, who only had a 3rd grade education and was a craftsman dyer. When there was a technological shift in the dyeing industry that made his craft obsolete, he did not have the education, (personal mastery), to change. He could not adapt. He lost his mental model for value creation because there was no further demand for his skills, and he did not have the self confidence nor the desire to learn a new way of doing. He died of alcohol in his early 50s, a person with little confidence, and too much money to buy alcohol.

The third example was my Pop, who had the education to change but grew so accustomed and set in his ways that as he aged and his health declined, and as the pace of change in business increased, he was unable to find a mental model that fit his aging abilities. He died quite an unhappy person at 72, with feelings of uselessness, feeling that he had a total lack of control over anything, and a very poor self image, and this occurred for a person who could have written a book about the American dream.

At 51, I find myself in a similar situation. My poor old leg requires a knee replacement, I am 30-40 pounds overweight, we have been unable to turn our business around, and I am staring straight into the abyss of my mortality through the death of my father and now the cancer in my Mother. I am seeking to find a mental model for the final quarter of my life. I grapple daily with thinking about how things have changed and how little control all of us have over anything. What is the point of life in America after your have lost your youth? I had hoped to use my personal focus on sustainability and my farm, as a post to which to anchor my mental model. However, the older you get, the less physical work you can really do, and I have become disillusioned with lack of anyone or any organization to seek sustainability. I am afraid that much of what we see advertised as sustainable change is really just another face of marketing and does not represent a rebirth or evolution of capital markets or social behavior.

The wisdom that comes from age is of little use in a technological age where businesses want flexibility, technological savvy within a 5 year business life-cycle. I find that all of these trends are opposed to what I feel is the direction that I need to go, which is to slow down, think, and act: to produce positive change in local environmental and social issues, to be a model of how to live a simple happy life.

I am unable to bring about change with my leg without entering the rat race of the medical system. I will have the surgery and pursue the PT and this is the best I can do. This replacement makes me even more dependent on medicine and doctors for the rest of my life.

There are no longer any changes that I can make in the business that are significant to it. I have shot my wad. My creative juices can no longer flow. We will hold on and continue to attempt to find a niche in which we can prosper, but I no longer have the zeal or believe in the operation of a business as a noble pursuit. I used to think that there was no nobler calling, than to be an ethical businessman. I used to believe that business was the best amplifier for ethical change because it influenced the breadth and depth of society. I think this has been removed from domestic enterprise by globalization.

Global business is a fickle mistress. Hard work, astute ethical management of a business is no longer the key to success in this global economy. Success will be measured on how fast you can get into a business with new ideas or services, build its cash production, and how fast you can liquidate it. There are no longer the profit margins in mature businesses to fund evolution and revolution at the same time. So either you clip your coupons until the coupons cannot be paid and the business dies, or you sell it to free up capital to start the next great thing. You cannot do both in the same business, unless there is great separation between business units. It certainly cannot happen in an SME with limited organizational and economic resources.

So the conundrum is how rapidly can expertise be grown, and how astute can management be in realizing when to liquidate. This also means that much of what they are teaching in MBA schools for excellence in operational management and contribution for an individual should be viewed in 5 year blocks.

The question for me is where to find a place where I can make a contribution for a new business?

No short cuts

For people that know our situation, it is no secret that our family business has been destroyed by the globalization of the textile industry. I have attempted to move beyond trying to sort out the "good" or the "bad" of globalization, because it is impossible for me to have enough data and scope to do so. I cannot measure the positive or the negatives created by globalization on any level other than personal.

On a local and personal level, these changes have been hugely negative, but I would guess that for the company and its employees that are supplying textile chemicals to the local markets in Vietnam or China, it is positive. What I do know is that I am not better off economically due to globalization, I am not happier, and our community, State, and Country are worse off today that we were 20 years ago. When our company began its restructuring forced by destruction of textiles, way back in the mid 1990's, our analysis showed that a successful future could be achieved if we followed the following course:

1. We needed deemphasize the incumbent textile related business segments, cease investments in this area and pour capital into diversification that was focused on service industries.
2. We needed to develop a service-technology-manufacturing platform, similar to what we had in textiles, for other markets including lubricants and service sectors, such as I+I cleaning.
3. That we could use our platforms of "sustainability", cleaner production, and new plants and equipment to gain entry to those markets, introducing a new vision for customers in these markets.

However, this process has proven much more difficult that I ever imagined. We were not able to say "NO" quick enough to existing good customers within the textile market and free up the invested capital. A bird in the hand is hard to release and harder to catch again. It seems counter productive to the bank, shareholders and employees to quit doing what you do well, when it is producing good cash flows, with only projections of decline, as the reason for change. Therefore, the restructuring of the textile business has been very slow, but a model for success in the global textile market might be emerging for us using a local business model in the far east.

The other disconnect from our perceived business strategy is the lack of vision and standards promoting sustainable market segments. Without uniform global regulatory and market standards of what is green or sustainable, or what is not, the only important policy decisions become local ones. In other words, the only regulatory expectations that impact our business are local or regional to the customers, but production is now global. This places inordinate costs on the local purveyor of goods and services, which the producer, located somewhere else on the planet, does not have to bear. To have a truly global market, somewhere these disconnects must be resolved. To have global markets with only regional and local policy and regulations, is inane and artificial, ie, price no longer reflects the costs and ultimate value of a good or service to the customer.

I am becoming to believe more and more that the resolution of the chaos and disrutpiton must be to redesign commerce to meet local values and demands. What do I mean by this?

One of the rationalizations for globalization of markets is lower costs to the customer. But does a lower selling price truly represent value? Is the textile worker who loses his job to China for a reduction in the price of jeans from $25 to $18, better off? What about his neighborhood, his town, his state, and his nation? Who bears the brunt of replenishing the local and state tax coffers when the mills are shut down? Are the costs of retraining, the cost of medical services, the results of stress, the loss of philanthropy, etc., used in the calculations of the cost of policy change? If all the factors that impacted the selling price were modeled, including fiscal, physical, environmental and social costs and limits within a particular economy, eg, national, would the $18 jeans still be a value? If indeed there are regional and global environmental and physical limits to growth, can we produce and enforce policy that evolve a global, national or local sustainability? I am not sure that it is possible to produce global policy that is enforceable. How can regional policy and global economics be balanced to produce a sustainable global market-base economy, based on regional relative valuations?

Having traveled a fair amount in world, and listening to people argue about conflicts between local, state, or national governments, there is no hope that I see for a congruent policy-market evolution.

It seems to me that as a nation or community, we have to decide where we can induce policy and manage it to allow for diversity in society and environments, while meeting the needs and relative regional values.

To continue on with my example... if the textile traditions of our region could be preserved, along with stability in local economies (not having to retrain and retire over 400,000 people) and to do this means that we must pay $30 buck for jeans rather than $18, then is this a good investment? The value of this increase in the cost of jeans and the value of local production would have to be contrasted to getting the lowest possible price.

The answer to this question in the organic or local foods movement is profound. People will pay much more for locally produced food and even more if it is organic. We pay more for bottled water than for gasoline. Why is it so hard to define the value of place, of culture, of tradition for future generations when defining local vs global production?

I know that when our firm employed 200 people, we were a proud, successful organization. Today at 37 people, we continue to seek a path towards regaining success, but I do not feel successful. I feel betrayed by our government and by the consumer who did not value our industries products enough to keep us around. Economists say that value is based on scarcity. When regional cultures, diversity in products, and foods are all generic and everyone is buying commodities at the lowest price globally, are we better off? When diversity in cultures become scarce, will we value it more and once it is gone, can we get it back? Is the warmth and weather the only reason to live in NC or does it have something to do with the culture of the people and place. When there is nothing unique about our place, why would anyone desire to be here? How do we put a value on that and how do we vote with our dollars? I think it comes down to preservation and valuing our local economies.

This question gnaws my soul.