Tag Archives: ecosystem

Redwood Forests Provide a Clue to Business Sustainability and a Greener Supply Chain

26 Oct

Thoreau did it.  So did Carter and Brezhnev, and Reagan and Gorbachev too.  They all took a walk in the woods, like I did on a recent weekend…to explore and resolve internal and external issues.  My hike took place in the coastal redwood forests of the Santa Cruz Mountains on the central California Coast.  A hike through these beautiful groves of ancient redwoods is truly an awe-inspiring, reflective experience. Redwood forests are complex ecosystems. From the tallest trees in the world to the tiniest animal, the whole forest is a working system in a very delicate balance. Everything has a role to play in this forest.

Coastal Redwoods (Sequoia sempervirens) are also known for their resistance to fire.  They are protected by a very thick bark that lacks the highly flammable resin of other tree species. These resilient trees in some cases, can live for more than 2,000 years, making them one of the oldest tree species in the world. Also, unlike most trees, redwoods lack a taproot. Instead, they have a shallow root system that can extend up to 100 hundred feet outward, forming a network of connected root systems with other trees. But despite the connected roots, high winds and/or flooding can bring these massive trees to the ground.

Now substitute the word “forest” with “supply chain”, “tallest tree” with “largest company” and tiniest animal with “smallest supplier”, and you hopefully get where I am going with this post.

I mentioned in prior posts that to make progress on environmental issues in organizations and in supply chain management, organizations must understand that they’re part of a larger system. Fifth Discipline and The Necessary Revolution author Peter Senge makes valid claims that organizations are in a better competitive position if they understand the larger system that they operate within and to work with people you haven’t worked with before.  Like a forest, where all parts depend on the other, if the balance is upset, there can be chaos and poor ecosystem health.  A supply chain is in effect a business ecosystem.  And a supply chain functions the same way as a redwood, in that it has interconnected roots rather than one strong taproot, but can be blown down by external forces that it may not be able to control.

The Concept of Business Ecosystems

Author James Moore developed and popularized the strategic concept of business ecosystems in his 1996 book The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems. According to Moore, a generic business ecosystem is defined as the economic and social environment that consists of organizations, individuals, regulatory structures and controls, government organizations, customers, competitors, suppliers, and the many entities with which a business interacts. The principal purpose of the business ecosystem is to align its members towards a shared vision that is greater than the sum of its parts.  Business ecosystem value is created by the combination of participants and their contributions – and their role within the ecosystem to enable the achievement of a combined vision or goal.

Many organizations have sought ways to deliver greater product and customer value through innovative supply chain solutions. The common link is that customers’ receive value from a whole solution, which takes into account all value chain contributions.  Think HP, Microsoft, Cisco, IBM.  Traditional high tech companies.  But this thinking extends to consumer product and apparel manufacturers (Herman Miller, Procter and Gamble, Unilever, Nike, Keen, Patagonia) and major retailers like Walmart, Starbucks, Kohls.  The list grows weekly.  Each of these organizations have created business ecosystems through redefining the nature of the value for the client.  They have further created new competitive environments, with new rules and practices that account for sustainability and that challenge their industry norms through green supply chain innovation.

While my recent post called out many large companies for being procrastinators and laggards, I continue to applaud the industry leaders who’ve seen how each tree (supplier) contributes to a stronger and healthier forest (supply chain).

So go take a walk in the woods.  Breathe the air, take in the silence…and think of ways that you can help your company refocus its sustainability efforts and supply chain health for future generations to enjoy.

Advertisements

‘Rebound’- Linking Bad Backs, the Gulf Spill, and the Economy Through Sustainability

15 Jun

So, it’s official.  I have a “bad” back.  A very competent neurosurgeon told me the other day that “you have structural issues”.  Indeed I do.  This all started after I went hiking with my family in late 2009 and experienced a burning pain in my legs, followed by numbness and teeth-gnashing lower back pain.  A series of tests ruled out circulatory problems (thank goodness) and other internal stuff.  “How bad is it, Doc?” I asked.  Well, an MRI revealed a bulging disc, mild spinal stenosis and a synovial cyst.  I guess I am not a spring chicken anymore, after all.

The center that I went to get this great news had a great name too-Rebound– and it got me to thinking.  In mulling over the state of our economy and the ongoing oil spill disaster in the Gulf of Mexico, I suggest that those situations are representative of “structural issues” that require therapy of sorts.   The economy appears to slowly be on the “rebound”, while the prognosis for the other (the Gulf spill) will still require more study to determine the full extent of the damage.  Common among these two situations and my back is a call for change, to think more sustainably.  In other words, considering the economy and the environment as linked systems requires a deeper, holistic, de-siloed way of thinking.

By taking a triple bottom line perspective, the “people, planet and profit” elements that constitute sustainability will be better served and long term value realized.  This post is about hope, about renewal and rejuvenation- please read on.

People

The spine is not only the foundation for our entire physical structure but also house the nerves that radiate to each organ and every minute part of the body.  Spinal nerves especially control the functional processes of all our bodily tissues and structures.   My back problems are not so bad that surgery will be involved.  But the experience will require making some adjustments in my exercise routine, losing weight (again!) and stretching more.

The key to back health is in strengthening the “core” muscles- and having the “mojo” necessary to keep on plan and stay motivated, even when things look really, really bad.   If I follow my plan, I expect to “rebound” from my injuries stronger than before.

Profit

In the case of the economy, I have just completed reading “The Great Reset” by Dr. Richard Florida, Professor of Public Policy at George Mason University.  In The Great Reset (http://bit.ly/cDbWWG), Dr. Florida explores the parallels of the current Great Recession to the Long Depression of the 1870’s and the Great Depression of the late 1920’s and 1930’s.  Florida argues that ‘these periods of “creative destruction” have been some of the most fertile, in terms of innovation, invention and energetic risk-taking in history, and this is what sets the stage for full-scale recovery.’  Florida argues that great crises are opportunities to remake or “rebound” our economy and society and generate whole new epochs of even greater economic growth and prosperity.  Among these new forces and energies will be:

  • new consumption patterns
  • new forms of infrastructure that speed the movement of people, goods and ideas
  • ‘mega-regions’ that will drive the development of new industries, jobs and a locally based way of life.

    Image Credit: ProgressOhio

I am also am reading Plentitude, by former Harvard University economist and current Boston College sociology professor Juliet Schor.  Dr. Schors book (http://bit.ly/cnbG8n) argues that society needs to make some big changes from the “business as usual” model of economics.  In a world economy traditionally valued based on gross domestic product (GDP), Dr.  Schor explores the economics and sociology of ecological scarcity (food, water) and rising costs of goods and services (energy, transport).  In addition, she explores the factors that have led to the scarcity in incomes, jobs, and credit.  Plenitude puts sustainability at its core.  The book presents a vision that suggests finding  new sources of wealth, implementing green technologies, and strengthening locally based economies, all of which can lead to a more economically secure, ecologically sensitive and sustainable world.

Both books offer promise that a redirected focus on community-based, environmentally-centric and technological efficiency and innovation can (and must) be the “rebound” catalysts that drive economic prosperity.

Planet

The current, devastating Deepwater Horizon oil spill and ecological crisis in the Gulf of Mexico presents a great set of uncertainties and human-induced risks not realized before in terms of scope and magnitude.  My earlier posts on the Gulf spill spoke to the issue of risk management and contingency planning and how such scenarios can be managed better (Risky Business: Why Better Risk Management Can Protect Lives & the Environment- Part 1 http://bit.ly/aRDeJj).   But this discussion focuses on ecological damage and on resiliency of natural environments.

The 1979, spill from Mexico’s Ixtoc 1 offshore well in the Gulf of Campeche is proof that the environment has a “stunning capacity to heal itself from manmade insults” (http://bit.ly/djoDkO).   This huge spill surprised marine biologists and ecologists in terms of the speedy recovery of the heavily impacted Bay of Campeche ecosystem spreading into south Texas.  However, there are major differences in the depth and location of the Ixtoc and Deepwater Horizon spills, and other natural phenomena that aided in the Ixtoc spill recovery rate.  These differences may not bode well for the Louisiana coast.  Case in point- the Exxon Valdez spill in 1989.  Studies in the mid 2000’s showed that 15 years after the Exxon Valdez oil spill, “some fish and wildlife species injured by the spill have not fully recovered” (http://bit.ly/d2VEaZ).   Researchers noted some uncertainty of what role oil plays in the inability of some populations to bounce back.

Ecosystems are dynamic and ever-changing.  This changing dynamic flow continues its natural cycles and fluctuations at the same time that it continues to recovery from impacts of spilled oil.  As time passes, separating natural changes from oil spill related impacts becomes harder to distinguish.  So time will tell, and after the well is finally plugged (and it will be plugged) and the last drop of oil spills, the long term ecological “rebound” will begin.

Like the distressed economy and like the gulf coast mess, my back will “rebound” to a healthy point that is hopefully sustainable.  Mark my words.  It’s said that “good health is not an event, it’s a lifestyle”.  This holds true whether we are talking about our bodies, the economy or our planet.

Risky Business: Why Better Risk Management Can Protect Lives & the Environment- Part 1

3 May

As noted by Jonathan Hiskes from Grist.org the other day, in the aftermath of the 40th anniversary of Earth Day, it was a hard week and month for the planet.  Hiskes remarked that there was a “confluence of terrible, horrible, no-good, very-bad events, rounding up what has to be the most disheartening “Earth Month” ever, “brought to you by the fossil-fuel industry” (http://bit.ly/dgFrBa).  There is no doubt that mining of coal, deep water extraction of oil reserves in the Gulf, and even off-shore wind development have had their dark days or have met with stiff resistance.  Risky operations can have “unintended consequences”, and that is just fine so long as adequate protective measures are in place…and followed.

There are plenty of places to read more about these unfortunate and potentially devastating events.  Blame has been thrown in all directions.  I myself have been quite vocal in recent weeks about the potentially complicit nature of Massey Coals (mis) management which may have led to the unnecessary deaths of the two dozen West Virginia miners last month.  Each safety or environmental accident may in its own right be a “game changer”.  The great political sage, Daniel Schoor ( National Public Radio), in discussing the wealth of political issues facing Washington politicians this year, asked earlier in the week, “What price energy? “(On Hill, Toughest Debate Is Often What to Do First  http://n.pr/aqNR2g)   Is it forty miners and roughnecks dead, or countless soldiers protecting oil “interests” in far away wars?

There are more examples.    A slower “unintended consequence” of the housing boom (and bust) is the unchecked soil erosion from abandoned construction sites and impacted water quality.  Pick any corner of the country and there are mini-Grand Canyons popping up from on-going runoff problems at construction sites that are in foreclosure or bankruptcy. In California, where I advised on construction site soil and storm-water management, laws and protections were put in place to address these issues.  Yet enforcement and cost recovery continues to be weak and require constant vigilance and draining of already thin public resources.  States or local jurisdictions, or the banks holding the properties in foreclosure have been left to take care of these orphaned properties.

Who Loses When Risk is Not Managed?

I have no doubt that there has been a central breakdown in process risk management, commonly used by organizations to establish procedures to safely manage the greatest of uncertainties of its daily operations.  This means that if a company is going to drill a mile under the Gulf of Mexico, they should FIRST make certain that all possible failure scenarios are identified, evaluated, tested and implemented, before that first barrel of oil is extracted (see a recent guest post on Solve Climate entitled“ A Dangerous Life Miles from Land and Focused on One Thing: Black Gold”  at http://bit.ly/aC1TkK and 2003 oil industry report that warned blowout preventer problems weren’t being fixed  http://bit.ly/bEBI05). While it’s vital that 24 hour protocols be applied to day-to-day activities that may be a threat to environmental well-being, unforeseeable events involving human error or equipment failure must be managed too.

In each of the recent events, inadequate steps have been put in place to 1) evaluate “worst case” impacts associated with catastrophic failures of equipment or systems; 2) establish policies and program to mitigate short and long term environmental risk factors and 3) assure that there are financial cushions (cleanup and reclamation bonds, for instance) that continue to hold those liable before they can run or hide.

My experience with risk management suggests that organizations take four approaches for “handling” a risk:

  • Control – lower the probability of the risk event occurrence.
  • Avoid – eliminate the opportunity for the risk to occur.
  • Assume – acknowledge a future risk event & accept the potential consequences without efforts to control it.
  • Transfer – reduce the risk exposure by reallocating the risk from one part of the system to another part.

It would seem that despite BP’s, Massey’s or other company’s claims to know their own business, they employed short-sighted risk management, ignoring possible “unintended consequences”, dropping their eyes on the ball and leading to the resultant safety and environmental impacts.  I would not say this if this was a one-time situation.  But in both  company’s cases, repeated safety and environmental violations over the years (and many deadly and environmentally catastrophic  accidents) suggest just this.

Non-routine accidents or incidents in dangerous working conditions (whether a mile under a mountain or under the sea) must be thoroughly re-evaluated. Risk management processes must revisited now to further lower or eliminate worker safety and environment damages.  Anything less creates unacceptable risk.

In my next post I will describe what process risk management is all about (see below) and what organizations can do to analyze, assess and plan for that “unintended consequence”.