Harvard Business Publishing

The ideals will not come about without the foundation changing. There has to be more than one bottom line within current financial reporting otherwise there is zero incentive for shareholders other than "hey, thats a good idea". Maybe Capitilism 3.0, I commented on that on my blog.

Honestly, take it head on from all directions, with the emphasis at the core of the enabler.

Maybe consumerism is a pathological vacuum-filler compensating for a lack of meaning/engagement/creativity...

http://webseitz.fluxent.com/wiki/WorldviewRoadmap

Umair...

Lately, you've been changing your focus from media (attention)economics towards broader issues of economic strategy...

However, I think that your earlier focus on media is still more relevant - even for seemingly unrelated "material" stuff like energy, sustainability, etc.

Why? Because all the material stuff people consume is ultimately instrumental to the core human economy - the attention economy. The attention economy is the core because it "drives" people... it is where all human motivations are produced.

So, that's why I still think that the web - and companies like Google - will have a much deeper effect on everything else... than we now can see and measure in purely web economics' terms. The instant search thing (Google) is changing profoundly what people see - meaning who gets to be seen... and why. The traditional cultural filters (books, teachers, authorities) and their top-down "information architectures" are being replaced by never ending "live" multidirectional flows of "unregulated" attention. Yes, Google basically doesn't regulate attention - it lets people decide what's relevant and what's not (amazingly, many people still cannot grasp this).

People get to see other people and be seen by other people in a totally new attention architecture - and this is where new motivations, satisfactions, ways of being happy or unhappy... are being defined... as we speak.

And because this is largely a bottom up process... people at the social "tops" (think the boardrooms) just don't have access to it... intellectually. To them, what's happening now will be as incomprehensible and shocking as the early Christianity was to the Roman elites.

And, as it was always the case throughout history, what is desirable for material "consumption" will be defined by the dynamics of the attention economy. Behind every human artifact, there is a human being... on the other end, so to speak. And that's what we ultimately care about and "consume" - other people.

Umair,

I'd like to add a company to the list that is often looked over when the media reference these self proclaimed "green" companies.
Interface Inc is an American based carpet company, that embodies the natural capitalistic principles put forth by great minds who built the philosophical framework for sustainable business (Amory lovins, Paul Hawkins, etc.) It is the only company I know that has a vision for its business to function in a complete cyclical and bio-mimicking manner and has already instituted many of these changes.
I have been thinking that we are reaching “peak consumption” for a while; it takes someone as eloquent as you to so concisely put it on paper. What we need is a shift away from a linear economy to a cyclical one, with all externalities accounted for. I think your analogy about the razor is off. What we need is a razor manufacture that sells you a razor, takes it back when it is dull, melts it down to form a brand new sharp razor, and then sells it to you again. Their process would be powered from the sun and produce no waste. Just imagine…

Great post Umair. I know the education space best so I'll offer up Grockit, Teachstreet and our site (eduFire) as examples of companies that have the chance to be tomorrow's revolutionaries. One of the reasons why I am so passionate about education is precisely because it doesn't require increasingly excessive levels of consumption to be sustainable. If I had a bunch of money and really wanted to change the world (some day I likely will and likely will!) I'd create a fund to invest in all sorts of crazy start-ups that are trying to do things to upset the apple cart within education. Throw a few million bucks at a lot of wild ideas and hop that a few stick.

Because if a few do stick it could fundamentally change everything else about the planet.

Keep writing amazing stuff Umair. You're inspiring those of us in the trenches who aren't building businesses that are merely designed to perpetuate an unsustainable culture of "Buy! Buy! Buy!".

Umair - First, I love your blog and find myself constantly energized and inspired by your posts. I'm only familiar with two of the companies you list at the end of this post; Whole Foods and Google. Though I don't know everything about these companies I don't understand how these two companies are any different than other companies when it comes to consumption. As I see it Whole foods is a retailer like any other that wants you to buy as much as possible when you walk in their doors. I have been a customer of Whole Foods and that's the sense I get when I shop there, nothing amazing or great. Google makes almost all their money from advertising and almost all the advertising I see when I use google is pushing consumption of some kind and almost nothing else.

I spent a long time at a bar this past Saturday night with a buddy debating the insatiable need for growth created by a economic and social value system based on continual increases in spending.

The problem, as you point out, is that "growth" is terribly narrowly defined as "spending on consumption". We've defined progress on such narrow terms that we've lost a broader view of what progress can achieve.

Because of an economic system that bases success on pure growth incorporate earnings, it will probably be difficult to find many public market companies that are pushing these types of next-generation economics. Obviously there are a couple, but only in the niches where we have started to see the value of shifting away from the old-nihilistic corporate system. It's the smaller private companies that are able to connect with people differently where we are seeing evolution in economic value systems.

It is interesting if you start thinking about how this manifests itself around the world. Developing nations are more concerned with raising standards of living rather than finding meaning or connection in their economic systems; but I think developing nations also can see some of the lessons of the path the US has taken and can find a better blend in economic and societal growth. It might be easier for those countries than the US, which has to almost overthrow years of "learning" to find a new path.

> Let’s track down more companies that are living this set of next-generation
> economics already.

I nominate http://southeastmnfoodnetwork.com/smfn/

So: more new firms/markets/networks/communities are accomplishing the same goals better and faster than old/industrial companies for less money.

Craigslist vs. Newspaper classifieds, right?

So the outcome is: less money needs to be spent on everything.

And this frees up capital to invest elsewhere.

At the same time, it seems that these new firms require less capital to begin with...so that's one part of asymmetrical competition b/w new and old that will accelerate all these trends.

The freedom that comes from a) less risk and b) higher efficiency is what will enable managers to act with normal (i.e. non-sociapathic) motivations when making strategic [or tactical] decisions.

(and also the fact that, as you have discussed, sociopathic behavior kills relationships with connected customers).

Thanks for giving us the details on the how and why! Incredibly useful!

I think the oft-repeated quote from Peter Drucker, "what gets measured gets managed", is crucial in understanding the causes of our current pathology. Corporations rely on earnings per share, or some equivalent measure, to gauge their success. Governments use GDP as a proxy for improvement. In this model, the current outcome can only be expected. Of course, there are other metrics available (Gross National Happiness comes to mind) but all are secondary to the absolute financial metrics.

We are starting to see that consumers, investors, and voters are capable of demanding more from their companies and governments in the form of demand for 'green' products. Fear has encouraged people to take into account the environmental impact of a product as well as its price/performance. Imagine if we could put the same fear of long-term strategic damage into investors...or voters. Changing the metrics involved changes the definition of success: Asymmetrical competition at its purest.

Lovely. Story of Stuff shows the consumption cycles very compellingly. Cradle to Cradle. Biomimicry. The paths are out there...emerging and improving. Interface, as mentioned in an earlier comment, is a fabulous example. I very much agree that this is the direction to go. I think it is vital for our thrivability. But can you (or anyone else here) tell us why corporations need to go in this direction from an economic standpoint? What is the vision for that economic future?

Nicholas mentioned measurements getting managed...and there does seem to be a deep need to more accurately track and make visible the flows in our economy and in our interwoven systems (with the earth we live on). Any comment on how the development of currencies (as defined as formalized structures for making flows visible (explained on Openmoney.info) will impact our economy?

My comment is a bit tangential perhaps, but Jon made me think about his idea of the 'unsustainable culture of buy, buy, buy' and I can't help but think that this 'addiction to consumption' is ingrained in our human psyche.

Perhaps it is the remnants of historical events such as the arrival of the Spanish Conquistadores to the New World, where they exploited the riches of the land without regards for human, social or environmental consequences to satisfy the needs of the Old World. Or the Industrial Revolution where the Industrialists had the upper hand on the Working Class. And history repeats itself again today, except that in our day the dominance is manifested as an economic dominance. This is how we keep score in our society: the more I have the more important I am.

I support Nicolas' idea that we must change the metric and perhaps this would lead us to seek a different kind of success; but I would also advance that we need to educate the younger generation and ourselves so that we do not blindly follow the steps of our ancestors in search of success.

Great post!

Ironically all the companies mentioned are consumption-based. Google - ads to buy things to consume. Whole Foods sells expensive products for people to consume. Threadless lets people create t-shirt designs... which other people consume. Marks & Spencer is a retailer to *consumers*. Just because a company has a motto to not be evil (which does NOT imply that they are good) or charges customers for plastic bags, ostensibly for the environmental impact (yet they aren't the ones recycling the bags!), doesn't mean they have some new strategic advantage or that they are not consumption-based companies.

We have been told to pull the blinders over our eyes, have built a society on mass consumption, and thrown away any real values. It's no longer the "great american dream" its even beyond "keeping up with the jones" it's "entitlement"

It's all self correcting, and when it's too late -- the sheeppeople will get it.

Jean, thanks for the link to openmoney.info. Really interesting stuff.

Could this addiction be a reaction to the "Cognitive Surplus" Clay Shirky has talked about?

http://www.herecomeseverybody.org/2008/04/looking-for-the-mouse.html

Here's what you're not considering... and oh, btw, if you find yourself blushing and dismissing it all at once, wander down the campus to whatever is closest to the sociobiology department and pass it by those people.

Males will always want to have more wealth than the majority of other males because females select for *relative* wealth, that is wealth compared to average wealth, when choosing a mate.

For this reason, the males with the most influence relentlessly attempt to sustain and re-create a system in which the most extreme disparity comes to pass.

While the majority are males are not super-competitive, the small super-competitive amongst the population (those that don't end up broke, dead or in jail) will come to wield disproportionate power because they control more resources, and ultimately the greatest resource of all- law-making whose aim is directed towards creating the greatest differential between themselves and other competitor males that they can. In this they are overwhelmingly successful.

Not that their behavior, when averaged out over all people who exhibit their behavior, is successful. But averages don't count in this area. If one nuclear bomb gets through, that's quite enough. So also with these males- the tiny fraction of super-competitive "winners" arrive in the winner's circle with one thought in mind- create as big a differential between their wealth and other males as they can.

If this seems far fetched, try Googling Steve Forbes AND girlfriend or Rupert Murdoch AND girlfriend or Larry Ellison AND girlfriend and tell me if you think that these men are paired with these women because she finds him the most fascinating man she's ever known.

Without a grotesque wealth differential, none of these pairings, or the millions like them over the years, would exist. But these types of men are just the men who seek to control politics and the wealth it directs.

The average Joe who is content with his life, only becomes aware of politics when it virtually breaks down his door.

Some scholar believe that Genghis Kahn may have 16 or 17 million
ancestors alive today:

http://www.msnbc.msn.com/id/5379014/

Don't kid yourself, the conquering "heros" motivations today are not any different than what they were a few thousand years ago.

That's what drives men to create and sustain apparently destructive systems bent on one myopic goal- making money.

The path you're proposing isn't going to result in power-seeking men having unlimited access to beautiful women and thus beating out their better-looking, younger, more personable, kinder, FILL IN THE BLANK HERE rivals.

So expect to hear nothing but a litany of dismissals of your goody-two-shoes proposal from, you guessed it, high powered males and wanna-be high powered males.

I like the idea of the business of business being more than business - it's something I have been working on since january on toothlesstiger.com and it's something that I evolve my business around.

especially a large part of my thoughts are gathered in this video:

http://toothlesstiger.net/2008/02/21/my-speech-from-lift08/

I think there's an amazing opportunity for companies to change themselves around, but most of them are left numb... and I think that the most relevant word that we use for this development is "substance" - we should have companies of substance that practice as they preach...

the good thing is that we have had counterattack towards consumer capitalism, that the movement has already started.. that people know that consumption is not a good thing... and that we just need the companies to start working in the same direction as well..

addiction, materialism, consumerism, all seem to describe the situation well. while consumption addiction has seemingly been rising (we all need stuff, right?) so has the visibility of the personal finance weblog. i only have anecdotal evidence but as a classic 'over-logging' (more addiction, right?) internet user i am comfortable with the assertion. on the personal finance blogs there is a lot of talk about taking back control of your financial life and fiscal responsibility, mostly by frugality, which is anti-consumerism. here is the paradox though, if everyone in the States for instance were to spend 5% less and save this would put the country into a recession. which would not be good. so is consumption all that bad? consumption of oil transfers a lot of wealth to the public sector, especially at $4/gal, which is needed to cover healthcare (medicaid in the US) and govt education since vouchers have been deemed evil by the democrats and teaching unions. so if consumption is stopped who will pay for senior health and educating children?

Let's not forget Patagonia, if it has not been mentioned already. They strive to do everything right, even if they do not succeed initially. Yvon Chouinard is a true revolutionary.

You bring up some valid points. To me, the real issue is marketers need are ultimately responsible for creating the consumer culture. Because consumption is a necessary evil, marketers and advertisers must develop and promote sustainable consumption standards.

What about the underlying motives? The beast in the cage in the back room remains the same. Until we change that, the beast will demand to be fed.

We need a new summer reading list for B School students, and their future bosses. Good to Great is fine to dandy. But I'd wish for titles like The Servant-Leader, Ishmael, Dr. Seuss, Kim Addonizio.

things are the way they are because people are the way they are. you think you can change systems, and people will change? based on what examples?

I think this discussion is very important, but it is skipping a few very important issues: First, competition forces companies to migrate to emerging nations to produce at ever lower costs. Then the same companies have to sell ever increasing quantities of the same products to keep their sales figures growing. This generates pressures on the consumers to increase buying of new products and discarding of old versions of the products. It also increases pressure on the environment.
Second, most people depend, directly or not, on the continuous growth of those sales to keep their jobs. Also, thanks to increased automation, this dependency also increases constantly.
We should be thinking of ways to create new jobs that are not attached to consumption of goods, even indirectly, so we would be able to create an economic system that also does not depend on the continuous growth of production of physical goods.
If we devise ways to create high valued jobs of this kind, in large numbers, we will be able to change the economic system to a more environmentally friendly one, also a more human value oriented one.