The Social Business

Free bulbs - not such a bright idea after all

I took in a parcel for a neighbour over Christmas.  It was a free pack of energy-efficient bulbs, courtesy of npower.

That was good of them, I thought, an energy supplier doing their bit to help us save a bit of energy.  Helping people to not spend their money with you doesn't come naturally to most businesses.  

In 1997 I worked as an interpreter on an Overseas Development Agency project to build hydro-electric power stations north of Lima.  One day we went to an event where the local energy company was handing out T-Shirts with the slogan "Apagando un foco, ahorras un poco"  - roughly translated as "You'll save some money if you turn off your lights".

The UK engineer for whom I was interpreting thought this was a daft strategy - particularly for a recently-privatised energy company.  As you might expect, I disagreed.  It led to some interesting three-way discussions.  Whether they ultimately took more notice of me or him probably had more to do with economics than ecology.  Yet it's a good illustration of the tension that exists in any business which is involved in the consumption of natural resources on our behalf.  

So I was interested to read a piece in the Times today suggesting that npower's handout of 12 million energy-saving bulbs may not be such a great idea after all.  They were sent out to help the company to meet their legal obligation to cut carbon emissions - just before a new law comes into force which bans companies from mailing out unsolicited bulbs.

The problem is that research suggests that the average household has half-a-dozen unused bulbs in the cupboard under the sink.  So four more bulbs are unlikely to have the intended impact.  But they have helped npower meet their obligations, and thus avoid a fine of up to £40 million.

And, of course, free doesn't really mean free.  Companies are allowed to pass on the cost of these schemes to customers, through higher tariffs.  So we end up paying for bulbs we don't want, and which don't have the environmental impact that we so dearly need.  Cheers npower.

This story demonstrates how first steps very quickly need to become next steps when it comes to preventing runaway climate change.  Low energy bulbs are a good quick-win, and as my energy use monitor demonstrates, they do make a noticeable difference to your energy consumption.  But consumers, energy companies and governments now need to raise their game.  Sending out light bulbs is the easy, cheap bit, and it ticks the energy-saving boxes for the energy companies.  Yet it clearly isn't having the impact that the government intended when it set up the scheme.  

An npower representative, quoted in the Times, said:

"There is nothing under [the carbon emissions target reduction scheme] that means that we have to get evidence that the bulbs are being used.  It's up to the customer."

Which you may read as we've done our bit, not our problem Guv (or more accurately, Gov).  

If we're going to stop runaway climate change, businesses need to take more responsibility for the social and environmental impacts of their actions. Hopefully this will encourage/embarrass companies like npower, and Governments, to do more.  

Bananas and the cult of the ASDA Shopper

For a while I was pretty much obsessed with bananas.  One of my proudest moments was when I was accused by the Fresh Produce Buyer at Asda (I was working at their HQ at the time) of "revolutionary activity", after I put a notice on the ASDA intranet about a World Development Movement campaign about poor conditions at Chiquita banana plantations.  "Remember what pays your wages" was the buyer's stern warning. 

Some things have changed with time - that conversation was 12 years ago.  In another email exchange with a buyer I was told in no uncertain terms that "The Asda Shopper will never buy Organic."  

Yet some other things don't change.  There was a good piece in the Guardian on Monday by Felicity Lawrence (thanks to Cliff Southcombe for pointing me to it) about the current banana supermarket price war.  It happens fairly often, particularly as bananas tend to be supermarkets' biggest selling line (as the produce buyer pointed out to me all those years ago) - and because they are a Known Value Item - people tend to be aware of how much bananas cost - in a way that they're not so aware of the price of dried borlotti beans.  

I lived in Guayaquil for a year, the port through which most of Ecuador's banana exports pass.  Whenever I travelled to the capital, Quito, I would bump along a pot-holed road through miles and miles of banana plantations, stretching way into the distance. It was an awe-inspiring sight.  

These bananas were dollar bananas - grown on plantations where conditions are regularly denounced as poor - low wages, lack of union recognition, regular use of pesticides etc etc.  It's this kind of industrial agriculture which allows supermarkets like ASDA/Wal-Mart to negotiate really low prices.

Of course ASDA will claim that this is in the interests of the ASDA Shopper.  In my years at Asda House the cult of the ASDA Shopper was something to behold.  There was no shrine in the atrium, but there might as well have been.    Of course any business should be focused on serving its customers, but I don't accept the supermarkets' regular assertions that they are just giving hard-pressed consumers what they want.  This one-dimensional argument is naive, ignores the social responsibilities of business, and is designed to deflect attention from a private company's primary purpose - to maximise profit for shareholders.  

ASDA have responded to Felicity Lawrence's article - with this letter from Alex Brown, their Produce Director.  I'm intrigued by this line:

"The reason we're able to offer the lowest prices is simple:  because we cut unnecessary cost out of our business and pass it on.  That's not because we're squeezing suppliers or trading unethically, it's just because we don't waste money."

One of the core values when I worked at ASDA - I assume it's still the same - was "We hate waste of any kind."  It's a good value - and that's why I can believe that they work incredibly hard to cut costs out of their business.  But am I supposed to swallow the line that they don't squeeze suppliers?  

I'd like to know whether Alex Brown has visited any of the plantations which supply ASDA, or whether he's considered the impact that a banana price war can have on other producers in this market.  If he can't afford the time to go to Ecuador, he could, as Felicity Lawrence suggests,  just take a look at the UK's diminishing dairy industry - and perhaps look a few dairy farmers in the eye and tell them that he's only doing what the ASDA Shopper wants.  

Life in a developing country

I work with a lot of start-ups, so I know an unrealistic budget when I see one.  Ridiculously ambitious growth targets tucked away in the third quarter of year two, and little consideration given to the increased costs which will accompany the pie-in-the-sky income targets.   

More often than not, the people I work with are setting budgets for short-term gain - to secure funding or investment.  They hope that by the third quarter of year two, the investor will have forgotten the original target, or that things will have changed so much that we can all just laugh about how unrealistic forecasting can be, and move on.

A number of commentators have made the point that politicians - and the public at large - haven't really grasped yet the long-term implications of the mess we're now in - as detailed in yesterday's Budget.  I won't pretend that I have either, but I'm trying.  The amount of Government borrowing over the next few years is colossal.  That might be OK if we were in a strong position to pay the money back.  But the consensus is that the Government's growth targets (back to 3.5% by 2011) are ridiculously ambitious.  Without this growth, it'll be even more difficult to pay back what we owe.

We live in a traditionally powerful, rich country, where we've become accustomed to stability and "growth". I don't think we can really grasp how much things are going to change over the next few years.  

I lived in Ecuador for a year in 1994.  Like the rest of Latin America, the Ecuadorian economy was on its knees, thanks to the colonial legacy and  a massive debt crisis - fuelled by the West's desire to find a home for surplus petrodollars.  Life in a broken economy isn't much fun.  

It's easy to romanticise your experience of another country, but it's a fact that I feel that Ecuadorians are in a better position to face an economic crisis than we are in this country.  I think part of the reason is that they gave up a long time ago waiting for the Government to sort things out.  People have realised that if society is going to improve, and if your economic situation is going to improve, then you have to get on and do it yourselves.  There's much more of a culture of energetic, spontaneous, effective local action.

Of course you'll find that kind of thing here too, but when you see it, it's remarkable rather than the norm.  Maybe this crisis will be a wake-up call for us all.  We can't leave the development of a different kind of society and economy to politicians or the State.  I'm inspired by the fact that more people seem to be showing an interest in economics - apparently sales of "serious" magazines and books are on the up.  That's a good sign.  

I use the term "developing country" carefully in relation to the UK.  Our standard of living is still absurdly higher than that in the majority of countries.  But let's face facts.  Our economy is shattered.  Maybe it's time for a bit of progressive development thinking here too.  

Growing your own, Permaculture and Roberto Perez

You can't beat the pleasure you get from growing your own. Here's me at the weekend with our apple harvest - from one small tree:

They're the nicest apples I've ever eaten by a mile - and if you need any more convincing, have a read of this article by George Monbiot (OK we may not all have space for an orchard - but like me you may well have space for a minarette apple tree.)

Imagine what it would be like if the whole country grew its own. That's more or less what they've done in Cuba - and was the subject of Roberto Perez's talk last night. (see where else he's speaking here or watch a film about Cuba's experience here.) When the Soviet Union collapsed, Cuba lost access to cheap oil - along with a market for most of its produce. It puts the credit crunch and £1 a litre petrol into perspective.

Faced with no fuel for tractors, and no money to buy fertilisers (Cuba had been an enthusiastic convert to the Green Revolution as well as its home-grown one) they had to work out how to feed their population. Enter sustainable, local, urban agriculture.

To cut a long story short, people were given guaranteed access to (not ownership of) land on which they could grow fruit and veg. Most of these plots of land were small scale, in and around cities. I didn't take my notebook with me to note down the details, but the impact of this change of emphasis in food production was immense. We're not talking about a little veg production on the side - we're talking about a country which now produces the majority of its fruit and veg from small scale, organic agriculture.

I left wondering what it would take for something similar to happen here. As someone pointed out last night, we'd probably need a real crisis - not just a 30% rise in the price of eggs - to stimulate a radical change in how we produce our food. But maybe that crisis is creeping up on us - who's to say that oil won't keep going up in price - and that fertilisers - and even supposedly sustainable solutions like solar panels - won't soon become too expensive to produce?

It may not be a revolution, but I see a massive surge in interest in connecting people to where their food comes from. I was a member of the CSA at Swillington last year, and as an adviser on the Local Food Lottery Programme, I'm involved with some inspiring local food projects. Even Morrisons is getting in on the act. There really is nothing as powerful as an idea whose time has come.

An organic pilgrim's progress

Last week, whilst in Norfolk, we went to Walsingham.

By chance we came across a shop selling organic and fairtrade clothing. I got chatting to the guy who runs it, and it soon became clear that he was on a bit of a mission. When I worked at a fairtrade shop in the late 1990's, fairtrade clothing was, largely, the kind of thing most people wouldn't dream of wearing. Enormous T shirts in wild prints, floor-length batik skirts, and fancy embroidered blouses. To a certain extent they reflected the fashions of their time - but fairtrade clothing was the ultimate niche product - ie hardly anyone bought it.

And you could forget about it if you were a bloke. I was up for most things when I worked at the shop, but I never ever modelled for our annual fairtrade fashion (sic) show. Walking up and down a catwalk isn't my kind of thing in any circumstances, but certainly not wearing the kind of stuff that Fairtrade Man could choose to wear.

So it was refreshing to see a bloke running this shop, and a bloke who's clearly into his fashion. The clothing he sells reflects this - and also reflects how the fairtrade and organic clothing market has developed tremendously over the last few years. He had some really good stuff - I bought a pair or organic jeans from a company called Kuyichi. I'd never heard of them before, but the jeans are great - lovely denim and a stylish cut.

There was an article in the Guardian yesterday about organic jeans. It points out the negative environmental and social impact of a lot of cotton production. Organic cotton isn't perfect - it still uses loads of water - often in parts of the world where water is scarce - but at least it doesn't use the masses of chemicals that are used in conventional cotton production.

I had a bit of look into Kuyichi. Their website is more style than substance - but they appear to get their cotton from Peru - and they encourage farmers to take a share in the jeans business, which is a good thing. I was also interested to find out about their membership of the Made-By network of sustainable fashion retailers.

All clothes produced by companies signed up to Made-By have a unique code - and if you type this code into their website, you can trace where your clothes came from. It's not fully up and running yet (my jeans' code didn't work) but it's a smart example of how technology can be used to strengthen people's resolve to make positive consumer choices - and also make business more transparent.

Sirolli and responsiveness

I went to see Ernesto Sirolli this morning in Leeds.  He has an approach to working with entrepreneurs which he calls enterprise facilitation, which is explored further in his book.

I really enjoyed it, he's an engaging speaker and what he says makes a lot of sense to me.  I like where he's coming from - and how a lot of what he does is inspired by early experiences of "international development" in Africa. 

I had similar experiences in Latin America.  For a year I worked in Ecuador with a youth development organisation which was inspired by the teaching of Paulo Freire - the Brazilian educationalist and author of Pedagogy of the Oppressed, who was an inspiration for Ernesto too.  I also worked on a UK Government funded project in Peru, teaching local engineers how to run mini hydro-electric power stations which had recently been built with UK aid.

One of Ernesto's key messages is the need for responsiveness in working with entrepreneurs.  He says that we need strategy too - but too much support (and too much regeneration in general) is incredibly heavy on strategy - this is what we have decided will be achieved over the next five years, whether other people like it or not - and very light on responsiveness - what do people actually need now?

In Ecuador, Senda Juvenil, inspired by Freire, were a model of responsiveness.  Working with young people, as individuals, to help them to realise their dreams for themselves and their communities. 

On the other hand, the ODA project in Peru looked great on paper - bringing recent technological advances to the rural poor of Peru.  But the technology was completely inappropriate.  No-one from the UK Government had thought to check on the seismic activity in that area of Peru.  They have regular earth tremors - which damage the pipelines from the mountains to the hydro-plants on a regular basis.  If they'd just listened to local people they might have found that out.

I'm inspired by Ernesto, but I don't underestimate the power which the people who are charged with "regeneration strategy" have in Leeds.  We're going to need to do a lot of persuading to encourage them that a bit of responsiveness isn't necessarily a threat to their strategies - but could actually be the thing that makes them work. 

Semler and start-ups

Some more interesting thoughts and actions from Ricardo Semler, this time on entrepreneurship.

Many of us will have been in a position where we've been working for someone else and have come to realise that we'd like to set up in business on our own. Sometimes, the proposed business will be off at a tangent (setting up a tea-shop in the Dales perhaps), but often your business idea will be closely related to what you're currently doing. You just want to be your own boss, do it a bit differently or for different customers.

Traditionally what happens is that you secretly hatch an escape plan, and then decide to make the leap. You probably haven't had time to really work on your new business idea, because all your time's been spent on your old job. So you have a scary period with no income once you've left your job.

Wouldn't it be more interesting if your current employer actively encouraged you to set up on your own? Semler has done this on a number of occasions at Semco. A group of employees have an idea for a new service, and he gives them time and resources to explore setting up in business. Often they'll set something up as a separate business, but one of their main customers will be Semco. Semler's company wins as well because it keeps talented people as partners, and there's plenty of scope for serving eachother's customers.

Could similar things be done elsewhere? Instead of losing your talented marketing manager, could you work with them to encourage them to set up in business, with you as their first customer? Maybe they could give you a good deal in return for some guaranteed work in their first year on their own?

I'm sure there'll be occasions when such an approach wouldn't work, but it seems to make sense to me that if you've got an entrepreneurial employee, who's going to set up on their own one way or the other anyway, you should try to work out a way to help them to realise their dreams, in a way that benefits you both.

And maybe the government could offer incentives to companies which encourage staff to set up new businesses?

Bibliomulas and democratic schooling

A couple of pieces of inspiration this morning from Latin America.

I enjoyed listening last week to a programme about bibliomulas - mobile libraries on the back of a donkey, carried high into the Venezuelan Andes. I heard about them on the same day that I got my usual lukewarm service from my local business library. It struck me that the usual excuse I hear for the poor service I often get in libraries - a lack of investment resulting in demotivated staff - is a bit of a cop-out. It's not just about the money - attitudes need to change as well.

I also watched a video on YouTube of Ricardo Semler - the maverick Brazilian entrepreneur who's taking his democratic approach to business into the classroom. He's helped to set up some schools in Brazil inspired by his experience at Semco - where, amongst other things, students decide when they go to classes, and can spend time in a fully equipped games room if they choose not to study.

I recently undertook some research into enterprise education - and it's clear that there's a lot of energy and creative thinking going into helping the next generation to be more enterprising in their thoughts and actions. But, like many people, I can't help but feel that there's something more fundamentally wrong with the education system, and too often it lets children - particularly boys - down badly. Maybe we could learn a few things from Semler's approach.