Nonlinear Thinking

Doughnut Economics

Via Doughnut Economics Action Lab:

The Doughnut offers a vision of what it means for humanity to thrive in the 21st century - and Doughnut Economics explores the mindset and ways of thinking needed to get us there.

First published in 2012 in an Oxfam report by Kate Raworth, the concept rapidly gained traction internationally, from the UN General Assembly to the Occupy movement.

Kate's 2017 book, Doughnut Economics: seven ways to think like a 21st century economist,  further explored the economic thinking needed to bring humanity into the Doughnut, drawing together insights from diverse economic perspectives in a way that everyone can understand

The Doughnut's holistic scope and visual simplicity, coupled with its scientific grounding, has turned it into a convening space for big conversations about reimagining and remaking the future. It is now being discussed, debated and put into practice in education and in communities, in business and in government, in towns, cities and nations worldwide.

Think of it as a compass for human prosperity in the 21st century, with the aim of meeting the needs of all people within the means of the living planet.

The Doughnut consists of two concentric rings: a social foundation, to ensure that no one is left falling short on life’s essentials, and an ecological ceiling, to ensure that humanity does not collectively overshoot the planetary boundaries that protect Earth's life-supporting systems. Between these two sets of boundaries lies a doughnut-shaped space that is both ecologically safe and socially just: a space in which humanity can thrive.

 

Microgrids

Innovation in the generation, transmission and, most importantly, storage of electricity continues apace.  Going well beyond interest by sustainability-oriented consumers, microgrids are emerging as an efficient and effective distributed generation option.  This recent Time Magazine article outlines the potential this technology may hold.

Microgrids have become increasingly popular across the U.S. in recent years, embraced by everyone from community developers to military officials. They have been installed as part of a 40-solar-panel infrastructure project atop a peak in North Carolina's Great Smoky Mountains; used as a way to deliver power to the 2,800 residents of Borrego Springs, Calif.; and implemented at the U.S. Army's Fort Carson in Colorado.

The reason is as simple as the bottom line: the technology offers a way for communities to collect, store and use their own energy, rather than pay for it to be shipped from miles away. In the U.S., microgrids often include batteries, a localized renewable energy source like solar panels, and sophisticated software to determine when to buy energy from utility companies and when to sell any excess power back.

The rise of microgrids comes as part of a broader shift in the ways Americans think about electricity storage and delivery. The grid, long associated with large infrastructure such as transmission lines, power plants and substations, also functions at the community and neighborhood levels. Indeed, microgrid capacity is expected to double by 2020, totaling 4.3 gigawatts in microgrid potential, according to GTM Research, an industry analyst.

 While this is sure to be of global interest, particularly in less developed countries where reliable power is always suspect, the U.S. appears to be on the forefront as an estimated $3.5 billion will be invested in micrograms between 2015 and 2020 with 54% of global microgrid capacity already located in the U.S.

 

The Life of Cheese

 

 

Compendium/Miscellanea/Almanac 04.17.2013

Stuff that has crossed my radar lately for one reason or another.

• The Strategic Plan is Dead.  Long Live Strategy. (Stanford Social Innovation Review)
• A new reality between the CMO and CIO (ZDNet)
• We’re from Corporate and We’re Here to Help (Strategy + Business)
• The Software Revolution Behind LinkedIn’s Gushing Profits (Wired)
• Pragmatic Pathway – New Approaches to Organizational Change (Deloitte University Press)
• Global Information Technology Report 2013 (World Economic Forum)
• Viral’s Secret Formula (Huffington Post)
• All eyes on the sharing economy (The Economist)
• 13 Hot Business Model Innovations (Sustainable Brands)
• Challenges and Opportunities of Investing in Cleantech and Renewable Energy (IGEL@Wharton)
• Marketers Rise to the Cloud Challenge (CMO.com)

Sustainability Becomes Mission Critical

After myriad proclamations over the past decade that the notion/concept of sustainability as a corporate imperative had crossed the Rubicon and entered the mainstream, it appears that maybe a destination of sorts has been reached.  A recent panel of senior executives from consulting, banking and the chemical industries sat down to debate and discuss this critical shift during the recent Wharton Social Impact conference and generally agreed that the movement has finally become a central part of the mission statement at many enterprises.

If building a sustainable enterprise was a fashionable trend five years ago, today it is a business imperative. Forward-looking corporations have figured out that a focus on environmental, social and governmental (ESG) factors is not just a bid to burnish their image, but rather it is a necessity in today's marketplace. And if done well, it is a true competitive advantage.

An important, and critical, divide seems to be opening between those companies that get it and those that don’t.  Despite protestations from a sub-stratum of firms that view an embrace of the green/sustainable strategy as a cost rather than an opportunity, more and more high-profile enterprises are engaging at varying levels of investment.

In fact, for savvy companies, a strategy built around sustainability can be a critical advantage, Boston Consulting Group senior partner Martin Reeves pointed out. Even when government action puts more burdens on business, Reeves said there can be an upside. When you change the rules of the game, you "are putting a floor on certain behaviors [and] raising barriers to entry." Case in point: the establishment of the Food and Drug Administration, which Reeves contended "essentially took a snake oil industry and turned it into an industry with very strict scientific standards."

When anticipating the learning curve for macro level changes in behavior, it is generally believed that it requires a generation for new behaviors to achieve mainstream acceptance and incorporation into strategic and tactical decision making going forward.  As the tail end of the Boomers and Generation X ascend to leadership positions in business, it would appear that sustainability will be a fundamental consideration for the most savvy and market attuned enterprises moving forward.

Among the panel's key messages was that the need to address ESG issues will only intensify over time, in part because the next generation of business leaders is demanding it. One of the audiences most keenly interested in the report Citigroup puts out annually on its sustainability record, Eubank noted, is the company's recruiting operation. "Students these days are much more environmentally aware, and they want to know what a company's sustainability policies are," Eubank said. "Bankers want to know that they are working for a company that is being responsible."

 

Compendium/Miscellanea/Almanac 01.12.2011

Stuff that I find interesting.  Maybe you will too.

• Budgets, Innovation Squarely in CMOs' Sights in 2011 (Advertising Age) 
• Clouds, big data, and smart assets: Ten tech-enabled business trends to watch  (McKinsey Quarterly) 
• How Tech Will Be Critical to Corporate Sustainability in 2011 (Greenbiz) 
• Light My Fire: The Matchbook Makes a Cultural Comeback (Fast Company) 
• How Aha! Really Happens  (Strategy + Business) 
• Swimming Against the Tide: How Technology, Media, and Telecommunications Companies Can Prosper in the New Economic Reality  (Boston Consulting Group) 
• Eric Berlow: How complexity leads to simplicity  (TED)  
• The AI Revolution Is On  (Wired)  
• The Battle for Control of Smart Cities  (Fast Company) 

The Slow Road to A Smarter Grid

The advent of the smart grid has been announced numerous times during the past 15 years.  It has been simultaneously encouraging and discouraging to witness the progress towards an environment of intelligent energy management during that period.  Few great advances arrive without serious headwinds.  Particularly in such a “smokestack”-affiliated industry as electric utilities, change can be glacial.

The “science” surrounding innovative technologies has always held far less interest for me than the practical application of those technologies.  It is not what it is, but what it can do, that intrigues me and feeds into my constantly evolving view of the world and the industries and markets that comprise the global marketplace.

A dozen years ago, I participated in sketching out an early architecture for the concept of the Smart Home as part of the broader smart energy initiative and have a continuing interest in the advancement of the technologies that comprise what is now referred to as the Smart Grid.  A simple graphic of the smart grid environment is represented below.

 

Managing energy demand and optimizing energy usage are fundamental to any strategy/philosophy/approach to arriving at a sustainable and clean energy economy.  To that end, electric utilities are being encouraged to utilize smart-grid technology -- network-connected devices to help intelligently monitor and manage power usage -- whether on their dime or through funding from the U.S. government's 2009 stimulus package. Smart energy systems are designed to save energy via intelligent management of energy usage in homes and businesses. Beyond that activity at the point of consumption, the smart grid seeks to promote improved optimization at every point between generation and consumption to actively manage the grid.

As this proposed build out of the smart grid is, for the most part, a digital network solution, the question/concern of hacking the system necessarily arises.  However real and mature the threat, it does create new challenges for utilities to meet to ensure safety, reliability, etc. for their residential and commercial customer bases.  The threat may be most acute at those interfaces where smart grid platforms are required to integrate with older control equipment such as SCADA ( Supervisory Control and Data Acquisition) systems as well as the first generation of smart meters.

As more and more processes in every industry become digitally-driven, we will face these same kinds of challenges.  In many cases, such as with the smart grid effort, they will be met and overcome because their is simply no alternative.

Business Models for Sustainable Consumption

Discovered an interesting report from the World Economic Forum published earlier this year discussing the need for new business models that are constructed on a platform of sustainable consumption.  The report offers a  “Business Case for Sustainability”  that provides “a cogent argument for sustainability as an issue that should be incorporated into the strategy and operations of business, not just as a matter of stakeholder responsibility but as a matter of business survival and value creation.”

 

Key elements of the business case include:

• Managing resource risks: Sustainability matters to business because it reduces exposure to volatile and rising resource prices, to the risk of increased scarcity of resources and to the risk that these (carbon, water, waste) are radically re-priced in the near future. Embracing models of sustainable consumption across the value chain will provide stronger resilience against external shocks.
• Shaping the regulatory environment: Principles of sustainability are increasingly being incorporated into the regulatory environment. If businesses wish to flourish in this environment, they must make themselves active participants in its construction.
• Engaging consumers as citizens: The biggest drivers of corporate sustainability investments are consumer concerns, employee interest and government legislation.8 For business, driving sustainable consumption can be an effective long-term strategy for deepening authentic engagement with consumers and employees.
• Engaging consumers as customers: Consumers increasingly want to be treated as customers, demanding not only more sustainable products and services, but also greater transparency over sourcing and content of existing ones. At the same time, the speed, spread and changing patterns of use of the media are forcing businesses to adopt pre-emptive strategies to manage their reputational risk on sustainability issues. Engaging proactively with the sustainable consumption is one way of managing these challenges in depth.
• Driving innovation: Businesses are the chief engines of value creation and innovation in society. The challenge of sustainable consumption presents an opportunity to enhance both, particularly when new partnerships and collaborations are opened along the value chain.
• Capturing opportunity: In the end, sustainable consumption matters to business because there will be winners and losers in the new economy, and those that move most swiftly are likely to reap the greatest benefits. Embracing sustainable consumption now offers a pathway to future markets and profitability.

What is made clear in the report is that continuing along a path of incremental adoption of today’s sustainability efforts will be insufficient as they are based on improvements to our existing model of consumption.  That model is, itself, unsustainable.  The graphic below illustrates the required shift from the traditional value chain to a closed loop value chain that incorporates reuse of consumed materials into the overall business model.

 

“The new normal for the global economy is one in which consumption is decoupled from negative environmental and social impacts, driven by a combination of innovation, evolving consumer values and more accurate product costs. In the end, it is not a world defined so much by scarcity and sacrifice, as a world defined by innovation and a new abundance.”

The “new normal” is an economy in which:     

• Consumers are the driving force 
• Consumption is about loops, not lines 
• Collaboration is a key
• Core business practices are sustainable    
• Public policy frameworks support sustainable consumption

Reports such as this support an emerging recognition, by early adopters at least, that those companies that are proactive in embracing sustainability will find themselves at a distinct operational, cost and branding advantage in the near future.

Are We Melting Yet?

 I understand and accept that the science surrounding climate change often appears to be inexact and that has driven some extraordinary polarization in the debate on the long term impacts, if any, that a changing climate might deliver.  However, I do believe that prudence should require every organization, and individual for that matter, to execute some scenario planning around the potentiality that a warmer planet might become the "new normal".  Personally, I think the Twin Cities have never looked better.

Building A Smarter Power Grid

A very nice video from GE on smart meters as part of the movement towards realizing the smart grid.