June 9, 2010

News & Opinion: Finding True Wealth

By: 800-CEO-READ @ 7:11 PM – Filed under: Management & Workplace Culture

There are a lot of great books coming out lately, and more to follow throughout the year. It seems the current business climate is an opportunity to present new ideas, a tabula rasa, so to speak, and we're discovering some real gems of thought being introduced to the world. One perfect example of this is the book Plenitude: The Economics of True Wealth by Juliet Schor. This is not a book on how to capitalize on new business and make lots of money. It's about how to build better business, live more fulfilled lives, and survive well in the process. Simple, and it almost sounds trivial, but when you read a book like Plenitude, you realize that there are many things we're missing. Not new ideas, not technological gadgetry, but fundamental issues and practices that have gone neglected in our quest to, well, end up where we are. We can do better, and books like this talk about how. The following is a brief Q&A I conducted with Ms. Shor after being pleasantly blown away by the book. If what you read here is at all curious, do pick up the book. How can the economy survive based upon an emerging model of spending and using less? The idea that the economy needs to grow in order to thrive is a widespread but increasingly outmoded one. In large part this is due to the planetary ecology. Because we are bumping up against what some scientists have called “safe planetary boundaries” economies that do not respect those boundaries will incur more costs, and be less profitable. At the moment, we have not learned how to “grow” without destroying nature and de-stabilizing the planet. Our challenge is to create a new type of economy in which profit or economic benefit does not require depleting resources. From the business side, companies who learn how to sell on-going services, rather than maximizing the number of “units” of a product will be ahead of the game as we transition to a different business model. Software and information services are a good paradigm to look at in this respect. Time is an important asset to both companies and individuals. How does 'working less' benefit both groups? One solution is to take more leisure time from our growing productivity. In the last 40 years, the average American has seen a substantial in the number of annual hours worked. This is paradoxical, given that our economy has become so much more productive in this period, and information technology has raised labor productivity. The successful companies of the future will reverse this trend, and enable employees to take more of their higher productivity in the form of free time. This makes employment more available to everyone and frees up employees to have healthier, less stressful and more socially connected lives. Companies can benefit as well because their employees are healthier, happier and more productive. How can companies 'slow down' and still be profitable? When we do things too fast we make mistakes, miss opportunities and fail to reach our maximum creativity. I think this is true for companies too, because after all, they are just groups of people. When management or labor is operating at hyper-speed, they will not live up to their potential. Creativity, which is increasingly key to success in the business world, requires time to dream, imagine, work out ideas, and think through problems. What role does design play in economics? Unfortunately, almost none. But it should. As a discipline, economics is surprisingly divorced from production. It came out of an exchange model, and has an under-theorized and simple theory of production. Design tends to be isolated. But in order to get an ecologically sustainable economy we’re going to need to integrate design with economic ideas. This will be one of the challenges of coming decades. Many of the ideas you discuss address change on a personal level, but for those changes to take root, they seemingly need to be driven by companies/media. Describe how you think this process will occur, and how long will it take? We live in a dynamic culture in which business and media respond quickly to changes that start at the individual level. I do believe that the Plenitude lifestyle, which I describe in my book, will be increasingly adopted by companies too. Not the biggest ones at first, but smaller companies and enterprises are attuned to culture change. In part it happens because the people who start those companies are mavericks, often living different kinds of lifestyles. Many are refugees from bureaucratic corporations that stifled their creativity and initiative. The sustainability revolution, which plentiude is a part of is being embraced by many small companies. There’s a rapidly growth sector of small, green businesses, and they’re where these ideas have taken hold first. But as they grow, and this sector expands, which it will, they will influence their competitors. A great example is the organic and local food now being sold by supermarkets, including Wal-Mart, as a result of the pressure from Whole Foods Market, farmers markets and other small providers. From Wikipedia: Juliet Schor is a Professor of sociology at Boston College. She studies trends in working time and leisure, consumerism, the relationship between work and family, women's issues and economic justice. She received her undergraduate degree from Wesleyan University and her Ph.D in economics from the University of Massachusetts. Before joining Boston College, she taught at Harvard University for 17 years, in the Department of Economics and the Committee on Degrees in Women's Studies. In 2006 she was awarded the Leontief Prize by the Global Development and Environment Institute.