skip to main |
skip to sidebar
Encouraging responsible economic growth, that is. In the May 28 edition of Business Week, Clayton M. Christensen (professor at Harvard B-School) and Scott D. Anthony (president of Innosight, a consulting firm) urge managers to shift away from paradigms that maximize profits for shareholders in the short term, to ones that focus on responsibly growing the companies in the long term.
Christensen and Anthony advise managers to tell people who hold their company's shares:
"You are investors and speculators, not shareholders, and you temporarily find yourselves holding the securities of our company. You are responsible for maximizing the returns on your investments. Our responsibility is to maximize the long-term value of this company. We will therefore act in the interest of those whose interests coincide with our long-term prospects, namely employees, customers, the communities in which our employees live, and the minority of investors who plan to hold our securities for several years."
They continue:
Well-intentioned, smart managers are systematically destroying companies by failing to take actions they know are right in the long term. . . managers should find ways to reward investors and stakeholders who want innovation, not plunder.
Kudos to them.
I grew up in the Black Hills of western South Dakota, which I think is one of the loveliest places on Earth. Every time I go back for a visit, some piece of forest or field has been sliced up to make way for a new strip mall or housing development. Even worse is Wal-Mart, which paved over a significant chunk of undeveloped land in the 1990s to open their first store in my hometown, only to have abandoned it a few years ago to smother an even bigger area on the other side of town with a Super Wal-Mart and a sea of parking lot. Their original building remains an empty eyesore for which they, of course, bear no responsibility.
The unchecked development in the Black Hills is a difficult problem to tackle for two reasons. First, with only about 250,000 people spread over an area of about 4,500 square miles, open space seems relatively abundant in the Black Hills, and not like the precious commodity that it is. Second, the local (and national) political and legal structure is such that economic development is king, but one that doesn't answer to the costs it imposes on its communities, citizens, and the environment.
First, the seeming abundance of open space. I currently live in the DC area where space is anything but abundant. I've see how the sprawl of big box stores and cookie cutter condos has eaten up pretty much every open space for miles and miles in any direction. Even though sprawl in the DC area has caused thick smog, massive traffic back-ups on the Beltway, and long commutes for many residents, development still continues mostly unmanaged. People here seem to be just starting to realize that more compact, controlled development might make more sense environmentally, and even economically. Although the Black Hills are a long way from being as heavily developed as DC, I'm worried that, like in DC, lawmakers and developers won't recognize the value of controlled development until everything has already been paved over.
Second, the dominance of economic development. The local Planning & Zoning Board puts economic development above all else, including the environment, aesthetics, and even future economic development. Spearfish is a pretty town, with lots of trees and sandstone buildings on Main Street, but you wouldn't know it until you were well into the downtown. Coming into Spearfish on I-90 from the east, you'd pass dozens industrial-looking, aluminum-sided buildings, housing everything from a chainsaw store to a credit card company to a beauty salon. In fact, pretty much the whole stretch of I-90 between Spearfish and Rapid City has become littered with ugly, cheap-looking businesses that obscure the true beauty of the area. A large part of the economy of Spearfish comes from tourism and tourists come to the area for its untouched natural beauty. If we junk up the area, who's going to want to visit?
I'm not proposing we halt development. I'm saying we need to plan development with a more long-term vision in mind, keep it more compact and within city limits (except for farms), encourage businesses to move into empty existing buildings, and establish building codes that take aesthetics and the environment into account. We also need to consider the costs of development to the community and its environment. In that way, we can keep the area growing and beautiful.
I'm reading A Sand County Almanac this week. It's my dad's copy, which has a short poem penciled in the front to my dad from an old girlfriend of his. But what I really wanted to share is this paragraph written by Aldo Leopold in 1948 in the introduction.
Our bigger-and-better society is now like a hypochondriac, so obsessed with its own economic health as to have lost the capacity to remain healthy. The whole world is so greedy for more bathtubs that it has lost the stability necessary to build them, or even to turn off the tap. Nothing could be more salutary at this stage than a little healthy contempt for a plethora of material blessings.
And from the Center for a New American Dream, a page of ideas on living better, with less stuff.
http://www.newdream.org/live/
Venezuelan president Hugo Chavez is taking privately owned idle farmland and creating farming cooperatives, as part of his plans to reduce the amount of food Venezuela imports and to construct a "socialist fatherland."
So far, opinions of the redistribution are predictably mixed, or at least you'd think so by reading New York Times. The landowners and the wealthy naturally hate it, but Chavez remains popular on the whole. The landowners make up a small minority of the total population (around 3% own 77% of the land, according to Greg Palast for commondreams.org), a fraction that is greatly overrepresented in the New York Times article, which offers four quotations by former landowners, and only two short quotations by co-op members.
The NYT article also reports that the plan for Venezuela to grow more of its own food may not be working and cites recent sugar shortages, even though a few paragraphs earlier in the article, it states that the co-ops are replanting sugar cane fields with crops that are more suitable for the area, like corn and manioc. The Times does not comment on whether production of those crops has increased or not.
Surprisingly, the Washington Post paints a clearer, if somewhat reluctant, picture of just how popular Chavez is in Venezuela, citing his "overwhelming re-election" in December and the modest economic headway he's made on reducing poverty and creating jobs.
I'll be interested in seeing not only how this story unfolds, but also in how the media chooses to cover it.
On Monday, President Bush gave a speech in the Rose Garden about reducing gasoline use in this country. Funny how "it's important the president hear from all sides on this in a reasoned and deliberative fashion," according to Bob Greco of the American Petroleum Institute, in this interview from Marketplace on American Public Media. Considering all sides, thinking things through, and moving cautiously have never seemed to be priorities for President Bush before.
Lots of gems on the speech in this piece by CNN Student News. A few years ago, you'd rarely hear this kind of criticism of the president on CNN. But now that he's an unpopular president, they're all over it. My how CNN has changed its tack.
(CNN Student News) -- May 15, 2007
Transcript
First Up: Fuel-Saving Drive
ELIAS: First up today, President Bush is looking for ways to help the environment. He wants new rules for fuel efficiency and vehicle emissions in place by the time he leaves office in January 2009. So he's ordering several agencies to start working on the plans to make it happen. CNN's Ed Henry was at the White House for the president's announcement Monday, and he talked to Wolf Blitzer about it afterward.
(BEGIN VIDEO CLIP)
ED HENRY, CNN REPORTER: Clearly there's a legal reason: the Supreme Court ruling last month that the federal government has to regulate these greenhouse gases. But clearly also a political reason: the White House nervous about the fact that the national average for gasoline has now climbed above $3 per gallon. Also in some areas it's climbing up close to $4 a gallon. That's worrisome. But it sounded like more talk from the president today in the Rose Garden, really no new action.
The president signing an executive order that merely directs the relevant cabinet secretaries to take the "first steps" towards reducing gasoline consumption, but actually not doing anything to reduce that consumption. The president kept using the word "action" in the Rose Garden, as if that would make it seem like there was some new action. But his own press secretary Tony Snow admitted that in the short term, this will do nothing to help consumers.
U.S. PRESIDENT GEORGE W. BUSH: The American people expect common sense and they expect action. The policies I've laid out have got a lot of common sense to them. It makes sense to do what I proposed, and we're taking action by taking the first steps toward rules that will make our economy stronger, our environment cleaner and our nation more secure for generations to come.
TONY SNOW, WHITE HOUSE PRESS SECRETARY: No, it's not going to have an immediate effect. On the other hand, if you take a look at what the president has been proposing for a long time, this president had proposed an energy policy upon taking office and it took years to get Congress to act on it.
HENRY: Now, the White House clearly trying to shift the blame to Congress there. But up until January of course it was a Republican Congress, Wolf.
WOLF BLITZER, CNN HOST: So what's the chance, what's the likelihood that Congress will pass legislation that the president will sign into law that will have a significant impact?
HENRY: Well, very little chance right now. The president saying today that he's directing his cabinet secretaries to use as a starting point his 20-in-10 plan. That's the plan to cut federal consumption by 20 percent in the next 10 years. When you know, he unveiled it in January in his State of the Union, the last four months there has been very little action. Something to pay attention to: The president in the Rose Garden today said he wants his cabinet secretaries to deal with this by the end of 2008 in terms of the legal maneuvering and what not. What's significant about that? By 2008, the end there, we'll have a new president-elect. So it really looks like he's kicking this to the next administration.
(END VIDEO CLIP)
In response to being ranked dead last on a Greenpeace list of the environmental friendliness of 14 electronics companies, Steve Jobs posted a letter on the Apple site about the company's green plans and current policies.
It's better than nothing, but it would still be nice if they made it easier for people to get products repaired, especially iPods. Right now, once an iPod stops working or the battery dies, you either have to figure out how to fix it or change the battery yourself, or get a new one because Apple won't service them.
And in the Greenpeace response to Jobs' letter, they note that while Apple is phasing many toxic chemicals out of their products and offering recycling to customers in the US, the recycling program may not extend to people in other countries and the company still has plenty of room for improvement.
This week is bike to work week around the country and this Friday (May 18) is Bike to Work Day. I've started riding my bike to work a few times a week. It's about 5 miles each way and it only takes me about 10 minutes longer than it would to drive and find parking. The ride is nice and I've seen a few fawns and even a bright yellow tortoise, but what I like most is how much more energy I have and how much more focused I feel on those days. Today I didn't ride and I feel like I'm still not totally awake.
More infoInfo on the DC area Bike to Work Day
Encouraging responsible economic growth, that is. In the May 28 edition of Business Week, Clayton M. Christensen (professor at Harvard B-School) and Scott D. Anthony (president of Innosight, a consulting firm) urge managers to shift away from paradigms that maximize profits for shareholders in the short term, to ones that focus on responsibly growing the companies in the long term.
