Now is the Time We’ll Read about Later in the History Books

•December 28, 2010 • 1 Comment

Every so often, an event happens that we know right away will go down in the history books: The Berlin Wall falls, the first sheep is cloned, the World Trade Towers are destroyed, Chilean miners are rescued from a half-mile below the earth, water is discovered on Mars…. The events usually speak for themselves as unspeakable tragedy or inhumanity, scientific breakthrough that changes our understanding of the rules of life, or triumph of the human spirit. They come at us in a distinct, impactful moment in time. Their importance used to be reiterated by screaming newspaper headlines the next morning. In this age of information overflow, we now recognize them through endless, round-the-clock coverage on cable “news” shows characterized by numbing repetition of the same video footage accompanied by talking heads babbling on with few new facts wrapped in endless speculation.

But major historical events can also stretch over long periods of time and are not defined until historians see all the pieces together much later with the benefit of hindsight: The Renaissance Period, the Ming Dynasty, the rise and fall of the Roman Empire, the Jurassic Period, the rise of humans…. What if we were living in one of these events now? One that people (or our successors) will read about in their history “books”? It’s hard to see through the fog of all the information “noise” around us, but I believe a picture is emerging.

It might be called the Age of Choice.

Seeing the bigger picture through the fog

Seeing the bigger picture through the fog

Historians will describe it as the dramatic period in which civilization had an overabundance of information on a barrage of critical issues and a challenging time sifting through it all to collectively decide which information was real and what to do with it: Will North Korea trigger a war that could consume a large portion of the world population and involve nuclear weapons? Or could it be a lunatic regime that collapses from self-delusion before it wreaks havoc? Will countries act together on climate change when leaders know that collective action is the only solution? Or will political leaders, business leaders and individuals seek to maximize their own short-term interests despite overwhelming information that it will bring collapse of the human support systems that provide for those self-interests? Will China continue to build coal power plants at the rate of one every ten days despite knowledge that they are sacrificing the long term for short term economic gain? Will America continue to fight two major wars overseas while its people live at home as if it was a time of peace? Will Americans continue to buy enormous quantities of goods from China despite personal experience that financial relationships in which money goes one way only is not sustainable? Will economists continue to measure the health of an economy by GDP despite information in front of them that it does not give a comprehensive look at economic conditions? Will the media continue to saturate the public with sound bites, sensationalism and opinion, knowing that it has greatly contributed to the decline in hard discussions about practical policy issues (but also knowing that it helps their quarterly ratings)? Will we, as individuals, continue to see ourselves as “consumers” in the face of gut knowledge that it doesn’t fulfill us and factual information that we are consuming world resources at a rate far beyond what the planet can sustain? Is the incidence of extreme weather actually increasing, or is it just the reporting of it because it provides for dramatic video?

The web of information is now almost as complex as the web of life

The web of information is now almost as complex as the web of life

The list of questions that lead to critical choices can go very deep and wide. What historians will write about the Age of Choice will be the struggle to connect the dots as individuals, as society’s, and as an integrated eco-system called Planet Earth. If historians do their job well, they will look at the challenges of sifting through an endless onslaught of information to find what is important, and how people use different coping mechanisms. They will come to understand that it was possible for individuals to interpret reality using completely different sets of “facts” – that someone who understands reality through the lens of email subscriptions vs. bloggers vs. Fox News vs. NPR vs. MSNBC vs. print media is going to have a wholly unique filtered set of data upon which to make decisions… and still be overwhelmed by the sheer amount of it.

But the bigger question that historians will address is whether a critical mass of human civilization recognized during a time of international economic and political turmoil that the path they had been leading for centuries was not sustainable and did not make logical sense at a gut, instinctual level… and whether that critical mass acted upon it and fixed it before it was too late.

The answer will inevitably also involve a discussion of the evolution of political philosophies: individual freedom and the interests of the individual vs. accountability to the community. This complex topic is such a flashpoint today that it is hard to have a discussion about it without emotions flaring. An American ex-patriot in Europe told me recently that it appeared from afar that America was having some sort of nervous breakdown. There is a need, however, to really look hard at the issues involved and figure something out that balances and protects both important interests. It could start with a discussion of what constitutes harming or helping your neighbor. I’m not advocating one political philosophy or another. In fact, I’ve considered starting the Competence Party. Its motto would be “Let’s just get something done… and do it well.”

How will historians end the story of the Age of Choice? As we look around us, now is the time to decide.

(C) 2010 by Mick Dalrymple

Brain Gymnastics for Sustainability, Lesson 7: Language Matters (Part I)

•September 2, 2010 • 1 Comment

How many times have we heard phrases along the lines of:

Charts, charts, charts
-“Consumer confidence showing signs of recovery”
-“We need to balance economic development with environmental protection.”

-“The Consumer Price Index rose 0.2% while the Producer Price Index was down 0.3% due to a drop in core energy prices.”
-“This design will have the least impact on the site.”
-“Until consumers feel secure and begin spending again, consumption will remain flat and the economy will be struck in neutral.”
-“How can we continue development while minimizing the effects on habitat and infrastructure?”
-“GDP numbers from the Commerce Department showed anemic 1% annual growth.”

Words Carry Meaning

Words Carry Meaning

Words carry meaning. Let’s take a look at a few of the ones from above:
“Consumer” and “Consumption”: I cannot pinpoint the year in my lifetime that the media and politicians started referring to Americans overwhelmingly as “consumers” rather than “citizens”, but the implications are telling. Firstly, it is an assertion or an acknowledgement that capitalism has superseded democracy as our primary defining characteristic as a nation. Secondly, it gives a connotation that Americans are a black hole or the “grave” in the “cradle to grave” process: That somehow our highest utility is at the end of a production cycle in consuming end products with no output other than generating waste.

Flowers from Rocks
We can’t achieve sustainability if we see and label ourselves as end consumers in a linear process. I would argue, instead, that people need to be “participants” or “producers” in a perpetual, cyclical process of transforming resources for productive good. If our products (and services) are to be remade into the framework of “Cradle to Cradle” as McDonough and Braumgart would have it, then people become agents of resource “throughput” to care for their needs and provide for the needs of the next agents in the process (whether it be birds, microbes, trees, manufacturers or neighbors).
This isn’t hard to conceive of in practical, everyday terms. Do we “consume” personal computers or are they a tool with which we generate productive outcomes? When we buy a shovel to work a garden or a wrench to fix a bicycle or a PDA for work purposes, we are acting as “Producers”, not “Consumers”. It is too bad that the “Producer’s Price Index” is already taken. Still, it would influence our self-perception if the “Consumer Price Index” was renamed to something even benign such as the “Participant’s Price Index”, indicating that we are valuable participants in a continuous flow of productivity. “Citizen’s Price Index” seems more empowering, but it’s maybe too early to further confuse democratic rights and responsibilities with economic actions (For more on the truth that every purchase transaction in our lives is a vote for someone and their policies and values, see “Bringing America Back”.).

It is a given that many if not most of our personal purchases are more consumptive in nature than productive, and that needs to change. But if we change our language, it facilitates a different view on our purchases. If we see ourselves as producers or participants, we might actually think a bit more before making that $0.99 Store purchase of cheap, non-durable kitchen utensil or leaded plastic kids jewelry for the next birthday party. We might think more about buying more organic fruit and composting the leftover skins to enrich soil organisms and the productivity of our landscaping.

Fresh Roasted Coffee

One Stop on the Resource Flow Cycle


Achieving sustainability requires tremendous effort and change on many fronts, from what we value to what we produce, to how we design and produce it, to how we utilize it and where it goes. And it also involves how we label ourselves and the perceptions that promotes. Let’s start finding substitutes for “consumer” and “consumption” to describe ourselves and our purpose in the economic system.

More next time on “Balance”, “Less Harm”, “Lower Impact”, “GDP” as our measure of self-worth and well-being, and the better idea that we can “Align” the three legs of the sustainability stool to generate regenerative good that exceeds the sum of the inputs.

Bringing America Back

•April 19, 2010 • 2 Comments

I experienced something unsettling a few weeks ago that still churns in my mind. It occurred as the Thunderbird School of Global Management held a homecoming dinner in the beautiful outdoor evening air that defines the Phoenix area this time of year. The African drumming and dancing in the background was as wonderful as the Ethiopian and Indian food served by student club members.

Thunderbird is recognized consistently as the best international business management school in the U.S. and one of the best in the world. Its students come from around the world and its alumni spread similarly, like seeds in the wind… which defined the impact of what happened.

At a table of world-travelers, the conversation evolved from interesting travel tales to the current economic woes and hostile political conditions here at home (eg: reloading guns and almost absolute gridlock in Washington). I brought up the question as to whether the U.S. was in a decline as the dominant economic and political force in the world. It was half intended to get feedback and half intended to fire people up to get our act together. But instead of debate or angry response, the response was… acceptance. Matter of fact resignation, with a hint of sorrow, … almost like I was reporting on an old news story that had already passed through the dinner table conversations around the world.

TBirds come from, are exposed to, and are reinforced through their education to be open-minded and to adapt to new, many times unusual, and sometimes unsettling conditions. The alumni at the table seemed to have each already come to their own conclusion from what they had seen at home and abroad that our star as a nation had peaked. One conveyed that on a recent trip to China, her Chinese host demanded two nights in a row to pick up the tab for dinner, stating “You don’t have any money. We have all your money.” Years earlier, she had been advised by a Brit that she should enjoy America’s time in the sun while it lasted. If America really is soon to be dethroned as the world leader, it will have been a brief run compared to the era of British domination and this Brit understood what it was like to be living in a former world leader whose glory days were fond memories.

So what is the problem?! I am not ready to throw in the towel! My experience abroad is peppered with memories of foreigners enamored with America as sort of a young, unruly star athlete; exhibiting extreme creativity and an ability to break both molds and the choking stagnation in other societies structured around class and birthright, all at the same time being loud, wasteful and misbehaved. Are we now drowning in our own self-indulgence? Has the keg party led to alcohol poisoning?

My belief is that our largest problem is that the critical mass of our society at some point made a generational shift away from  leading lives centered around being productive members of society to leading lives dominated by the pursuit of money… immediate money. The majority motivation is now weighted on instant gratification without contemplation of the medium and long term consequences of our actions. We have been stuck in adolescent development: perceiving ourselves invincible and thinking of ourselves rather than others or even, heaven forbid, our connection to a larger society and natural ecosystem. With the Great Recession, we have just experienced our first major car accident since getting our license, and it has temporarily (or, hopefully, permanently) jarred our perception of invincibility.

I can still hear my mother’s voice when she thought her kids were being lazy: “Why don’t you make yourself useful?” And my father lecturing me for two hours in my bedroom on how difficult it is to know who is in the wrong when one or both parties are not telling the truth and that, therefore, punishment goes to all. It sure rings familiar in thinking about a financial industry in which “liar loans” was an accepted industry term.

How can we keep our nation from sliding into the land of has-been world powers? Our society is built on complex webs of local, regional, national and international economic, political, environmental and social systems, many of which need repair. Fundamentally, however, everything comes down to our individual actions and interactions. So, even the changes in macro structures come from humans interacting with each other. As an individual, I cannot change the entire system. But the system cannot change if we, as individuals, don’t change.

I would suggest changing what we can in our individual relationships and through what we do control with both our wallet (through our daily purchasing decisions) and our jobs. I suggest the following considerations whenever making a decision about a course of action at home, with friends, at the store, and in our work:

1)      Will my grandchildren be proud of what I am about to do?

2)      Would my parents and ancestors approve?

3)      Is the world going to be a better place with this action?

4)      Does this action benefit me by causing harm or perpetuating harm to someone else or the planet?

The answers are not always clear cut but many times, we simply don’t even take the time to get information, or we simply ignore it. How many more people in Juarez, Mexico need to die by gun massacre because someone in the U.S. wants to party with pot or cocaine? Or something seemingly much more benign: the $0.99 kids plastic jewelry pack that we grab as a party favor for our kid’s birthday party attendees. Does it contain lead? Was child labor or slave labor involved in making it? How much pollution was emitted by the dirty diesel ship that carried it halfway across the planet? Who’s ending up with my money and what are they going to do with it? Is this going to end up in a landfill tomorrow, like its packaging? Is the shopping bag going to end up in the Great Pacific Garbage Patch?

Many more decisions are clearer and more obvious and simply involve listening to our own conscience and also voting responsibly with our wallets. We need quite a few system fixes but we can do a lot to bring back our country’s strength and leadership by respecting each other, being honest with each other and “making ourselves useful”.

After a.k.a. Green: A Look Back and Forward at the Green Building Products Industry

•February 26, 2010 • 2 Comments

After 4-1/2 years of tackling head-on the significant challenge of creating a successful pure-play green building products retail showroom in central Arizona, we closed a.k.a. Green’s doors in December of last year. Many people asked “why?” as we served as an anchor of the green building community in the Phoenix area and our reputation extended well beyond the Valley of the Sun. At the request of Green Building Product Dealer News and others, here are the primary reasons that went into that difficult decision. Some may not be what other dealers want to hear, but we hope that ideas herein can help strengthen those important and dedicated businesses:

a.k.a. Green Storefront

1)      The Economy. Operating a primarily retail products business in the development-addicted Phoenix market during the worst recession since the depression was about as easy as surfing on gravel. The December, 2009 news that Arizona’s economy was in worse immediate shape than Michigan’s did not come as a surprise to us. We saw a boost in business when the new home construction market collapsed as people who planned to flip their homes turned instead to remodeling as they realized they wouldn’t be selling for awhile. But then our sales fell off a cliff to the tune of 70% virtually overnight when the financial meltdown occurred. Home equity lines were yanked as home values plummeted, taking remodeling plans with them. Also, no job = no income = no home improvement. Our pool of contacts and friends here are skewed toward those in the development industry (the industry hardest hit), but easily half of them are either out of work or severely underemployed. It’s ironic that we have spoken out about the Valley’s unsustainable dependence on attracting new people here and then putting them to work building more resorts, buildings, and homes in order to attract more people here. The system actually did collapse as we predicted, but very suddenly, and much more severely than we anticipated. We couldn’t insulate ourselves.

2)      Medium-term prospects: Living on the edge of writing checks into your business every month is precarious enough. In evaluating options, we didn’t expect the Phoenix building market to recover to reasonable levels for at least two years. It continues to be hard to predict. And at the end of the tunnel? Without any comprehensive standards for green products, in two years everyone will be carrying “green products”. In fact, our original goal of making green products available to the mainstream public will have been fulfilled… at least in the pronouncements of marketing departments. So, why live with no income and on the edge of significant debt for years only to have to split the potential rewards with every goliath chain retailer and others?

3)      Suppliers: For years, we learned the hard way about manufacturers/suppliers who didn’t have their act together, didn’t stand behind their product, didn’t honor exclusivity promises, or who took us out at the knees by selling directly to our customers (often at prices equal to our cost). This is not to disparage the great suppliers with great product and supply chains. It was discouraging to work extremely hard to build awareness of a manufacturer’s products in a market devoid of their presence, and to not get the sale… or to have the manufacturer then make a deal with a distributor to siphon off the commercial projects, leaving us with retail crumbs and shrinking margins  with another middleman. Yes, we were naïve, and it took us quite awhile to get our own operations running smoothly. But the hardest part was when the economy got rough for everyone and some of our most trusted manufacturers resorted to selling direct, even to consumers, in order to survive. They cut off their limbs to try to save their torso. So now we are gone but I assume they figure that new retailers will emerge when the market recovers, if they can only make it through until then.

4)      Internet Retailers: During the last year, we really started to see the impact of out-of-state internet retailers cutting into our sales. Surprisingly, some of their retail pricing was below our cost. Tell me how that is possible, given none of them can be doing the kind of volume that would warrant those kind of manufacturer discounts. The kicker was when they seemed to actually be encouraging customers to continue to utilize our showroom and staff to pick styles and colors and even elicit our installer list. With their additional advantage of not having to charge sales tax, we could never match their pricing. I actually wonder about the longevity of the traditional retail business model, as these issues go way beyond our own industry. “Customer service is the key,” some might say. I have to chuckle because, although there is some validity to that, we actually had customers come in and want us to solve their warranty issues with a manufacturer for product that they bought online from an Internet retailer. The American consumer mentality of lowest first-cost and always looking for “the deal” is so pervasive that selling on quality of service is a more and more difficult challenge, particularly in a large, nomadic urban area. My partner, Jeff Frost, has talked extensively about the hidden costs of a discount economy in his series “The False Perception” on our blog.

Green Drinks @ a.k.a. Green

Green Drinks @ a.k.a. Green

5)      Business Model: Our revenue streams did not align with our activities or our real interests. We are change agentsand cause-driven advocates who were subsidizing our real interests through retail sales. We started and managed Green Drinks locally until it became so successful and time consuming that we decided to turn it over to the Green Chamber. We are national leaders in the USGBC and the American Green Chamber and we had a full-time marketing person whose assigned efforts for local not-for-profits took half her work schedule. We took on entrenched interests whose practices block market transformation. We hosted innumerable student tours and made countless presentations to community groups. None of that had revenue tied to it. And we were doing free marketing of products for others to get the sale. We even won a prestigious local award for community education, hitting something like 200 architecture and design firms in our first year. We are educators and we should have had our model reflect that. By the time we really figured that out, we did not have the resources to make the switch in the showroom and we knew that manufacturers would not have the marketing resources to back it up for some time.

6)      Customer Base: It doesn’t work economically to spend hours educating a customer on something new and foreign to them, developing a customer relationship for a high-involvement purpose just for the one-off sale that may be thwarted by their contractor. How many times is the same retail customer going to buy flooring? You can justify some of that time investment in that a good customer experience will result in referral business. But the equation still doesn’t add up. Luckily, in the last year, more customers started coming in with some prior research and knowledge about green products. Still, we should have focused a much more concentrated effort earlier on developing the trades base. Trades Believers = Repeat sales. Unfortunately, in the beginning, the trades and builders weren’t interested because their customers weren’t asking for it and they were making money hand-over-fist with their traditional methods. So, we had to create the end-consumer demand first. But somewhere in there we should have shifted to a trades focus earlier. This is, of course, a local-market based timing decision.

7)      The Information Age: We have come to expect that information is abundant and free. Most customers do not understand the costs of both knowledge creation and information exchange. It is expected that brick and mortar retailers provide expert advice, but a sense of reciprocity that the retailer deserves the sale to pay for that advice is very rare. It is the 45-minute interaction that is the killer. Too short to charge for but it chisels away significantly at payroll and through the other work that doesn’t get done. We adapted to this by providing fee-based educational seminars. This was successful until the financial meltdown, when consumers started viewing almost everything as discretionary spending. If we offered a seminar for free, it was packed. If we charged, we couldn’t get enough sign-ups anymore to make it worth pursuing. One key to educational seminars (besides quality and objectivity) is offering CEU’s or tying it to a certification.

8)      Big Box Retailers and Discounters: Greater Phoenix is the land of Home Depots. Everywhere. Lowes has come into the market significantly, but everything is measured against Home Depot pricing. That is the reality against which we always had to make our case. Throw in some discount “wholesalers” selling products like engineered bamboo that fails in a hot, dry climate and suddenly we have to defend products (solid bamboo, in this case), as well.

The Future:

Our industry has been in rapid transformation for at least four years. That will continue, possibly even faster. I believe there are a few key strategy topics that need to go into any green building retailer pure-play planning, many of which are the same as described in our original business plan:

1)      Consolidation: Either in the form of a roll-up or a co-op, retailers need to consolidate to gain critical mass in purchasing, the balance of power between suppliers and retailers, research, industry voice, and marketing.

2)      Green Product Retailers Association: Yes, we got burned in Chicago in 2007 by one of the participants in our organizing session and everyone involved became gun-shy. However, this would have similar benefits to #1, above.

Stairs to Green's Future3)      Green Product Standards: a.k.a. Green has been pushing this since Day 1. The issue is complex and expensive, but the fastest first step would be for the FTC to update its Green Guides as to allowed and disallowed advertising methods… and enforce them rigorously. The rest needs to be sorted out by a consensus body (EPD’s vs. certification, thresholds vs. ratings, industry-specific vs. across-the-board, etc), but the independent retailers need to be at the table.

4)      Retail model: With information and product flowing freely across state lines and throughout the supply chain, aided by efficient shipping companies and a lack of inter-state sales tax, it might be time to re-think the brick and mortar model. We have ideas on a model that plays to these now-present market characteristics but will save them for another time.

5)      Green Mainstreaming: If we are truly successful, “true green products” will be synonymous with “products”. So what will be the differentiation for a green products retailer? There are various market-positioning answers to that question.

6)      Energy: The national focus from the feds down is going to be energy efficiency and renewables for some time. How can you leverage that without giving up your roots in indoor air quality, toxicity and natural resource depletion?

Path ForwardFor Jeff and myself, the closing of a.k.a. Green has led to much more work through a.k.a. Green Services, as clients and manufacturers now perceive we actually have time to devote to their consulting, design or certification projects. Our second online seminar, this one aimed at the general public, has launched through a new partnership with Rio Salado College. Hosting Greenbuild in Phoenix last year and closing the showroom also caused several projects to be pushed. We are just now starting to wrap those up, assess lessons learned from a.k.a. Green and contemplate our next long-term steps. And we look with admiration at those pure-play retailers who, either by choosing slightly better markets or by playing their cards smarter, continue to stick to their sustainability values in this difficult economic time. With the planet on a climate change ticking clock, rest assured you won’t be seeing “Mick and Jeff’s Hopped Up Hummer Shop” anytime soon but, rather, something that continues to help further the mission of healthier people and a sustainable planet.

The False Perception (part three) – Buying Online

•November 3, 2009 • 1 Comment

So far we have covered the false perceptions of value and externalities.  The third, buying online, is an extension of both of these concepts into a reality that leave very few local GCH_largecompanies unscathed.  We all have done it.  We all have researched and found a product at a store, be it shoes, books or furniture, and rather than buy the product, we go home and “Google-it” to see if we can find a cheaper price.  Now of course the pricing fluctuations can be enormous but, in most cases it is marginal.  Usually less than 10%.  I can give an example.  I am in the market for new hiking shoes.  I really like Merrell shoes for performance on the trail but they are expensive… often $110 a pair.  So, to ‘check’ pricing online, I did some research to see if I could find a cheaper price.  What I found was that Amazon sells them for $101 with free ‘SuperSaver” shipping.  Theoretically saving me $9.  But as we learned in our last two parts… at what cost?

Lets start with the obvious… Free Shipping!  One thing you learn after being in the retail world for any given time, is that there is no such thing as free shipping.  The costs are buried in the price of the product and unless you are large giant like Amazon, it is very rare to get huge discounts on shipping from most carriers.  In addition, it would be shipping one item to my house, wasting additional packaging (box, bubble wrap, paper, tape), fuel necessary to drive it to my house, and additional man hours to deliver.

The next less obvious point is that the money you spend in your community, stays in your community.  According to Local First Arizona, for every dollar spent locally, 45 cents is recirculated in your community.  It is payroll for employees and tax dollars for city and state governments, which goes to public services like police, fire, schools, water, sewer, trash services, etc…  Now in this case, Merrell is not an Arizona company but, if I purchased the shoes from a local shoe reseller, then the money I spend still has benefits here.  If I purchase them from a national chain, like REI, then only 13 cents of my purchase stays here.  That’s because the money goes to REI’s headquarters and supports their local tax base.  Now here is where it gets even worse.  If I were to order those same shoes from Zappo’s, a large online retailer of shoes, then zero of my money stays here in our local community.  I might as well just move to where Zappo’s is headquartered, because I am supporting their local tax base and supplementing their services.

So what happens when you purchase products online (when they are available locally) is deprive your community of desperately needed tax dollars, deprive local business of sales that they need to sustain themselves, which in turn, deprives our community of good quality paying jobs, which keeps more people from earning money to make more local purchases, which leaves our government looking around for donations (usually from our education funds) to keep our local economy afloat.

Local First ArizonaIn this digital age, it is almost too easy/convenient to shop online for our products.  We tend to forget that those decisions have repercussions often larger than the money we saved.  So next time you start to push the “Submit” button on your next online purchase, spend a minute to think about how that decision will impact a local business.  One that is tied to your community, provides jobs and benefits to your community, gives back to your community and usually never asks for a bailout as thanks.

In addition you should plan to attend Local First Arizona’s 5th Annual Certified Local Fall Festival this Saturday from 10am to 4pm at Duck and Decanter at 16th street and Camelback (thank you Kimber). You should also check out The 3/50 Project for more information on buying local.

The False Perception (part two) – Externalities

•October 14, 2009 • 5 Comments

…continued from The False Perception (part one) – Value.

Why Good Paint Costs More...When we started a.k.a. Green, I never thought that we would compete with big box retailers and, as it turns out…we don’t.  We primarily compete with our society’s acceptance of cheap products that are designed to be expendable and are manufactured with many hidden ‘costs’.  A perfect example of these hidden costs is prevalent in the paint industry.  When we first opened a.k.a. Green, one of our paint manufacturers had two versions of the same product – a general line and a ‘PRO’ line.  The pro line was about $8 less per gallon, but both were Zero-VOC, No HAP’s and No exempt solvents.  We smelled a fish.  So we set out to understand why a company would make two products of ‘equal’ quality when they could just make one at a price somewhere in the middle.  Why have a more expensive line?  They told us that the ‘PRO’ line was manufactured with cheaper ingredients, and actually didn’t perform to the same level as their other line.  It had less scrub resistance, less coverage/hide and didn’t level out as well as their general line, but it was cheaper…and that appealed to contractors.  This, we have seen, is a common practice in the paint industry.  Manufacturers need to entice contractors/homeowners with cheaper prices, but to make it work for them financially they have to cut corners and cheapen the product.  In the end, you, the consumer, gets a product made with cheaper ingredients (read: usually more hazardous – thus the formaldehyde issue), at the expense of quality, performance, durability and, while less appreciated…your health.

This practice extends to just about every product we buy.  An example comes from a friend who wished to purchase a lunch box.  She searched many stores in her effort to find this particular lunch box, but ultimately found it at Wal-mart – for 50 cents.  She inquired with a sales associate about the cost and its ability to stand up to usage over time.  The associate said “what difference does it make?  If it breaks, just buy another one.”  Without batting an eye. Want more examples?

We call it ‘The story of a rock.’  There is company here in Arizona which makes products from stone.  They carve giant chunks of stone out of a local quarry and load them into a container.  This container is sent via truck to Los Angeles where it is taken from the truck and loaded onto a shipping vessel.  The ship travels to China, where it is unloaded from the vessel and put back onto a truck.  The truck is taken inland and the container is unloaded at a factory which makes the finished stone products.  The finished products are loaded back into a container, back onto a truck, back to the shipping port, back onto the boat, back across the Pacific to Los Angeles, unloaded, put back on a truck, shipped back to Arizona and unloaded at the factory ready to be shipped to places of sale across the region.  (Deep Breath)  This rock travels halfway around the world and back in spite of the fact that there is a finishing plant with the same capabilities just 30 miles from the mine.  But hey don’t send the rock there because it is Cheaper to send it to China.  Not just cheaper… CHEAPER BY FAR!!!  How can this be?  There are many reasons; Chinese subsidies, US subsidies and tax incentives, subsidized fossil-fuel energy, social inequity, cheap labor, poor living standards, lax environmental protections, free polluting, etc…  And we don’t even bother to think that we pay for these costs.

Cut down the Tree? Sure, No Problem.

Cut down the Tree? Sure, No Problem.

So do you know all the ‘expenses’ associated with your purchasing decisions?  What is the ‘cost’ of our addiction to cheap products? We refer to these expenses/costs as Externalities. These are costs that we ‘pay for’ but that are not reflected in the price of the products we purchase. They are pushed off onto the larger society. In business terms, these are costs that occur but don’t show up on a Profit and Loss spreadsheet or in returns to shareholders.  We pay for these costs in tax incentives, government subsidies, environmental damage and occasional cleanup (eg: Superfund), air quality, water quality, lost species, soil erosion, climate change, military engagements, foreign aid, healthcare costs… and government bailouts.  These are the hidden costs of our addiction to cheap products.  Want another example?

Let’s take a look at gasoline.  Right now, we pay about $2.78 per gallon of gas at the pump.  The key is the phrase “at the pump.”  According to Lester Brown, in his (free) book Plan B 3.0 (now available in 4.0), the actual cost of a gallon of gas if you count all the externalities is close to $14.78 per gallon.  Oh, and you pay that… just not ‘at the pump’.  You pay it in the form of taxes which go to oil companies in the form of subsidies and taxes breaks.  As a matter of fact according to experts, the US pays the equivalent to a TARP bailout every year to the oil industry to further our addiction.  That is over $700 billion each year!  That’s $2300 per person per year in taxes that are extended to feed our addiction to gasoline.

So, our big lesson… Currently, there is little room left in the world for quality products.  People want them cheap, and the overwhelming majority are not aware of (and some simply don’t care about) the ‘cost’ that choice brings.  The big question… Can we overcome this tendency before it costs us Social degradation and Ecosystem destruction?

The False Perception (part one) – Value

•October 13, 2009 • Leave a Comment

Cheap

Recently, I picked up Cheap: The High Cost of Discount Culture by Ellen Ruppel Shell.  This insightful and well written book is a must read and an eye-opening exploration of our addiction to cheap goods.  Naturally it got me thinking about a.k.a. green and our marketplace locally.

Approaching 5 years in business now, we have had plenty of time to reflect on our journey.  When we started a.k.a. Green, we were beginning to hear snippets of a green dialogue popping up locally and nationally.  Before “green jobs”, before the focus on energy efficiency, before Vanity Fair’s Green issue.  No mainstream attention, yet.  We felt and continue to feel our timing was spot on.  At the same time, we underestimated location.  In our zest for positive change, we were a bit optimistic about the momentum that would be required to overcome the challenges that existed (and still exist) in our marketplace…

 

  • a State Legislature that doesn’t accept the science behind Climate Change nor recognizes human contributions to it,
  • a Home Builders Association that sees green building as a threat, and lobbies for legislation to prevent the adoption of green building codes or programs (even its own program – the NAHB National Green Building Program),
  • a Home Depot’s or Lowe’s on every corner (like Starbucks or Walgreens) – something fairly unique to our city,
  • a fast-paced housing market that bred ‘contractors’ as kings whose main concern was time to market rather than their clients’ quality needs,
  • cheap land, a political climate that worshipped boundless growth, and an economy lethally dependent on attracting people to the Valley and putting them to work building inexpensive homes and amenities to attract more people to the Valley,
  • and a general lack of public dialogue regarding green issues; renewable energy, energy efficiency, public health etc…

This combination of challenges is unique to Phoenix, especially when you compare us to Portland, Seattle, Austin, San Francisco, Chicago, New York, etc… where many of the challenges don’t exist.  Quick and fast has been the story of development here for 40 years; and with it, we have too often sacrificed quality, craftsmanship, durability, planning, education, and just about everything that takes tomorrow into consideration. Tomorrow is here and we are paying for it.

In contrast, however, these challenges are relatively minor compared to the biggest challenge we, as a society, face … that of ‘Value. It used to be, in previous generations, that Value, was a balance of durability and affordability.  People then didn’t buy the cheapest car, they bought the best car that they could afford.  They didn’t buy the cheapest TV, they bought the best TV they could afford.  They knew that the cheap products may not last as long, and they looked at their purchases as long term investments. In fact, cheap products were not really common. How many parents/grandparents still have that huge solid wood furniture TV from the 70/80′s?  Don’t be shy, there is one in every family.  Fish Tank TVYou can look at investments in much the same way.  Previous generations looked at investing over the long term, often looking at returns for when they retired.  Furniture was also passed on from generation to generation because it was built to last forever. Looking back several generations, the mantra has always been Quality over Quantity.  But things have changed.

Now investing is quarter to quarter and if companies don’t produce profits for shareholders in 3 months, they will likely go other places.  This also extends to the products we buy.  Nowadays the idea of passing on furniture is foreign… frankly the Ikea shelf falls apart when you move it, forget about trying to ‘pass it down’.  Today our definition of ‘Value’ is defined by price and price alone.  Our mantra has slowly shifted since our parents’ generation, and has now become Quantity over Quality.  How many times have you heard yourself or someone else say “…its OK, it didn’t cost much, I’ll just buy another one”.  We have all heard it and certainly done it.  What we have become is a society that values cheap at the expense of durability and craftsmanship.  We are an ‘Away’ society, meaning that we just throw it away when it breaks and we accept that it will break because it was… Cheap.

to be continued…

 
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