In a world with finite natural resources, in which virtually every economic transaction emits some CO2 into the atmosphere, it’s more important than ever for businesses to be sustainable. Sustainability in this sense means having at worst a net-zero impact on the world, and thus not contributing to the depletion of those resources. Measuring your impact means considering your “externalities” – what economists think of as the side effects of what your business does.
But how does an individual business do that? And is thinking about them as “side effects” even the right approach? This week’s article is all about externalities and how to internalise them.
This week’s article
Economists talk of externalities as something to be dealt with by regulation or taxation. But how can businesses that want to be more sustainable wrest control of theirs – and make sure they’re positive?
This week’s four interesting links
The late Donella Meadows’s book Thinking in Systems first exposed me (and countless others) to the idea of systems thinking.
Here’s a great essay of hers that starts from the question of control:
“For those who stake their identity on the role of omniscient conqueror, the uncertainty exposed by systems thinking is hard to take. If you can’t understand, predict, and control, what is there to do?”
Encouraging us to abandon this desire for control and embrace a lack of it, she suggests that working with complex systems is a form of “dance”, before offering us all a superb dance class:
“I had learned about dancing with great powers from whitewater kayaking, from gardening, from playing music, from skiing. All those endeavors require one to stay wide-awake, pay close attention, participate flat out, and respond to feedback. It had never occurred to me that those same requirements might apply to intellectual work, to management, to government, to getting along with people.”
John Merrick reviews Alberto Prunetti’s new memoir (of sorts), Down and Out in England and Italy:
“Prunetti is no genteel returnee, instead acting as our Virgil leading us, the latter-day Dantes, deep into the recesses of the capitalist inferno. His leaving and returning is not from the solidity of middle-class life to the working-class of old, but rather from one form of manual labor to another. We follow him from the stable, unionized, masculine labor of his father’s generation in the steel mills of that crucible of the Italian workers’ movement, Livorno, into the new world of dreadful temp jobs, deep into the abyss of long hours and poor pay, followed by heavy drinking and a fight on the weekend. The working-class hero, our Virgil tells us, is no longer the celebrated blue-collar worker on the picket line but the tabarded underclass cleaning p*ss and sh*t from the floors of the nation’s toilets or serving up reheated slop to dead-eyed consumers in suburban shopping malls.”
Michael Lorenzos hopefully ends one of the more tedious and intractable debates within marketing: the conflict between brand and performance marketing.
Brand marketers see performance activity as cheap, short-termist and diluting of the brand; performance marketers see brand activity as ineffective, fluffy, and imposing of unnecessary constraints on creative.
Lorenzos argues the sensible middle ground: that the dichotomy is a false one. Brand building helps drive sales and generally makes performance marketing perform better. Performance marketing builds brand associations. He ends with some great advice for both camps, and for the CMOs who are tasked with wrestling them into some kind of cooperation. #
Markus Strasser spent quite a while trying to build a business that extracted knowledge from academic papers: understanding the insights within them, building relationships between them, throwing up new and interesting connections, and generally automating much of the drudge work of sifting through the published knowledge within a given field.
His findings were dispiriting, and his business sadly failed. Part of the problem is that ideas alone don’t tend to lead to innovations; you need teams of people, and much of the knowledge within successful teams is implicit and not expressed in the papers themselves:
“But the complexity threshold kept rising and now we need to grow companies around inventions to actually make them happen… That’s why incumbents increasingly acqui-hire instead of just buying the IP and most successful companies that spin out of labs have someone who did the research as a cofounder. Technological utopians and ideologists like my former self underrate how important context and tacit knowledge is.”
Strasser’s essay is interesting not just as a deep dive into scientific knowledge and its structure, but also as a personal story of the pain of starting a business that turns out not to be viable:
“I’ve been flirting with this entire cluster of ideas including open source web annotation, semantic search and semantic web, public knowledge graphs, nano-publications, knowledge maps, interoperable protocols and structured data, serendipitous discovery apps, knowledge organization, communal sense-making and academic literature/publishing toolchains for a few years on and off… nothing of it will go anywhere.
“Don’t take that as a challenge. Take it as a red flag and run. Run towards better problems.”