[The following is an excerpt from Be a Hobbit, Save the Earth]
“‘Are these magic cloaks?’ asked Pippin, looking at them with wonder.
“I do not know what you mean by that,” answered the leader of the Elves. “They are fair garments, and the web is good, for it was made in this land. They are elvish robes certainly, if that is what you mean. Leaf and branch, water and stone: they have the hue and beauty of all these things under the twilight of Lorien that we love; for we put the thought of all that we love into all that we make.” —LOTR: I, Farewell to Lórien
In Be a Hobbit, I railed and bitched a lot about capitalism, in particular, the modern, corporate-consumerist version of that economic system. Personally, I don’t believe capitalism is sustainable for much longer. This is not because it is inherently evil, but because it is built upon a handful of faulty assumptions, chief among them, its dependence upon continued growth–growth that is impossible given the finite resources of our planet. That being said, I am NOT anti-commerce, and I’m definitely not a communist, though I think we could stand for a little more socialism, especially when it comes to certain systems, like health-care and education. But that begs the question of my stance on commerce, and how that fits into my Shireness model. [I’m currently researching to write a book on this new model: a sustainable business model for the future.]
If Shireness isn’t anti-commerce what would a Hobbit business person, or a Shire-minded business look like?
Short answer? A generous one.
How do Hobbit business people build Shire-Minded businesses? Shire-minded businesses produce goods and services that added value to the Shire/community and society at large and make a profit doing it. At the same time, they take care of all of their assets which includes their value-makers: their employee-owners.
They produce things, not just because they can or because they can convince someone else that they need them but because the products fill an actual need. Like the Elves of Lothlórien they put “the thought of all that [they] love into all that [they] make.”
Shire-Minded businesses make the very best product possible. Those products or services are of a quality that the business owners and employees themselves would want in their own houses or feed to their own children, and of such quality that they are proud to put their own name and face on the label. If as a business person, you cannot say these things about what you make or sell or the companies you invest your money in then you should consider changing the way you do business, do something else for a living, or find a better company to back with your money.
Value or Profit? Costs and Assets
The problem with so many capitalist businesses today is that they seem to pursue profit to the exclusion of everything else.
The anonymous shareholder is often blamed for this. They do of course have to shoulder much of it, because the purpose of the corporate structure is to pay dividends to shareholders. But many a decision has been made by CEOs that might not have been approved by a great number of the shareholders had they known or foreseen the consequences.
There seem to be a couple of reasons that modern business have lost the path and strayed into the depths of Mirkwood Forest. One is the conflation of profit with value, and the other is the externalization of costs and the conflation of some investments, with costs.
These days it seems that if you ask a business person what value their company provides they break out an Excel Spreadsheet to show you the bottom line: their profits. The two words have been conflated and they are NOT the same word, nor are they synonyms. Profit is the bottom line. It is what is left over after you take in revenue and subtract all your costs of doing business. It’s what you can reinvest in the business and pay off your shareholders. Value on the other hand, is a measurement of worth. Does a product, or service, provide something valuable to the customer or society at large. This should be true value not perceived value.
One might argue that sugar-covered breakfast cereal provides value to the customer, because they can eat it. True, it does provide a certain number of calories and will in fact fuel the body for a period of time. But are these really valuable calories? Is it truly nutritious? Does the product contain ingredients that are harmful in the short- or long-term to the consumer? If so, then its true value drops considerably. If, however, the product is nutritious, safe, and healthy, then we can say that it has true value. In other words, whether a product has true value has very little to do with whether it will be, or can be, profitable. If we can say that it does indeed provide value, then we need to consider the impact of production on the environment: from the standpoint of the employee’s, the community’s, and the Earth’s health and well-being.
Sustainable Business Model, or Sarumanic Destruction? Externalizing Costs
One reason most modern companies can hold down costs and uphold profits is that they just refuse to count ALL the costs. They externalize them. This is particularly important when it comes to environmental impact. Most modern companies never take into account the impact of their products or services on the physical environment, or on the health and well-being of their employees, or the communities in which they operate. This allows them to cut costs, or as I like to say, cut corners, to keep their prices down. But this is an artificial cost reduction. This is one of the main reasons so many companies relocated to Mexico and to China in the 90s, and early 2000s. Those countries had lower regulations on pollution, wages, working conditions, and waste disposal.
This was the “big sucking sound” that Ross Perot warned us about when four living presidents signed NAFTA. [Note: When four presidents agree on something, run the other way.] Instead of working within the legal parameters in the U.S., many American companies just pulled up stakes and moved so they could create even cheaper products or drive up profit margins. But the true costs of doing business was elevated pollution, slave-wages, sweat shops, and mountains of toxic chemical and plastic wastes dumped in the backyards of China and Mexico and many other places around the world. This is not a sustainable business model. This is Saruman-ic business. It is Shire Scouring business. If we keep this up the entire planet will be ruined in a decade’s time. The newest ‘free trade agreement’, the Trans-Pacific Partnership, is another disasterous agreement that will–if allowed to pass through congress–destroy countless more U.S. jobs, undermine the sovereignty of every government in the agreement, and fuel the destruction of the environment further. It must be stopped.
It’s time to start calculating the true costs of doing business so that we can find ways to produce things more sustainably. The first thing is to ask ourselves if the product we want to make is actually adding value. If so, then is it needed? Then and only then, should we consider making it. Just because we can make something doesn’t mean we should.
Labor: Investment or Cost?
The other problem with modern business is the confusion between investments and costs. So many business people are still arguing that labor is a cost. Yes, labor costs money, but labor is not a cost, it is an investment. You put money into an employee. You spend money training them to do their job efficiently, and they in turn produce products and services that make you profit. Employees are investments. I hesitate to compare people to other types of investments, but it might be instructive to do so.
As business people, we invest money in infrastructure and tools to help us produce goods and services. These tools are an investment, not a cost. They can be used over and over again. Costs are something that you spend money on, and then it is gone. Energy to run our businesses is a cost. Certain materials, chemicals, or other ingredients can be calculated as costs. They are used up and gone. Eventually tools break down, but if we take care of our employees they should not break down. They may retire one day, but they don’t break down. But because we think of them as costs we tend to use them like ingredients, not tools. We burn them up like fossil fuels in our Saruman-ic factories and then just find a new one to take their place. This becomes a cost because the constant retraining of new employees—as long as it’s not seen as an investment—is a drain on a company. What we need is to invest more in the workers we have, and not just in their training but their well-being, as well.
Saruman’s Slaves: the Overwhelmed Modern Worker
A huge problem, especially in the U.S., is the over-working of employees. Workers in every industry are wearing out. The American work ethic is unsustainable. The idea that the worker must sacrifice family, social life, and leisure time for the good of the company is still the paradigm. And it is literally killing the work force. Brigid Schulte, in her book Overwhelmed: Work, Love, and Play When No One Has the Time, points out that the insistence upon face-time at work, the sacrificial work ethic, and set hours instead of productivity is dragging the modern worker into an early grave.
The average health of the American worker is declining every decade. The problem with this work ethic—or one that should matter to business leaders—Schulte points out, is that it has been scientifically demonstrated to be not only destructive—in terms of employee health and well-being—but very inefficient and unproductive. It turns out, go figure, that unhealthy, stressed-out, over-worked employees with broken family relationships and no down-time, or vacation time really suck at doing their jobs. Recent studies show that the average American worker is only productive about 2 to 3 hours per day!
If you think that’s low, a study of Fortune 500 CEOs showed that because of their constantly interrupted schedules they only average about 28 uninterrupted, productive minutes per day! A half an hour! This is not productive, either for the bottom line or for the health of everyone involved. A new way of thinking about work is needed.
Author Daniel Quinn talks about forming Tribal Businesses, or what I’ll call Shire-Owned Businesses. The idea has been around for some time and there are a growing number of them popping up everywhere, but there needs to be many, many more. Shire-Owned Businesses are essentially employee-owned. Every employee has a vote or say in the way the business operates, or at least a share in its profits as well as what ever wages were agreed upon. This way employees have a stake in the success of the company and many times an actual vote when it comes to company policies and direction.
This is how most business should run. Instead, we have share-holder run corporations who hire and fire CEOs to do one thing: maximize profits at the expense of everything else. Employees in this old-school way of thinking are little more than wage-slaves who can be hired and fired (freely in most cases), and have no say in what the company does, or how it is run. The true costs of doing business, the costs to the environment and to society, is of little concern to the shareholders, it seems. As long as the dividends keep rolling in the effects on the future of our planet are inconsequential.
Shire-Owned Businesses oppose such thinking. First and foremost, they should be designed or redesigned with the mission to help clean up the planet and to promote others to join along. And they don’t have to be built from scratch; existing businesses can be transitioned into employee owned companies. They must also be profitable, of course. But there are businesses out there doing this. For more information, read Cat Johnson’s article on “How To Convert a Business into a Worker-owned Cooperative.”
Be creative and use your talents, whatever they are, to create your own business. And don’t forget to ask for help from your neighbors! You live in a Shire remember. Whether you work solo, or build a multi-employee based company make sure that your employees are properly treated. Never forget how it was to be a wage-slave yourself. The last thing we need in the New Shire are slaves. We need empowered individuals who believe in their job and its importance, not only to making a living but to saving the Earth from the force of Saruman-ic corporations and the Dark Lord of Mordor.
If you can create such a job for yourself, and for others, you will dispense with the soul-sucking depression that can set in when you hate what you do for a living. You will then be happier and that means healthier. If you can create a business that also promotes Shireness, a sense of community, then you can be a Hobbit business revolutionary!
The New Model: Hobbit Cooperative Consumption
Not only do we need to rethink the way we run our businesses from a philosophical and organizational point of view. We also need to rethink what we make, how we make it, and how we sell it. Rachel Botsman and Lisa Gansky have identified a couple of related world-wide movements that’ve been going on for sometime that they call Cooperative Consumption and The Mesh. Essentially, what they are talking about is the birth of businesses and sharing platforms designed to better use resources and that break outside of the old formula for business, ‘I-buy-cheap, sell-it-to-you, good-bye-till-next-time,’ mentality.
Instead of focusing on selling cheaply made goods and services with built in obsolescence—with the intent on getting you back into the store as soon as possible to buy another version after throwing out the old one when it breaks—Mesh businesses focus instead on making products that last and that are more sustainable, both in their materials and in their potential to be reused, or recycled, many times by the company itself. This seems to be counter intuitive to making a profit, but in reality it’s not. Instead of trying to sell you a new model every year, or every week, Mesh companies offer service and repair, exchanges, or rentals of products to keep customers coming back.
Botsman’s idea of Cooperative Consumption, is similar to Gansky’s Mesh in that most cooperative consumption companies are created to fill a need for consumers who are selling, renting, or giving away things they already own or providing shared ownership, or rental service for products that haven’t been traditionally offered that way. Botsman points out that shared ownership, or temporary rental of things is really a very old concept. Most of us still think ideas like shared ownership of vehicles as weird, but how many times have we all shared rented beds with strangers? I’m not talking about simultaneously; you can keep that story to yourself. I’m talking about renting a hotel room. And how many of us have rented cars while on vacation or on work trips? So the idea isn’t weird at all. It’s just hasn’t been applied on a large scale to other items that we use occasionally, like tools, toys, our guest room, cookware, party decorations, etc. But some of these businesses already exist, too!
Goodbye Consumerism, Hello Experientialism!
The difference now, is that the newest generation, the Millennials—in part because they are young and adventurous but in large part because they are under-employed and lack the finances to keep up with the Joneses—are latching onto the ideas of shared ownership in new ways and with a new enthusiasm. They are moving away from consumerism and towards what James Wallman calls, Experientialism.
Wallman, in his book Stuffocation: How We’ve Had Enough of Stuff and Why You Need Experience More than Ever, argues that there is a growing movement, and a large one, walking away from the consumerism/materialism model that most of us in the West have been following for the last 80 to 100 years. He points to recent studies that show that only half of us still hold materialistic values, and that two-thirds of us would like to live more simply, with less stuff. If these numbers are correct, and I suspect they are near the mark, it is an encouraging sign.
Wallman says more and more people are opting instead to fill their lives with experiences, instead of more things. What’s funny is that in many ways it is the Greed of the Sarumans of the world that is pushing the rest of us to withdraw from the consumerism model because we can’t afford it any longer. As a result, their Greed is destroying the very system that supplied them with wealth. That’s not to say that we shouldn’t buy things at all. Just that instead of buying lots of low priced, low quality crap, we should purchase better quality things, and less of of them. Also, those items should enhance experiences, like cooking, sports, travel, instead of filling up garages and basements with so-called status symbols. So let’s reject Saruman’s consumerism, and follow Bilbo’s Experientialism.
We’ll return to the idea later, but if you are a business person or dreaming of opening a business, consider this new trend and read Wallman’s book. It would pay to do so because his day job is advising Fortune 500 companies on future trends, and he’s damned good at it. So if he says that the trend is towards Experientialism, and away from consumerism it would be best to give that some thought in your business plans. Plus it’s more Hobbity anyway. At the same time, don’t forget to incorporate the ideas of the Mesh, and Cooperative Consumption.
If you can come up with a product or service that provides, or facilitates experience, is open to the feedback of your customers, offers them ways to share ownership and costs, reduces waste and pollution, and promotes Shireness and community you’re well on your way loads of dragon gold, I suspect. If you can do all that, take care of your labor investments and save your customers money, too? Then you’ll be striking a blow on Saruman’s corporate domination of our political institutions by siphoning money away from greedy, capitalistic businesses who have lost touch with their customers.
From Orc to Dwarf: Striking Saruman from Within the Tower
“Wait a minute!” you say. “I work for a company like that!” “What can I do?” Maybe you’re in the unenviable position of an orc in Isengard, who would rather be a Hobbit, or a Dwarf. What do you do then?
Do you feel like an Orc? Maybe you have become a bit Wraithish working for a Sauron, or Saruman? This is a likely scenario with most people. I’ve been there. I have friends and family stuck in such a predicament. What can we do if the very income we depend upon to feed our families comes from the pocket of Saruman?
Leaving your job might not be an option, at least not yet, but maybe you can leverage your position to the good of Hobbits everywhere? Think about it. How can you make a difference right where you are? If you’re just an employee, like most of us, those changes might be tiny indeed, but never underestimate the tiniest of changes. They are like butterflies flapping their wings that may just cause a tsunami one day, so keep at it.
A friend of mine works for a bank and often feels that his soul is draining away. But the other day he convinced one of his clients not to invest in fracking by telling her how destructive it was to the environment, and that instead she should invest in new green companies. And the client took the advice! Then she proceeded to tell all her friends the same information! So save the Earth, from where you are, first. You can change jobs later if you want.
But what if you are in a position of more influence? What if you’re the boss? What if you are a Saruman or you’re afraid you’re becoming one? Do you already own or run a large business? Are you the heir to one, but are tired of seeing how your family’s business has been run? Are you a stockholder in a large corporation? Are you secretly a Hobbit too? You know what? It’s not too late.
Maybe, instead of becoming an Orc or Wraith, you can be a Gandalf, Legolas, or Gimli!
Think for a moment about your legacy.
Which epitaph would you choose for your grave-stone: “He made lots of money.” or “He saved the Earth”? And don’t think I’m being sarcastic, because for once, I’m not. We’re all going to die. What will be your legacy? Smaug-loads of money? or Saving the Earth? It’s your choice.
If you’re in a position of power you can make sweeping changes to the way things are done by applying your new Hobbit mentality to the business world. Not only can you do immense good at the sweep of a pen but you can also take down the enemies of Earth: your competition, all those other Sarumans who chose the path of Greed!
Contrary to what some think, environmental sustainability, ethics, generosity, and fair-play are not the enemies of profit. In fact, there is growing evidence that they are the new way to ensure it. The current corporate mentality is profit at all costs, even the cost of destroying the business itself, the environment, and the future of the planet. It is an insane mentality. No logical argument can be made for running a business that way. It is purely about Greed driven by the lust for more. Of course, legally, every corporation must seek to maximize profits for their shareholders but destroying the very planet from which the profits are derived is not a sound business strategy in the long-term; it is a short-term murder, not a long-term marriage.
At the root of this insanity is the shareholder. Corporations live to serve their shareholders; it’s the law, actually. In many ways, this is their strength. With ownership spread out among many people, risk is lessened, while capital is maximized. Blame can also be dispersed when things go wrong, as we see many companies attempting to do these days.
“We serve our shareholders! We answer only to them! If there is blame to be had they are to blame, not the board or the CEO!”
How convenient an excuse. What sucks is that the excuse is grounded in an element of truth. Shareholders are the driving force in large corporations. If a CEO attempts to make sweeping changes without the support of her holders, she’s doomed and she’ll be looking for a new job. But what corporations and most stockholders don’t realize or even consider, is that shareholders can also become Hobbits, or at least Gimlis.
How’s THAT for an idea!? If you own stock in a company, are you concerned about the future of our planet? If so, then use your vote and voice to make changes, big changes. You, like company owners and CEOs, have a unique power that can be used for good. Use it, we need you! The Earth needs you! Be Gandalf in the rising sun! Be Bard! Loose your Black Arrow into the belly of Smaug! He will never see it coming! And you will be scoring a win against the corporate corruption of politics, and the destruction of the environment.
Or, you can continue to run your business like Saruman, and be left in the dust-bin of history.