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Last year I did something I suspect I will never do again in my life. I took a shower in an aeroplane. It was amazing to step off the plane in London properly scrubbed and ready for action. All on the back of some quality sleep in my bedroom-cubicle type thing with an ensuite bathroom. The plane was an A380 – that massive double decker behemoth that this week ceased production due to lack of demand. I’m kind of sad but not sad. Being on an A380 always felt a bit like being on an ark to me – it was so big you could imagine living on it whilst far below the environmental apocalypse came and went. The plane itself quite possibly would have caused that apocalypse, it is a testament to peak globalisation – carting vast numbers of people across continents whilst burning eye watering amounts of fuel and emitting who knows what into the atmosphere. The A380 is no more because there’s not enough demand and it’s too fuel inefficient. There doesn’t appear to be a second hand market for it either – which goes a long way to explaining its demise after just 14 years compared to the 50-and-still-going-strong that the 747 has clocked up. The A380 is a superjumbo product from a superjumbo business – Airbus. Brought into the world to be as big as it could be, to capture as much share as possible, no matter how adverse the economics of gigantic planes. Airbus is somewhat rare in being a European super company – a mega business created from numerous collaborations in order to be able to compete against other mega businesses, mostly Boeing. It was thought that Europe needed a mega-champion to punch its weight in a world of very big businesses – that to compete effectively in some industries it was important to be really big, even if that meant creating a near-monopoly. This week a similar plan to create a European champion – or Railbus – by merging Siemens and Alstom was nixed by the competition commissioner Margrethe Vestager for the opposite reason. It was more important to avoid the creation of monopolies than to create another mega-business for a mega-world (in this case to go up against the Chinese version). This has not gone down too well in French and German circles, where many subscribed to the view that size really mattered. “If we want to be able to face competition with Chinese giants, we have to gather the European forces,” Bruno Le Maire, the French economy minister, told the FT last year. Monopolies – rarely a good thing Fans of exponential growth such as Peter Thiel like monopolies. To him they’re a good thing – an indication of providing real value. Google is successful and valuable because it’s so big. It’s an example of a good monopoly in that it isn’t a rent seeker. To survive it has to keep innovating. But it’s all too easy for monopolies to be rent seekers. They have a vested interest in incumbency. They don’t have to pay much attention to what customers want (or need) to survive. They can treat suppliers like crap. They have too much power. It’s very hard for them to do good. Which is why in forming the Good Growth approach we are very keen to ensure that monopolies are taken out of the supply chain. When monopolies in the supply chain wield too much power – producers suffer. Monopolies are a by product of this dash for growth that I’ve been banging on about. They are a consequence of the idea that big is beautiful, that growth means ‘get big’. But is it not time to reclaim the word ‘growth’? To recognise that ‘growth’ does not necessarily mean increase in size? That growth can mean increase in value? For everyone….that growth can be good. We think that growth can be pursued in a way which delivers value to everyone, and in so doing creates positive impact for producers. That this can be designed in from the start. A key part of this is to reject the “get big at all costs” approach that results in damaging (and potentially destructive) monopolies, instead to focus on a growth path that delivers impact and commercial value in lockstep: In other words recognise that size – in and of itself – does not necessarily deliver value. And that pursuing a growth path that recognises that value is created by meeting needs – customer needs, producer needs, investor needs. That seems to be what’s happening in the airline industry….smaller, more efficient planes are what’s required, what needed, what’s valued. Ditto in food retailing – about the same time as the A380 was deemed a good idea most supermarkets developed an obsession for big, out of town, boxes. Cavernous warehouses masquerading as shops – now empty mausoleums to the pursuit of scale. Today it will be announced that Honda is going to shut its plant in Swindon. That will cost a lot of jobs of course but indirectly it will wreak havoc on the supply chain that has grown up to serve that plant. Within the Swindon area that Honda plant was pretty much a monopoly as far as those suppliers are concerned — their livelihoods depended on it. Which means their survival depended on it. Structuring supply chains to the benefit of all This asymmetry of power in supply chains is a massive problem. In agriculture especially it causes untold damage – economically, socially, environmentally. Industrialisation and monoculture drive out craft, turn farmers into labourers, and create real risk of poverty. A decision to switch production (say when Kraft/Cadbury swapped out the chocolate producers for Green and Blacks) can devastate a community. When we set out to design a better approach to growth, one that hard wired ‘doing good’ into the business, we realised that to succeed we had to address both how investment worked, and how supply chains were structured and valued within the business model. Treating supply chains as a cost to be managed creates the monopolies that lead to social and environmental ills at the producer end. Which is why the Good Growth approach adopts supply chain structuring as one of the five key pillars of how we work. Business can (and should) be designed in away that treats the supply chain as a source of value – economic, brand, impact value. More on the others soon. For more thoughts on Good Growth head over here. #goodgrowth #airbus #honda #peterthiel #railbus #swindon #380

Is ‘growth’ always a good thing? I’ve been in ‘growth’ my entire working life. It’s been the goal of (just about) every organisation I’ve worked at or advised. They’ve all wanted to grow: grab more market share; break into a new category; drive up margins; scale new propositions; hire more staff; have a bigger footprint etc. When I first arrived at VW the brand had been on a 7 or 8 year run of growth in a rising market (which came to a shuddering halt pretty much the same day I started). ‘Growth’ was expected. Every forecast, every plan, every budget was predicated on the idea that growth would continue. So when it didn’t, a lot of things went wrong very quickly. The experience of ‘not growing’ was shattering to an organisation that knew only growth. That combined with a rapidly shrinking market caused a world of pain – a whole industry producing too many cars chasing too few customers, but unable to countenance the idea of shutting factories. The next 3 years was spent on a quest to recapture the magic growth formula – to get back to that (much more comforting) position of continuous growth. The business, and everyone leading it, was programmed to seek and expect growth. (I once got into a heap of trouble for suggesting that a particularly unloved product had reached its ‘natural’ level of sales and that expecting it to find more customers would be counterproductive. That kind of chatter is heresy in an organisation wired for continuous growth – I was put on triple rations of kool-aid until I’d recovered my senses). Since VW I’ve been struck by how deeply the pursuit of growth pervades every business. I’ve only ever had one client that was seeking to become smaller – and that was because they’d been compelled to by regulators and the state after a gigantic screw up that we’re all still paying for. It absolutely was not what they wanted. They found the whole process of shrinking deeply humiliating. Another client had set themselves the target of being the biggest in their category worldwide – the biggest by revenues, by market share, by margins, by staff, by every metric you can imagine. And they got there – they ticked every box, they climbed all those mountains. But there was no jubilation – being the biggest, even though they’d longed for it for so long, was curiously unfulfilling. It just brought a whole set of new anxieties about staying the biggest and a sense that somehow they had missed the point. Burns up natural capital Conventional growth causes untold damage In a world of finite resources growth models that deplete those resources extract a cost that will be felt for generations to come. Nowadays business is getting better at recycling but the waste is still pretty appalling. Taiwan manages to recycle 77% of industrial waste – the US only 44% (household waste is even worse in the US at a mere 26%). That’s a lot of waste being generated by business. Not to mention the waste generated from a use-and-dispose consumption model that assumes obsolescence in products. Cars, computers, phones, fridges, TVs – all these items are expected to wear out, are designed to be worth less every day. The business models of selling something means you only earn from selling more of that thing. You want people to need a new one (and by implication dispose of the old one). The traditional car industry earns not a lot from older cars as they seep out of the franchise service network. In fact car makers capture only a fraction of the lifetime value of a car. Which is why mobility and -as-a-service business models are exciting, as they realign incentives away from flogging new stuff to keeping existing products going. Burns up human capital But it’s not just environmental damage that raises questions over growth. Over recent times I’ve come to question whether size – being big – is in itself a good thing. Now there is no question that big organisations can be a powerful force for good. In a world where many challenges are transnational, big business has an advantage in mobilising across borders. When a global business is clear on its purpose it can – if it really wants to – do amazing and positive things. There are numerous examples of this from unexpected quarters – some of the work GSK did in Africa with rural pharmacies, PwC’s work to strengthen tax systems in emerging markets, L&G’s investments in housing solutions for the future. But so few do. It’s hard. And the need for the big machine to be kept going almost always blows these good intentions out of the water. I’m convinced of two things. Firstly that small, radical, agile businesses can have enormous beneficial impact on the world, that being big is not a prerequisite for impact. Secondly that the process of scaling, the process of growth, is in itself a problem. Something happens during the scaling/growth process that comes at a considerable cost – to impact, to returns, to purpose, but most of all to humans. I’ve lost count of the big organisations I’ve worked with whose “big purpose” intentions got sidelined by short term pressures. Some of this is down to baked in expectations around investment – all the discussion is around how big you can get and how fast, not how much growth is right. Investment models encourage unbridled growth – but recently I’ve met more and more investors that question the consequences. Some will express regret that the thing they loved in the pitch – the ethos, the culture, the belief, the principles – somehow got diluted during the growth process. Brand practitioners have long tried to counteract this dilution of ethos/values by codifying in some way the ‘culture’ – creating various tools to help attract the right kind of people in the first place, and then to ‘align’ them to the organisation’s values. It rarely works – the culture of a business inevitably changes as it grows. That “we can change the world” pioneering spirit is hard to preserve as you move out of the attic and up into some swanky offices in glass and metal land. Many years ago I went to Silicon Valley just after the dot-com bubble burst with Leaders Quest. Some of the most forward thinking people there – who had time and reason to get philosophical about this stuff – were coming to the conclusion that there was a limit to the size at which an organisation could continue to act in a human way, that beyond around 30 people it became industrialised, codified, process-driven. More machine-like than biological. This mechanisation doesn’t just make it harder for organisations to retain their human characteristics but also can create real harm by industrialising processes that would be better off staying at human scale. Take food for instance – we’ve seen some tragic consequences of complex food chains recently. The horsemeat scandal, and most recently the death of a Pret customer near here in Bath. The latest Pret death is entirely down to stupidly long and complicated food chains – the sandwich contained a supposedly dairy free yogurt which wasn’t. The yogurt was labelled dairy free. The yogurt supplier blames someone further down the chain – etc. Getting at the truth of what’s actually in your sandwich is nigh on impossible given the multiple links in the food chain. The tragedy for the Pret brand is that they are supposedly prepping their food on site – in other words the distance between consumer and the people making the food is short – but their underlying supply chain leaves them just as vulnerable to this kind of contamination as any other food chain. But there may just be a better growth model Over the next 18 months or so we will be developing a “good growth” model, for real, with a handful of small businesses with great potential, combining investment, brand development, organisation design and supply chain development. We believe that it is possible to design a business that does good things for people and the environment, that is good for all stakeholders including investors, and which grows in a way that preserves the human scale. So the three principles thus far are: social and environmental benefits hard-wired into the business model multiple stakeholder value (staff, investors, customers, society, environment, supply chain) also hard-wired into organisation design growth achieved through replication not scaling – human sized units that share some common resources It will evolve, and we will learn. When we have some new insights they will appear here. More later. #industrialwaste #goodgrowth #circulareconomy #volkswagen #purpose #pret #leadersquest #gsk

Many brands are being dishonest when it comes to doing good. Time to call them out. There's a spectrum - hiding bad ingredients on labels, omitting or obfuscating, meaningless self-certification schemes, claimed sainthood. A plethora of ethical consumption apps threaten to make it worse. What's in your cornflakes? I have a confession to make. I don't read labels. I've never read labels. Somehow I've just assumed that I knew what was in the product, or how it was made. Which puts me to shame because it turns out I'm not omniscient after all. We've - better late than never - embarked on a quest to rid palm oil from our lives. Palm oil is bad for a whole host of reasons - rainforests, Orangutans, health. And it's everywhere - it's wormed its way into our foodstuffs over decades - getting rid of it is no small task. Which is where the labels come in. It should be easy to spot what's got palm oil in and what hasn't. But it's not. Some products list it as an ingredient - Nutella (main ingredients: sugar, palm oil....somewhere down the list 'nuts') - others do not. Some of the naughty people are using 'alternative' names such as the innocent sounding "vegetable oil" or the not-at-all encouraging "sodium kernelate". Rootling out palm oil has become an obsession - and I'm flabbergasted by how very hard it is. To help me I've got the Giki app and subscribed to Ethical Consumer, but so far all they have done is to reinforce how very little I know and how very hard it is to know what's right. So far we've worked out that a lot of what we had in our food cupboard, and until now thought was OK, is not. Peanut butter, cereals, some brands of 'butter' (yes butter)... The ethical apps have helped a bit - but they also raise a whole host of other questions - where was it made, is it recyclable (really), do the parent company operate in dodgy places - which are both worrying and not-at-all easy to answer through a simple tick box exercise. Next problem - when "outdoor bred" means "mostly indoors" A long time ago I worked with farmers on marketing-y type issues. Many of them were keen on pursuing "organic" as in it could mean higher prices and margins. But "organic" then, and still today, means a host of different things. Most people - me included - do not have a proper understanding of what "organic" actually means. We have a vague, uninformed view, that "organic" means good, probably means no chemicals, probably means nice life, probably means healthy. But it hardly ever means all or even some of this stuff. As shorthand "organic" is a very non-specific and unsatisfactory shorthand term. It means very different things in different categories. Standards vary wildly across different jurisdictions. It's not simple. 'Organic' chicken can live indoors pretty much its entire life but still be labelled 'organic'. There are massive differences between the US and the UK (as the latter is about to find out if the much vaunted 'cheap food for everyone' post Brexit trade deal ever gets done). For example: in the USA, there are currently no federal regulations to control or safeguard the welfare of animals used in agriculture. At all. Decoding labels today requires a knowledge of what's not on the label. Phrases mislead - take pigs for example.....pigs that are "outdoor bred" actually don't live outdoors, they're born outside and then raised inside. "Outdoor reared" means half their life outside (but not necessarily with access to pasture). It does not mean outdoor reared. Using different names is misleading. Using phrases like 'outdoor bred' is..well....dishonest. Marking their own homework - self-certification schemes A while back Green & Blacks was bought by Cadbury, which in turn was bought by Kraft. A small brand with high ethical standards and a strong commitment to a fair supply chain bought up by food giants used to controlling their supply chains from a cost perspective. For a while Craig Sams managed to get them to stick to the high fairtrade standards that were at the heart of the brand, but at some point 'fairtrade' - i.e. an externally audited standard - became an inconvenience for Kraft. Instead they decided they would create their own - self-certified - scheme: Cocoa Life. For most of the range...but not for all. So now Green and Black's has two ethical badges - but are they as good as each other? And if they were...why would they need both? Kraft's not the only one to seek self certification. Sainsbury have also introduced a confusing 'Fairly Traded' self certified brand that replaces the independently audited fairtrade scheme. They got some stick for it - quite right too. Do I trust Sainsbury enough to believe that their own scheme is as rigorous as the original Faitrade scheme? Of course not - even a cursory glance at their record shows that Sainsbury is not be trusted at all when it comes to doing good. Fake good A notch worse than suspect self certification schemes are the brands that make a big deal about being good, about doing good, without actually doing good. There's an ever growing market of time-poor well heeled 'ethical consumers' who feel reflected virtue by shopping from a host of brands that are parading their 'good' credentials. A batch of poorly researched and undercooked ethical apps are making things worse - swallowing the bollocks and giving these brands ethical ratings they do not always deserve. Most people - like me - either don't read the labels properly or don't have the time and ability to do their own research. We are more than willing to go with what the app says - but if the app hasn't done its homework or is incomplete they can create confusion. CoGo for example is a great idea but launched way too soon with (at best) very patchy data. These apps need to be very good from day one. So the apps - rather than make it easier can end up making it worse. And working out whether a brand is really doing good or not is far from easy. Take for example Tom's Shoes. Many people seem to love the 'giving away shoes' story. But stop for a moment and think. Does it actually help these communities to foist free shoes on them? Does "giving away" shoes constrain the ability of local shoemakers to develop and grow? Does what looks like a nice thing to do (through our western consumerist eyes) actually screw up the very people Tom's purports to help? Or Naadam - the "sustainable cashmere" brand started by a couple of mates. Now first of all "sustainable cashmere" is a very, very hard thing. Even the smartest, most forward practitioners admit that they are a very, very long way from achieving sustainability in cashmere. But not Naadam. They claim "real sustainability" and superficially it's a great story but.... ....when you look at what they actually do to pursue sustainability it's really not very much. There's no rigour or auditing - it seems more hope than strategy. Perhaps the most worrying aspect is the puff around Naadam park - a park with gazebos and a soccer pitch for the nomadic community they work with. Naadam are so pleased with this they've entered it for an ethical award. Nomadic herders don't want - or need - gazebos and soccer pitches. They need funds for their kids to go to school. They need help in managing pastures. They need help in getting further up the value chain and realising more stable livelihoods. Fake good is no good Doing good is hard, really hard. Working out what is really needed to make a difference involves detailed and ongoing research and monitoring. There are endless tradeoffs to be made. What's right one year is not the next. There are very direct contradictions between social and environmental good. Doing good is not - and never can be - a marketing campaign. It's hard, hard work and needs to be built into the operating system of the brand. The brands that are trying hard don't make a song and dance about it - it's serious business. What Kering are trying to do with cashmere is an example of a brand that understands - and is humble about - just how hard it really is. Kering wouldn't build gazebos and soccer pitches. There are others - like Patagonia - but the most impressive and progressive brands tend not to be mega-sized (check out Veja for trainers). It's hard to be good when you're big - take a closer look at Unilever. Their scale compels them to do things that are 'not good'. Working out what's right cannot be done through badges. Apps that oversimplify what is a very complex field aren't helping. Brands that rush to claim "good" or "sustainable" credentials are using "good" as a marketing tactic. It's fake good. I like all (not quite all) these brands I've mentioned here. They are in some way or another trying to do the right thing. But they've all turned doing good into a marketing thing. Inventing badges or schemes. Coming up with bullshit like gazebos and soccer pitches. They of all people should know it's not that simple. We as consumers should know it's not that simple. We all need to work a lot harder at understanding what is - really - good. And then do it. #fakegood #goodgrowth #tomshoes #palmoil

Get married for love For much of my working life I've wrestled with the problems of partnership - or rather the wrong partners in business. I think collaboration is one of the most powerful forces in business but all too often I see businesses make terrible choices in which partners they collaborate with. One of my favourite brands was a little Norwegian electric car maker called Think who made ahead-of-their-time electric city cars. The Norwegians loved it - but as in many aspects of life they were a long way ahead of anyone else. So Think struggled commercially, got sold and resold a couple of times, and ended up with a bunch of owners who wanted them to "get much bigger". So they cast about for a distribution partner who could help accelerate their entry into other markets and - inexplicably - settled on a tie-up with a kind of cash'n'carry warehouse store brand called Migros. (Photo by Eduardo Soares on Unsplash) On paper maybe there was some logic to it - we need sales, you've got shops; you need a bit of eco-cool, we've got that - but it's still very hard to see how this marriage came to be regarded by anyone as a good idea. Needless to say it did not work - and Think is no more. I was always taken aback by how much care a business would put into choosing its CEO or key staff - checking for alignment and shared values - compared to how very little of that soft stuff they would think about when it came to key partnerships in critical areas like 'selling our precious product'. If businesses chose partners based on a common way of thinking, shared interests, and not on a knuckle headed "you're big" they'd all be a lot better off. Distribution partners - repent at leisure Who sells your product can make a massive difference to your whole business - and not in a good way. And all too often it's super hard to spot. As we have been developing the Good Growth Company we have been looking with a critical eye at every aspect of business chains. The conclusion we come to is that partners really, really matter. So much so that I'd say with confidence that the critical factor in building any good growth business is finding and choosing and engaging the right partner at every point in the chain. One wrong partner in a critical link and the whole system gets screwed up. This can mean: investors - so many good businesses have been and continue to be ruined by taking money from the wrong folks and being forced to dance to a different tune supply chain - the wrong processor can wreak havoc on small producers in pursuit of economies of scale. Primary processing becomes a transaction based on scale rather than a value add step in the chain. (For example the gigantic washing machines used to wash wool - these become mini-monopolies in the chain and act as such) distribution - especially for products that derive a lot of their value from story of origin. If you end up with a distribution channel that does not support that story not only does the value you create get lost, but worse the distributor starts to influence how you make the product. I think distribution exerts a malign influence on brands that many are unaware of A lot of our effort is going in to trying to align and 'unfragment' these chains to get everyone pointed in the same direction - it's surprisingly hard. (there's a lot more about this stuff here) "But we're really big" I've been having a lot of fun working with the wonderful folk who make wine in Georgia. Wine is category where producers make a fabulous product, and should be able to exert significant influence over how that product gets sold, but all too often do not. One of the striking oddities in wine is how much influence (good and bad) the distribution partners can exert over the product and the strategy. From China to Russia to Japan to Germany to the UK the in country distributors wield massive influence over where and how the product gets sold. In the US especially there are a plethora of wineries and in relative terms not many distributors. The maths means that each distributor is being courted by many wineries. The rules - a hangover (sorry) from Al Capone's time - are rigid and insist on strict controls in each state. Meaning that for wine producers looking to import into the US middle men are baked into the equation - each wanting a healthy margin. So the commercial equation is especially tough. The local producers (of whom there are many, and who themselves struggle with overcapacity and a younger population more interested in cannabis than the grape) can avoid many of these margin takers by selling a healthy proportion direct. A decent Napa winery will sell 65-70% of their product direct to people visiting or who have joined their club. Not so for importers. 100% of what they sell goes through the importer-distributor-retailer system, and in a different way in each of the 50 states. They have to find distribution partners who can work in the right channels and present their brand to the right kind of customer with the right story. But this is cripplingly hard: In wine there is a high volume price driven channel which sells off the shelf, and a hand sell channel through independent retailers which allows for stories to be told. They are very different channels catering to very different segments. Wines from unfamiliar places with unfamiliar grapes don't do well in supermarkets. Yet too many distributors try to push them through that channel - at tiny or negative margins - and with monstrous marketing costs. It's a killing zone for brands When asked why any producer would want to do this - sacrifice any hope of making any margin, send additional funds to the sellers for shelf promotions, be told to make the wine cheaper to be able to duke it out in the ferocious price war - the answer is: "because this is a really big market" Which is nuts Size really does not matter - what counts is shared interest At the same time as I was first wrestling with the weird asymmetrical influence that distributors exert over producers in wine (asymmetry of margin vs risk especially) this refrain of "because we're really big" was getting a regular outing in the Brexit and free trade agreement discussions. One of the oft repeated assertions in the UK was that the EU, specifically the Germans, would want to treat the Brits kindly "because we buy a lot of cars". Another - fascinatingly repudiated on the BBC World Service - was that Commonwealth countries would want to switch trade to the UK post Brexit "because we're a really big market". "Why would we want to do that?" .....came the retort from a group of economists and trading folk from various places in Asia and Asia Pacific that had had some kind of colonial connection with the Brits a long time ago, but who had been busy over the past 40 years or so forging strong partnerships with their geographic neighbours..... "we want to trade with people who share the same values as us, who care about the same things" Don't we all? #goodgrowth #postbrexit #tomorrowscapitalism #distribution

"We are a car company - we make cars" In the 80s when I was a teeny tiny teen I ended up working in the new fangled "espresso" bar at Next in London. Nobody in the UK had ever heard of espresso, the height of coffee sophistication until that point had been a percolated from the Wimpy. But Next was a "lifestyle" business. So we had an espresso bar, a furniture store, a jewellers, a hair dressers, even a restaurant. As well as clobber. If you had really wanted you could live your whole life as "Next Man" or "Next Woman". This was 1985 - Next was a brand full of confidence. It was cool. We even had Yasmin Le Bon modelling the gear. And then it wasn't cool at all. It was way too much. Who the heck wanted a Next hairstyle? The whole idea of "lifestyle brand" was about as naff as you can get. The brand extensions all got rowed back and in 1988 the mail order business kicked off and Next went back to being a clothing company. For as long as I can remember businesses and brands have defined themselves through what they make or what they do. But this won't work for regenerative business. There are a handful of exceptions such as Nokia and Saab who have shifted what they make in order to continue to exist. But these were product pivots - moving from making product x to product y. Occasionally the odd bit of brand faddism tried to shift this "what we do" model a bit. At the height of the codswallop around "experience brands" VW went though a funny turn, getting all excited about creating "fascinating experiences" that got to the heart (or the 'essence' - mandatory for any German brand) of what it was to be "VW". What all of this meant in practice was vast and lavishly lit showrooms (then called "experience centres") and a to-this-day odd installation called Autostadt - an auto theme park in search of a purpose. (Apparently this is the place to explore three wholly unrelated questions: "What motivates people to excel? What lies beneath the bonnet of your car? And who will determine the future economy?") WTF? I still remember the internal meeting when this tide was reversed. Something snapped and a big cheese declared that when it came to the brand we just had to remember that.... "We are a car company - we make cars." This identification with "what we do" is incredibly powerful. WE MAKE CARS. That's what we do. It is the reason for our existence. It became so ingrained, so unquestionable, that it ended up being distilled into a pompous tagline (Das Auto) and meant that the business could not even conceive of a world where MAKING CARS was no longer central. This mechanised rigidity not only relegates human creative passion to a mere input, it also means that it is impossible to contemplate even a tiny shift into an adjacent business area - renting cars? nope, set up a new brand; ride-sharing? nope, set up a new brand. It was this rigidity that almost killed Kodak, and which explains why so many of the industrial era businesses die so quickly. When the product becomes obsolete so do they. Regenerative businesses are not product businesses As we build up the Good Growth Company this shift away from product centric business emerges as a fundamental, possibly the fundamental, distinction between a regenerative business and an extractive business. Product businesses are driven by an internal logic that subordinates place to product - how can we make more? how can we make more, more cheaply? where can we get hold of more materials to make more stuff? This product centricity is at the heart of what makes so many growth obsessed businesses destructive - it drives behaviour that relegates nature (and all its places) to a source of "raw materials" for more product. Place is subordinated to product. If your measure of business success is "making and selling more stuff" then that business, by definition, cannot be good for the environment, and can never be "regenerative". The key feature of a regenerative business is that we work within the boundaries of the ecosystem, and specifically within the boundaries of what's good for that ecosystem. It's the opposite of the product centric, make as much as possible, industrial paradigm that has screwed up the planet so very badly. In our Chigertei pilot we have a mix of goats, sheep, yaks, horses and camels. Our challenge is to work out the best mix for the restoration of the place and to make products in that mix. We can't just make what we fancy. So the trick is to flex the product mix out of these core materials to support the ecosystem, to make the things that restore the natural balance in the place. A regenerative business must subordinate product to place. There's no other way. What matters is what's good for the place. Flexing product mix is the key to impact Financial incentives exert a powerful influence over landscapes. In the EU prior to 2003 pretty much all farm subsidies were hitched to intensive farming. It was almost impossible as a farmer to do anything other than intensive farming. This subsidy regime led to awful outcomes: my childhood soundtrack was often punctuated by discussion of the 'butter mountain', and "bugs on the windscreen" became a thing of the past. Intensive farming is the result of product centric business models that are disconnected from the natural balance of place. More milk. More butter. More flour. We have learned, especially through the work of Ibis Rice in Cambodia, that the depth to which we can engage a community is the key to delivering impact. If we can get upwards of 50% of the villagers engaged then we can start reversing environmental degradation. Get 70% engaged and we're flying. But engagement is hard if the farmers are treated harshly by the economics. If they are at the "raw materials" end of a global supply chain farmers get a very raw deal. They carry all the risk, have next to no pricing power, get treated as an input cost. If the price they get paid for commodity x (say rice, or the fine goat hair for cashmere) fluctuates because of demand volatility, or just (as in this year) a decision not to make so much cashmere, then they have no choice but to do what they can to keep bread on the table. They will produce what pays them. So the key to engagement is two fold - we have to shift the risk from them to us, and we have to make things that fit with the landscape. This means taking all the materials without quibble, and making sure we cover everything that the landscape can produce. So in Cambodia this means not just rice, but mung beans, cashew nuts and sesame seeds. If we have that broad mix we can work with all the farmers - if we're just a rice business we can only work with rice farmers. The key to getting from 50% to 70% is product mix. Scarcity is value creating There's only so much core material in a place. The world of wine gets this in a way no other category does. Appellation and vintages are signals of scarcity. There are only so many grapes, there is only so much wine. When it's gone, it's gone. Product centric industrialisation is all about super abundance. Regenerative business is all about scarcity. Working within ecological boundaries means working with finite amounts of materials. So we have to make a virtue - again - out of scarcity. We have to remember the way it was when we had to wait for the crops to grow, to wait for things to be made. And linking the place of origin to the consumer is key. Which means these are place brands not product brands The last piece of this jigsaw, the difference between regenerative brands and extractive brands, is that the truly regenerative brands are place based, not product based. Where they come from, the source of origin, is the thing that matters. This sounds like a big deal but it's not really. It's reclaiming something we lost but perhaps have started to recover during the pandemic. It's reconnecting us to places and their very special character, reconnecting us to what matters in those places. Place matters - time to restore it to where it belongs. #goodgrowth #regenerativebusiness #regenerativedevelopment

A glimpse at our pilot ecosystem in western Mongolia About 36 very bumpy hours in a Land Cruiser from Ulaan Bataar will take you west to the valley of Chigertei in the very far west of Mongolia. Or you can fly if you have no sense of irony. This is a place which is extreme. It can be astonishingly cold. And breathtakingly beautiful. It's ethnic Kazakh, so the people who live here are not really Mongolian, they have their own sense of identity which is very connected to the place they live. The whole area is designated as a protected area - because it's under threat. Degraded Barry Rosenbaum and the Altai Institute have been working in Chigertei, and the wider Deluun area, for the past ten years. He has seen first hand the degradation of the natural environment and its consequences. A perfect storm of factors is degrading Mongolia’s grasslands. From 1940 to 2014, annual mean temperatures have increased by more than 2.0°C, while rainfall has decreased and seasonal weather patterns have shifted. In the 1990s, Mongolia abandoned its communist system of government and with it, strict quotas on the number of grazing animals allowed. Since then, the country has gone from 20 million grazing livestock to 61.5 million. Mongolia's herders raise camels, horses, cows, and sheep, but the fastest-growing herds are goats, thanks mostly to the swift rise in global demand for cashmere. Mongolia is now the world's second-largest cashmere producer, after China, producing a third of the global supply, and cashmere makes up 40 percent of the country's non-mineral exports. Thirty years ago, cashmere goats made up 19 percent of all livestock in Mongolia. Today, their numbers make up 60 percent. Goats can be more lucrative than other livestock, but they're also much more destructive than the sheep they've replaced. As a result, overgrazing has caused 80% of the recent decline in vegetation on the grasslands. Most species of wildlife suffer from overgrazed grasslands. The consequences of increasing livestock numbers and change in herd structure with the resulting over-exploitation of land and plant resources, coupled with effects of climate change, has become the main contributing factor to the increase of species being categorized as endangered in Mongolia. For example, populations of Altai argali have coexisted with nomadic herders and their livestock for centuries, but today the impact of overgrazing by livestock on the habitats of this species is very high and have pushed Argali into marginal habitats. Argali are a primary prey species of snow leopards. When the numbers of prey species decline, the decline of rare predators is not far behind. Degraded rangelands can be recovered naturally within 10 years if existing rangeland management can be changed. Without change, it will be too late after five to 10 years. By then, Mongolia's grasslands will be transformed into an ecosystem that will be unusable, bringing an end to Mongolians' traditional way of life. Ecosystem out - the Good Growth operating system So how can we help reverse the degradation? We work with Barry and other scientists to build a system that restores the natural balance - that regenerates the ecosystem. We make it our business to put back what has been extracted. What we've come to is an operating system that is not driven from the market in, but from the ecosystem out. Everything is governed first and foremost by what's needed to regenerate the ecosystem. This changes pretty much everything. It's this shift that is the only innovation we've made. Instead of fixing on a product and then making as much of it as possible, we fix on a place and make what we can from the natural balance of resources in that place. We're working with the natural capital not extracting it. That's why we have a range of brands making lots of different things. This gives us a new operating context and so we need a north star to help us make these decisions. And that's where clarity on principles and priorities come in. The carrying capacity Right now economic incentives - especially cheap cashmere - are driving up goat numbers. No amount of "sustainable cashmere" initiatives will change that. If we're going to change the dynamic we have to start thinking about what's good for the place, not how much of one particular product we can make. In Chigertei Valley there are 180 families looking after just over 41,000 animals. Of these 18,000 are goats, 18,000 are sheep, about 3,000 are yaks, 2,000 are horses and there are 26 camels. If only the fine hair from the goats is perceived to be valuable then all that will happen is increases in goat numbers. So our job comes in 3 steps: First to work with Barry and other scientists to work out what the most helpful mix of animals should be. Inevitably this will mean fewer goats. Second to work out how to ensure that the families get enough money and security to be able to look after the regeneration in the valley. Much of the time they are under financial pressure - getting the kids to school, paying taxes, repaying loans - so giving them some kind of security will help them to work on longer term issues. And third put value into the rest of what's in the valley. This means creating value from the coarse hair of the goats (and also from the milk), in a "whole goat" approach, alongside creating value from the yaks, the sheep wool, the horse hair and - yes - from the camels. This means that we are working with what we have, with what nature gives us. We are putting a value on making a healthy ecosystem and on the regenerative work that goes into that. The aim is to create as much value as possible in the regenerative mix, by getting as creative as we can with the materials to hand. If of the 41,000 animals currently there, only the goats (and of them only a fraction of the goat), are being commercialised then we have - before we have even started - a whole host of materials that are currently being ignored. So designers and textile research people are working with us to create new uses for the fibre - horse blankets, rugs, cushions - as well as knitwear made by navygrey and Khunu. We may blend some of the fibres in a special "Chigertei" mix - we need to do more testing but if we can I would love that. And beyond fibre we can also do more to realise more value from the milk. Mongolian Artisan Cheese may be niche now.......you heard it here first. Exciting stuff. Lots of hard work. More soon. #goodgrowth #regenerativebusiness #chigertei #altaiinstitute

How we're approaching decision making in regenerative business Too much certainty is killing us Let's talk about certainty. Or rather incredible certainty. And why we all need a lot less of it. Do you remember the "you can't go wrong in a Volvo" ad? Making cars safer does not make them "safe". Helping drivers avoid accidents does not insulate them from accidents. Shit happens. So of course you can have an accident in a Volvo. Intimating that they are so safe that "you can't go wrong" only encourages drivers to believe they can't be harmed. It breeds risk. It's the same with schools and Covid - don't tell us they are "safe", tell us that they are being managed for risk and monitored, and that we all need to play our part in helping minimise risk. Government and business use too much misplaced certainty in the face of complex issues. We don't know everything so we cannot be certain. What's needed instead is humility and nuance allied to very clear priorities. The reason we're in such a mess right now is that we have neither. Misplaced certainty is undermining sustainability claims Delivering "sustainability" is not simple. What's good for the environment may not be good for people or cost too much. The only way to deal with these thorny kind of issues is to have a clear set of priorities and a shedload of humility. We don't know everything. So we cannot be certain. But businesses can't cope with uncertainty - it makes everything much harder and scary. So businesses tend to overstate with certainty things that are by no means certain. In particular making "sustainability" claims that don't stand up. "When you see the BCI logo or ‘On-Product Mark’ on packaging, it does not mean the product is made of physically traceable Better Cotton." Take Better Cotton - clothing with this logo may not *actually* have any 'better cotton' in it at all. Why? Because "physically tracing Better Cotton through the supply chain is time consuming and expensive". The premium paid for the item has - instead - gone toward compliance and training programs. This is a sustainability program focused solely on inputs (farming methods). Yes of course the focus on training and farming methods is a good thing but it does not mean that the T-shirt that you buy is made of "better cotton". It is overclaim and the sustainability industry is full of it. Fast fashion cannot be reconciled with sustainability. There is an obvious friction between trying to flog as much stuff, as fast and as cheaply as possible, and trying to work within ecological limits, To resolve the friction you need a clear set of priorities. What matters most? Flogging stuff or the environment? If it's flogging stuff then claims you make around sustainability are bollocks. Resetting our priorities: put finance back in its place. We live in a world in thrall to money. Somewhere along the line, probably in the 1800s, humans started to lose connection with place. We stopped making things by hand and started making things with machines. We moved from working at home to working in factories. We became industrialised. Little by little "what mattered" changed. "Productivity" meant making more stuff for less cost. Businesses started to pursue the bottom line in terms of numbers. And then sometime later, in the 1980s, the world went nuts for money. When I was at Uni the definition of a "good job" was one where you could make oodles of dough punting on stocks. Doing boring things like *actually* making things for real was quaint. Everything became about money. Bigger, better, faster. Make more stuff in order to make more money. As Mariana Mazzucato says - we financialised the real economy. And in so doing severed our connection to places and all sensitivity to what makes those places healthy. Where once we had worked with what nature gave us we came to see places simply as sources of material to feed our machine. We became extractive and we did not notice. Priority: environmental regeneration > humans as agents of regeneration > economics Time to turn back the clock, to relocate finance where it belongs, as an enabler of doing good things. And to reset our notion of "what matters". It's not easy - we have to unlearn a lot. So alongside humility and nuance we need some crystal clear priorities - a framework for deciding what the right thing to do is. For far too long "do good" businesses and enterprises have equated environment, social and business outcomes. Or at least pretended to equate them. But it's by and large bullshit. These aims can't be equal. When push comes to shove something has to give. And normally the only thing that doesn't give is the money. So a manager will bust a gut to hit a profit target, but won't bust the same gut to hit an environmental target. So for us in Good Growth what matters is the environment - first and foremost. The entire organisation is designed for and in order to restore natural capital. It is our reason for being. This is what we mean by purpose. Next comes humans - as agents of regeneration for the environment. We see our role as working with the humans in the ecosystem to improve their livelihoods, and therefore their capacity, to work in ways that restore that ecosystem. So much of this involves shifting the economic context in which they operate. And last of all comes a healthy commercial outcome. Of course we care about profit and business strength. It's just that we would never put financial outcome ahead of environmental outcome. This clarity has been liberating. And helpful. Here are a couple of examples of gnarly issues that this sense of priority helps resolve. 1. Why the heck are you operating in degraded places? The valley we are working with in western Mongolia is pretty degraded. On all the environmental measures - biodiversity, soil, wildlife - things aren't great. (More on this here - not only the valley but the 'ecosystem out' model). So why operate there? (We've been asked this question many times now) We're there because it's degraded. We're there because learning how to reverse degradation is going to be vitally important for all of us. We're there because this is where the challenge is. If we were a normal self interested business we would go elsewhere - where we can get hold of volumes of decent fibre for less hassle and less cost. We wouldn't regard it as our job to deal with the degradation. But it is our deal. We exist to restore the environment. 2. why not introduce more 'productive' animals? this one is a real dilemma. There are yak breeds, for example, that might have a higher yield of better quality fibre than the yaks in the valley. If we brought those yaks into the valley they'd produce more money for the herders. And surely that's a good thing right? But wait - we should be guided by what's best for the place, not what makes our lives easier or what makes more money. Introducing a new breed of yak might bring all sorts of bad environmental consequences - too many of the same species can cause havoc (more on this soon with vines). If our only consideration is our own commercial end then of course we'll bring in the more 'productive' yak. But if what we care about is the long term health of the place, of the ecosystem, then our decision is guided by what's right for the health of the environment. That's what really matters. We have designed the Good Growth Company so that the question of what's good for the environment sits at the head of everything we do. Of course there will be, and are, tensions between commercial outcome and environmental outcome. Which is why we need to know what really matters most. Planet first. Always. #regenerativebusiness #goodgrowth #environment

Much of what I have been taught to believe unquestioningly turns out to be untrue Increasingly I find that building the Good Growth Company is much like taking that pill in the Matrix, suddenly you become aware that the stuff you have taken to be true, the pillars on which pretty much every business you have ever been involved with operate, the articles of faith, the fundamental truths are....well....are not only simply not true, but more often than not the cause of a lot of the problems we face. What follows then is a kind of confession - stuff I used to believe but now cannot. I am fully aware that to many this will sound like heresy or lunacy - and that's fine - but I am convinced that we have to recognise how the underlying structure of our system, and the assumptions upon which it is built, must change. Good Growth is all about hard wiring regeneration into the core operating model of business. We're not interested in grafting on a bit of "do gooding" as a by product of business-as-usual, this is a fundamental redesign of the operating system. Much of this design - maybe all of it - involves turning conventional notions of capitalism upside down. How businesses get funded, how value chains are built, who owns what, how products get made, what products are made. There's a ton of theory on all of this - but not that many people trying to work out how it all works on the ground in real businesses. Depending on where you stand we're either creating a new version of capitalism, or a post capitalist model, or are completely nuts. I guess time will tell. The pilots we are building (initially fibre product from Mongolia and Patagonia) are explicitly conceived as vehicles to road test this new design. More of what we're up to can be found here. "It is the world that has been pulled over your eyes to blind you from the truth" So for me this design process is a bit like taking the red pill - only a bit less wham bam and a bit more creeping enlightenment. As we build up the model we find ourselves peeling back layers and layers of thought processes that had been so thoroughly drilled into us we never questioned them. The only thing we are doing in all of this that is remotely innovative is designing from the ecosystem out, not from the market in. Everything else is just hooking together bits of business system that have been fragmented for years - making it whole again (to quote Atomic Kitten). So instead of a market in approach where the source of origin is treated as the lowest point in the supply chain, we turn the whole thing on its head and make the source of origin the force that shapes the whole value chain instead of That one thing - designing from the ecosystem out, has a seismic, upending, impact on the whole system. It turns the operating system that I've been used to on its head. Here are just a few examples: 1. Brand valuation has nothing to with "value" Brand valuation is always something that I have been sceptical about, some kind of pseudo science peddled by Interbrand etc. Fellow sceptics in the brand world would often say that a brand's value was no more than what someone was willing to pay for it. But even that is to reduce "value" to "price" - to surrender all of the breadth of the term "value" to a narrow financial definition. It's this narrowing of what we mean by value (check out Mariana Mazzucato) that has got us all into such deep shit. If we can't put a price on it it can't be worth anything - right? So it comes as no surprise to find that the ways brand valuation works *actually* is merely a function of a financial view of a business. Pick apart any brand valuation model and guess what - it's actually a model of financial value. They are all predicated by and subordinated to the standard "price of everything, value of nothing" business model. Tellingly the unit in which the models are expressed is $. Even their attempts to measure "intangible" value are predicated on price premium and volume, whilst putting customer primacy, market share and customer loyalty into the mix over other factors. "Brand valuation" is an area where brand businesses are bringing absolutely nothing new. The lower the costs in the supply chain the higher the brand value. Simples. And nothing at all to do with brand value. So the more you screw your suppliers, and the people who work down the chain, and the places where your raw materials come from, and the environments which created those raw materials - the more you screw planet and people the higher the value of your brand. Interbrand has the "best" brands globally as Apple, Google, Amazon, Microsoft, and Coca Cola. But in this context what the hell does "best" mean? Brand Finance can put Aramco straight in at #24 "following the largest IPO is history". None of them poster children for a better planet. 2. Lean supply chains are not a good thing "lean" was a gospel drilled into us all at VW in the 90s. The Machine that Changed the World was the bible. The Japanese were to be feared because they were so goddam efficient. They had Ninja like abilities called Kaizen to take out "non productive" cost or waste. Supply chains are not stronger for being leaner. As we have seen all too clearly in this pandemic, a supply chain cost optimised to the nth degree is a supply chain that breaks under pressure. Worse than wafer thin resilience is the damage wreaked on environment and communities. Supply chains that are designed to optimise costs don't pay any attention to the value that can be created at the source of origin, nor to the collateral damage wrought on environments and communities in the name of shaving a couple of cents off. There is nothing regenerative about lean supply chains - and no consequence at all for making them extractive. Which is why so many are so very destructive. Conversely value chains built from the ecosystem out are inherently value creative, and also (at least in design) regenerative from the get go. 3. Products are not defined by market needs Follow this 'ecosystem out' logic through and how you make decisions about what products to make changes. Once upon a time at VW we made a very small estate car on the basis that it was in a segment "not currently occupied by the competition". Unsurprisingly we discovered that the number of people who needed such a tiny car (people who didn't buy anything bulky at the shops, didn't have suitcases and had extremely small dogs) was vanishingly small. In the Good Growth model our product mix is determined by the needs of the ecosystem. Commercialising a regenerative balance in the ecosystem means taking the raw materials available (in our case initially fine and coarse hair from different animals, mostly yaks) and turning all of those raw materials into commercial products. Ordinarily the coarse hair is ignored by brands - it's not worth as much as the fine hair. But we can turn it into mattresses, sleeping bags, natural insulation in jackets, horse blankets, curtains etc etc. Clothing brands are not set up to turn coarse hair into blankets - so they ignore it. This means that the only way the herders can increase their income is by a) chucking the coarse hair away (about 75% of the yield) and b) having more animals. The upshot is an incentive to keep increasing animal numbers, with a consequent deleterious impact on environment and habitat. A little nuance that comes from this is that we don't attribute cost at the product level but rather at the whole animal level - the cost of raw material for a superfine jumper is pretty meaningless for us if it ignores the coarse hair from the rest of the animal. Businesses built on industrial principles inevitably seek to industrialise their supply chains around high margin products and ignore the rest. 4. Shareholders are not prime, and nor are customers In a previous life we had it drummed into us that "the customer always comes first". This phrase was on posters, on rulers, in training programmes, in meetings. It was a mantra repeated hundreds of times a day to justify whatever programme we were dreaming up. To question this idea was heresy of the highest order. In most places it still is. But it wasn't true then (actually we cared much more about what the German HQ needed), and moreover it really should not be our mantra if we want to build a regenerative model. What customers want or need and what is needed to regenerate the planet are not always compatible. So no - the customer does not always get what they want. We can only make so many cashmere stuffed mattresses, so if a hotel chain wants more we're going to turn them down. In my previous life we would have moved heaven and earth to get them more - we'd do "whatever it takes" to meet their demands. And it's precisely that "whatever it takes" reflex in response to customer demand that has fucked us all up so very badly. So our job is to find the right customers - which is a kind of inversion of the normal "marketing funnel" And of course - as is now beginning to be recognised - shareholders are not prime either. Flogging the company to grow in order to meet some hockey stick shaped growth curve, or some end of year profit target, is actually pretty dumb. Just because VCs fetishise exponential growth (aka scale) doesn't mean everyone else should. They aren't the people who create the value. 5. Environment over humans Last but by no means least we have to recognise that there are often conflicts and trade offs between profit and regeneration, and between meeting social needs and regenerating natural capital. In the old world a manager would bend over backwards to hit a profit target, but not so to hit an environmental or social objective. We're going to bend over backwards to deliver regeneration - whatever it takes. But of course - as will increasingly become clear as we head further into the Anthropocene - there will inevitably be times when what's good for the planet won't necessarily be good for the humans. In those cases we must always, always prioritise the needs of the planet. Black flowers. There's more of this to come We promised to make our process open - to share what we find as we find it. As I say - much of this may sound nuts, but if it does not, if it gnaws away at some unspoken thoughts or feelings you may have had for a while about what's not working, maybe you should get in touch. #goodgrowth #regenerativeeconomics #tomorrowscapitalism #anthropocene

"If there is a battle between the planet and mankind, the planet will win" "what's the exit strategy?" is a big question without any kind of answer right now. In a few short weeks the majority of the world's population have been forced into a different way of living. Will things ever "get back to normal"? Should they? I very much hope not. Right now all the rhetoric is about fighting the virus, conquering this thing, defeating it. Humans have for way too long seen themselves as the masters of nature and the gut reaction to the virus is to hide away, summon the troops, and beat the crap out of it. But what if we can't? What if we have to learn to live with this kind of threat? In Edge of Darkness (the best ever TV series in the world ever btw - NB not the atrocious Gibson film) the ghost of Emma Craven has a word with her dad about Gaia - the idea that the planet will look after itself if mankind (or anyone else) becomes too much of a threat. "That is the power of Gaia. The planet will protect itself. If man is the enemy, it will destroy him." Something better change It is hard for any of us but the Trumpiest to avoid the idea - at least a bit, and maybe a lot - that our way of life, our unfettered consumerism gorging on limitless products churned out by business systems and cultures that unquestioningly fetishise planet busting growth, might, just might, have something to do with this crisis and that this little virus might well be the harbinger of the black flowers. Which is why I am more than a little uneasy about the magic money trees that have been unleashed with the aim of preserving the status quo, keeping us all afloat so that we can "get back to normal" once this is all over. This mobilisation of the state is breathtaking. A heady reminder that when it comes to the big stuff - climate change, war, preservation of the human race - the state can get stuff done at a speed and scale that business cannot. So if we end up with a consumerism that is more localised, and states acting more globally to tackle the big stuff, that might be a great outcome. But it's not going to happen on its own. This is the time for new models to take root - otherwise there's a danger that we will learn nothing from this and pour all our energy into recreating the system that caused the problem in the first place. The one thing we don't need after all this is a return to 'business as usual' - time for a reset. Shared interest matters much, much, more than we ever knew The one big thing we want to see is that every business system, every supply chain, from now on is built on partnership and shared interest, and not on a purely transactional model. What does that mean? As so often in our quest to find the truly regenerative business system, the world of wine is very instructive. There is a very strong connection between the business of wine and the finite resources of the planet. It's a sector whose rhythm is shaped by the seasons, and where natural events have a direct impact on the product. People who work in wine are close to nature in a way that people who work in finance are not. Secondly wine is a case study in source of origin chains - the value (in the fullest sense of the word) of wine is intrinsically connected to who made it, where and how. Sure there's a high volume low price industrialised bit, but even there origin counts. So the partners in the chain matter - for a small artisanal producer the distribution and retail partners they work with can make or break them. And not only that but the word of wine journalists and critics also makes a massive difference. They are all part of a system that links the source (grapes - harvest - winemaker) to the ultimate consumer (you and me). What connects that system up really matters - if all the links in that chain (processing, distribution, import, retail, reviews, recommendations etc) are built solely on a disconnected, dispassionate, transactional basis then the connection between source of origin and consumer will be weak if not totally severed. But if every link, every part, was bound together through shared interests and shared values than that connection will be much, much stronger. A while back I came across this really intriguing debate amongst wine writers and critics - should morals come into what products get recommended? Or should wine be 'judged' purely on the basis of the product? It was a really intriguing question - and one that I think is central to our post-Covid future. The answer to Jamie Goode's question is yes. Of course yes. Of course morals matter. Not in the sense that wine critics become all powerful arbiters of what 'good' is - that would exacerbate a power imbalance which does nobody any favours. But absolutely yes in the sense that partners in a chain share the same values. Of course critics and sellers and producers should exercise a judgement on who they are happy to work with, to endorse, based on morals. Only people who share the same values should be happy to be part of the chain to sell that product. And vice versa - producers should never team up with sellers who espouse different values. Divorcing the product from the people that made it - and everything they stand for - is at the root of the problem of globalised consumerism. It severs the link between consumer and producer. It is core to the problem we now face. We've lost touch with nature and where things come from. In these Covid times, in this corner of Somerset, local people are reconnecting with local producers. Local deliveries of milk, meat, veg have been set up. We are - joyfully - rediscovering the wonderful people and producers who have been on our doorstep all along. The longer this goes on the stronger these binds will become. Hallelujah. Real value is much more than price, and connection is at the heart of real value. So time to make it clear. In business, in supply chains, in what and how we buy stuff - shared value matters much, much more than driving out cost. If there's one thing we learn from this let it be that - and let us use this moment to start building systems and chains that explicitly are designed around shared value first, creating more value through the chain second, and driving down cost only after all that. Let's go to work. #goodgrowth #tomorrowscapitalism #aftercoronavirus #jamiegoode #regenerativeeconomics

From next week my partner and I can no longer live together. I am not a citizen in this bit of Asia and do not perform an "essential" job. I need to go back to where I came from. If I get sick here I will take a hospital bed away from a citizen. I was welcome to spend money to gawk at gardens in the sky or eat overpriced dressed up food. Not welcome to spend time with a loved one. Consumption and entertainment get into the GDP, money transactions count; relationships are useless. Thats the way we live - transactional, temporary, veneerism. We entertain ourselves in idiotic fifteen second bytes. Anything longer is a drag. Who cares that the guy making a fool of himself on video lives in his own excrement? Or taking a break from skinning dogs while they are still alive. Our lives are measured in finger-flips - independent momentary interactions with nothing beyond the fifteen second frame. All that matters is advertising revenue. How did we end up here? We jump up and down frothing at the face while a clown mouths off about a Chinese virus. But we happily buy cheap Chinese shoes. Don't even know the shoes are Chinese but we know the virus is. We don't care that the shoes turned a river red or that the factory used to be a village. As long as our shoes are cheap and our clothes trendy. My consumption decision stops at the store. Once in a while I might notice something with a sticker that says, "We are nice people", I gladly toss it for something cheaper or trendier. And now the "Chinese" virus is killing us and mass slaughter of wildlife distresses us? Now we forward WhatsApp messages to stop wildlife trade and cute videos of dolphins swimming in Venetian canals? Those Chinese slaughtering exotic animals are bad; that's what caused the virus? And suddenly we are all custodians of the environment? We forget that the Chinese can afford pangolin scales and rhino horn only because we wanted cheap shoes and toys? Globalisation was supposed to bring the world together. But this globalisation is not sustainable. This transactional, short-term, blinkered globalisation is hastening our collective demise. Where are the communities that the wise men say are essential to our wellbeing and survival? Communities bound by consumption enslavement and whatever skullduggery as long as the government says it is within the law? That sense of identity that supposedly keeps us sane? Does that come from wearing identical t-shirts and chanting racist chants while bulked up freaks engage in acts of physical self-abuse and violence? The sense of purpose that supposedly makes life worth living? Shop till you drop? Globalisation without a sense of a global community is a disease. Without a common purpose, a sense of identity, and reciprocal obligations we are parasites on the planet and on each other. We cannot survive as a species unless we rethink our value systems. Humans have tried to find purpose in their lives since times immemorial. We don't have to ponder the philosophical or spiritual "who am I?" or what ever to see that unless we make environment and social good the core of our value systems, unless we put at the center of our existence the safeguarding of our planet and our collaborative evolution as a species, we are guaranteeing our own extinction. We won't have any philosophical questions to ponder. We will all be dead. Stewardship of the environment and empathy for our fellow humans is the most urgent human purpose. So what? Hold hands and sing songs? Teary-eyed at pictures of children holding baby goats? No. Have all of us turned us into complete idiots that we ignore science for bullshit?Feel good brand bullshit is hoodwinking us while we merrily buy and discard without any idea of what we are really doing. Have we decided that collective idiocy and disregard of science is the new black? We have the power to make a difference but while the pundits and the bureaucrats slather themselves with science-based targets and SDGs we smoke brand bullshit. Who is going to insist that brands and corporations step up and translate the science into real changes? Change the way they operate, change the way they account for their business outcomes, change the way they are governed, change the way they pay their managers? It does not take a genius to see where to start. Isn't it obvious that science has to be the driver and we have to start where our raw materials are produced? How can we believe that our supply of raw materials is unlimited? We are happy to massage our consciences with easy badges without a thought to carrying capacities, optimal herd mixes, wildlife ecology, and ecosystem health and the real needs of the communities that produce them. What is that price premium actually doing on the ground? Fair-trade is not fair for the planet. Its not fair for generations that will come after us. Science has many of answers, some need to be found. But we are happy to ignore science and instead to rely on nice-looking labels to tell us its all okay. And we are happy to believe that we live in our own little bubble. Do we know how our consumption decisions go? Our ill-informed concern has easily transformed into not-in-my-backyard attitudes that are drowning third world countries in garbage while we beam at our immediate "footprints". We export our sins. Claiming zero carbon footprints while suffocating entire towns in India is hypocrisy of criminal scale. Todays supply chains are very effective at insulating us from the environmental and social damage of our consumption. What do we do other than use a transactional and abstract "price" to believe that everything is alright? "Fair-trade", "returning 2% of profit to the communities", "donating one pair of shoes for every ten bought" - we have to stop this nonsense. Our perverse consumption decisions are destroying our world - killing the environment and destroying our communities - what does the extra 2 percent do? And then the way we deal with each other. Our lives are an endless series of transactional short-term engagements. "Get out of our country when health becomes more valuable than the money you spend gawking at our gardens in the sky" is a terrible way for humans to behave with each other. Reciprocal obligations develop over time. It is unrealistic to expect that suddenly we will all start holding hands and singing songs. But we have to start somewhere. And a good way to start is with an appreciation of the folks who produce the raw materials that finally feed and clothe us and the ecosystems that they come from. It is time to stop seeing raw materials as nothing more than anonymous inputs into trendy products and communities as nothing more than the value of their surplus labor. Sometimes we need them, sometimes they need us and this cannot all be written into a contract. We are humans. We need to start behaving like humans not like some code that executes on the basis of rules. We have to stop believing that we are meant to be greedy selfish assholes who care only about ourselves. And we have to stop believing the bullshit that draconian governments and unscrupulous corporations pump into our heads. We have to stop and look around. We are happier when we have a purpose that goes beyond catching the 7.20 am bus to downtown. We feel better when we help each other, when we are kind to animals. Why do we have to make that only a weekend distraction? Who does not feel better joking with the coffee lady while she makes your coffee? Why not make relationships a central point of our existence? Who says we need relentless growth to survive as a species? This is bullshit and it is time we used our brains to think for once. Unless we do this we are all fucked. #coronavirus #goodgrowth #tomorrowscapitalism

William Gibson’s novel The Peripheral is a great novel. In it a character from the past has to pretend to be, in the present, a "neoprimitivist curator", something that she could never even have comprehended - simply because of when she was from. So they implant into her present day avatar a cognitive bundle to enable her to sound something like a neoprimitivist curator. “You’ll spout a reasonably high grade of facile nonsense”, she is told. “Will I know what it means?”, she asks. “It won’t mean anything. . . Were you to keep it up, you’d shortly repeat yourself.” “Bullshit baffles brains?” And this brain-baffling bullshit has started showing up more and more as the Instagram generation discovers environment conservation as a market niche. A cashmere brand claims it is helping herder communities in the middle of the Gobi desert by building jogging tracks; a high-profile founder claims her brand understands “fully the carrying capacity of the region”. Almost twenty years in Mongolia I have yet to see a cashmere herder out for a jog and not even a rangeland ecologist has ever claimed a "full understanding" of the carrying capacity of a region. So what's going on? Brand Bullshit. We are seeing more and more bullshit artists setting themselves up as creators of a new and better world. In reality its not about this at all. It is about bullshitting their way into what they see is an underexploited market niche. But there is a reason that the “market niche” of environment conservation and social wellbeing is underexploited - doing it right is bloody hard and its impossible to do right if you are on a venture capital hunt. But although the purveyors of this bovine dung are false messiahs, the sins they are claiming to be dying for are real and important. When the bullshitting do-gooder says she understands carrying capacities, she knows overgrazing is desertifying grasslands. And when the daring duo cashmere cowboys yodel about their jogging tracks bringing communities together, they know that communities in the Gobi are disintegrating. The textile industry and its supply chains are wreaking havoc on ecosystems and communities around the world. So what to do? How to go beyond the brand bullshit? The real versions of what the brand bullshitters are claiming to be do exist. Researchers at the Wildlife Conservation Society, for example, have been studying Mongolian grasslands and trying to figure out optimal herd mixes, carrying capacities, rangeland health indicators, and management plans. The South Gobi Cashmere Project partly funded by Kering and supported by WCS has been trying to build commercial herder enterprises around science-driven sustainability standards. The IBIS Rice project supported by WCS has crafted a product based on science-based land use plans. Wildlife Friendly protects wildlife by certifying enterprises that assure people and nature coexist and thrive. This is real work. It takes more than a motorcycle ride across the Gobi or a homestay with a herder family to figure out. Making these real solutions financially viable is what it will take to go beyond the brand bullshit. And it is hard work. And this is what the Good Growth Company is about. We start with an outline map of a business system that can deliver good outcomes. This could be a local-global chain that connects threatened Mongolian grasslands and herders through specialty manufacturing hubs in Scotland through small brands to conscientious consumers or it could be artisan wines from fragile slopes in Georgia through specialty retail to US consumers. And then we work with partners who know what they are doing to understand what ecosystem balance means at key locations in the system. This could have quite different components at different places - from wildlife habitat protection, and children's education in a Mongolian valley to community-owned spinning facilities in Scotland to activity-oriented consumer groups in the US. And only from that understanding determine the parameters of the system including the mix of inputs, the type of products, the type of connections. And the design of a business system - structures that foster long-term symbiotic partnerships based on reciprocal obligations, fair distribution of value, and a sense of community and a shared identity; financial products that are directed at the whole system rather than only a part of it and which are structured to maximise regenerative returns; and a strong brand narrative that ties the participants together - is all directed towards balance at each node of the system - regenerative from the get go, not just "lets try and get there at some point in the future." Sounds hard? It is going to be bloody hard. And what it will look like will probably be quite different from what each of us has imagined. But this is the only way to get around brand bullshit. #brandbullshit #fakegood #goodgrowth #WCS

For a while now, International Finance Institutions have been trying to integrate their activities better with the wider economic and financial system. Their efforts to better align social and environment objectives with private sector and non-government objectives mirror the principles of Triple Bottom Line (People, Planet, Profit) coined by Volans co-founder John Elkington in 1994 - TBL was intended to pull Planet and People into the Profit focus of businesses; IFIs have been trying to pull Profit better into their Planet and People focus. But IFIs will have to do much more if they are to remain relevant. In 2018 John Elkington recalled Triple Bottom Line because it had done little to trigger the kind of systemic change that is needed to make capitalism sustainable. Instead most adopters were using TBL as little more than an accounting tool. With the backing of organisations like Aviva Investors, The Body Shop International, Covestro, Unilever and the Scottish Environmental Protection Agency, Volans’ Tomorrow’s Capitalism Inquiry is exploring how the principles of the Triple Bottom Line can be applied to accelerate the emergence of an economic system where companies thrive because of – not in spite of – their commitment to creating economic, social and environmental value. International Financial Institutions need to be part of this systemic inquiry. Unless IFIs help trigger the sort of economy wide transformation that Tomorrow’s Capitalism Inquiry foresees, their goals of poverty reduction and environment protection, are going to become more and more difficult to reach. They will become increasingly irrelevant trying to address the negative outcomes of systems over which they have no influence. They would have missed the opportunity to contribute to the way tomorrow’s economic systems will be shaped and to define for themselves a role in them. IFIs are uniquely positioned to act as systemic connectors - pulling together the public resources, private investments, philanthropic capital, and non-government initiatives that will be needed to trigger systemic change and influence evolution. IFIs must participate in Tomorrow’s Capitalism Inquiry to make sure that they remain relevant, influential, and effective. #tomorrowscapitalism #volans #goodgrowth #greenswans