One of the big points for me was the way Jahn looks at operating cash flow.  Anyone who has been to business school has learned a variety of accounting conventions and financial ratios – which have become the goalposts and field markers in the game of business.  But how much sense do they actually make? Do they really tell us what’s going or are they several levels of abstraction away from the reality of the business?  Jahn would argue the latter.

What’s amazing is that most of us, at the level of ordinary domestic reality, know that so much cash is coming in, and so much is going out.  Pretty simple. Businesses, on the other hand, especially the big ones run by MBA-types, have a bewildering array of metrics, used in financial statements, that often obscure the truth more than illuminating it.  Think about Enron, widely celebrated as a runaway innovator and success until the sheer “creativity” of its financial metrics was revealed in all its shoddy glory.

Likewise, one of the supposedly radical innovations in Lean Manufacturing is the idea that workers become involved in working out their own solutions to problems, based on agreement about the metrics that matter. How radical is that? For most of our history as hunter/gatherers, or farmers, that’s been pretty ordinary stuff. Let’s put our heads together and figure out how to cut one of those mammoths away from the herd so we can eat.

But somehow, we’ve been lost in that Industrial Age Bubble, where ordinary logic is banished in the name of specialist management-think.  Somehow I think this is related to the clever MBA mindset (disclosure:  I have an MBA) that slices bits of mortgages into new instruments, puts it all into a blender, and creates derivatives whose risk characteristics and accountabilities  resemble some indistinct smoothie more than a piece of meat one can value and sink one’s teeth into.

Somehow the ordinary business of risk, interest, and trade gets lost in all this.  And we’ll likely deflate until we find the  ground again.

Listen to my interview with Jahn Ballard:

Descartes has had such an impact on our culture that today we tend to think it “common sense” that each of us is an island – or at least we behave that way.  One of my teachers, Julio Olalla, was fond of pointing out that we tend to think of ourselves and our problems as our own isolated psychological case, when in fact we are playing out cultural scripts that date back centuries.  These scripts are passed on through family stories, cultural messages, official history, and the very words we use to describe our world.

Our culture has achieved incredible material success/excess because of our ability to view ourselves as separate – as if, like Archimedes, all we need is a place to stand and a lever big enough, and we can move the earth.  The only problem is, we are standing on the earth.  There’s nowhere else to stand, space fantasies notwithstanding. Despite our limited success at conquering nature, we are in danger of overbreeding, starving and poisoning ourselves with our own toxins.

Eastern philosophies, particularly buddhism, offer a radically different worldview, based on mutual causality. Western philosophy has generally focused on linear causality until very recently.  A causes B, which causes C.  Which is exactly why so many of our great inventions have brought about unintended consequences. Pharmaceuticals have conquered many diseases, which is a good thing, but are now polluting our water, subjecting fish, and ourselves, to unmetabolized birth control pills, anti-depressants, etc.  Only recently, with the development of Systems Theory, have we begun to see how phenomena emerge, sometimes unexpectedly and chaotically, from a variety of causes.

In a chaotic, interconnected world, we see that we cannot control everything, but instead influence a complex chain of events through intentions and small actions – even if we are not sure which ones matter.  This is why random acts of kindness are a good thing!  Thich Nhat Hanh, the Vietnamese buddhist monk and peace activist, has coined the term “InterBeing” to describe this mutual connectedness.  Rather than believe our own story about how things happen to us, he suggests we continually ask why things occur the way they do.  And, when we keep asking that question, we ultimately see there is no one to blame, including ourselves.

The way of leading business that I see emerging among “natural” entrepreneurs draws from this well.  Any complex product arises from a number of ingredients, that come from different places.  Each has an impact on the local economy that produces it, the local ecology, the health and well being of the people who live and work there.  Likewise for the way it’s manufactured, packaged, used and ultimately disposed of.

Today on my BlogTalkRadio Show, I interviewed Joshua Onysko, the founder of Pangea Organics. Pangea is the fastest growing organic skin care line in the world.  Josh has built Pangea from the ground up to be a business that acknowledges the connectedness of all players in the manufacture and use of the product.  Josh has even thought deeply about packaging.  Since cardboard packaging consumes millions of trees a year, Pangea’s products are packaged in downcycled paper fiber which is impregnated with seeds.  Plant your holiday gift pack wrapper and a Colorado Blue Spruce tree will grow.

Josh is using profits from Pangea to fund micro-financing efforts that go back to the people – mostly women – who grow the crops that supply Pangea with ingredients.  This creates stable livelihood for the growers, and a steady supply of quality product for Pangea.

The market for organic personal care products is growing at 22% per year. Why does this matter? Our skin is our largest organ, and absorbs 87% of what we put on it.  Cold processed organic soaps maintain the liveliness and efficacy of the ingredients so they can be available to the skin.

Josh pointed out that we are led to believe that healthy products are a luxury. In many cases, because of their effectiveness, organic products are actually cheaper per use, and infinitely better for long term health. Is a “cheap” bar of soap actually cheaper, when we consider the real cost of petroleum by-products, wasteful packaging, and unknown efffects of chemical ingredients?

All of this may sound like fringe thinking, but Josh summed it up when he said “the Fringe predicts the Future”. Business people and economists are beginning to see how many costs we have traditionally “externalized” – but on a small, crowded planet, all those “externalized” costs, like the pharmaceuticals in the water supply, ultimately find us.

Listen to my interview with Josh:

In today’s BlogTalkRadio Show with Dr. Don Beck – bio-psycho-social mapmaker and activist – we explored that question.

In Dr. Beck’s view, our greatest need is a remedy for the polarization in our society. We’ve tended to look at conflicting values like left vs right, free-market vs interventionist, as a kind of pendulum that goes back and forth.  There are trade-offs and compromises made between opposing poles. In fact, the better mental model is that of a spiral, in which each movement transcends and includes the previous movement.  The apparent opposites and value conflicts are really moves in a bigger dance, a pattern that reveals itself as it emerges.

Beck’s model, called Spiral Dynamics, imagines personal and cultural emergence as a response to increasing levels of complexity in our environment.  Today, we are at an unprecedented level of complexity, with 6.5 billion humans emerging from a variety of conditions and cultural stories.  Here there are Vikings with nuclear weapons, shamans on the internet, and hedge fund managers doing yoga.  It sounds like a giant halloween party in Times Square attended by all the people who have ever lived.  For a species in which, for most of our existence, most of us have known at most 200 people, this is quite an encounter.

How can we all live together and adapt to this situation? Beck practices what he calls “natural design”.  It’s not based on a “one size fits all” formula.  It’s based on curiosity, inquiry, mutual respect, and an understanding that we all respond intelligently to our particular life situation.

Don Beck has used this model to defuse conflict and create political and economic transformations in a number of troubled societies, including South Africa, Palestine, the Netherlands, and Mexico.

What are the implications for business leadership? Beck thinks that it’s critical to align the business’ cultural DNA with the “habitat”, the larger cultural and economic conditions. There’s no way to fake that – which to me fits in with the new sense that branding has to be authentic.  Authentic branding is not limited to product packaging and advertising, but to the totality of experience of everyone who touches the organization.  Collective karma, if you will.

We talked about race.  Working in South Africa, Dr. Beck developed a color scheme to describe the various sets of values, or vMemes, that he encountered there.  It was no longer an issue of black vs white, but a tapestry of purple, red, blue, orange, and green. As he said today, “It’s not the color of your skin that matters anymore, it’s the color of your mind.”

Can the US create a national political culture that honors everyone?  The blue states, the red states, the cities, the suburbs, the rural areas, even…….Alaska? If we recognize that different parts of the country have different life conditions, can we find a new framework that accommodates each and all of us?

And perhaps President-Elect Obama is just the right person to serve this transformational time.  His unusual background led him to be labelled “un-American” at one point in the campaign.  On the contrary, the fact that he didn’t fit any neat category – African father, raised by white mother and grandparents in multicultural Hawaii – required him to make choices about how to define himself, rather than to “know” who he was.  He had to “ask” who he was, and make a choice.

To my way of thinking, inventing and re-inventing oneself is as American as apple pie.

Here’s the interview:

Marsha challenged me on the use of the term “sustainability”.  She said that five years ago, sustainability was a good word, because it provoked reflection.  Now it doesn’t anymore, it’s become old hat, and when you use the word people think they get it.  This is a loss, since provocative questions and inquiry are at the source of innovation and new thinking.   The term Marsha likes, and a term that has come up for me in several conversations – including the one with Michael Brownlee about community, cited earlier, and a conversation I’m having with Don Beck of Spiral Dynamics fame – is RESILIENCE.

Resilience is a term that is used to describe any system – whether a body, a mind, a family, a community, a company, an economy – that is able to adapt, thrive, rebalance, and innovate in the face of changing circumstances.  Sounds like something we need more of these days, what?  Resilient leadership that sees the big picture, builds healthy collaboration and connection, and finds sources of renewal and inspiration.

Marsha made the comment that a Resilient Leader never makes a statement when a question will do.  Think about that….

Which leads us to the $5 word of the day, NEUROPLASTICITY.  Neuroplasticity has been the subject of several international conferences in the last year or so.  Brain science tells us that the typical “adult” mind functions by re-running tapes from the past in order to determine how to deal with challenges of the present.  This is useful if the environment is relatively stable.  As you may have noticed, ours is most definitely not stable.

On top of that, we have all been trained in school and at work to “have the answers”.  But, being in a conscious state of “not knowing” and inquiry is a key to having a youthful mind that can imagine new possibilities. And this is the way for business people to add value at a time when the rules of the game are continuously changing.

What gets in the way of neuroplasticity? Stress, naturally.  Multitasking, which degrades our ability to focus. And the big kicker for business leaders – concern for status. If you’re a high status individual, you might be worried about losing it, not seeming to be on top of things.  And likewise, if you’re a low status individual, you keep telling yourself a story that your ideas and actions don’t matter.  Either way, you’re not really confident and open.

How to promote a state of neuroplasticity? Marsha suggested practices like exercise, mindful breathing, meditation, creative play – as well as a practice of never making a statement, never having an answer when a question will do.  That resonates with my experience – being comfortable holding a question is a skill we can develop, that keeps us open, in literally in a state of wonder.

You can download the full hour-long interview at www.blogtalkradio.com/sustainableleadership

Or listen to it right here:

Dick has been a thought leader in the financial planning world for twenty-five years, including a stint as President of the Institute of Certified Financial Planners.  He is currently the editor of insidemoney.org, an online journal that addresses our personal and collective relationships with money.  Dick is also a regular columnist for Financial Advisor Magazine, and writes articles about money and what he terms “money forces” for various other publications.

He is something of an agent provocateur within the financial planning profession.  The conventional advice one gets from most financial planners is to save now for a comfortable retirement.  While this is undeniably good advice, it is based on an underlying assumption that money = security.  It evokes a paranoid mood, eg, “if you don’t save money now, you’ll be eating dog food in your old age”  The problem with the current financial meltdown is that you may have played by the rules, saved for a rainy day, and now your securities aren’t worth what you thought they were – so where’s the security? Money is not security. Money is one metric, along with happiness, health, and safety, in a larger idea of what “wealth” is.

So what does money have to do with sustainability?

When I was in school, we were presented with this concept of the “time value of money” as if it were an objective law of nature, equivalent to the law of gravity – ie decreed by God at the dawn of creation.  But money is actually a human invention.  And a very clever one at that.

Dick points out many positive, evolutionary aspects of money.  Money enables us to feed a high percentage of the 6.5 Billion people on the planet – not enough, to be sure, but astounding when you think about it. We have laws and rules about money that enable enemies to do business with each other.  Cross border ownership of resources, denominated with money, reduces the motivation for war.

So here’s the connection with sustainability:  Our debt-based money system inherently requires expansion and growth. Capital seeks the highest rate of return, at an acceptable level of risk.  That return derives from expansion of production and consumption. Economically, it’s a problem if we stay the same.  If we don’t get bigger all the time, we lose ground.

And, one of the results of our economic progress is that we actually become isolated from each other.  The elderly pay money to reside in an assisted living home.  Parents pay a third party to provide “child care” while they work, to earn money.

So debt has enabled a huge material benefit to many humans.  And, taken too far, it becomes an addiction. Financiers develop ever more sophisticated instruments to manage risk and squeeze out more returns – and sometimes it crashes, like recently.

I keep coming back to this theme about addiction – as a culture we are addicted to debt, to cheap oil, to novelty.  There’s a lot of good stuff there, but we have become immoderate, like a glutton who just can’t stop eating.

So how do we create an economic and monetary system that doesn’t demand endless increases in consumption?

I wish somebody would tell us the answer to that question right now.  But, just realizing that we created this system is a tremendous step in the right direction.  If we made it up, we can change it.

Here’s the interview:

Our first online interview  October 1 with climate scientist Jeffrey Kiehl, covered a wide swath of territory in an hour.  Jeff talked about how nature becomes invisible to us.  Our limited awareness of ourselves in nature, time and space impacts our ability to see, and act on, the environmental challenges we are creating for ourselves. Jeff describes  how the images, metaphors and stories we tell ourselves impact our possibilities for acting in new ways.  And how do we change? We need to rewrite the story.  We have been living in an industrial-age culture in which the machine is the metaphor for life and business.  And now we are moving into a new metaphor, in which living systems are the metaphor. The earth goes from being an inert lump of resources waiting to be exploited, to something alive.  If we are addicted to fossil fuels, we talked about treatment models from psychology and the recovery movement. Jeff tells a powerful ancient greek story in which a greedy man becomes so addicted to the fruits of the earth that eventually consumes everything, including his own limbs!  In this story, the spirit of the earth is alive, showing up as a goddess.  At the end, we talk about the need to move from an argumentative, media-dominated discussion of sustainability into a real collective conversation focused on new stories and new actions.

Check out Jeff’s website at www.jtkiehl.com The interview is available at http://www.blogtalkradio.com/SustainableLeadership/blog/2008/10/01/Nature-Visible-and-Invisible

Or listen to it right here:

In the second conversation, recorded today, Michael Brownlee and Dan explored the rapidly growing “Transition” movement as an evolution towards resilient local communities, spurred on by the challenges of energy descent.  We talked about the idea of “peak oil” and the impact it may have on our economy and our lifestyles. Michael defined “resilience” as the ability of communities to withstand economic and environmental shocks.  Rather than viewing energy descent as a scenario of collapse and breakdown, however, Michael sees these times as a spur for cultural evolution of the human species.  We are moving from adolescence into adulthood, with new capacities for collective intelligence and community.  The Transition movement, which originated in the UK, has become a rapidly growing movement in Colorado.

See the Transition Boulder County site at transitioncolorado.ning.com and hear the interview at http://www.blogtalkradio.com/SustainableLeadership/blog/2008/10/09/Transition-The-Most-Inspiring-Movement-in-the-World

Here’s the interview with Michael:

And, that could be completely wrong.

I’ve been through several apocalyptic mood swings ever since I read The Limits to Growth in the run-up to the first Earth Day, back when I was in high school. Then, there were the two oil shocks of the seventies. Then the Harmonic Convergence. Then Global Warming. Now Peak Oil, taking us right up to 2012. The world hasn’t ended yet, and on the other hand, it’s a big assumption to believe that the past is a good predictor of the future.

So how am I holding the future now? The Buddha used the analogy of tuning a stringed instrument. He was talking about how to hold one’s mind. Not too tight, not too loose.

Too tight might be taking the worst-case scenario at face value. This attitude leads to paralyzing fear.

Too loose might be thinking everything will somehow work itself out and life will go on. After all, it has every time before, hasn’t it?

What does this analogy say about leadership, about the kind of leadership we all need to embody these days? One of the most important things leaders do is to create a mood.

Is it possible to act from a confident mood, without falling prey to either lame optimism or fearful pessimism? Can we be confident even while acknowledging great difficulty?

One of the biggest limitations of logical thinking is that it tends to be black and white. That’s why some of the smartest people I know are the most depressed. But are they right?

The quality I’ve observed in some of the best business and political leaders is the ability to embody paradox. Seen differently, paradox is a form of creative tension, the gap between the real challenges of our time, and a vision of what sustainable life might look like. And to act in that gap.

When the internet came along, I saw that as evidence that, at least on a crude level of text, pictures, music, etc, an infosphere was emerging. It opened communication, created a forum for dissenting voices, and made all kinds of products and ideas available. The internet is a miracle of innovation, and has made possible a whole new class of entrepreneurial, home based professionals, including myself. It’s not global consciousness, but it’s a step in the right direction.

When NAFTA came in, I was living in Halifax, Nova Scotia, Canada. After having lived in the US all my life, I found that products in Halifax were overpriced, of low quality, and limited selection. That was the late 1980’s. As NAFTA took effect, I had as much choice as I’d had in the States, at lower prices. I thought that was a good thing. And, it created opportunities for people in that somewhat out-of-the-way, but very creative, place to find new export markets for software, music, film, and other knowledge products.

There are lots of problems with globalization – but I’ve tended to think many of these could ultimately be fixed with sufficient attention to labor and environmental standards as part of international agreements.

Two years ago I met Michael Brownlee. Michael was the head of Boulder Going Local, now known as Transition Boulder County. The premise of Transition is that, with peak oil, the cost of transportating goods and people will become so high that we will have to create more economic and social value at the community level – the way humans have lived for most of our history.

I have to admit I was skeptical at first. Boulder County, Colorado is not a place that has supported a subsistence economy since the days of the Arapahoe. When my industrial age European-descended forebears arrived here after the Civil War, Colorado was already a commodity economy. The railroad transported immigrants and capital west, and gold, wheat and sugar beets east. Civil engineers like my great-grandfather Alpheus McNitt built irrigation ditches to bring water from the mountains into what had been called the Great American Desert.

So, isn’t re-localization just wishful thinking? Seems not. Last week Michael and partner Lynette-Marie Hanthorne held a workshop outlining the ideas of David Holmgren, one of the Australian founders of the Permaculture movement. Holmgren makes the argument that we are still living in the post-Enlightenment culture, based on a fundamental belief in human brilliance. The whole modern worldview, with its belief in progress and innovation, is based on this assumption.

But what if all the marvels of 21^st century life as we know it, are in fact more the product of cheap oil than of human brilliance? I resist this idea. It sounds Marxist, the idea that our consciousness is determined by our material circumstances. I believe that thought generates our world. I’m not new agey about this. I recognize there are limits – the inevitable cycle of birth, old age, and death we all live through. The influence of parents, schools and other cultural institutions on the stories we tell ourselves, stories about who we are and what we are capable of.  Nonetheless, we create the world we live in.

But the evidence for peak oil, as a constraint that we’re colliding with at 90 miles an hour, is compelling. Holmgren makes the connection between cheap oil and social breakdown. Our ability to drive many miles to our private home with our automatic garage door opener, where we don’t talk to our neighbors. Each in his/her own unit, with its own toaster. Our isolation, our addictive behaviors, which are epidemic. The fear we have of each other. Maybe life’s not so good with cheap oil after all?

Holmgren lays out four possible future scenarios of post-peak oil “Energy Descent”:

Techno-Explosion: In which we discover a new source of limitless energy and blast off into a science fiction future of no material limits. Given the dystopian view of social breakdown he lays out, it also sounds like a recipe for Timothy Leary – inspired psychosis. Perhaps we could colonize space, and humans will multiply infinitely through the galaxy and beyond. Hopefully the pharmaceutical industry will keep up and they’ll get that Holodeck invented after all.

Green-Tech Stability: After a little bumpy period, we learn to replace fossil fuels with renewable energy sources. We don’t continue our Evel Knievel – like jump into space, but settle down into a stable, slow/no growth pattern, in which we relax into an abundant, but less frenetic lifestyle. This is the point of view advocated by many of us who believe in innovative, capitalist solutions, eg Al Gore.

Creative Descent / Earth Stewardship: Using permaculture principles, we descend gently but steadily into a localized, subsistence economy that features greater value in community and ecological harmony. Population subsides from the current level to something that respects the earth’s carrying capacity – maybe 1 billion or so?

Collapse: Think end of the Empire, Dark Ages, warlords, barbarian hordes, moats, only with automatic weapons. Not a pretty prospect.

Michael challenged us, not to believe one idea or the other necessarily, but to take a hard look at what idea we were holding of the future. And to examine the basis for that view.

I come down in the Green-Tech Stability camp. But, I wonder, can we recognize the challenge and change the system and our own worldview fast enough? And what kind of hard-facts slap in the face will we need to get moving?

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