Doing Business Differently

November 30th, 2012

This item first appeared in Dead River Journal, 11/29/2012:

We know that the new economic and ecological realities we face require us to do something different in business, which in some cases also means doing business differently.

Certainly it’s possible to use a conventional business model to manufacture and install solar panels, build windfarms, etc., and we certainly need these kinds of things “at scale,” as they say, sufficient to offset the energy we get from coal, oil, and nuclear. But other kinds of businesses — local, community-based businesses focusing on food, energy conservation, community banking, and other elements of local “economic, social, environmental, and cultural development” — these it seems need a different approach to doing business altogether.

For one thing, getting people to invest in local projects is surprisingly difficult under the conventional business model. It’s just much easier, and assumed to be much safer and more profitable, to “diversify your investments” by putting them in mutual funds, bonds, and publicly-traded companies. What we need are local investments that are either super-secure, or where the risk can be spread over many different enterprises and investors.

Focusing attention on the local economy is one of the central tenets of “financial permaculture,” a movement that is growing out of the tradition of permaculture derived from the work of Bill Mollison and David Holmgren in Tasmania in the 1970s.

Wikipedia describes permaculture as:

Permaculture is a branch of ecological designecological engineering, and environmental design which develops sustainable architecture/human settlements and self-maintainedagricultural systems modeled from natural ecosystems.[1][2]

The core tenets of permaculture are:[3][4]

  • Take care of the earth: Provision for all life systems to continue and multiply. This is the first principle, because without a healthy earth, humans cannot flourish.
  • Take care of the people: Provision for people to access those resources necessary for their existence.
  • Share the surplus: Healthy natural systems use outputs from each element to nourish others. We humans can do the same. By governing our own needs, we can set resources aside to further the above principles.

— and certainly these are goals of financial permaculture as well. The central goal is, however, to develop economic structures that are enduring and resilient because they are designed around these principles.

In January I’ll be speaking at the 2013 Financial Permaculture & Local Business Summit in Miami, and working with Earth Learning, the South Dade Economic Development Council, the Financial Permaculture Institute, and Miami Dade College at an ” integrative learning experience” to build resiliency in the local community.

As the poster states, “We will address the economic and ecological challenges of
the 21st century as we explore creating money cycling, local investments, and
forward-looking businesses that optimize the local natural systems and human capacities to implement models of regenerative business and local resiliency!” This is certainly what we need; the challenge is now to translate this into practical reality.

My experience is that it’s a lot easier to talk about “regenerative business” than it is to create one. To begin with, it must actually do something to regenerate the ecosystem, and ideally also the culture and the community, and for many of us these are elusive and difficult realities. What is a community, really? Is it geographically bounded, or defined by economic interrelationships, or is it something entirely in our minds, a form of agreement? Is it what’s conscious, or what’s unconsciously accepted to be real? Is it defined by administrative boundaries, or by cultural ones? These are difficult questions, like defining obscenity: we know it when we see it.

Then there’s the problem of making money, which is often the stickiest one: if it’s a business, it has to make money. And this may be true even if it’s not; in our society, to keep anything alive, even a nonprofit, it has to make enough money to “break even,” even if all of it comes from grants or donations. We are, as Buckminster Fuller frequently pointed out, the only species that has to work in order to have the right to eat. And of course it’s not just a matter of making enough money; it also has to make money “the right way,” which is to say in way that does not harm others or the environment and sustainably generates a surplus.

This leads us back to the question we started with, which is how and when we need to do not just different kinds of business but also to “do business differently.” Building a windfarm can be treated as just another business; it takes the same sort of planning, investment, and implementation as building a gas-fired power plant. But building a windfarm that returns its profits to the community — like some of the rural coops — requires a different kind of thinking. Similarly, having a local currency, or a community-owned bank, or a full-scale eco-community, means a different approach to business. It’s not about maximizing absentee shareholder value, but about maximizing stakeholder value, where the stakeholders include not only all the individuals who are affected but also future generations, other species, and nature itself. Creating this kind of business is hard, but it’s worth doing.

If you’re interested in attending the Miami event, or want to learn more about Financial Permaculture, please visit http://www.financialpermaculture.com/cms/

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