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WHAT WE LEARNED IN THE RAINFOREST
Business Lessons from Nature
By Tachi Kiuchi, Bill Shireman Berrett-Koehler Publishers, Inc.
Copyright © 2002 Tachi Kiuchi and William K. Shireman
All rights reserved.
ISBN: 978-1-62656-228-8
CHAPTER 1
Feedback
LESSON ONE: USE LIMITS TO CREATE VALUE—CLOSE THE LOOP
IN THE RAINFOREST, nature uses feedback to "close the loop." In the face of limits, feedback triggers adaptations that lessen or make an end-run around physical constraints.
IN BUSINESS, companies like Coors use feedback to "close the loop," triggering innovations that lead to new products, processes, businesses, and profits.
Skydiving is the perfect antidote for a high-stress job. It gives you total release. When you look down and realize that you are freefalling, straight for the ground, at 120 miles per hour, all your senses are fully engaged. There is little opportunity to dwell on corporate strategy, balance sheets, or day-to-day family issues.
When people skydive, all their five senses must be operating effectively. Imagine, for example, that during this particular dive over Costa Rica, we had no sense of sight or hearing—just a sense of touch.
With only a sense of touch, after we stepped from the airplane, we would feel the rush of the wind against our faces; we would sense great movement and exhilaration. It would be very exciting. The only problem is that we would not be able to see the ground, so we would have no way of knowing that we were descending rapidly toward it. We would not even know that we were falling. Thus the ground would have no impact on us at all, until we reached it. Then, it would have a significant impact.
In business, we are much like a deaf and blind skydiver. Business operates with only two senses: taste and touch. Our businesses have a sense of taste in that we know what is going on inside the business—what our immediate bottom line is. And our businesses have a sense of touch in that we know the effect of what is happening directly to us from the outside, we feel it right now, this quarter.
But think about it: Our businesses have no real sense of sight or hearing. We do not know what is happening at a distance, until it is directly affecting us, until we feel the impact. So we speed forward blindly, feeling the excitement of commerce, the exhilaration of the wind against our faces. But we do not know if we are ascending quickly into the sky or speeding toward the ground.
Ray Anderson, the chairman of Interface Carpets, says that modern business people are often like the early inventors of airplanes, who pushed their homemade planes off the edges of cliffs, confident that once in the air they would fly. Many were surprised when they crashed to the ground. Ray says that we have pushed our whole economy off a cliff. We are rapidly consuming the earth's resources, cultivating a fast-moving economy. We feel the wind against our faces. Gravity is pulling us faster and faster, and we feel more excitement than ever. But now we are approaching the ground.
Before we reach the ground, we need to wake up. We have work to do. While we are in midair, falling, we must—as the rainforest has—learn to slow our fall, or even to reverse it and fly.
IN THE RAINFOREST
FEEDBACK TRIGGERS THE CREATION OF VALUE
FEEDBACK IS NATURE'S WAY TO LEARN
In the rainforest, the evolution of every creature is shaped by feedback, adaptation, and learning. Every species is sculpted in response to the extreme limits that are a constant reality. These limits propel the creatures of the forest rapidly toward a "ground zero" at which they have fully consumed the resources that had sustained them. However, through feedback and adaptation, they develop a system that brings new supplies of resources—the margin they require to avoid hitting the ground—often just in time.
The rainforest delivers these resources through an extensive array of feedback loops that serve as the sensory system of the forest. These loops are extremely tightly bound, compared to those of temperate forests. In Pacific Northwest forests, for example, warm spring days signal plants to burst with buds, shoots, and leaves, creating an environment rich in protein. Animals conditioned by this protein pulse bring forth their young during this time; birds return to raise their newborn, insect eggs hatch, frogs awaken from hibernation. In summer, plants and animals tap the abundant food to grow in size and number. Come autumn, growth slows, trees drop their leaves, and plants produce berries, seeds, and nuts to reproduce again in the spring and to sustain life through the winter.
In the tropical rainforests we visited, by contrast, sunlight, rain, and warm temperatures are constant, and plants germinate, grow, flower, and seed year-round. Leaf fall is slow and continuous, rather than concentrated in the fall. As a result, there is no seasonal protein glut. Constant heat and moisture lead to fast decomposition. The humus that enriches the soil in temperate forests doesn't have time to accumulate in the tropics. The forest floor is a dark factory of decomposition. A leaf that falls in a North American forest may take a year to decompose; the same leaf in the rainforest will fully decay in a month. Bacteria, mushrooms, and insects are on it as soon as it reaches the ground, or before, tearing it into nutrient molecules, liberating them to be drawn up into roots or leached quickly from the soil by rain.
In Costa Rica, it seemed that at the base of every tree, along every fallen log, and in every crevice where forest litter could gather, wild mushrooms were flourishing, tearing apart the dying leaves and wood and returning their components to the soil as rapidly as possible. Here in the tropics, root systems find water and nutrients close to the soil surface, so these root systems are shallow. Roots may barely penetrate the soil, or they may even run along the top of the ground. Such shallow root systems can leave tall trees vulnerable to wind or weather that could topple them. To keep them upright in the absence of a deep root system, many tree species grow side buttresses—thin, hollow flanges that extend from the base of the tree to the ground like the legs of a Christmas tree stand. These supports sprawl outward across the forest floor, like a vacuum system that draws in resources and delivers them to the rich canopies of life above.
The processes of breakdown and buildup in living systems are called their metabolism. Within every living system, from a forest to a cell, raw materials are drawn in and broken down into simpler forms in a process biologists call catabolism. Then, inside each cell, enzymes, cellular factories, or other agents take the pieces and rearrange them in more complex forms—a process called anabolism. In this process, certain values are lost, traded for new ones that yield a new whole. In other words, new resources are gained as others are lost.
In the forest, resources are drawn up from the soil into the roots of trees and plants and delivered to a vast array of species. Biologists used to diagram this arrangement by relating species to one another in a manner so simple that they resemble linear food chains, each link reliant mostly on one or two other links. This simple kind of diagram has, of course, been used to depict the way we convert resources to industrial products. However, this approach, even when used in scientific journals, vastly understates the diversity and interrelationships of species.
If all forest forms of life were linked together in simple food chains, they would quickly run out of resources. Conversion rates are extremely low: Often 1 percent or less of the caloric content of one link is converted to calories by the next. For example, plants convert into energy no more than 2 percent of the sunlight that reaches them. Sheep that eat grass or cows that eat corn keep about 1 percent of that. People that eat the sheep or the cows keep 1 percent of that. This entire three-link food chain ends up "wasting" 99.9998 percent of the original energy of the sun.
How does nature overcome such extreme wastefulness? By drawing species together in complex food webs. Food webs offer major efficiency gains over simple food chains. In a web, energy "wasted" in one process isn't really lost. It just shoots off to the side, where nature tends to put it to its best local use, in whatever form it's in. Thus webs contain vastly more connections than classic descriptions of food chains. Most species eat or are eaten by ten to 1,000 other species. Resources cascade through the web as they are transformed back into their simplest forms and are drawn back through the web again as they meet and combine with other resources to take on more complex forms, in an endless nonlinear flow. The resources do not usually cycle back into the same forms, since that would require the consumption of more energy to transport and reform them. Instead, they are taken up in their present form, to fill a local need to which they are already suited.
MACHINES JUST DO IT—LIVING SYSTEMS ALSO IMPROVE IT
The strands in these webs aren't static like those in a spider's web. They are dynamic passageways that in effect draw all the organisms in a forest together into a single coextensive network, Tansley's ecosystem. Competition, which forced the adaptations in the first place, now undermines its own position and partially gives way to cooperation. Everything begins to rely on everything else for the efficient and effective operation of the whole.
As the linked strands in simple food chains branch off in all directions to form webs, feedback and adaptation accelerates. Food webs find ways to use all the resources consumed within them. With every new feedback loop, new arrangements are made, over time leading to the development of new relationships, even new species. With every adaptation, the information content of the ecosystem increases; in effect, ecosystems learn.
For example, in simple food chains, resources are taken in at one end, used in the middle, and discarded as waste out the other end—to the "outside," that is, to the next larger ecosystem. Food chains act more like simple machines: When they are receiving fuel, they keep performing the same task, repetitively. When the fuel runs out, they stop. They lack the options of a more complex system, so they are less able to adapt.
Food webs, in contrast, have lots of options. They act not as machines but as complex adaptive systems with the ability to sense resource supply levels and adapt to subtle shifts as they happen. In complex food webs, all waste is food. However, this recycling isn't direct. In the forest, nature doesn't waste energy turning leaves directly back into leaves. She takes them as they are. Leaves may become mulch, then break down into their chemical components, each of which is taken up in new processes. Like the organisms they previously constituted, they feed or are fed by many subsequent processes.
Nature also follows this strategy on much larger scales. Look, for example, at how nature recycles water through the hydrological cycle, the natural circulation of water between earth's surface and the atmosphere. Water evaporates from the oceans. From there, air moves the water to cooler realms where it condenses into clouds. Then the clouds drop the water back to earth through precipitation. Once it reaches the ground, it spreads out and joins rivers, streams, and soil. From there, it may be taken up into plants and animals, many of which are at least 95 percent water. Then, the water may be broken down into hydrogen and oxygen and reassembled with other atoms such as carbon to form carbon dioxide and other compounds.
Because water serves functions at every stage along the way, the "transportation costs" of water recycling are, in an important sense, zero. The entire contents of the world's oceans would take about one million years to pass through the water cycle, but this does not mean nature is slow—it means nature is thorough, complex, and yielding.
This fact points to a flaw in conventional wisdom about recycling. Often, environmentalists and business leaders seek to "close the loop" by recycling a given product back into the same product—a can into a can, a box into a box, a car into a car, for example. That's fine, but simple closed recycling loops can be inefficient. If a product is consumed far from where it is produced, for example, the energy costs of getting that product back to the point of production can wipe out the environmental gains of recycling. Yet when one product is recycled into a different one, especially a less valuable one, environmentalists sometimes criticize the process as "downcycling." Sometimes they are right: If a high-value application is locally available, then a low-value use of recyclables may be wasteful. But often "downcycling" is simply the most efficient way to use resources.
Consider, for example, the crude ways we have been recycling most plastics. Plastic bottles of milk or soft drinks are placed in recycling bins, transported to local service centers for sorting, transported to centralized facilities for grinding. Then they undergo three separate, energy-intensive processes to prepare them for remanufacture back into bottles. Each process imposes additional environmental costs, as the empties are shipped cross-country from one process to the next. The components of the bottle are of value only at the beginning and the end of the process. The entire chain that takes them from the home back to the factory imposes costs, both economic and environmental. It can take more energy and materials to recycle a plastic bottle back into a plastic bottle than to make a brand new one. By comparison, if plastic bottles are refilled or recycled as fabric for clothing or carpet, reprocessing steps are reduced, costs are lower, and less energy and pollution is created in the process. Plus, a handful of companies, such as C&A Floorcoverings, can recycle the end product yet again.
So, nature's strategy for recycling is to build local markets, using materials as it finds them, at or near the point where they are created. In this way, the path of resources through nature's economy grows more and more complex, less like a food chain, and more like a food web.
IN BUSINESS
TO CREATE VALUE, HARNESS FEEDBACK—CLOSE THE LOOP
BILL COORS AND THE CLOSED LOOP: BUSINESS-AS-LIVING-SYSTEM
The first step in turning an inefficient food chain into a rich food web and fostering a vibrant productive economy is to close the loop. In so doing, nature takes a simple machinelike system, one without the immediate capacity to sense costs and adapt, and awakens it gradually into a more adaptive and resilient complex living system.
Closing the loop is a core strategy that Bill Coors, Chairman of Adolph Coors Company, has used for many years to awaken machinelike companies and turn them into more adaptive, living companies, able to learn how to grow more efficient and innovative year by year. By feeding back the environmental costs and benefits of doing business, he has triggered a series of efficiencies and synergies that have enabled both his companies and their stakeholders to profit.
Feedback is a source of information, says Coors, and it takes two forms. Soft, gentle feedback cultivates easy adaptation. Hard, powerful feedback forces painful adaptation, or death. Coors prefers the soft, gradual path of adaptation. He has learned that by triggering early, subtle forms of feedback, he can stimulate both continuous and discontinuous change at his companies and keep them a step ahead of trends that buried most of his one-time competitors. Bill first met Bill Coors in 1985, in his office adjacent to his brewery in Golden, Colorado. We were supposed to be on opposite sides in a bitter environmental battle. I was CEO of the nation's largest recycling lobby at the time, fighting for a California "bottle bill" that would require deposits on beer and soft-drink cans and bottles. Coors was head of the nation's number-three brewery. I was preparing my organization to mount a second statewide initiative campaign for a bottle bill, an effort that Coors and his allies would have invested millions to stop.
Yet Coors turned out to be our most powerful ally, not for a traditional bottle bill but for a new, more effective form of the law that we designed and that California passed into law. The law has historically recycled nearly 80% of bottles and cans, according to Darryl Young, director of the California Department of conservation. California's version of the bottle bill applied a philosophy Coors had used to create profits at the brewing company and a host of spin-offs: "All pollution and all waste is lost profit."
Coors knows that in business, pollution and waste are stuff the company has paid for but can't sell. He also knows that the costs of pollution and waste extend far beyond those the company pays directly. Even before biologists described to him the ecological effects of can and bottle litter in the hills around his brewery, Coors had been on a mission to reduce waste and recycle everything the company made.
(Continues...)
Excerpted from WHAT WE LEARNED IN THE RAINFOREST by Tachi Kiuchi, Bill Shireman. Copyright © 2002 Tachi Kiuchi and William K. Shireman. Excerpted by permission of Berrett-Koehler Publishers, Inc..
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