Ray Anderson, Self-styled "Radical Industrialist," 1934-2011

You have to marvel at someone who styled himself a "radical industrialist."

That's what Ray Anderson called himself in title of his book, Confessions of a Radical Industrialist, which I reviewed here.  An entreprenuer, company builder, and visionary, Anderson founded Interface in 1973 to produce the first free-laying carpet tiles in America.

Ray Anderson lost his battle with cancer yesterday at the age of 77.

His company revolutionized the commercial floor-covering industry and became the world's largest manufacturer of modular carpet, which such brands as InterfaceFLOR, FLOR, Heuga, and Bentley Prince Street.

In 1994, Anderson had an epiphany that set his company on a new course, trying to prove -- some say successfully -- that an industrial manufacturing company can embrace sustainability and profitability. Their goal was to make Interface and its individual carpet brands use no new raw materials.

It all started with what he called, as he titled his 1998 book, a "Mid-Course Correction":

"In 1994, at age sixty and in my company’s twenty-second year, I steered Interface on a new course—one designed to reduce our environmental footprint while increasing our profits. I wanted Interface, a company so oil-intensive you could think of it as an extension of the petrochemical industry, to be the first enterprise in history to become truly sustainable—to shut down the smokestacks, close off its effluent pipes, to do no harm to the environment and take nothing not easily renewed by the earth. Believe me when I say the goal is one enormous challenge."

Through his books, many talks, and his daily life, Anderson made the business case for sustainability.  His was a brand of environmentalism, as he put it, "with good old capitalist self-interest firmly in mind."

The one word that describes Ray Anderson best is authentic.

He was an inspiration -- a hero, really -- to those of us who believe that profit and purpose are not mutually exclusive and, in fact, are necessary to the success of any business.

Here is Ray Anderson speaking at the TED conference in 2009:

Jack Donaghy and the Future of Manufacturing in America

Image via Wikipedia

Jack Donaghy is the archetypal American businessman.  He's a striver who thinks he can get to the top through hard work, innovation and creativity -- and okay not a small dose of cronyism -- really, by making things.

But, Jack, played by Alec Baldwin, is a dying breed.  As he points out in last night's episode of 30 Rock, we've become a nation of consumers rather than a nation of makers.

Jack's company has been bought by a cable network from (ahem) Philadelphia, which as one character says in the episode, "doesn't make anything and has no expectations of innovative ideas from its executives."

Despite this, Jack is determined to make something, to use his creativity to create value.

"We need to get back to doing what American businessmen do best," Jack tells his new colleagues. "Making things."

I think Jack is onto something.  And I'm reminded of a conversation I had a couple of weeks ago with Sheila Kennedy of Kennedy & Violich (KVA) in Boston.

Sheila is an architect, designer, and innovator.  She makes things.  Beautiful things.  Practical things.  Some of the things she makes are going to change the world.  Actually, they are already changing the world.

Her Portable Light Project, for example, is bringing flexible photvoltaics into fabricated products that can be integrated into blankets, handbags, or other useful items to provide a small amount of energy to charge a cell phone or provide lighting for rural villagers without access to power grids.

Soft House is another project of KVA MATx.  Soft House transforms household curtains into a set of energy harvesting textiles generating up to 16,000 watt-hours of electricity -- about half the daily power needs of an average American household.

Sheila makes things.  Yet she was telling me that we've lost the art of making things.  Prototypes, for instance.  It's getting increasingly difficult to find someone in this country to actually make a prototype.  If a designer wants a prototype, she very often has to go overseas to get it made.  Why?

We have become a nation of consumers and packagers and marketers of other people's fabrications.  We've even taken to referring to our economy as a "service economy," as if all we can do now is serve others.  And serve them what?  OPM -- other peoples' makings.

It's really quite extraordinary.  And we're seeing it now in the cleantech sector, too.  The manufacturing, research and development in the sector is shifting oversees, has been for years, but is starting to accelerate now as China, India and others ramp up their capacity to make the products and technologies to meet the energy needs of the future. 

When our economy gets too far from the art of manufacturing, of making real, tangible things, it's a bit like what Ezra Pound said about poetry getting too far from music; it begins to atrophy.

There are some hopeful signs, as Sheila and I discussed.  One of these is Etsy, a consumer web marketplace for other peoples' makings; specifically handmade products, art, books, jewelry, handbags, woodworking, and almost everything else you can imagine.

"Your place to buy and sell all things handmade..." is a great tag line.  We need more hopeful efforts to rebuild manufacturing in this country.  The future of manufacturing in America may be smaller, more localized production and distribution, and it certainly requires a more patient, long-term view.

Perhaps then Americans can get back to what we do best, as Jack Donaghy says: making things.

Green Skeptic on Job Creation: FoxBusiness

I was on FoxBusiness yesterday, talking with Stuart Varney about the green jobs number that has come out from the Obama administration.

There were three points I wanted to make on the subject:

1.) What qualifies as a green job? What counts? We need a clear definition to determine whether the accounting is accurate and the impact is greatest.
2.) Only $5B of the $90B stimulus commitment to clean energy has moved thus far. How can we more efficiently move that capital to put it to work?
3.) Lack of manufacturing base for clean energy in the US calls into question the number and quality of the jobs that will be created here in the US. Will they be just service-oriented? Will that have significant impact on the larger economy?

You can judge for yourself whether I succeeded. Let me know what you think.

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Not Ready for Cap-and-Trade: US Manufacturers

The carbon cap train may be leaving the station, whether aboard the EPA, White House & Congress Railroad or on the high-speed rail from the Copenhagen Circus.

But left behind and potentially dead on the tracks may be US manufacturers, especially those in the industrial equipment sector.

There are nearly 46,000 industrial manufacturing companies in the US and Canada ranging in focus from machinery, aerospace, and petroleum refining to printing, chemicals, food, and medical devices, to computer systems and peripherals, pharmaceuticals, and paper. (These are the Dunder Mifflins of the world.)

Imagine you are the CEO of a small to mid-size company with under a billion dollars in revenue that supplies a part or product for a larger original equipment manufacturer (OEM).

The OEM is charged with reducing its carbon footprint, but there is only so much it can do at the home office, facilities, and transportation. So the OEM turns to its suppliers and says, "What are you doing to reduce my carbon footprint?"

Suddenly, you are charged with meeting those targets or potentially losing their business. But your company is ill-equipped to track reductions or even to establish a benchmark against which to measure reductions.

"Well," one government official familiar with the situation said to me. "You can use your enterprise software to track various components, just like you do with other management issues."

Maybe, or maybe not.

A new survey conducted by Reed Business Information for IFS North America, a global enterprise applications company, shows that US manufacturers, even large ones, are not ready to measure their environmental impact. (The survey will be available December 28th.)

Many of these companies are currently not tracking environmental metrics, and most lack the technological or management infrastructure to do so in a cost-effective manner.

One survey respondent, who works for an aerospace and defense manufacturing company with more than $2.5 billion in revenue, said his company would "like to have this embedded, versus buying and integrating a third party package or writing my own solution."

Currently, neither Oracle nor SAP, the most widely used enterprise business software applications have built-in environmental footprint management tools.

Oracle recently entered into a partnership with OMRON to "create a solution that will help companies track and reduce energy consumption in manufacturing and non-manufacturing environments," according to a spokesperson with the company.

SAP has several solution modules, including SAP Carbon Impact, but as of this writing it is unclear whether they offer a fully integrated product.

IFS, which commissioned this survey, released a product with an embedded "eco-footprint" tool last February, but they only serve a fraction of this market in a specific niche.

"We are not an ERP solution for every manufacturer," says Chuck Rathmann, a spokesman for IFS North America. "We are kind of a niche player for complex, engineer-to-order manufacturing, asset intensive industry, aerospace and defense and a couple of other verticals."

So, even if the major enterprise solution providers are working on tools to help with the transition, many companies will need time to adjust to new regulations and expectations.

Middle-market companies, especially those doing under $1 billion in revenue, are in a particularly tough position. They simply can't afford the costs of consulting and integration necessary to track environmental metrics.

With only 20 percent of the over 260 mid-size companies in the IFS survey indicating they are tracking their eco-footprint, it could be a long process. And what about companies over $1 billion? Only 36 percent say they are currently tracking it.

Few would argue that tracking this stuff isn't important. In fact, 83 percent of those surveyed said it was important. However, the number one reason for that importance was compliance.

The timeline, however, is a different story. Regulators and government officials need to take into account that people can't just flip a switch and make this happen.

But is anyone in Washington or Copenhagen considering the unintended consequences of their decisions on this sector? I doubt it.

In fact, I'd be surprised if any one of these companies has a seat at the table in the global climate summit in Denmark -- they typically aren't heavy on marketing or lobbying budgets. But once again they may be left out in the cold.