Credit crunch part 2 – it’s really a resource crunch

October 31, 2008 — 10 Comments

It has been very gratifying to see the considered comments that have followed some of my posts. I am delighted to see a conversation going on about many of these topics. My approach has been to just let them run rather than making any attempt to moderate or direct. This time however I was so struck by some of the comments on my last post that I felt compelled to attempt a sequel on the topic.

The idea that the reset is more complex this time rings very true to me. Paulo points to a crisis not only of credit but healthy food, sufficient energy and an aging population. The common factor is that these are all resources (including having enough working age folks to support retirees) that are being stressed by our incessant growth. They have now been joined by a lack of economic resource that, as we are seeing clearly in the US election, has jumped right to the top of the agenda.

In the past economics have trumped all other concerns in times of crisis to the point that important issues, such as renewable energy, have lost ground. My question is whether this is going to be the case this time?

It strikes me that one of the contributions that design thinking could make is to help find ways to show the interconnectedness between many of the strands of this particular crisis. Michael Pollan in a brilliant New York Times article, titled Farmer in Chief, did just this when he argued for a new approach to food policy. He connected health, food, economics and energy in a compelling way and helped show how a we might conceive of a system that would positively impact all of these interconnected resources.

I believe there is a real opportunity for a mass change in behavior around our use of resources toward approaches that are more sustainable (and probably more local) with this recession acting as a catalyst. Before this can happen however, as with all systemic change, we first need visibility and transparency. While cause and effect is not clear we will not change our behavior.

Crawford mentions ING Direct as an example of simplicity and transparency in financial services. There is evidence of an increased uptake around services that give new levels of transparency and control. PNC Bank in Pittsburgh recently launched a new service called Virtual Wallet that gives users much more control of how and when cash flows in and out of their account. Apparently it is proving to be a popular offering. (I should declare self interest here and mention that an IDEO team helped PNC with this service.)

Similarly, we need  tools to give  transparency to what energy we use, what food we eat, how we use water, what materials go into the products we buy and use and throw away. Artist Chris Jordan has done a fine job of giving us some insight in aggregate (one of his images is at the head of this post) but we have very few ways of understanding the impact of our decisions at an individual level. It is all very well to know my annual carbon footprint, which is very depressing, but this is backward looking. I need tools that help me make a decision now and show me the implications of that decision over time.

Tim Brown

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10 responses to Credit crunch part 2 – it’s really a resource crunch

  1. It *would* be great if we could visualize and reveal resource flows to people, perhaps on a city-wide scale. as you know, people understand the here and now and not the flow that they and their environment are part of. I’m not sure though that this is a pre-condition to behavior change or because people can see the effect of something, they change their behavior. Don’t they change behavior because they fall in love, move job, develop an illness? If so, rather than demonstrate cause and effect – which sounds like squeaky-pants, front-of-house teaching – isn’t the challenge to find ways in which people can feel more in control and connected to the world in which they live. Sure, it could be rendering stuff visible or more transparent. But isn’t it really about helping people feel secure, confident, happy, powerful and able to make a decision?

  2. I agree that transparency and visibility, and visualizing resource flows, will help, but I also think that people will only change their behavior because they want to fulfill a need or achieve a goal. In our world, we are used to measure our success in life by surrounding ourselves with objects. I think education would be the key to correct this bias. We should start with a review of our basic needs, reset, and build a new culture from there. Somehow, we should learn to feel confident and comfortable without relying so much on “things.”

  3. I’m a design grad student at CCA, for our program we have been doing design research towards the attitudes and behaviors of energy use in the home. It seems people feel great responsibility for the environment, yet they feel powerless which translate into guilt or apathy. Visibility and transparency could help us understand our impact. It will allow us to clarifying the complexity of the vicious cycle we are in. Knowing the cause-effect of a problem doesn’t become a motivation for action, but this information can bring a sense of control and empowerment. Nevertheless, doesn’t matter how aware we are, it will mean nothing if businesses and corporations, who create the “things” we use, don’t stop to reconsidering the consequences and begin to restructure the way the industry works. Design thinking is essential for this shift to happen.

  4. Andrew Fallshaw November 2, 2008 at 5:40 am

    Tim,
    your last 2 posts have touched on 3 of the core areas of Lean Thinking; analysis, transparency, and interconnectedness.

    While best known as emerging from Toyota’s production system, the essential philosophies of Lean seem super relevant for Design Thinking, and seem to have inspired sustainable approaches like Cradle To Cradle.

    In Lean Principles, they start by deeply understanding the consumer (the end consumer is the ultimate judge of value), then mapping the entire value stream back from there, as transparently as possible. They only want to do things in which the customer will see value. Then they optimize this stream for flow, seeking to add value and eliminate waste. Analysis and measurement is used throughout for this.

    I guess the most interesting part of this is their revelation that too many people are working on local optima (a small part of the picture), without understanding the whole picture. Greater transparency helps us see the rest of the picture.

    Designers intuitively begin with the customer, and are now learning to understand the rest of the picture, from whole life cycle analysis to the business and marketing constraints that determine whether their efforts will make it to market. I think that this bigger picture understanding is where Design Thinking is progressing the most.

    Let’s hope as we improve transparency both in our financial markets, and our environmental impacts, we can then better know where to focus our efforts on adding value and eliminating waste.

  5. I think David strikes at the route cause here. We can get too far ahead of ourselves in our analysis and hopefulness. What makes for change is to balance the everday needs with forward thinking. Afterall most of us, within my sphere, work with daily issues and struggle to make sense of what we are asked and required to do to spend much intelligent thought on what we are doing for the future.
    My profession requires me to deal with highly innovative product ideas and take them into manufacturing now. So I balance the now and future and try not to compromise the innovation with todays capabilities.
    I think that the economy drives much of what we now do for the future. It makes little sense for the future to bail out the USA auto industry when they as an industry have remained unconcerned about the future or even in providing quality products now. Clearly they are not prepared for the near future, even before the crisis, let alone a future of 5 years from now. But we cannot ignore the plight of the people who lives depend on those companies and their products. Thus the provision of comfort and security.
    I am not suggesting that the march into the future will take place by or be lead by an auto worker but we cannot expect the future to be better if we do not attend to these needs.
    I published recently an article on Innovation on my website written by a woman from Germany who has spent most of her carear in managing innovation within an industry that innovates incrementally. Her thoughts are that during this time of crisis we should focus on innovation. Take the time and resouces to develop the culture to allow innovation. Crisis requires organizations to be more careful and thoughtful about their futures.

  6. Greetings,
    The following is an interesting announcement and as usual the EU is taking the future seriously.

    “Europe needs to boost its capacity for creativity and innovation for both social and economic reasons.”

    “The modern world puts emphasis on better use of knowledge and rapid innovation. It therefore requires a broadening of the creative skills base involving the whole population. In particular, there is a need for skills and competences that enable people to embrace change as an opportunity and to be open to new ideas in a culturally diverse, knowledge-based society. Education and training are determining factors in this.”

    “The activities of the Year should focus on creating an environment favourable to creativity and innovation and become a strong impetus for a long-term policy priority. Emphasis should be put for instance on education across a wide range of subjects including mathematics, science and information and other technologies. Highlighting creativity through such skills should foster problem-solving and the practical application of knowledge and ideas. All forms of innovation including social and entrepreneurial innovation should be taken into account.”

    “The European Year of Innovation and Creativity is proposed as a cross-cutting initiative covering not only education and culture, but also other policy domains such as enterprise, media, research, social and regional policy and rural development. It should include information and awareness-raising campaigns, promotion of good practices, debates, meetings, conferences and promote a wide variety of projects at regional, national and European level.”

    Reference (EU-Commission): IP/08/482

  7. Tim you are touching upon an issue the complexity of which almost defies transparency. The issue is that of resource scarcity and resource dependency. Scarcity results in dependency which breeds instability, and when resource scarcity and dependency have a global dimension (as they do now) they become geopolitical tools. When we consider the breadth of resource scarcity – energy, food, water, land, housing, education – and the breadth of resource dependency – energy, debt (yes its now a resource for those who own our debt), raw materials, unskilled labor, skilled labor, etc. – its frightening complexity becomes apparent. Consider the United States, whose scarcities are not just energy related: for energy, raw materials, basic processed materials, cheap goods, unskilled labor, very skilled labor (not to mention debt), etc., it is dependent upon nations that hold no “special relationships” with it at all, and, in some cases, upon nations that are opposed or antagonistic. This is an inter-related world so no nation can be an island, but for any nation to be dependent on others to the degree the United States is today is downright dangerous. Resource crunch, certainly, but it is much more dire than that requiring some very serious longer-term thinking about what how nations minimize the resource scarcity and dependency threat.

  8. Hello Tim, I came across your Serious Play presentation on TED.com and subsequently found this blog.

    There is professor at UCLA , Dr. Jared Diamond, who has studied human societies that have collapsed. Some left considerable records of their downfall. He stresses that there is no one factor that leads to collapse. He identified five and speculated that there were a dozen more.

    In my own reading and work, I have found many frameworks, hierarchies, systems, networks, structures, patterns and the like to classify humanity and its tools and environment. I am even working on one of my own. One thing I am discovering is the term “singularity” and the term “tipping point” appear to be synonymous. But as Dr. Diamond states, there is not one singularity.

    What I am finding is a societal tipping point is like a “phantom wave” where many singularities occur simultaneously and result in complete systemic failure. However, we do not yet have adequate means to measure, model or forecast the behavior of such complex systems. We are theoretically deficient to date.

    One thing that does seem of particular importance is the distribution, not only the quantity of population. We as a planet have to lower borders and allow humanity to redistribute to address issues of population growth and decline and distribution of resources. Religion, nationalism, racism have to be relegated to the artifices of the past.

  9. 126 minutes guide to caring about the thoughts of Tim Brown…

    …and the Economy.

    This morning I did not know Tim existed. And that he was thinking.
    But 126 minutes ago I went about my daily routine and checked the http://www.ted.com/talks part of my brain. Am downloaded the latest talks published there.
    100 minutes ago, still not knowing who ‘Mr.’ Brown is, or that he was indeed thinking, I finished watching the other videos, and opened a video file called “TimBrown_2008P.mp4”.
    And then I met Tim Brown.
    96 minutes ago I heard “David wanted to found a company where all the employees are my best friends. … Now he has 500 and fifty of them”. Oh, so this David’s idea wasn’t fluke? Interesting…
    95 minutes ago I restart the video file and note in the browser the name of the company.
    70 minutes ago (approximately, my atomic internal clock is running a little slow) after finishing Tim’s speech I went onto the Ideo’s official site to the ‘Career’ section. Weeell, because I wanted to see what friends David wants lately.
    40 minutes ago I recover from the shock. As these guys (and girls) put a single prerequisite for employment: that one is not brain-dead. Sure, they tend to have some secondary norms, like said brain must not service a complete moron, or a jerk (apparently they are more strict here, as even a ‘light’ jerk will not do), but it’s all secondary.
    And I find myself wanting to be employed. Here. Where one doesn’t (presumably) need 4 degrees and a huge portfolio to be given a chance of being innovative on other people’s money.
    20 minutes ago after deciding that today I do not have the stamina of composing a real interesting application letter, I find a quite interesting link on the top of the site Among the ‘Top Picks’ there is a ‘join the ‘design thinking’ Discussion’ link.
    21 minutes ago I did not know what the phrase ‘design thinking’ really meant, so out of pure guilt (seeing that this is at least some part of a man’s career) I accessed my part of the brain reserved to wiki.
    10 minutes ago I find to my surprise that ‘design thinking’ is just what I know to be the long road one travels from creativity to innovation. I summoned the will to read Tim’s here post (as it is lot of text for me, for only one tiny picture – although the links are surprisingly useful, for a blog) and 1 minute ago I decided to write my two cents about the problem.
    Yes, I do believe that design thinking has the potential power to avert the current economic black hole that the world is finding itself drawn to.
    Why? Because I see the current resource crisis just as that: a crisis of resources. Not of real physical resources but of perceived resources. Our global economy is based on 3 hugely ingenious ideas. The only problem is that they appeared in medieval society and they just become obsolete.
    1. Money (the paper kind). Money is a state enforced ownership certificate for a fixed (well kind of) amount of precious rare metals (presumably gold).
    2. Trade. One feudal domain, due to ‘recent’ advances in technology is forcing the need for trade as a critically vital part of any local societies.
    3. Credit. As ‘recent’ advances in political sciences needed huge infusions of money.
    * Recent as 1300’?
    And since humanity always went for the most comfortable and work saving solutions, we combined the three. Money represents not only ‘real’ assets such as a pre-determined weight in gold, but is also represents a capital of trust. And on this unstable base we put trade. Without which our ‘global’ society was never able to function.
    One doesn’t need an economics degree to see what happens when the base separates and becomes unstable.
    So we need innovation. We need clear and simple markers of economic health. We need a prescient brain able to say: you produce too much, or too little; you just borrow your last dollar; and NO you cannot sustain a particular course of action, just because it is popular, since in X years your society will cease to exist.
    The three must be separated. We are very far (or so it seems to me) from an utopian society, so we still need money, trade and debt. We cannot function without. But we also need to isolate the three. And we need a model that is clear, simple and very loosely connected. So the next time a country registers a fall in equities market, some people will be sorry for losing a home, but half of the globe will not suddenly end up unable to feed their children.
    Quite simply put, we’ve been hugely wrong in our pricing policies (on everything) and we need to be shown better.
    The simplicity needed for new economic models is bordering the extreme, and as we all know, simplicity is one of the most difficult challenges to tackle.
    A solution has to be designed for this specific purpose, it has to innovative as there is a lot of value to restore, and it has to be hands on, as we (no matter the age) cannot afford the reeducation of a couple of generations for things to start working again.
    Tim (and ‘brain-users’ alike) please lose some sleep over this, so the rest of us don’t have to?
    * Please allow for correction on the minuted time intervals above, as this text took me the better part of the hour to complete.

  10. Well. Yes the credit crunch.
    After a long inordinate course in the world, I found myself amongst my things, my objects, and the design world of consumerism.

    I remember the time in college when I was idealizing the beauty and purpose of my contributions as a designer, and then leading to assumption that I could change the world. A greener place and place where cradle to cradle and the victor papanek where the obama’s.

    But since graduating I am here, almost 4 years down the track, and finding my way back to this ground through the ‘recession’. I am now working for a consumer driven mobile phone industry. ‘silence’?

    Well, in every way I agree with everything that is being said here, and amongst all the mumble jumble, I would like to practice this myself, and also get on a pair of size 15 shoe and kick the corporate junkies off their money shacks.

    But if it was that simple I would lose my job right? As a londoner, and any other young designer city sleeking, you need to survive? Somehow the power of designers seem to lower down the ranks of fulfilling greatness. I think here and there designers like myself, are losing their need for existence in glossy surfaces, and the bling bling – to thinking alongside obama.

    I ride my bike to work, but it gets me a plastic money factory.

    Thoughts/advice please.

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