The Clean and Green Club

Positive Power Spotlight, July 2007: Rocky Mountain Institute

Back in 1977, Amory Lovins published a groundbreaking book called Soft Energy Paths: Toward a Durable Peace. I stumbled on it a year or two later and was blown away by the idea that not only didn’t we need nuclear power, but that the whole idea of mammoth, centralized power generation using fossil fuels, uranium, or other non-renewable fuels was basically dinosaur thinking, and that as a society, we not only needed to move beyond that, but could easily do so, using the sun and wind as our primary power sources.

Lovins has been a hero of mine ever since. He has gone on to write or co-author several other very important books, including Natural Capitalism. And to establish a profit-making consulting firm, the Rocky Mountain Institute, based out of the ultra-energy-efficient model home he built for himself in Old Snowmass, Colorado, in 1983. How efficient is ultra-efficient? So efficient that the 4000 square foot luxury house paid back the entire cost of all its energy saving features in just ten months (at a time when fuel was a whole lot cheaper than it is now so today’s payback would be even faster). A few years ago, Lovins told an audience that the residential portion of his house (not counting RMI’s offices) had a $5 average monthly electricity bill–and that despite living in the snowbelt just outside Aspen, he was keeping the house warm enough to grow bananas.

RMI makes its living in part through selling informational resources about soft energy technologies–but more importantly, by consulting on energy reduction.

And by looking holistically, the savings can be huge. RMI has helped with projects such as…

• A house in a city known for extreme temperatures (up to 113 degrees Fahrenheit) that doesn’t need an air conditioner or central heater
• An industrial piping system that is not only 92 percent more energy efficient, but is also lighter, quieter, cheaper to build, and easier to maintain
• A prototype SUV that compares favorably with today’s models in comfort and storage capacity, but uses only as much energy for everything as the typical SUV uses for air conditioning

In short, RMI can be an international model for developing sane energy use patterns that don’t interfere with our lifestyle, and earn a healthy profit.

Note: a longer profile of Lovins and RMI appears in my award-winning sixth book, Principled Profit: Marketing That Puts People First.

Click to visit Rocky Mountain Institute

This month and next, we’ll look at the dark side: two books that look not at what can be made right in corporate America, but what went wrong.

The Rise of the Rogue Executive places much blame on internal procedures that jettisoned 100 years of responsible practices, and the technologies that made fraud and profiteering possible on a scale that simply wasn’t possible in generations past.

And sometimes, flat-out lies, as in WorldCom using a totally theoretical “what-if” spreadsheet looking at the opportunity if Internet use doubled every 100 days as the basis of its income projections! The result of this total lie was devastation in the telecom industry, which was frantically laying cable in order to keep up with this demand prediction.

Another key cause was the incentive structure (eliminated by Sarbanes-Oxley in the aftermath of Enron’s collapse) that turned consultants and auditors at Big Six accounting firms such as Arthur Andersen into sales staff and pressured auditors not to jeopardize the far more lucrative consulting business (the book reproduces the full text of the Anderson indictment, in fact). Can you say “conflict of interest?”

And taking it further, CEOs face pressure to cook the books or look the other way when those to whom they delegate are unethical, both because of their own ludicrous compensation structures and pressure from investors for short-term growth. (The book cites bad behavior on the part of Dick Cheney during his Halliburton days, among others.)

But ethical, involved leaders can surmount the challenge. The book discusses this, but this part is much weaker, mostly focusing once again on the wrongdoers. I’d have liked to see that part built up.

Of course, my own award-winning sixth book, Principled Profit: Marketing That Puts People First covers that part in detail, explaining how to set up and run successful ethical companies.

And one easy step companies can do is to sign the Business Ethics Pledge, so consumers know of their commitment.

Find this book at Amazon: The Rise of the Rogue Executive: How Good Companies Go Bad and How to Stop the Destruction by Leonard R. Sayles and Cynthia J. Smith (Wharton, 2005)