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ISBN 9781439102077 Published April 12, 2011
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Posted April 14, 2011 8:35 a.m. by dylan
If Charles Fishman were a baseball player, he’d be a pitcher worthy of the Cy Young Award year after year. Lucky for us, Fishman ended up a business writer—one of the most consistently excellent in the field. And twice now, he has gone “the full nine” and delivered perfect outings at book length. We featured his first effort, The Wal-Mart Effect, in this space in 2006. He got our attention again with his 2008 article in Fast Company, “Message in a Bottle,” which won him his third Gerald Loeb Award for outstanding business writing, the most prestigious award in business journalism. It was that article that served as the impetus for his new book, The Big Thirst: The Secret Life and Turbulent Future of Water.
Water is at the heart of our very existence and essential to everything we do—from washing sheep’s wool in Australia to hydrating the cells in our bodies. While most of us “take it for granted because good water is basically free,” businesses like GE, IBM, Coca-Cola, Intel and the Australia’s Michell Wool company use so much water that they understand the need to keep it flowing with different prices for different purposes and different tiers of water quality. Michell Wool, for example, doesn’t need clean drinking water to clean its wool, so they now use untreated water for one-third the price. IBM’s microchip plant in Burlington, Vermont, on the other hand needs water that is so clean that it isn’t safe to drink.
But Fishman does not suggest that we should hand over our water supply to those corporations to manage on a for-profit basis—just that we need an economics of water to manage it, and that we need to value and price it correctly. He argues, somewhat contrarily, that “free” is the wrong price for water; in fact, some of the poorest populations on Earth who don’t have easy access to safe drinking water are paying to belong to water co-ops so they don’t have to walk for hours or wait in line to get water that is often not safe, while those in “water rich” countries are literally flushing treated drinking water down the toilet.
As Fishman writes:
Everything about water is about to change—how we use water, how we share it, how we think about it. […] This book is an effort to rescue water not so much from ignorance as from being ignored.
While Fishman’s book may not be a business book in the strictest sense of the word, considering we spend almost as much on bottled water in this country as we do to maintain the nation’s entire water infrastructure, water use and value is an intriguing economic conundrum. And in the end, Fishman shows that when we stop ignoring it, water can and will be used more smartly.
Posted April 2011 7:43 a.m. by dylan
In - 800 CEO Read Blog
➻ Charles Fishman, the author of The Wal-Mart effect, has a new book coming out with Free Press called The Big Thirst about "The Secret Life and Turbulent Future of Water." If you can't wait until April 12th to start in on it, you can read an article adapted from the book in Fast Company about The Business of Water. From that article:
Every gallon of water we use has an economic value—the value of whatever we can actually do with that water, whether it's brew our morning coffee, grow an acre of wheat, or make a microchip.
Yet in our homes, our schools, our companies and organizations, we typically behave as if the opposite were true. We act as if clean, on-demand water has zero economic value. Especially in the developed world, the value inherent in water is hidden under a cloak of invisibility. Although the water has indispensable usefulness, it rarely has a price.
What's often oddly missing from the conversation about the business of water is the price of the water itself. The companies that are taking water seriously today have something at risk—their inability to function without reliable water, or their reputation if they squander or damage local supplies. Some see an opportunity in persuading other businesses to try to understand their water risk.
What is so striking is that businesses that start to take the economic value of water seriously immediately start to use it and think about it differently.
Now, Fishman isn't suggesting that we turn our water resources and infrastructure over to profit-driven corporations, simply that we recognize that their is an economic value to water, and that we should value it properly.
Explaining that "The only way to understand and appreciate the importance of water to our lives is to look at the data flow," Fishman also has a fascinating infographic, illustrated by Francesco Franchi, at Fast Company about our Water World.
➻ Sticking with Fast Company here, Douglas McGray takes a look at How Carrots Became the New Junk Food. McGray's article tells the story of a second generation Coca-Cola executive, Jeff Dunn, taking his considerable skills to baby carrot grower Bolthouse Farms as its new CEO, and what's now taking place there.
Like his father, Dunn considered himself a marketing guy, which made sense for a top executive at a soft-drink company. "We were selling sugar water and fairy dust," Dunn says. "And don't forget the fairy dust."
Three years ago, he became CEO of Bolthouse. His office is across the street from an agricultural machine yard filled with tractors, seeding trucks, and 65,000-pound harvesters. It has been something of a change. Then again, there are similarities. "Carrots are basically a duopoly," he says. "It's Coke and Pepsi." And when he looked at his flagging sales, he wondered if some fairy dust might help.
To help with the alchemy of that fairy dust, they teamed up with Omid Farhang and the advertising agency Crispin Porter + Bogusky. And then something completely predictable happened:
A few weeks later, Farhang was in the California desert, with a film crew. "There's a guy in a shopping cart with a rocket strapped to it, and there's pyrotechnics lining the base of a cliff, and there's a really hot model standing next to a machine gun," he recalls, and laughs.
I won't spoil the ending for you, but it turns out that fairy dust might end up tasting a bit like cool ranch.
➻ Felix Dennis, the founder of Maxim and author of The Narrow Road: A Brief Guide to the Getting of Money (being released by Portfolio on April 14), seems to think that the fairy dust on Wall Street might be running out. In an interview with Forbes about The Mogul's Maxims recently, there was this exchange:
[Jeff Bercovici of Forbes]: Is starting a company still the best way to get rich? Haven't hedge fund managers and bankers disproved that?
[Felix Dennis]: Yes, there are certain professions, the financial sector being one of them, where you are massively overpaid. But those days—I'm not saying they've ended, but those days are ending. Anybody who goes into college now and thinks, "I'm going to join the equivalent of what Bear Stearns was, and I'm going to get rich just by loaning other people's money and taking huge plunges, and if I'm wrong I don't lose anything"—well, that might've worked in the 1990s, but it's not going to work now, brother.
Those bankers you're talking about, they're not part of a virtuous circle. They are pond life. Whatever an entrepreneur is, she or he is not pond life. They have meaning. And without wishing to sound pompous, they are part of what made America great.
I'm assuming that when he refers to "pond life," he means leeches. But, by making the blanket statement that entrepreneurs are not "pond life," he's also saying that entrepreneurs are not snapping turtles or mallard ducks—virtuous animals both—a statement I can't stand behind. (It should also probably be noted that investment banks on Wall Street helped build much of the industrial infrastructure in our country, things like railroads, certainly "part of what made America great.")
➻ Vikram Mansharamani released a book entitled Boombustology last month with John Wiley and Sons about the bubbles created by "pond life." And he wrote about Spotting Bubbles Before They Burst on Gloria McDonough-Taub's Bullish on Books blog this week. He believes that it's not necessarily the information you have that helps you spot bubbles, but the lens you look at that information through. More importantly, he thinks you need multiple lenses:
Financial booms and busts are, particularly from an a priori perspective, probabilistic events for which multidisciplinary analysis is essential. Addressing financial booms and busts through a single lens may in fact have negative impacts and lead to gross misunderstandings.
Adopting a singular perspective will lead to an emphasis on depth of data versus breadth of information. It leads to deeper and more thorough understanding of particular information, but it misses the point that information is not the essential element.
There are plenty of “dots” but the connections between them are lacking.
Conceiving of financial booms and busts as uncertain ambiguities necessitates the application of different lenses to develop a probabilistic interpretation of scenarios to better understand how they may evolve. Economists, political scientists, psychologists, and even hard scientists have much to learn from each other. What we need today are analysts who employ a multidisciplinary perspective to connect the dots.
He goes on to discuss a course he created at Yale to teach "such a methodology" and some of the very savvy predictions his students have come up with. It's certainly worth a read.
➻ Speaking of needing a lens for the information you get, Marc Mohan reviewed The Information in The Oregonion last month. He writes:
The equivalency between bits of information as the smallest unit of data and as the smallest units of existence grows clearer and clearer, until Gleick's contention that it's bits all the way down, makes a certain sense.
I'm sure it does.
➻ "Your feet upon the table are an abomination, and worthy of rebuke." (Ian Frazier reading "Laws Concerning Food and Drink; Household Principles; Lamentations of the Father" at the 92nd Street Y, forwarded to us by our sheriff, Carol Grossmeyer.)
World Water Day and The Big Thirst
Posted March 21, 2011 11:35 p.m. by dylan
In - 800 CEO Read Blog
Designated by the United Nations General Assembly in 1993, World Water Day is held annually on March 22. It's a day to focus attention on the importance of freshwater and sustainable management of water resources that grew out of the 1992 United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro. With over half of the world's population now living in cities, this year's focus is understandably on water and urbanization, under the slogan "Water for cities: responding to the urban challenge."
But first, a little background on Fishman. He has been a favorite of ours for years here at 800-CEO-READ. His previous book, The Wal-Mart Effect, was a New York Times, Wall Street Journal, and Business Week bestseller, a finalist for the Financial Times and Goldman Sachs Business Book of the Year Award, and a Jack Covert Selects in 2006. And we've used his 2007 article for Fast Company, Message in a Bottle, as an example of superb writing in our writing sessions at past author pow-wows (author gatherings we host every year).
The statistics and factoids below come from his new book, the aforementioned Big Thirst, being released on April 12 by Free Press.
➻ Water is the oldest substance you’ll ever come in contact with. The water coming from your kitchen faucet is about 4.3 billion years old.
➻ A typical American uses 99 gallons of actual water a day—for cooking, washing, and the #1 personal use in the U.S., toilet flushing.
➻ The average cost of water at home in the U.S.—for always-on, purified drinking water—is $1.12 per day, less than the cost of a single half liter of Evian at a convenience store.
➻ Americans spend almost as much each year on bottled water ($21 billion) as they do maintaining the nation’s entire water infrastructure ($29 billion).
➻ Microchip factories require water that is so clean it is considered dangerous to drink.
➻ The difference in price between home tap water and a half-liter bottle of water at the convenience store is a factor of 3,000—you could take the bottle of Poland Spring that you buy for $1.29 at the local 7-Eleven and refill it every day for 8 years before the cost of the tap water would equal that original price, $1.29.
➻ We often hear that “only” 2 percent of the water on Earth is fresh and available for human use, outside of the polar ice caps.
The “only” 2 percent comes to 1.5 billion liters of fresh water for each person on the planet. It’s 400 million gallons for every person alive. That’s a cube of fresh water for each us as long as a football field and as tall as a 30 story building.
➻ The U.S. uses more water in a single day than it uses oil in a year.
The U.S. uses more water in four days than the world uses oil in a year.
➻ Enough water leaks from aging water pipes in the U.S. each day to supply all the residents of any of 30 states.
➻ The city of London loses 25 percent of the water it pumps.
➻ Seventy-one percent of earth is covered with water, but water is small compared to earth. If Earth were the size of a minivan, all the water on Earth would fit in a half-liter bottle in a single cup holder.
➻ Not one of the 35 largest cities in India has 24-hour-a-day water service. Even the global brand-name cities like Hyderabad, Bangalore, Delhi and Mumbai offer water service only an hour or two a day.
➻ Treating diarrhea consumes 2 percent of the GDP of India. The nation spends $20 billion a year on diarrhea—$400 million a week—more than the total economies of half the nations in the world.
➻ A common statistic is the 1 billion people in the world—one in six—don’t have access to clean, safe drinking water.
But a less well-known statistic is equally stunning: 1.6 billion people in the world—one in four—have to walk at least 1 km each day to get water and carry it home, or depend on someone who does the water walk.
Just the basic water needs of a family of four—50 gallons total—means carrying (on your head) 400 pounds of water, walking 1 km or more, for as many trips as required, each day.
➻ Between 1900 and 1936, clean water in U.S. cities cut the rate of child deaths in half.
➻ Cooling water a typical U.S. nuclear power plan requires: 30 million gallons per hour
Water that New York City requires: 46 million gallons per hour
➻ Water required to maintain a typical Las Vegas golf course: 2,507 gallons for every 18-hole round of golf
Each hole of golf, for each golfer, requires 139 gallons of irrigation water.
➻ Average time a molecule of water spends in the atmosphere, after evaporating, before returning to Earth as rain or snow: 9 days
➻ Amount of water that falls on a single acre of ground when it receives 1 inch of rain: 27,154 gallons
This year's official World Water Day ceremonies are being held in Cape Town, but there are events being held worldwide. To see if there is one in your area, visit the World Water Day website.