In a radio interview this week the Chief Sustainability Officer for IKEA, Steve Howard, introduced the interesting idea that the West has arrived at “peak stuff.” He observed that consumption of “stuff” such as IKEA products had peaked. He observed that after “[…] a tremendous expansion in consumption and people’s livelihoods through the 20th century. And the use of stuff is plateauing out.” According to Howard, consumption of oil, sugar, beef and automobiles in the West have either all peaked and are on decline, or are trending that way.
He goes on to say that IKEA plans to continue expanding in the USA and most markets. When asked by the interviewer how IKEA plans to expand when demand has peaked, he seems to pedal backwards
I don’t think we’re there yet. You know, my comment about peak stuff was, if you take the total material impact of society in the West, it’s probably just about peaked. But then if you say, well, we exist in that world, too, but what we’ll make sure of that we do is, you know, we will always say – we like to act in the best interest of our customers.
That sounds like the hand-wavey answer of a Chief Sustainability Officer caught between wanting to talk about positive social impact things while hastily remembering not to spook the stock analysts. The truth may be closer to, “We know demand for IKEA furniture has peaked, and we don’t yet have an answer for this.” It’s hard to stop a train moving towards Unsustainaville, fueled by expectations of ever-growing shareholder returns.
One thing IKEA is doing in the right direction, which is to say in the interest of customers, is their internal used furniture sales process called Second Life. Essentially, a customer returns a used item and receives in-store credit, and IKEA sells the used unit for the same amount to another customer. This enables recycling, reduces waste, while promoting additional purchases with the in-store credit.
This reminded me of a popular quote by the father of management, Peter Drucker,
“There is nothing so useless as doing efficiently that which should not be done at all.”
If the Chief Sustainability Officer of IKEA recognizes that the US market for their stuff is saturated or nearly so, building additional outlets and attempting to expand demand seems to be an instance of doing something “which should not be done.” On the other hand, the Second Life example is an efficient way of disposing of second-hand furniture that is still in usable condition. One could argue that retiring usable furniture is also wasteful and something “which should not be done.” Overconsumption is another example of something “which should not be done” from a sustainability perspective, but additional consumption seems necessary to keep growing IKEA’s bottom line. What is a CSO to do?
From a moral perspective, Drucker’s statement is correct. A bad deed should not be done efficiently. From a lean perspective, he is not correct. The following hierarchy of needless things, from “needless” to “not at all needless”, would be correct
- Doing inefficiently something that which should not be done at all (bad, bad)
- Doing efficiently something that which should not be done at all (good, bad)
- Doing inefficiently something that which should be done (bad, good)
- Doing efficiently something that which should be done (good, good)
An unnecessary process performed using fewer resources (#2) is not as useless as an unnecessary process that requires more resource to perform (#1). Even while approaching “peak stuff” we are far from “peak process” in terms of efficiency. Anytime we can do something efficiently, we should, so long as that something is not doing harm. Part of what a Chief Supply Officer does is to guide the organization away from harmful business practices.
The 20th century may have seen great strides in the quantity and quality of stuff we have accumulated, but not as much in the quality of customer experience, end-to-end from disposal and recycling, to delivery customer service experience, to selection and purchase. In fact, unlike “stuff”, there is no theoretical “peak” to what we can achieve through continuous improvement of processes.