The Artisan Way

“Grow or die” isn’t the only way forward. The artisan model of business suggests a third way: a true sustainable alternative.

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It is late, and it is cold. I am bone-weary after traveling 24 hours by car, plane, and finally train; all I want to do now is go to bed. But I didn’t come all this way to rural southwest France to sleep. Suddenly someone yells my name in gravel-accented English. “Ee-la-ree, Ee-la-ree, come! Ze truck has arrived!” It is at once an order and an invitation. What else can I do? I am off into a damp and moonless night.

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The pigs had gone to the abattoir two days earlier; tonight, hundreds of pounds of bristling vitality return as neatly halved carcasses. Huge and intimidating, each carcass is far heavier and taller than I. The pigs are unloaded, one by one, bridged across the shoulders of two men dressed in long butcher’s coats, then carried and hung in the modernized meat lockers of the crumbling butchery. In this shrouded medieval night, I am overwhelmed by the sights: the men’s steaming breath, the flash and glare of white coats as they enter the old stone building, and the dull rosy glow of fresh meat. At this moment I’m thinking just one thing: What have I gotten myself into?

The answer: a six-week stage on an artisan pig farm in Gascony.

A Question of Growth

More precisely, I’ve come to investigate what a quaint industry like family farming can teach us about the quest for scale and growth. On my way to the airport, I passed the world headquarters for Google, Apple, Oracle and a host of innovative start-ups that probably seem far better candidates for insights into business success for our age. For, really, what is there to learn from a family-run pig farm that takes an “artisan” approach to industry in which innovation, growth and scaling are downright antithetical to its purpose? What can the artisan approach teach to mainstream businessfolk focused on profit, market share, shareholder value? What’s the point of a business with no stock options, no promotion path, and no chance of a luxury retirement after an advantageous IPO?

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Not much. Unless, that is, our fundamental beliefs about business are simply more familiar than they are intelligent or true. We have seen the mighty fall. Progressive economists are beginning to express doubts about a positive endgame of endless growth. Even diehard free-market economists have begun to notice the “wisdom of the market” creating more dinosaurs than long-term winners. Executives accustomed to ignoring the societal impacts of doing business—such “externalities” as pollution, diet-related illness, inequality—are finding they can no longer ignore the waste piling up around them. Many among us have witnessed the slow dawning of an inescapable conclusion: that the way we do business works only because we ignore about it what doesn’t work.

And so with my own growing conviction—that what we know can hurt us—I set off to investigate an artisan industry.

A Deadly Certainty

I give a talk called “The Seven Deadly Certainties” in which I identify seven attractive axioms of organizational life that, once enacted, can surprisingly backfire. Each certainty is a poisoned apple. We first taste the sweet temptation: a recipe that produces immediate advantage. Then we feel the poison: that very advantage turns on us—but only after we have happily, unwittingly, swallowed it down. We barely have time to think “Oh, no” before the symptoms set in.

Consider this one: Adopting a critical “best practice” can create powerful consistency throughout an organization. Yes, but those same best practices ultimately stifle creativity by establishing a rigid status quo that resists change. Customer satisfaction gets lost behind self-assured statements like “This is how we do business.” Just think Blockbuster or AT&T.

Or, try this one: By collecting highly reliable numeric data, organizations can clarify unsettling ambiguities. Yes, but that same numeric data simultaneously creates blinders to the vast array of market and human factors that can’t be quantified. Just think Polaroid or Palm.

Or, how about this one: Organizations grow rapidly to achieve the efficiency and reach of scale. Yes,  but… Wait a minute! What is the “but”? We have all heard it for years: “Grow or die.” Can there really be a “but” about growth?

When it comes to scaling, we can learn plenty from research outside the usual business world. Experts in fields ranging from natural history, cybernetics, and mathematics have raised troubling questions around the “grow or die” axiom. Take the work of theoretical physicist Geoffrey West. Former Stanford professor and president of the Santa Fe Institute, as well as one of Time magazine’s Time 100 influential people, West makes a harrowing case about scaling in business and other life. He and his colleagues studied the growth of biological and social systems, including corporations. The National Academy of Sciences published their results in a 2007 article called “Growth, Innovation, Scaling, and the Pace of Life in Cities.”

West’s conclusion: “Social organizations that are driven by economies of scale are destined to stop growing.” Sure, he says, through innovation we can overcome many of our barriers against growth. But for only so long.

 “All companies die,” he said. “All companies.”

Pore over West’s evidence for just a few minutes, and you’ll see for yourself where an organization’s risk factors lie. West’s research points to a basic difference in the universal laws that govern the growth of biological systems versus those of social systems. As biological organisms grow larger—West compares a two-gram shrew with a two-million-gram elephant with a two-hundred-million-gram blue whale—energy per mass decreases. For each doubling in size, there’s a 25 percent energy savings per unit of weight. Put another way, the exponent is 0.75: less than one. Economies of scale spring from this “sublinear” relationship.

Social systems, however, are different. The corresponding exponent is 1.15 to 1.2. That is, it is supralinear. In the context of cities, that means that for every doubling in population, there’s a 15 percent per capita increase in all the good things about civilization: income, patents, wealth, colleges.

 Photo by Ingrid Taylor, used with permission under Creative Commons license

Photo by Ingrid Taylor, used with permission under Creative Commons license

But… There’s also a 15 percent per capita increase in all the bad things of civilization: crime rates, AIDS cases, flu patients, crimes, garbage. These are the analogs of those “externalities” that business executives prefer to keep off the books.

Returning to the image of our poisoned apple, West sees the sweet temptations of scaling up. Early stages of growth are fast and invigorating; in early days, scaling makes organizations both resilient and robust; growing organizations take best advantage of the economies of scale. All these features are familiar to those of us who have enjoyed living in a growing economy or working in a thriving business.

West sees two poisons. The first is that economies of scale apply to both the desirable and undesirable factors of growth. We reap the early rewards, but we discount the simultaneous increase in problems.

The second poison: the universal laws of growth that determine an upward slope can’t last in a living system forever. There is no escaping the Sigmoid Curve (commonly referred to as the “S-curve”). Winning organizations that appear to be beating this growth dynamic today disappear if we simply widen the time horizon we analyze. The unavoidable decline of growth is evidenced by West’s example of 23,000 studied companies; each followed the S-curve path of growth. You can find more evidence by investigating how many organizations once revered for “greatness” or their promise “to last” have actually lasted the test of growth. The answer is bleak. The laws are clear. Growth levels off, or, even worse, supralinear growth crashes. It is simply a matter of rate and time.

This, in short, is the deadly certainty of growth: Growth leads inevitably to decline, and often collapse.

How could an organization avoid this collapse? Consider West’s suggestion: Rapid-cycle innovation.

Rapid-cycle innovation is a race against organizational atrophy and collapse. To win this race, radical innovation must happen faster than an ever-increasing pace of decline. It sounds possible, even sexy. Just think of it: a bunch of brilliant people coming up with great ideas, implementing them with record-breaking speed. We like this potential so well that we support an entire industry of innovators—including academics, visionary CEOs, consultancies, and keynote speakers—to help keep the growth engine running.

The rub? To be effective, rapid-cycle innovation must be preemptive in an unpredictable environment. To achieve perfect timing, innovations must be launched before the momentum of growth is lost. Predicting the right moment is impossible. In a July 2011 talk at the TED Global conference in Edinburgh, West hit the nail on the head: “If you have a serious theory, you should be able to predict when Google is going to go bust.” With no good theory that predicts the timing and rate of growth’s decline in organizations, all we have is ambiguity.

 Photo by Steve Damron, used with permission under Creative Commons license.

Photo by Steve Damron, used with permission under Creative Commons license.

This ambiguity means an organization wanting to implement rapid-cycle innovation must take a terrible risk: it must let go of untold upside growth while launching an unproven innovation. With the statistical risk of innovation astronomically high, this is not an attractive choice for many. Tail-end profit is too tempting, and uncertainty too frightening.

Rapid-cycle innovation is a strategy for the brave or, some would say, the reckless. When it works, organizations create legends; when it fails, everyone gets fired. It is also an innovation treadmill. “We’re not only on a treadmill that’s going faster and faster,” West warns, “but we have to change the treadmill faster and faster. We have to accelerate on a continuous basis, and the question is: Can we as a socioeconomic being avoid a heart attack?”

Stepping back, then, what do all our troubles with organizational growth, scaling, and innovation have to do with a pig farm?

Seed to Sausage

Could it be that our business efforts, values, and goals are based on a false, if comforting, belief that the secret of continuous upward growth is at our fingertips? Or, are we are simply hoping to be the lucky ones who get on and off the S-curve ride with good timing and profits, while others take the nasty fall? If the growth ideal fails, are there unconsidered alternatives? Interesting ideas often come not so much from a dramatic effort to think outside the box as from a deeper look inside the box. It was in that spirit that I traveled to the meat room on the Chapolards’ farm.

In my book Artistry Unleashed (Rotman/UTP Publishing, 2010) I posit a theory of practical creativity. What I call “artistry” in that theory depends on the interaction between conflicting forces: meaningful exploration on the one hand, and productive effectiveness on the other. Artistry is progress fueled not by some stable equilibrium but by the push and pull of this enduring tension. By contrast, my journey to the farm revealed an unexpected glimpse of balance.

The Chapolards run the 65-acre family farm, Ferme Baradieu. Working in agriculture is a family tradition in this rustic land of cassoulet and Armagnac. Four brothers—Dominique, Mark, Bruno and Jack—and much of their extended family, make the whole enterprise work. Together they raise the grain, beans and flowers that feed the animals. They breed and raise the pigs. They butcher about 10 pigs per week. They prepare the range of traditional charcuterie, and they sell their fresh meat, sausage, paté, and hams directly to local customers through neighborhood farmers’ markets. The whole operation runs within 20 kilometers of the farm. It is a labor-intensive, all-day-consuming, nonstop enterprise.

Every business enterprise must make positioning choices about advantage, quality, and sustainability. As we have explored, modern organizations pursue advantage through scaling. In the pursuit of scale, quality is achieved through standardization and sustainability through profits. These three—scale, standardization, and profit—work together like parts a well-oiled engine. When the corporate engine is purring, everybody is happy. When growth slows, this engine begins to sputter.

But an artisan industry like the Chapolards’ is different. First, instead of pursuing scale, they stay at a fixed size (10 pigs per week). But they control the whole system from end to end; or, as they say, “seed to sausage.” Call it “holism” rather than scale. This holism will never provide the Chapolards with economies of scale enjoyed by a specialized operation slaughtering upwards of 1,000 pigs a week. But at the same time, all involved—human, animal and environment—are protected from the unpleasant realities of factory farming.

Although it’s initially tempting to equate this kind of holism with “a simpler life,” it isn’t that. Think for a moment what the Chapolards must accomplish. Even though smaller in scale than a factory farm, the web of interrelationships they orchestrate is intricate and complex—from fallow ground through their point of sale. Reaching across this impressive span is so difficult that few enterprises ever try it. Can you name a single modern corporation that manages its whole system effectively from end to end?

Second, while their products taste deliciously consistent from week to week, it is not because they create reliability through mechanizing and standardizing production. Instead, their qualitative standards of taste, texture, look, and feel are transferred to the products they create by hand. In fact their methods must vary somewhat in response to changes in the weather, the time of year, the qualities in the meat. They are personally involved in all aspects of creating their materials, producing their products, and interacting with their customers.

Finally, they supplant the ultimate purpose of profit making with that of creating a community that extends from their family, to other local farmers and producers, ultimately to customers. They take a two-hour lunch each day at home with family. And, while meeting end-users face-to-face is a special time for modern business people, the Chapolards do this at the market two days a week, 52 weeks a year. Dominique and Christiane Chapolard know most all their customers by name. These familiar faces willingly wait in line to buy products week after week. Dominique and Christiane have never designed a questionnaire to measure customer satisfaction.

The family business motto, “Seed to Sausage,” sums it up. This small business directly manages its resources from beginning to end. Their personal sensibilities control the features and quality of their products. And they sustain an enduring relationship with customers. Imagine a contented Gascon citizen enjoying a Chapolard Boudin Blanc sausage for lunch . . . . The picture is complete.

The Chapolards are neither business people nor artists in the typical sense.

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More steady than either business people or artists, they are artisans. As artisans they neatly sidestep the struggle between creative innovation and effective implementation that drives what I call artistry. They also operate without producing the many destructive externalities (pollution, economic waste, energy consumption, resource depletion, and disease) so common to a more modern enterprise. Acting as a beacon of possibility, they embody an alternative to the model of business the rest of us take for granted.

The Artisan Way

Last night watching TV, I learned that serving French’s mustard brings me closer to “family and friends,” and that “extraordinary community” is simply the extension of charging business expenses on American Express. This sounds like growth business embracing artisan ideals. But growth business isn’t going in the artisan direction with any haste. With scaling, standardization, and profits the priorities, these advertisements likely reflect savvy marketing rather than a fundamental change of heart.

For the Chapolards, holism, involvement, and community are not marketing tools used to build brand image; for them the artisan way is a way of life. Artisans embody these ideals day-to-day, without ulterior motive. Venturing into their world as I did, you will find them:

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  • Working close to home;
  • Generating little to no waste;
  • Taking care in what they do;
  • Making products for people they know;
  • Imparting quality by hand;
  • Sustaining a slow or no-growth business
  • Managing production holistically end-to-end.

Taken collectively these features should sound a familiar bell. It is trendy now in the mainstream of business people to talk and write about related ideas such as green business, customer empathy, or meaningful work. Organizational visionaries suggest it is high time that growth businesses take responsibility for the unpleasant externalities linked to its operations.

But artisans are not trendy. Artisans work this way, and always have, because the work emanates from their defining values. It is an authentic endeavor. This authenticity is essential, for all artisans with tell you this is not an easy life.

In proposing the artisan model of business, I’m not suggesting that we ditch our modern lives and return to 13th-century European guilds or 19th-century prairie farms. Still, every week in the boardrooms and conference rooms of every corporation today, executives meet to make one crucial decision: Should we or should we not scale this project or brand or initiative? We’ve all been thoroughly schooled in the promise of scaling. But when we honestly face the consequences of West’s “15-percent rule”—that 15 percent more of all the good things also means 15 percent more of all the bad things—and when we pay more than lip service to our ultimate responsibility for our business’s entire system, that’s when the artisan way comes into its own. For the most part, this is the side of the equation that our business schooling has ignored. And perhaps it shouldn’t: Because instead of inevitable death, it just may hold a key to authentic sustainability.

I had plenty of time to think about these possibilities while scraping every last bit of meat off the bones during my visit to the Chapolards’ farm. The engine that keeps it running—holism, involvement, and community—has a good chance of outlasting faster-burning models. If so, it presents a working alternative to consider. When it comes to the artisan way, maybe it's time for the old to become again new.