I recently attended a fantastic training seminar presented by Allan Savory in Graaff-Reinet in the Eastern Cape Province of South Africa. The Holistic Management course was totally over-subscribed, and there was a 40% waiting list. This was after years of rejection and ridicule by various governments and institutions around the world. It is interesting how this is clearly an idea whose time has come. We are frankly out of alternatives, so people seem to be listening & prepared to try something unusual. It does help that 60 years of data gathering trying it the conventional way have vindicated what Savory has been saying all along.
Ok, but rather than go into raptures of ululation, today I’m talking about how the Holistic Management principals hold true in a broader context than simply chasing cows around the veld. If you recall Savory’s Four Insights:
- The only way to make effective decisions is through having taken a holistic perspective. If decisions are made from a partial and subjective view, the decisions will fail to take other relevant considerations into account and result in poor decision making.
- Environments can be placed on a continuum between Brittle & Non-brittle, and their response to environmental vectors will vary accordingly – by way of example – rest in a non-brittle environment leads to regeneration – in a brittle environment, it leads to further decay.
- In brittle environments, the land needs and responds well to relatively high concentrations of animals moving in conditions as they would in the presence of predators.
- In any environment – trampling and overgrazing have little to do with the quantities of animals, but rather their period of exposure to the plants and soil.
image courtesy http://wizzley.com/baby-cow-costume/
The parallels in society & business may not at first appear obvious. but I think that they do hold true. My hypothesis is that civilizations are very similar to land. Civilizations depend on their surrounding and supporting environment. They draw down resources from their environment. As the civilization arguably contributes nothing to the health of environment, it ‘parasitizes’ it. These resources are drawn down from the environment’s buffering capacity, and when they exceed that buffering capacity, they start to collapse the very environment that supports the civilization. Now here’s the rub – environments that are ‘Brittle’ have less resilience than less brittle (or more humid) environments. Civilizations in brittle environments that overstress their supporting environments are in a much higher risk of collapse than those in environments that are more resilient and have a higher chance of recovery. Or that’s my hypothesis, anyway. Its time for me to read Jared Diamond’s book Collapse, which goes into this very topic in far greater detail and with actual research. But as Diamond traced in his book Guns Germs & Steel – The Middle East as it is known now was also known as The Fertile Crescent, and the birthplace of much of the world’s agriculture. It was a highly fertile area, but in an arid & therefore brittle place. The population pushed the environment too hard and had to abandon hunting & gathering as a livelihood, and moved to agriculture. They continued to push it too hard, and they have what we see now. From Grist’s review of Collapse:
Diamond tries to distill a unified theory about why societies fail or succeed. He identifies five factors that contribute to collapse: climate change, hostile neighbors, trade partners (that is, alternative sources of essential goods), environmental problems, and, finally, a society’s response to its environmental problems. The first four may or may not prove significant in each society’s demise, Diamond claims, but the fifth always does. The salient point, of course, is that a society’s response to environmental problems is completely within its control, which is not always true of the other factors. In other words, as his subtitle puts it, a society can “choose to fail.”
So too, in business is it the same. If you work in a business environment with buffering capacity – an economy with strong intersectoral dynamics or a government prepared to bale you out if, say, you’re a bank and you end up losing a packet through dodgy dealings, you will stay in business more likely than an industry out there by themselves,or doing business in a place where the financial environment does not or cannot offer buffering capacity. When you have greater economic complexity, you have more latches with which to keep your economic system buoyant. If you have all your eggs in one basket, well, you know how it goes. But this is a decision that can be made, to either hard-wire economic buffering capacity into being – or not.
Savory speaks of three types of money. He refers to them as ‘Paper Dollars‘, which are conceptual and essentially baseless. At one stage, Money was linked to a Gold Standard, but the decoupling allowed money to have a notional value. The second type are ‘Mineral Dollars‘, which are derived from minerals in the ground. They are finite and have serious environmental costs which are seldom accounted for. The third type are ‘Solar Dollars‘ – the product of sunlight converted into something, be that biomass or energy such as electricity. This is the only truly sustainable source of energy, which cannot be overstretched, as you get what you get – you can’t demand more.
So with Europe as an example, the UK shut down their manufacturing sector (as did the USA) and outsourced it to ‘the Third World’ and put all their eggs into Paper Dollars in the form of banking. When the conceptual house of cards collapsed back in 2008, there was no buffering capacity to fall back on. Germany and France, which had retained their manufacturing sectors fared better during the financial downturn. As did China, which was the nett recipient of much of the outsourced industry. They are producing ‘stuff’ from Mineral Dollars and selling it on, paid for in Paper Dollars for the most-part. Parts of the world with strong mineral resources were in a better position to weather the collapse of the Paper Dollar economy (local governments notwithstanding).
Many of the rural communities with which I work are involved in mining. They work hard hours in lousy conditions, extracting finite resources from their environment, and selling it to the outside world. Some of the money trickles back into the local economy, once the mining house’s Head Office have extracted anything surplus to covering costs at the coalface. Finite Mineral Dollars. I’m looking for a model that traces the ‘Trophic pyramid‘ in a food chain – that tapering of energy as one moves from direct sunlight conversion in photosynthesis through to tertiary consumers. There must be a model of that from Solar Dollars through to Paper Dollars, with agriculture being a very poorly paid necessity, and the real wealth (or relatively real wealth) accumulated by those who produce nothing, but tax the system for Paper Dollars. The model needs work. Answers on a postcard, please, to PO Box …
If you live in a brittle environment, there is not too much you can do about it, except use a different model to that model used in humid settings. So the IMF’s one-size-fits-all doctrine will never work, as each environment is unique. In farming, the agricultural disasters of the last century can all be placed largely at the door of trying to apply European farming practices in brittle environments which do not respond in the same way as European environments do. What is unique about your economic environment? Can you simply tax your economic system (the realm of paper money) or do you have to produce something? As the UK shows, taxation without production is a one-way trip. Your economic mix needs to have a sustainable driver at its base. What is yours? Does your business network resemble a trophic pyramid? Where are you positioned on that pyramid. The broader the base, the more tertiary consumers the model can handle. The converse holds true.
Which brings me to the next point, Savory’s concept of a ‘Holistic Context’ (it used to be called a ‘Holisticgoal’, but the name has changed for reasons I won’t go into now.) This ‘Holistic Context’ is a vision one creates of the ‘Whole’ you are managing, be that your farm, your family, your business, your economy, your country etc. It involves a series of steps, but the essence is that it is NOT goal setting, which is reduces you to tunnel vision. You may well achieve your goals, but at what collateral cost? A ‘Holistic Context’ on the other hand uses a peripheral vision to keep an eye on all the elements within the ‘Whole’ that you are managing. This is Savory’s representation of the Context framework below:
- So identify your decision makers – who has the right to make choices – who has veto rights? – Make sure you have them all included in the discussion and formation of the ‘Holistic Context’
- What are you resources – list them all
- What money or access to money do you have?
Next line – listed as ‘Holisticgoal’, but now ‘Holistic Context’.
- What quality of life do you want?
- What are your forms of production – which speaks to the area we covered earlier.
- What is your future resource base? This is huge. What will make money for you in future? In changing times like these, you need to give that some thought.
One the next line of Ecosystem Processes, you will need to broaden your definitions and think metaphorically.
- Community Dynamics is simple. Its about people – all people. How do you wish to function within society? Who are your allies, who are your threats, and how can you ensure that you are best able to function?
- ‘Water cycle’. Water is the lifeblood of Gaia. Cash is the lifeblood of your business. When your cash-flow collapses, it doesn’t matter how well your accountant tells you you are doing – its game over.
- ‘Mineral Cycle’ – don’t get this mixed up with ‘Mineral Dollars’ – they are very different. Mineral cycle refers to the renewal of resources, so that you don’t keep depleting your resource base. Think of it as liquidating your assets without planning for depreciation. Are you building your resource base up, or running it down?
- Energy Flow. This in Permaculture terms speaks to the conversion of sunlight to carbohydrates. In business, it speaks to keeping the base of your trophic pyramid as wide as possible. It also speaks to more conventional understanding of energy too. How will ‘Peak Oil’ affect your business? If you are dependent on fossil fuels for your means of production, you’d best start thinking about alternatives.
- Human Creativity. Man, I love this one.
- Next is a bracketed set of tools specifically addressing pasture management. They are tools that can be used to get the most out of the resource base to hand:
- Resting resources,
- Fire or liquidating assets (like fire, a useful tool occasionally, but disastrous if used too frequently)
- Grazing, or ‘sweating’ your assets and
- Animal Impact – knowing how hard to push and when to rest up resources. Like the idea of Solar Dollars, you can only use what you get, you can’t demand more.
- Living Organisms is your symbiotic relationship with all the decision makers and strategic allies in your network. Who can you tie up with, where can you create win-win partnerships?
- Money & Labour – I don’t need to speak to this.
Testing Questions – measuring the quality of your decisions to date.
This part is great, as you’ll see:
1. Cause & Effect. Jot down every single cause-effect link you can think of. It may seem onerous, but you will miss a bunch you never saw coming. ‘Sucker-punched’ I think they call it)
2. Weak Link . This one is awesome. Target your resources at your weakest link. If your weakness is in production, there is no point in pouring more money into marketing. Fix your means of production first. But only up to the point where it ceases to be your weakest link , at which point you redirect resources to the new weakest link. This requires constant monitoring, which we get to a little later.
3. Marginal Reaction – getting the biggest bang for your buck. That’s of interest to everyone. It seems similar to the previous two, and works with them, but the key question is: ” Which action provides the greatest return, in terms of our Holistic Context, for the time & money spent? No two actions can possibly give you the same return for each unit of effort invested at that moment. So when resources are limited (aren’t they always) you want to select the one that will yield the highest return. It is by necessity a subjective test.
4. Gross Profit Analysis is conversely pretty black or white. “Which enterprises contribute the most to covering the overheads of the business?” This assesses the enterprises (products or services from which you derive income) that, after associated costs and risks have been factored in, produce the most income to cover costs AND generate an income. Its weakness is that it takes no account of ecosystem processes or many less tangible considerations. A good example within mainstream agriculture is the preferred use of chemical fertilizers to boost productivity. But we now know that the damage to the environment, soil health and the dependence on these fertilizers that develop makes it a long term liability. Simple GPA misses that. It is a bit of a blunt tool in that regard.
5. Energy & Money – Using the most appropriate forms in the most constructive way. This goes some way to balance the GPA above. It speaks to how appropriate the selected course of action will function when measured against the entire ‘Holistic Context’. So the question it poses is: “Is the energy or money to be used in this action derived from the most appropriate source in terms of our ‘Holistic Context’? “and “Will the way in which the energy or money is to be used lead toward our ‘Holistic Context’?” Is it bringing you closer to your Holistic Context, or further away from it?
6. Sustainability: Generating Lasting Wealth. Going back to the bit on the Future Resource Base here. This is where ‘Mineral Dollars’ fall short. Once the gold reef is exhausted, it’s all over. ‘Paper Dollars’ as we know them in today’s economic system are a ponzi scheme. Once the rich have run out of peasants to screw, the game will be over too. All that we are left with are ‘Solar Dollars’ . So the question you’ve gotta ask yourself is”If we take this action, will it leads us toward or away from the Future Resource Base described in our Holistic Context?” This extends to your place within society and your interaction with your client base and the public at large, your way with the natural environment and ecosystem services you are requiring. Remember that you are most likely to be tapping the natural environment’s buffering capacity. What will happen to your business or farm, country, whatever, if you overshoot this buffering capacity? We love the simplistic ideal of a silver bullet that will be a panacea for all ills. I have yet to find one that lives up to its hype. But with every step you take, you choose to move closer towards a sustainable resource base or an unsustainable one. Remember that to achieve what you want will require effort and commitment. The converse is that you can easily & effortlessly have what you don’t want.
Oh look. Another pyramid. This shows the Capitalist model of exploitation of the proletariat, which has been accelerating for the last century. We can only have the ludicrously rich because of the poor masses prepared to work for slave wages. Image courtesy of CrimethInc
7. Society and Culture: Personal Values and Social Responsibility. We tend to forget that we are members of society, working within a society, dependent on that society for our income. The most stable countries in the world have the least variance between top and bottom wage brackets, and a secure middle class. The greater the disparity, the higher the risk of social disintegration. I read somewhere recently that there has never been a revolution that wasn’t started by hungry stomachs. Playing fair may or may not be part of your Holistic Context. So too would be working to be inclusive of the cosmopolitan cultural viewpoints of society, and how you blend those into your organization, so that everyone feels like an equal. As a good friend of mine once said “Equal means of the same value – not having the same characteristics”.
That sums up Testing Questions. Before we move on, I’d like to use a number of points from Savory’s ‘Holistic Management’ book, which portray the value of the testing exercise:
- All Actions must be tested towards a ‘Holistic Context’, otherwise the tests become meaningless. The tendency to slip back into conventional decision making ‘s ever present, especially once you think you have the hang of it. The difference between Rotational grazing on a Wagonwheel and Holistic Management Planned Grazing appear subtle to the untrained eye. The difference lies clearly in the decision making process. Wagon wheels work by rote. They fail. Planned Grazing is a dynamic process that does not follow a set pattern. Each decision is based on observation and is a dynamic decision making framework. So too in your business – if you leave the business on auto-pilot, chances are you won’t know you are horribly off course until you are spitting mountain out of your teeth. When you find yourself in an emergency situation, take corrective action by all means, but test that the action complies with your Holistic Context. My grandfather used to say “Don’t lose your head to save a minute, you need your head – your brains are in it”.
- When tackling a problem, run the Cause & Effect Test first. If you are treating symptoms but not cause, you aren’t fixing the problem, you’re kicking the tin down the road so you can deal with it later. Find the root cause, and fix that.
- The Gross Profit Analysis (GPA) is only of real use to you when you are comparing two or more enterprises. The Marginal Reaction Test (Bang-For-Your-Buck) is only of use when comparing two or more courses of action.
- The Weak Link Test applies in three different contexts: financial, biological & social. Look for the financial weak link when doing your Holistic Financial Planning; consider the biological weak link only if you are looking to strengthen or weaken biological communities, and look for social weak links any time an action is contemplated that will affect people who’s support you will need.
- The Society & Culture test is based on the picture that emerges after passing through all the other tests that apply and should be done last.
So that sums up testing questions. They are a great touch-stone of reality. Beyond them come the next stage:
1. Learning & Practice: Shifting your paradigm. If you aren’t moving forward, you’re sliding backwards. We live in a rapidly changing world. Einstein is famous for saying that you can’t use the same kind of thinking to get you out of a situation that got you into that situation in the first place. Most of us do keep learning throughout our lives, but to keep pace with the rising challenges that this changing world throws at us, we need to consciously keep changing and trying new approaches. One of the greatest failings of western ‘culture’ (Gandhi laughs in his grave) is that we have it drummed into us that we have to be right. We have to know. We pay a fortune in Professional Indemnity Insurance to protect us in the event that we do make a mistake, and a mistake can literally ruin our reputation. Which is very constraining, when you think about it, as we learn best from our mistakes. It helps to have a mentor or adviser to work with us to work our way through things and reduce the risk of error, but to be paralyzed by fear stops us from ever progressing. I see this most noticeably with most of the engineers with which I work. They tend to play it very safe, even though the solutions they put forward are part of the problem we face in today’s world. Asking them to step outside of their box is unconscionable for them. they are so trapped in their paradigm, that they can’t see that they are making themselves increasingly irrelevant in the built environment discussion. I could write an entire piece on this alone (and may if you’re not careful). One of the great blessings in my life is to work with a learning organization – we never stop pushing the boundary of what we know. I’ll leave it with asking yourself if you are learning ahead of the curve, or playing ‘catch-up’ with the rest of your industry. Work out where you want to be & get there.
2. Organization & Leadership: Creating an Environment That Nurtures Creativity. “Leadership is an integral aspect of organization in all higher life forms, and realization of the need for it is also instinctive; without leadership, the organization dissolves into chaos. Thus, the two, organization and leadership are inseparable, and survival depends on them” – Allan Savory. This is well worn territory, so I’ll move on.
3. Marketing: Developing a Strategy in Line with Your Holistic Goal. There is plenty of information out there on how you may go about marketing, written by people who know an awful lot more about it than I do. I would just add that ensure that your marketing is in line with your core values and Holistic Context. If you are marketing internationally, make sure that your family is happy enough to have you gone for periods. If you can’t do that, alter your marketing accordingly. Choose the kind of people you want to do business with. Some businesses or governments are notoriously bad payers. If your cash flow can’t finance their operations then be wary of engaging with them, or ensure that you have contracted up front regarding payment terms, with serious penalties for late payment. If they refuse, walk away. There is no shortage of people out there who will let you work for free.
4. Time as it pertains to Holistic Management from a grazing perspective is a key vector. Overgrazing is not a function of numbers, it’s a function of time. Veld can take a short hard burst of severe animal activity, as long as it is allowed to rest up afterwards. In fact, it will benefit enormously from just that. Prolonged grazing in a state of ‘semi-rest’ is what really does the damage – the veld has no chance to lose its moribund material, nor time to recover and put up new growth. It depletes the system and causes collapse. Maybe there are parallels there for you, your business or staff.
5. Stock Density & Herding Effect. Like Time, this is a tool specifically designed for grazing management. Too few resources put to a task can be more harmful than too many used under the correct management regime. We speak of ‘sweating’ the land or our resources, and then resting them. It works better that way than a slow constant off-take which depletes the Resource Base. I’ll leave you to ponder what that means for you.
6. Cropping & Burning are also tools used for grazing management. A good burn can help when you have too much moribund material on your hands, but it robs the soil of nutrients and kills off your soil biota. There is a hypothesis that holds that it was the use of fire as a hunting tool which caused so much damage to environment, that the hunter gatherers had to look for alternative forms of food, which heralded the advent of agriculture. Its fine to take off the dross once in a while if needs be, but foolish to use it too often. We liken burning to liquidating assets. There are times that it is just what is needed, but if you do it too often, you end up with a whole new problem on your hands.
7. Population Control. I hesitate to write about this, as it has such emotive power. Allan Savory maintains that as a stock owner, knowing when to destock is the difference between success & failure. As you go into uncertain times (e.g. drought), it is better to destock less earlier than having to hold a fire sale later and have to destock half your assets. I see the parallel with retrenchment here. If you shed any excess or borderline excess baggage earlier, it will save having to shed useful resources later, which will weaken your model. With the cold eye of a stockman, it is easy enough to do. When it affects families and your society, it is very compelling to hang on to your staff for as long as possible. Its a small trajectory adjustment now, or a much bigger one later. Tough call to make. Allan also holds that if you have been hit by disaster, avoid knee-jerk responses and rather focus on revising your planning. It may not be necessary to destock after all. You won’t know until you have objectively studied the effects of the catastrophe on your Holistic Context.
Savory is adamant about the importance of planning. It is the one thing that we resist doing as it is boring, yet is such a vital tool for success. Savory maintains that it is the difference between success and failure. Lets look closer:
1. Financial Planning. “Holistic Financial Planning is the single most important activity undertaken each year to ensure that all the money earned and spent is in line with your Holistic Context. If prosperity and financial security are included in your Holistic Context, then few activities during the year count more than this planning. It takes precedence over vacations, interruptions or excuses of any kind.” – Allan Savory – Holistic Management pg. 463
The difference between conventional financial planning and Holistic Financial Planning (besides capitals) is the inclusion of attitudes, priorities and considerations not normally found in financial planning. On paper, they may look similar at the end of the exercise, but the journey to that point is distinct. Conventional financial planning involves drawing up a list of anticipated income in one columns, a list of anticipated expenses in the other, and the difference between the two is your profit. If the bottom corner of the page is the wrong colour (i.e. red) you go back and rejig the numbers until you get the answer you want. Then you go out and try to follow the plan. Its tried and tested, but not all that it could be. The corollary of Parkinson’s Law holds that your expenditure swells to fill your anticipated income. This is just as true for individuals as it is for businesses. Every time you get a pay rise, you never seem any better off – your expenses rise with it. The same thing happens with your company’s turnover. With an erratic or seasonal income stream, this can play hell with your cash-flow, and have you ending up with getting bridging finance, at which point your profit goes to the bank, not you.
The Holistic Management Financial Plan is different in that it includes your Holistic Context and the decisions you make guide you toward that, and it factors in human nature, and requires an attitude hell-bent on success, especially when making a profit is included in the Holistic Context (and a profit is always included, even in governmental and not-for-profit organizations.) The profit is hard wired in as a fixed overhead – its not negotiable, same as your tax bill or rent. Start your first planning about 6 months before financial year end, so that you have time to work through the model thoughtfully and give it the proper effort that you deserve, to get it right. Rush through it, and you may as well not bother.
- The first session focuses on an Annual Review of the business or your income, including brainstorming new income streams.
- The second session – determining the enterprises you will engage in that year.
- Third session – Determine the weak link in each enterprise and how to address it
- Fourth session – Make a preliminary allocation of expenses.
- Fifth session – Brainstorming ways of cutting expenses.
When profit is included in the Holistic Context, the Holistic Financial Plan will help you achieve your targets in an environmentally, socially & economically sound way.
2. Land Planning & Grazing Planning – This pertains directly to those working with large tracts of land. If you wish to know more, buy the book.
That wraps up Planning Procedures – next is:
One of the most fascinating things I observed about Allan Savory, was how much he lives his adage of “Assume that you are wrong”. Working in the realm of consultants, I notice how often we take a view on something and will then defend that view until it simply no longer defensible. We will smash a square peg through a round hole to defend our opinion if need be. As I said earlier, we work in a world in which we have to be right. At some point we will have to reluctantly climb down and admit we were wrong. Its something we all dread. After all, we are paid to give advice, and people expect that our advice is correct. Allan is unique in my experience. He expects to be wrong. He goes so far as to try and prove his model wrong, rather than prove it right. Until you have encountered this, it’s hard to express just how refreshing and liberating this is. It requires a secure ego. It’s also the basis of the Feedback Loop. Plan – Monitor – Control – Replan, always looking for what is going wrong, not what is going right. When you let go of having to be right, you are far quicker to spot where things are going wrong and need adjustment.
Years ago, both the Savory Institute and Holistic Management International realized that the model that they had developed extended beyond the realm of grazing, and was of just as much value in business. I am finding that the lessons are of fantastic value in the communities and companies with which I engage. I hope that you may find it useful too.
The reference to Ox herding is a pun on the grazing planning and the Zen parable about chasing the mind around, and slowly bringing it from being feral to being under ones control. I think its a lovely analogy for how we battle to get control of our homes or businesses, but once we have mastered the techniques, it is possible to bring serenity and abundance to our lives. If this has been of use and interest to you, I would suggest that you pick up a copy of Allan’s book, Holistic Management, and/or contact a Holistic Management consultant. A good way to find one near you is to contact either The Savory Institute or Holistic Management International.