Products That Last - Review No.2

17-02-2015

Hello everyone; sorry I’m late – business to attend to and a library book to finish.

Now – where was I?

Products That Last and Business Model Archetypes

I’ve had lots of conversation with luminaire manufacturers about what happens in the (near) future; what happens when its not so easy to get hold of raw materials; when energy costs start to impact on the cost of component production (and let’s not get ensorcelled – now there’s a new but wholly appropriate word for you – by the artificially low price of energy today. That’s just politics.). Basically . . . when we finally realise that the stuff we need is running out.

And the response is wholly expected. There is no other way of doing what we’ve doing since James Watt played with his mother’s kettle. This is the way that it’s always been and there can be no other way. Profits have to be made and this is how we do it; we make stuff – we sell stuff – we make more stuff – we make a profit.
We don’t care what happens to the stuff that we make once the money’s in the bank.
And that is how business is done.

The central section of Products That Last looks at exactly this historic business paradigm and then goes about gently suggesting that, actually, there are other ways of doing business. And not new ways that have never been attempted, but ways that are already out there – albeit in different business sectors. The daft thing is that we already know about them because we’re already taking advantage of those business models ourselves.

The authors offer five ‘Business Model Archetypes’ and provide a friendly sliding scale to indicate the relative shift from now to when. There is a simple starting point for embracing a Circular Economy business model; Use Less!
(no – not useless – USE LESS – the problems of having a satirical language, you see)

We can use less by having what we make last longer; by designing for replacing failed components rather than dumping the entire product; by not selling at all, but providing a leasing service, thus retaining control of the entire product process, enabling second, third, nth iterations of what we make. Products That Last identifies this as a paradigm shift from Product Value to Service Value – and gives us examples of how this works in practice at the moment.

And if you’d like to read about a company that embraced this culture 20 years ago, then read Ray Anderson’s wonderful autobiography “Confessions of a Radical Industrialist”. For Anderson, the change came about because of a challenge from customers to justify his company’s environmental policy – inevitably, he didn’t have one, but by the time he’d finished he’d turned Interface round to being an examplar company for what we now recognise as The Circular Economy.

The prognosis for manufacturing business is that, in order to survive, we need to reduce the exploitation of raw materials; reduce the amount of material that we lose to landfill; retain control of what we make throughout its lifetime and beyond. And in order to do that we need to find a new profit model. To stay in business, we need to find a new way to market.

And the key word in this exercise is VALUE. Our current manufacturing model only attributes Value up to the point of sale. We don’t care what happens next. As a consequence, we don’t see the on-going value of what we make once its in the hands of the customer. But our customers see what we make in a wholly different way. For them, Value resides in what the product does for them, functionally, socially, aesthetically and emotionally.

It’s the old story of your grandad’s spade. Yes, the handle needed to be replaced after a particularly bad experience with a tree-root and I remember my dad replacing the blade - but its still my grandad’s spade. And I inherited, and still use, my father’s pocket watch – and my old laptop, given the name Lazarus because of the number of times it’s died, still performs a valuable support service, even though the battery’s knackered and the machine can’t actually be used . . . as a laptop.

By looking at the entire lifecycle of the product as seen from the point of view of the user, we may better see how the lighting manufacturer can use the Circular Economy model to their advantage – and still see money going into the bank.

The final section of the book – and I’ll be back to you soon, looks at the way that design can influence the lifecycle stages of products. And I’m looking forward to that.

To learn more about me and (sort of) justify my standing up and talking about stuff like this, click HERE!