4th Quarter 2005

We’re a real estate company that deals with structures, concrete physical structures. And often we think in those terms. This short aggada will deal with three fairly common items.

Silos. A number of years ago, we had decided to put together an outside board of directors. And one of the people we approached to sit on our board was someone I had admired many years from afar, the head of a non-profit organization that had done (and continues to do) a brilliant job of building a diverse group of stakeholders from across political and professional spectra. And so we asked her if she would consider sitting on our board. Her response: In the 25 years that she had headed her non-profit organization, she had never been asked to sit on a for-profit board. Her organization had no guidelines for this, no precedents. She would have to ask her own board. Ultimately, it was decided that she could not be on our board, since it might somehow taint the wonderful work they were doing for sustainability in her community. This got us to thinking. And so we did some research – actually our summer intern Josh Yellin did the research. And what he found was interesting: of the some 1200 directors sitting on the boards of the top Fortune 100 US companies, only 15 held positions with non-profit organizations. The disparity between the coalition-building that goes on everyday within the non-profit world and the lack of such diversity in corporate America is discouraging if not surprising. And it begs a serious question: if we really are going to help seed substantive change in the way we do business toward more sustainable ways of doing business, what needs to be done to break down the silo-like mentality between these worlds? How does the message get conveyed to the business community that it’s in their own financial interest to broaden their leadership base? And how does the message get conveyed to the non-profit world that it should be less queasy about sitting on the boards of businesses that often grace their own boardrooms?

Bank Vaults. The South Carolina branch of the Urban Land Institute recently co-published with the X a wonderful study on the keys to smart growth for the entire state. The work is impressive, the result of some 18 months of brainstorming among virtually all of the key stakeholders in South Carolina. Here, if anywhere, seemed to be at least a provisional answer to the problem posed by silo-like thinking: key leaders in business, government, academics, and the non-profit world, all coming together to put together a comprehensive growth plan. However, here was the catch: While everyone agreed that South Carolina needed to institute a well-coordinated, well-thought out master plan to address its future growth and while everyone agreed that this would take lots of bucks, no one could agree on the mechanisms to fund the plan. A similar fate had already been confronted by the State of Georgia. In 2000, the Georgia General Assembly created the Georgia Greenspace Program, intended to set aside a significant portion of the state’s geographic area as natural, undeveloped greenspace. But the program was cut from the state’s 2004 Budget, never getting off the ground. So, added to our first-order question of trying to combat silo-mentality comes a second-order problem: once you have consensus, how do you back up such forward-thinking with capital? While we know that running a business sustainably cuts down on the risks faced by a typical business, we have yet to convey that fact convincingly to the insurance world. And while we know that reducing waste accrues to our bottom line, we have to convey that convincingly to Wall Street. And while we know that constructing a building sustainably leads to lower operating costs and longer building life, we have yet to convey that to the banking world.

MP3 Players. I’ve recently purchased MP3 players for our kids. Needless to say, they are thrilled and spend more time than I’d like plucking downloads off the internet for .99 a song. One of the things that I’ve come to realize here is that the days of the concept album are over, when groups would devote much time and creative energy to pulling together a group of songs that were greater than the individual parts. Instead, my kids were making their own concept albums for themselves, a hodge-podge of styles and tastes and messages that somehow worked for them. That kinda threw me for a moment until I realized that in a very real sense, my kids were not having a concept "pushed" onto them, fully-made. Instead they were adopting a "pull strategy," cobbling together a community of songs that worked for them. This hit me. I thought about the communities we have historically pushed onto the consumer in the past century: first the so-called Garden Cities that we built to help provide a little more elbow room from urban dwelling, then in the suburban mania that took hold after World War II. Maybe, just maybe, this new generation of consumers, my kids and your kids, are developing in ways that reject pre-packaged concepts of community, in favor of a medium that enables them to build community for themselves. How? Much the same way our kids are creating their personalized MP3 play list: leaving them with a legacy of "greatest hits": green space that has stood the test of time, buildings that have "great bones" and are begging to be restored, neglected brownfield sites that beg to be re-discovered and reclaimed.

Sustainable development as the next Ipod? It’s a very un-silo-like concept. But I’m willing to bet that that the idea is bankable.

Martin Melaver

CEO