When companies deliver goods and services that truly leave the world better off, that’s “thick value.” That means creating real economic value; not simply capturing it from customers or suppliers, but genuinely making everyone better off. “Thick value” isn’t my idea. It’s something that Umair Haque talks about in his new book “The New Capitalist Manifesto.”
I just experienced “thick value” this morning and thought it’d be a good excuse to talk about the concept here. See these carpet tiles on the right? They used to be in our basement, and hopefully will be again soon. We’d had some earlier moisture problems that prevented us from finishing our basement. In our first couple goes at making more usable space down there, we did some modest moisture abatement and installed regular carpeting. It didn’t work either time. Water crept in, and we had to pull the whole carpet – twice; a huge hassle and two huge piles of nylon now in the landfill. Ugh. So, then we got smarter. We hired some folks to dramatically rework the drainage around the outside of our house, and just to be safe, we changed our approach on floor covering. Rather than traditional carpeting, we went with FLOR carpet tiles from sustainability pioneer, Interface Flooring. Despite some very heavy rainfalls this last year, we’ve been nice and dry – for the first time.
So you can imagine our dismay when we were downstairs enjoying our basement over the weekend and my wife stepped on a square and noticed it was wet. Argh! No! Not again! Luckily, we discovered it’s just a problem with our water heater overflowing. A problem for sure, but much more easily resolved. The great news is that we didn’t have to yank our whole carpet. I just pulled up the affected tiles, squeezed the water out of them and laid them out to dry on our front porch (hence the picture above). I’m hoping we caught it in time to prevent any mildew; and if so, I’ll just plop them back down in the basement. If I find them smelly after they’ve dried out, I’ll just swap them out for some of the extra tiles we got just in case we had something like this happen. Problem solved. Minimal hassle. Minimal (and hopefully no) landfill.
That’s thick value – and here’s why.
In the old days, carpet makers could care less whether you had to pull up their carpets and buy whole new carpeting if your basement got wet. In fact, they probably loved it because it meant you had to buy new carpet, which translated into more sales and profits for them. But that kind of value is “thin value” according to Haque. It’s thin value because it’s actually robbing value from me and from the environment. The lost value to me comes not only in the money I have to pay for a whole new carpet, but also in the time and hassle of having to manage the whole process of pulling up the old one, disposing of it, shopping for a new one and having it installed. The lost value to the environment is the new contribution to the waste stream, the harm from extracting the oil and processing it into carpet, the energy used and the carbon emitted.
Interface’s Ray Anderson wasn’t content with this approach and changed his company in ways that radically rethought the whole carpet value proposition. The FLOR carpet tiles don’t steal value from me and help reduce the value stolen from the environment. In fact, I’d go so far as to say they actually create additional value for me – beyond that of traditional carpet. They just saved me a bunch of time and cost this morning by turning what would have been a minor disaster into a minor inconvenience. What’s more, they’re responsible in a way for the fact that we feel confident enough to install carpeting in our basement again. That means we now have a place to watch movies that’s not in our living room and I now have a place to do my Kinnect workouts.
So, in a way, you could say Ray Anderson’s radical rethink of the carpet is strengthening my family and keeping me from getting fat. Now that’s thick value, and I’m happy to share it with the company that made it possible. Heck, I’ll even dedicate a blog post to them, I’m so pleased.