Amory B. Lovins
Cofounder, Chairman, and Chief Scientist
Rocky Mountain Institute seeks to turn scarcity by inattention into abundance by design. To drive big changes despite political gridlock, RMI works mainly with society’s most dynamic force—private enterprise—to transform design, bust barriers, and spread innovation.
Engaging with commerce skirts the policy swamp but often reveals stagnant business logic instead. As practitioners of transformational solutions, we therefore apply “institutional acupuncture”—sticking metaphorical needles into carefully chosen points in complex organizations and relationships to get the business logic flowing properly in the channels and directions it already naturally follows.
Institutional acupuncture requires identifying overlooked opportunities and the often delicate or obscure points whose precise stimulus can unblock congestion. Sometimes our efforts directly change an industry, but more often, behind-the-scenes actions trigger indirect change. Our work with automakers, for example, started in 1990–91, when we realized that vehicles needed fundamental redesign. Thus began a two-decade-long exploration, with and within the global industry, of how to design, build, operate, and think about cars. That reconnaissance led in 2000 to the Hypercar® Revolution, an SUV design (with two European industry partners) that remains surprisingly advanced even a decade later. Further refinement morphed that effort into our spin-off Fiberforge Corporation, a for-profit innovator in technology for making cost-competitive ultralight structures at automotive speed and, ultimately, scale. RMI’s early and broad reframing of auto design has given us an influential role in a critical solution space, ultralightweighting, where judicious but insistent pressure is starting to thaw cultural rigidities.
Encouraging recent signs include Toyota’s 2007 1/X carbon-fiber concept car (with a Prius’s interior volume, half the fuel use, and one-third the weight) and BMW’s MegaCity carbon-fiber concept car announced in 2010 for 2013 mass-production. In 2004, when Boeing revealed a half carbon-fiber airplane (now the 787 Dreamliner) that annually saves eight times its weight in fuel at no extra cost, we drew the strategic analogy to cars. In 2006, Ford Motor Company recruited Boeing Commercial Airplanes’ CEO as its own. In 2010, Ford is leading innovation in lightweighting and advanced propulsion. As a strategic advisor to its Chairman (2007–09), I’m impressed with Ford’s technical progress and market success.
RMI injects some innovation directly into the marketplace: at the end of the 2009–2010 fiscal year reported here, our third formal for-profit spin off entered a unique strategic partnership with General Motors. Quiet collaboration with powerful partners is another route. In early 2005 we helped support and accelerate Walmart’s and its suppliers’ efficiency gains in trucks and stores. That October, Walmart’s CEO set a goal of raising the 2005 efficiency of its trucks—the world’s biggest civilian fleet—25 percent by 2008 and doubling it by 2015. By 2008, the actual gain in cases moved per gallon was 38 percent. The onboard generators Walmart had introduced to displace parked trucks’ idling soon began spreading industrywide. These successes spurred RMI to publish in 2008 a path to roughly tripled efficiency. To help vault barriers, like sparse objective assessments of a myriad new fuel-saving techniques, RMI drew corporate partners into a nonprofit spinoff—the North American Council for Freight Efficiency—seeking strong efficiency for competitive advantage. This helped build industry receptiveness to the first U.S. efficiency standards for heavy trucks, which EPA published in October 2010.
Our collaborations with key industrial partners are frequent, diverse, and effective. Previous Annual Reports have described joint efforts ranging from iconic, like the Empire State Building Retrofit, to little-known or proprietary, like many mining, chemical, real-estate, and automotive projects. RMI has for decades helped leading hydrocarbon and electric-utility firms face strategic challenges, because as Bill Tolbert said, “If you’re not part of the problem, you can’t be part of the solution.” Hence our collaboration with the nation’s number three producer of coal-fired electricity, Duke Energy, and soon with others.
Some technical projects demonstrate big savings but reveal even bigger icebergs of hidden opportunity. For example, a U.K. data center we codesigned, which EDS (now HP) built in 2009 at normal cost, saved 73 percent of non-IT energy and 98 percent of cooling and pumping energy, tripled computing per watt, and quadrupled potential capacity. Yet EDS reckoned adopting all our recommendations could have saved about 95 percent of energy and 50 percent of capital cost—tempting us to test that hypothesis next.
Such breakthroughs have a way of pushing industry to a new level. Often the highest hurdle is the first—finding the right receptive partner at a ripe instant. Our chance to shift chip fabs’ efficiency followed more than a decade of failures to slip through the invisible crack between industry upturns (when everyone is too busy to think about novel design) and downturns (when such rethinking is deferred until it’ll be needed). Texas Instruments’ Paul Westbrook finally achieved that feat. Our 2003 collaboration saved $230 million of capital cost as well as much energy, water, and up to a thousand high-tech American jobs. TI’s farsighted choice to share its learnings with competitors—it blessed Applied Materials’ sending me to describe them at China’s big chipmaking conference—has raised that sector’s global efficiency bar.
Even in that excellent project, some big efficiency opportunities couldn’t be tested in time for the design deadline, but intrigued another firm galvanized by TI’s breakthrough. That company’s next fab should save about two-thirds of the energy and half the capital cost. Now we’re starting to envisage 8–10-fold energy savings at even lower cost. The master key is rapid mutual learning with highly motivated expert partners. This creates hands-on implementation experience, teachable cases, competitive pressure for emulation, and revenue to leverage the philanthropy that funds our innovation. Adam Kahane quotes an African proverb: “If you want to walk fast, walk alone. If you want to walk far, walk together.” Through business collaborations, RMI does both.
Some interventions tightly focus our convening power on assembling technical “innovation workshops,” like RMI’s recent solar-cost charrette. Such carefully researched and targeted events redefine what’s possible and profitable, then mobilize and motivate industry leaders to create radical change.
In contrast, it can take decades to map and pierce the acupuncture points of extremely complex organizations like the U.S. Department of Defense, which RMI is helping become a leader in energy efficiency and resilient electricity. Similarly, our micropower analysis supports a long-term effort to inform key financial institutions about nuclear power’s competitive landscape, making them more prudent in rating securities, assessing risks, and allocating capital.
RMI’s acupuncture needles sometimes unblock policymakers’ meridians, too. A 2004 meeting with Dr. Jeffrey Runge—an emergency-room physician who’d treated many car-crash victims before he led the National Highway Transportation Safety Administration—helped shift NHTSA to regulate light trucks’ efficiency by size, not weight. This innovation, later expanded to cars, helped decouple size from mass, so automakers can make vehicles big, comfortable, and protective but not heavy, hostile, and inefficient—thus saving oil, lives, and money.
Buckminster Fuller said, “You never change things by fighting reality. To change something, build a new model that makes the existing model obsolete.” In 2009–10, our disruption hatchery launched intensive Institute-wide research on a new strategic focus, Reinventing Fire. This “grand synthesis” will map and drive the U.S. transition from oil and coal (and ultimately natural gas) to efficiency and renewables, led by business for profit. In autumn 2011, when it rolls out a book, technical website, and other publications, our engagement with industry will jump to a new level—doubtless disclosing still more enticing meridians, points, and needles.
Institutional acupuncture is one of the many sharp tools in the Reinventing Fire kit, but it’s no panacea. To suggest we’re unique because we operate both within and on the periphery of the private sector would be a stretch. To suggest we have singlehandedly transformed major industries would be fanciful. But with your help, which we value as much as our independence, we strive at every opportunity to get business leaders’ qì (“chi” or “vital energy”)—their entrepreneurial juices—flowing, nay, blasting through blockages. The best way we know to dissolve that congestion is to inject new ideas with seemingly magical effect, one sharp little needle at a time—expertly, gently, mindfully, and decisively inserted into the right spot at the right moment.
Amory B. Lovins
Old Snowmass, Colorado
September 2010