Brittle Power- PARTS 1-3 (+Notes) - Natural Capitalism Solutions

200National Energy Securitycomponents is to organize components into a hierarchy in such a way that thelarger whole can still work relatively well despite the failure of some of its subordinateparts. This is the strategy cited in the earlier discussion of food websand of Swiss watch-makers. It also applies, for example, to electric grids innormal operation: the failure of one power plant or transmission line is notsupposed to crash the grid in which they are embedded. Selective coupling—the options of autonomous operation for individual portions of the grid—contributesmarkedly to this ability to keep going despite partial failures. (If therewere no relays to disconnect failed power plants from the grid, the failurecould propagate instantly.) This feature is examined at greater length belowin the context of resilient design for computers.The ability to isolate and correct faults at the level on which they occurreduces reliance on remote, slow-responding control systems. If the isolation ofa failed power station and the substitution of another took place automaticallythrough the action of control devices at the stations themselves, they would notrequire the intervention of remotely sited control systems linked by fragile linesof communication. The corrective action would be faster and surer.The same principle applies to organizational design. It can take a long timefor information to trickle up a chain of corporate command to senior executives,for them to detect mistakes made by their subordinates, and for correctiveorders to trickle back down to the operative level. In contrast, one highlyproductive Boston stockbroking firm gives its portfolio managers autonomy inchoosing what to buy, so that bad investments are made by only one person,not by all of them on central direction. Even more important, that firm relieson the individual managers to detect and correct their own mistakes. They cando this faster for themselves than any superiors could do for them, and withoutthe encumbrance of institutional inertias. By staying fast on their feet inresponding to rapidly shifting market conditions, the managers thus avoid thelarge-scale errors that depress earnings in more traditionally managed firms.Stability Resilience involves the ability to take time when you need it.Components should be coupled in such a way that there is time for decouplinga faulty unit before others are damaged. An oil refinery, for example, whichhas very small holding tanks between its stages would have no operationalflexibility. If everything worked perfectly, it would have smaller carryingcharges on idle-in-process inventories than would a plant with bigger tanks.But if all stages did not work at exactly the rate and in the manner planned,there would be no way to bypass a faulty stage, and there would be no graceperiod—no breathing space—in which to improvise repairs. The whole plantwould therefore have to be shut down—at vastly greater cost than that of