WINTER 2007-2008 UPDATE

from John Abrams

IT'S JANUARY & I'M IN VERMONT, holed up for five weeks working on the second edition of my book, "The Company We Keep". If I manage to get it done (sometime) it will have several new chapters and a deeper focus on employee ownership and all that it promises in this globalized and climate-challenged world.

After a very snowy and wintry December and New Years’, we’re having a bit of a heat wave here. From the window beside my desk, if I turn my head left, I look across open terrain, partially wooded, to a brook, which has been babbling but is now roaring furiously with unseasonable snow melt. I’ve looked out this window, at intervals, for days, and today I see two new things – a patch of grass (unwelcome) and a small scampering red squirrel (entertaining - winter thaws have unexpected benefits). Winter will return, I’m confident.

Before I left the Vineyard, Deirdre Bohan and I finished work on our 2007 Year-in-Review and Ten-year Plan for South Mountain. Working our way through that exercise is always a wonderful way to reflect on where we’ve been (for certain) and where we’re going (perhaps). Being up here, away from the company, furthers my opportunity to reflect, and if the high temps aren’t enough to warm me, that opportunity is. Here is the capsule summary of where we see ourselves headed this year, and in five, and in ten:

By the end of 2008 SMC will have dramatically shifted its emphasis, make-up, and operations from what it was 10 years before, having expanded from a company which had two major functions – Design and Construction – to a company that has six, having added Interiors, Renewable Energy and Window Sales, Lighting Design and Fabrication, and Teaching and Consulting Programs. We are more mature, stable, diverse, and prepared for the future than ever before.

The biggest differences we see at the end of 2007 from the end of 2006 are:

• Profits have increased dramatically, allowing us to do more of the things our mission calls for;

• Renewable energy promises to be a larger part of our mix than we previously imagined;

• Our new lighting design and manufacturing endeavor has come into focus and become more of a reality;

• Teaching & Consulting is beginning to show promise as a long-term potential profit center and driver of our mission.

Our overarching theme for 2008 is to continue to focus on our efforts to systematize and increase the effectiveness of our design and construction work, the bread-and-butter of the company. Big strides forward have been taken and it is essential to our future success that they continue. Our newer endeavors are on firmer footing because they are more contained, and because they began later in our evolution. In contrast, Design and Construction is large, complex, and has a long history, and therefore, if we are not thorough, vigilant, and change-oriented, it has the potential to suffer from calcification and inertia.

By the end of 2012 SMC will have established and fully integrated the several new endeavors we are currently developing, and they will have become a significant part of our workload and revenues. We will have made significant progress in our planning for transition to Generation Two leadership and our march toward the goal of becoming a carbon neutral business (at least, by then, we hope to know what that truly means). Finally, we will have enlarged our contributions to the island community, and we will have moved from our current 32 employees and 16 owners to approximately 40 employees and approximately 26 owners.

By the end of 2017 SMC will be a strong, diverse carbon-neutral company of +/- 43 employees and +/- 30 owners deep into its Generation Two journey and prepared for John’s retirement, which is likely to occur in the decade that follows. We will continue to be a leader in the post peak-oil Vineyard economy and community, and we will have begun new endeavors that we have not even identified yet.

You notice the Generation Two theme. Among many exciting current SMC initiatives, one of the most is the exhilarating on-going work of transitioning from Generation One to Generation Two. There is a new group of young, employees whose task it will be to take us beyond what we, the first group of owners, has been able to accomplish. They are thoughtful, articulate, passionate, and irreverent. At a recent Future Owners meeting one said, “ How does our structure translate to our clients? Have any of them ever read our website or your book and said, ‘This stuff seems like a crock. What’s with these guys anyway?’” I responded, “Nobody has ever actually said that out loud, as far as I know, but I’m sure plenty of people have said it to themselves.”

“Well, do you think our oddball ownership structure ever keeps business away? “

“Good question. It probably does, but it’s also part of what distinguishes us and helps us to attract people who share our values. It may be part of why we get to work with such wonderful clients.”

Part of the issue of how the company will progress past my tenure is the issue of identity. Small businesses tend to be identified not by their company name or brand, but by their leader. So it is with South Mountain, but the company has been gaining identity swiftly in recent years, for the last decade at least. But still, many identify it with John Abrams, and employees (and employee owners) often get asked, “Oh, so you work for John Abrams?” At the same Future Owners’ Meeting DonE Turnell shared his great stock answer when confronted with that question, “No, I work for South Mountain Company, and so does he.”

There you have it.

ONE OF THE MAJOR ISSUES CONNECTED to the Generation Two transition is employee housing. For many years SMC has contributed significant resources to funding, designing, building, and creating policy and awareness for affordable housing on the Vineyard. Great progress has been made. If we can manage to get our Martha’s Vineyard Housing Bank bill through the state legislature, we will be well on our way to a long-term solution of this vexing problem. But we have immediate needs, within the company, and we decided – this year – to turn our efforts inward for a bit, and devote time and money to housing efforts for those of our employees who do not have permanent housing yet. Meanwhile, we will keep our other island-wide housing endeavors going too. Jenney Way, in Edgartown, a 10 house project we have been shepherding for years, is under construction and should be completed in May. And 250 State Road, an eight house project in West Tisbury, is in design. Both of these projects extend our efforts to make affordable housing high performance housing, using both solar and cutting edge green building techniques to do so.

I WAS AT THE DAVIS HOUSE, which we are just finishing, with Ryan Bushey, Deirdre, and owners Karen and Dave Davis. I was getting a little bored so I went scouting for details, carefully checking out how things were done. I looked inside a closet downstairs. Way down on the right I saw something in the semi-darkness. I got down on my knees. And there was a beautifully crafted tiny door (a clean-out for the pellet stove) with sweetly shaped trim, pretty turnbuttons, and a little carved handle. In a closet, in the corner, where nobody will ever see it. But when they do. . . .

I have to be honest. I don’t know what to think. Over the top? Well. . . maybe. But at the same time, I have to admit it reminded me of a quote I read in a book by William Coperthwaite, called A Handmade Life, when he says, “I want to live in a society where people are intoxicated with the joy of making things.”

That’s what I saw down in the corner inside that closet – the work of someone intoxicated with the joy of making things.

SPEAKING OF CRAFTSMANSHIP, my friend Kevin Ireton and his wife Cynthia recently spent five days at the Riggs camp, just after we finished remodeling it. Heidi and Douglas generously loaned it to us for this purpose, and this is a part of the e-mail he sent to Heidi to thank her:

Dear Heidi, As the editor of Fine Homebuilding magazine, I visit houses for a living. Sometimes I get to stay in them. They are always good houses (that’s why I’m there), and staying in them is always pleasant. But it’s not usually moving. Perhaps it was the spectacular views, or the restraint you showed in choosing to remodel the place so sparingly, or maybe it was the photographs of your family stapled to the walls, but staying at your home in Chilmark felt as though you were sharing a very intimate and precious thing with my wife and me. We are very grateful for your kindness. All the best, Kevin

I took Kevin and Cynthia for a tour. As always, he was blown away by the craftsmanship. He said that every time he sees what we do he thinks we must have reached the pinnacle of craftsmanship, and every time he sees more he realizes we’ve far surpassed what he saw before. That’s exactly what happens to me when I look at the work of the superb craftspeople at SMC who are constantly taking it to a new level.

BACK TO THE DAVIS HOUSE: Aside from being a tremendous repository of craft, we hope that this house is a harbinger of things to come. A radically eclectic curvilinear earth-integrated design with partial sod roof (thanks to Ryan), simple mechanical systems, composting toilets, no central heating (two pellet stoves and good passive solar combine with some electric back-up that will be used rarely, if ever), the largest PV system we’ve ever installed on one of our projects (6.45 kW), and solar water heating. Nice mix. We’re hoping this will be close to a no fossil fuel house and that when left alone, with no heat on, it will never freeze. We’ll see.

MOVING TOWARD THE EVENTUAL GOAL of SMC carbon neutrality, Rob Meyers and Phil Forest, our energy and renewables guys, recently finished an audit and assessment for the SMC office and shop and learned that, with some effort, we can bump our electric production from 25% of our usage to 87%!! The Board agreed to all aspects of the audit and assessment – by the end of this coming spring we will have completed the energy efficiency improvements, replaced our Bergey wind turbine with a quieter and more productive ARE 442 and added a 6 kW solar electric system). This is a big step in terms of our building energy use, as we already do our heating with Biodiesel. So what will we tackle next? Jobsites, transportation? Don’t know yet.

Although Phil and Rob are doing a superb job running our new Renewable Energy division, they are less good with remote-controlled toy helicopters. After trying several other ways, we decided this might be the best method to simulate wind turbines so that we can do photo-representations for planning purposes (put a remote controlled helicopter up in the air where the turbine would be and photograph from different locations that might be impacted). So Rob bought a cheap ‘copter and tried to learn to use it. After he crashed it around some Phil tried, and now the thing is a total wreck. But while Rob was fooling around with it on his lawn some guy stopped by who is a super-hobbyist and we hired him to do a job for us. It worked like a charm!! Sure beat trying to loft a weather balloon in the wind or fly a kite.

Next update I hope to be able to report some very exciting news about several far-reaching renewable energy projects that are in the developmental stages right now.

NOW THAT THE RENEWABLE ENERGY DIVISION is in full swing, we have begun to concentrate greater effort on SMC Lighting, a long-term effort to develop a line of elegant lamps and lighting fixtures designed and crafted by SMC. Michael Drezner has taken on leadership and a dedicated team is working hard at all phases of this major effort: Pinto Abrams and Jim Vercruysse in the shop, Tim Mathiesen and Deirdre upstairs, myself, and others. Two prototypes are nearing completion. The very first completed floor lamp will be auctioned off March 12th at the Northeast Sustainable Energy Association’s Building Energy conference in Boston. Exciting stuff! Once the prototypes are completed, we will post photos here on the website.

One of the things we are learning is how difficult and complex it is to actually complete design and production of a new product – there are umpteen aspects that require analysis, distillation, and solutions. It takes a long time. Reminds me of the story of a greedy fundamentalist who is praying one night. He closes his eyes and says, “God, is it true that a million years to me is like one second to you?” To his surprise, God answers, “Yes, it is true.” “God,” he says, “is it true that a million dollars to me is like one penny to you?” Again, to his surprise, God answers “Yes, that is also true.” He then says, “God, could I have a million dollars?” And God answers, “Sure, just give me a second or two.” People keep asking when these lamps and lighting fixtures will be ready for the marketplace. Just give us a second or two.

ANOTHER INITIATIVE that is forging ahead in 2008 is the SMC Jobsite Materials Recovery Effort. Led by Matt Bendle and Pete D’Angelo, we are trying to make major progress with Construction and Demolition Waste by developing new ways to use material more efficiently and to re-use and recycle an ever-greater proportion.

SO. . . . THINGS ARE GOOD. The work is exhilarating, our clients are great, the challenges are many. And while it’s easy to get carried away, we always need to keep our eyes on the prize.

There’s an old proverb about a young boy walking to town who passes a stone quarry. He sees a disgruntled looking man chipping way at the stone and asks him, “What are you doing?” The man replies, “I’m chipping away at this wall of stone, trying to get a rock out of it.” He walks further in the quarry, and encounters another man, who looks less grumpy but is still grunting while he works. “What are you doing?” he asks. “I’m chipping out a stone block that is going to be part of a foundation of a building,” comes the response. Finally he stops to talk to a third man who is happily whistling as he chips away at the stone. “What are you doing?” he asks and the man replies, “I’m building a cathedral.”

Hopefully this is the predominant spirit we are cultivating here; that no matter what we are doing – writing a letter, moving a pile of lumber, nailing sheathing on a house, doing a heat loss calculation, making a lamp – we are actually making beautiful things of durable utility. Each and every minute of each and every day.

May we have as much success in reaching our 2008 goals as we have in this seminal year of 2007, may we continue to rely for inspiration on the wonderful clients that come our way, and may we continue to be grateful for the wonderful group of people who, assembled together, make South Mountain Company what it is, and are continuously making it what it will be.

I hope our paths will cross soon – John