A Lesson in Convergence Thinking
By Natasha Léger

orangearrowEvery business school student now knows “If you can’t measure it, you can’t manage it.” As a result,

The Big Thirst: The Secret Life and Turbulent Future of Water By Charles Fishman
The Big Thirst:
The Secret Life and Turbulent Future of Water
By Charles Fishman

KPIs (key performance indicators) now dominate business thinking. Charles Fishman, in The Big Thirst: The Secret Life and Turbulent Future of Water, takes this one step further and explores the notion of valuing resources…in this case, water. From his perspective, “if you can’t measure it, you can’t value it.”

Water, the world’s most precious resource, has been squandered and mismanaged because it has not been valued. It has not been valued because it has been freely available. When water flows continuously from the tap at a cheap rate, people don’t think about how to conserve it. When water rights are written so that you lose your rights if you don’t use your share, farmers have no incentive to conserve. Fishman provides a number of examples of water mismanagement primarily by municipal governments, and provides shining examples at both the business and government level of proactive water management based on valuing water.

Valuing water requires understanding the relationship that water has to everything we do. “Companies are realizing that the water bill includes the electric bill, the natural gas and heating bill, the chemical treatment and filtration bills. Reduce your water use by 9 percent, and you reduce a cascade of costs alongside the water bill.” Fishman sites some examples of the relationships to water that companies have discovered:

a. One gallon of water used by Intel in 2005 generated $5.74 in revenue and $1.29 in profit; in 2009 a gallon of water generated only $4.37 in revenue and 55 cents in profit. In terms of water, Intel’s pro tability fell 57% per gallon used. That’s a measure you don’t see very often, even on a Bloomberg terminal. Intel also reports renewed determination to hit its goal for water productivity—to reduce water per chip below 2007 levels by 2012.
b. The industrial giants IBM and GE each use 11 ounces of water to generate $1 of revenue. Coke needs 333 ounces of water to generate $1 of revenue. Coke says that every liter of beverage it manufacturers and sells requires 2.43 liters of water—1 liter for the drink, and an additional 1.43 liters of manufacturing, cleaning, and processing water.
c. Levi, which now only designs and markets jeans (outsourcing all the sewing), discovered that a single pair of blue jeans required an astonishing 919 gallons of water during its lifetime. Levi attributed 450 gallons of water (49 percent) to growing the 2.2 pounds of cotton the jeans required; it charged 416 gallons (45 percent) of water to washing the jeans once they were purchased, leaving just 53 gallons (6 percent) for which Levi itself was directly responsible. One of the company’s great water-saving insights from this project is that jeans would “use” a lot less water if we, the wearers, would replace our top-loading washing machines with more water-efficient front-loading ones.
d. Cruise ships must be water self-sufficient, either tanking up on potable water in port or using fuel to run onboard desalination and puri cation systems. Every toilet ush, every cup of coffee, every shower, and every ice cube uses water that has to be ordered and accounted for. The dining experience—the buffet displays—require literally tons of ice on each ship each day. For this ice, water has to made or loaded onboard, ice makers have to run nonstop, ice beds must be laid out and replenished, and meltwater must be drained into the ship’s water treatment system, where energy has to be used to clean it before it’s released back into the ocean. Royal Caribbean substituted super-chilled river rock for ice on the buffet lines and now saves 2.7 million pounds of ice-making per year, eliminating a whole category of water use, reducing costs while improving the cruise experience.
e. The IBM microchip plant in Burlington, Vermont makes the ultra pure water necessary to produce semi- conductors. IBM Burlington has created an internal nervous system to monitor and gather data about its water across the whole facility. The plant’s pumps, tanks, and pipes are wired with 5,000 electronic sensors, which each gather about 1 data point per second. The water sta at IBM Burlington gathers 400 million data points about the factory’s water every single day. IBM’s utility plant creates nine custom varieties of water—and that’s where the real money goes, for chemicals, filters, energy for pumps and boilers and UV disinfection, and for sta on duty 24 hours a day, 365 days a year. Water usage is a competitive advantage as it directly a ects the cost to produce the chips, from cell phone chips to GPS chips to camera chips.

Las Vegas is the most advanced municipality when it comes to water management, and to strategically thinking about water. In the last ten years, Las Vegas has added 1 million people to its population and uses one-third less water. Las Vegas reuses and recycles almost every gallon of water that is used indoors in any context. Any water anywhere in the metropolitan region that goes down the drain—water from car washes, water from dishwashers, from showers and mop buckets, from elementary school water fountains and hot tubs and toilets—ends up treated and reused at a golf course or park, or it ends up cleaned and sent back to Lake Mead. That is the only way Las Vegas survives.


IBM Burlington has created an internal nervous system to monitor and gather data about its water across the whole facility. The plant’s pumps, tanks, and pipes are wired with 5,000 electronic sensors, which each gather about 1 data point per second.


A smart water culture requires a “mind-flip” in thinking, according to Fishman. This mind-flip requires relational thinking, and this relational thinking is inherently location-based. IBM is embarking on developing a water management business and wants to do for water what Apple’s iTunes has does for music. That type of management requires monitoring the information about water, which is a new paradigm shift in thinking.

For anyone concerned about the scarcity of fresh water and the type of thinking required to develop appropriate solutions, this is a must-read. For those interested in mind-flipping business thinking that leads to innovation and opportunities, this is a must-read. Water management is the ultimate in location-based skills and thinking.