Wednesday, June 30, 2010

Nucor and Advocacy

On page A13 of today’s New York Times, the steel company Nucor has placed an ad under the banner - - “What’s good for America?” Nucor answers their question with “Jobs.” Nucor writes the following in the ad - -

“Rising out of the Great Recession means creating jobs - - more than 25 million over the next three to five years - - to account for the millions of Americans currently without work, as well as for those young Americans soon entering the workforce. What’s more, we need quality jobs that will support a family.

Without creating these jobs, any recovery will be unsustainable. To create jobs we need policies that will address our trade deficit, cut our national debt, move us towards energy independence and rebuild our infrastructure. These changes will create sustainable, long-term growth that will be good for America.

And what’s good for America is good for Nucor.”

Nucor has identified specific outcomes that we can all share. From job growth to debt reduction to investing in our troubled public infrastructure - - all of these goals address a future represented by an improved version of the past. The ad is representative of a similar and united voice that most of our country shares - - GE, Boeing, Ford, and many others could run the exact same ad with an organizational name change.

We can all agree on the desired outcomes - - what is truly missing and clearly needed is the specific details on the decision making process. Most of the goals Nucor has identified make up our current “National Paradox” - - cutting deficits while investing in public infrastructure, reducing our trade deficit with other nations of the world while utilizing the world as our banker, calling for energy independence as we ban drilling in the Gulf of Mexico - - our national goal of sustainable job growth wrapped in a box of contradiction and incongruity. The need to invest, save, and spend all at the same time during the paradoxical era - - an era marked also by a sickness associated with modern democracy: the current system cannot impose any short-term pain for long-term gain.

Our “National Paradox” is extremely time dependent - - we are running out of time in a world where the future always arrives too fast - - and in the wrong order. Running ads may be an appropriate first step - - however, what is truly needed are not additional ads but greater advocacy. Honest public and corporate debates that address specific ideas and recommendations. What specifically is Nucor an advocate for in the context of increasing spending on our public infrastructure? Is Nucor an advocate for eliminating the Department of Education? What about raising taxes 30%? Maybe reducing Social Security benefits by 30%? The ad presents no specifics, no points of advocacy, no voice that declares we must change, a call that we must do something different, or declarations stating we must do something better. The central and hidden theme of our “National Paradox” is the need for rapid change - - individual and societal change over a broad spectrum of America’s political, economic, social, and cultural linkages.

Advocacy needs to be about change and the specifics of change with the understanding that people do not change when we tell them they should - - they change when they tell themselves they must. Whatever we are advocates for - - the language and context needs to be in terms of must versus should. The language of the Congressional Budget Office is one of warning - - from interest payments on public debt jumping from 1% of GDP to 4% of GDP by 2035 to Medicare doubling as a percentage of GDP by 2035, equivalent to $700 billion of additional spending in current dollars. What is truly missing is effective public and private sector leadership that translates warnings and the requirement for change with an advocacy for specific ideas, recommendations, and a common path to the future.

Tuesday, June 29, 2010

Engineering Artistry

The world of the engineer consists of that which is relatively measurable and that which is relatively un-measurable. One part requires a quantitative approach that entails making measurement using well-defined tools. At the other end of the spectrum, our sensory system is the primary source through which the qualitative environment is experienced. Qualitative relationships result in qualities like coherence, harmony and expressivity - - none of which the engineer can measure. This world of experiencing qualitative relationships and making judgments; recognition that form and context are usually inextricable; and understanding that not everything knowable can be articulated in propositional form - - is the intersecting world of engineering and the Arts.

Engineering and art both have paths where paying attention to qualities is a mode of thought that can be applied to all things made. From how a story is composed in the context of the language arts, to the degree of wetness of the paper when painting with watercolors, to the complexity of designing a bridge - - all three forms of making something profit from attention to the way the elements are configured.

Consider the case of watercolor painting. From paper, brush, and paint - - the variables are so numerous and complex. There are no formulas to employ that will guarantee a rightness of fit - - success is a function of immersed engagement. As with painting, the trained engineer becomes increasingly competent with his or her ability to deal effectively with multiple demands simultaneously. In learning to engage in painting or engineering - - perception is refined, imagination stimulated, judgment is fostered and technical skills are developed. For those who work hard enough, artistry can be achieved.

In many respects, engineering is closer to the Arts than say mathematics. Both the Arts and engineering must deal with the fact that very often there is more than one answer to a question and more than one solution to a problem. This is far different from the world of mathematics with a focus on converging on a single, quantifiably-correct answer. Another lesson from the Arts is understanding that the way something is formed matters. The Apple iPod is a great example of where getting it right means creating a form whose content is right for some purpose. During your next presentation, remember the lesson that actors and performance artists have learned. What is said cannot be neatly separated from how something is said - - form and content interpenetrate.

In engineering, like art, it is important to understand that seeing is an achievement, not merely a task. Both endeavors need individuals willing to embrace the idea that to really see is to accomplish something. Seeing in the context of engineering is not separate from cognition - - it is part of what one becomes cognizant of, and the goal is to develop your sensibilities in a given domain to enable you to see what might otherwise go unseen. That is the why the great engineering connoisseurs of our times can walk into a building, or look inside a computer, or fly an airplane and see things that many of us would miss.

Monday, June 28, 2010

The Engineer as Ethnographer

The engineer as designer has three important tools. These three tools are especially important in a world that substantially favors reliability over validity, consistency over innovation. The engineer as designer and symbol of design thinking lives to advance knowledge - - it is a core drive, a source of pride and happiness. The design thinker seeks a balance to the issues of validity and reliability - - the designer understands that one without the other does not make a sustainably advantaged enterprise.

The first tool of the engineer as design thinker is observation. Observation that is deep, careful, and open-minded. They see the grays in a black and white world - - the new insights that will enable them to push knowledge forward. Their sense of sight and hearing is greater than most - - they must be able to see things that others don’t with an optimal combination of careful watching and listening. The engineer as anthropologist skilled in ethnography - - the ability to walk into a new society and culture and listen, see, and learn. Where learning is deep and user-centered with the goal to understand your customers, thinking carefully about the kind of data you want and how best to get it.

The second tool is imagination. One would assume this is a natural ingredient in the engineering recipe. Part of a natural ability versus something in the toolbox. In many engineers, imagination is underdeveloped. Engineers that favor deductive and inductive logic versus the world of imaginative abductive reasoning. These are engineers comfortable with the experience, through observation, of embracing data that is neither consistent with nor explained by the current models. When faced with that data, the abductive design thinkers must make an inference to an explanation. It is an inference and testing loop - - it is a guess that constitutes the best explanation one can devise given the data, which is insufficient to yield a statistically significant finding.

The third tool is configuration - - observation and imagination must be translated into an activity system that will produce the business outcome. There needs to be a meaningful payoff. The design thinkers and managers need to ask how insight and new solutions fit into the larger schemed of a business enterprise.

Sunday, June 27, 2010

"A Widespread Yearning for Significance"

Nancy Adler writes the Point of View column for the business journal Rotman. Her Spring 2010 column is entitled The Art of Leadership. The article focuses on a 21st century society yearning for the leadership of possibility - - a leadership based more on hope, aspiration and innovation than on the replication of historical patterns.

She writes the following:

Following a century focused on the efficiencies gained through mechanistic and reductionist techniques, we yearn today for wholeness and meaning. To paraphrase Simon Fraser University Professor Rosalie Tung from her recent Academy of Management presidential address, "What we need is not an economy of hands or heads, but an economy of hearts. Every employee should feel that he or she is contributing to something that will make a genuine and positive difference in the lives of customers and colleagues. For too many employees, the return on emotional equity is close to zero. They have nothing to commit to other that the success of their own career."

Why is it that the very essence of our humanity - - our desire to reach beyond ourselves, to touch others, to do something that matters and leave the world just a little better - - is so often denied at work? To succeed in our current environment, firms must give their members a reason to bring all of their humanity to work.

Saturday, June 26, 2010

The Fluids Index

From the May 2010 issue of British Wired - - a ranking of the most expensive liquids in British Pounds per liter:
  • Human semen (spot market per fertility clinics) - - 44,000
  • Swine flu vaccine (Pandemrix) - - 12,000
  • Scent of Eros "pheromone" cologne -- 3,198
  • Domaine de la Pomanee-Conti 1997 red wine - - 1,310
  • Channel No. 5 eau de parfum - - 1,020.00
  • Hewlett-Packard black ink - - 952.40
  • Human blood (UK price of collection and processing) - - 295.60
  • Comvita Manuka honey (UMF 25+) - - 160.00
  • Absolut vodka - - 22.97
  • La Vieille Bon-Sencours Belgian beer - - 16.00
  • Berg water (bottled iceberg melt) - - 6.20
  • Starbucks cappuccino - - 5.80
  • Red Bull - - 4.40
  • Diesel (February average on UK forecourts) - - 1.10
  • Crude oil - - 0.30

Friday, June 25, 2010

Deadly Sins of Modernity

From Gandhi (1950) - - the seven deadly sins of modernity;
  1. Wealth without work
  2. Pleasure without conscience
  3. Knowledge without character
  4. Business without morality
  5. Science without humanity
  6. Worship without sacrifice
  7. Politics without principle

Thursday, June 24, 2010

The Wicked

The graveyards of the world are full of indispensable people. General McChrystal probably learned that fact yesterday morning. In his place, General Petraeus faces a daunting task for a monumentally complex problem in Afghanistan. In this case, complex is the wrong word. Wicked is more appropriate. Wicked problems aren't merely harder or more complex than hard problems. They don't just involve more factors or stakeholders. They don't just take us longer to solve. Analytical thinking alone, no matter how skillfully applied, is not going to generate an answer to a wicked problem.

The term "Wicked Problem" comes from Horst Rittel in a 1968 article in Management Science. Wicked problems are " . . . problems which are ill-formulated, where the information is confusing, where there are many clients and decision makers with conflicting values, and where the ramifications in the whole system are thoroughly confusing." They show up in our social systems, economics, politics, science and engineering - - problems that are ill-defined and unique in their causes, character, and solution.

Think of the following characteristics when examining the wicked world of unique problems:
  • The causes of the problems are not just complex but deeply ambiguous: you can't tell why things are happening the way they are and what causes them to do so (finding a cure for Alzheimer's disease).

  • The problem doesn't fit neatly into any category you're encountered before; it looks and feels entirely unique, so the problem-solving approaches you've used in the past don't seem to apply (BP's efforts to come up with solutions to plug the leaking oil well).

  • Each attempt at devising a solution changes the understanding of the problem; merely attempting to come to a solution changes the problems and how you think about it (developing policies and economic alternatives for combating global climate change).

  • There is no clear stopping rule; it is difficult to tell when the problem is "solved" and what that solution might look like when you reach it (what the "end game" looks like with respect to the Afghanistan war).

Engineers are trained for the complex - - look at the situation, identify a set of definite conditions, and calculate a solution. The world of the wicked is entirely different - - the solution can no longer be the only or even the primary focus. The fundamental issue when dealing with wicked problems is a complete understanding of the nature of the problem itself. It is a world in which engineers and policy formulators must thrive on problem setting, at least as much a problem solving.

Petraeus falls into the rare category of indispensable and tackler of wicked problems - - those two attributes go hand in hand.

Wednesday, June 23, 2010

The Right Siders Club

Look to the brain and trained mind of future superstar engineers to be a little different than us mere mortals - - it might tilt a little to the right. The reality is that these superstars will be more whole-brained and equally adept at both modes. Superstar and mortal engineers will have similar and classically trained left sides - - what will be strikingly different is how the superstar functions with more engagement from the right side. The superstar right siders - - the ones that prefer groups, the dreamers, the connector of dots, the free exploration learners, the ones that think in terms of geometry/spatial imagery, and finally the ones highly skilled and prized for their abilities to show relationships between ideas - - can have a productive future with their capacity for original thought and creativity.

These right siders have minds that produce a different kind of person and engineer. You can break this difference down into three traits and labels required for membership into the Right Siders Club - - (1) Creators and empathizers, (2) Pattern recognizers, and (3) Meaning makers.

The right sided engineer wears the hats of creator and empathizer. He or she is willing to absorb more complexity and is willing to consider a greater number of factors to be salient when engaged in the exploration and decision making process. They thrive on complexity and creativity and don’t like the phrase “keep it simple.” These superstars will look outside the box, outside the walls, and outside the building for factors and variables that may not typically be considered. By engaging in this explorative process, the engineering right siders open themselves up to more possibilities. Because the fewer things you consider are of consequence in any given situation, the fewer raw materials you have to work with. Fundamentally the right siders embrace complexity, absorb possibilities, and have the ability to connect complexity and possibilities with the feelings, needs, and opinions of critical stakeholders.

The right siders move beyond deductive and inductive logic - - the language of “What must be” and “What must be operative” to the world of abductive logic. The right siders with abductive reasoning skills have the ability to consider a set of seemingly unrelated facts and find patterns and trends that yield relationships and linkages. They actively look for new data points, challenge accepted explanation, and infer new worlds. The right siders see causality, patterns, and relationships among salient factors - - the critical attributes that made for superstar pattern recognizers. In addition, the pattern recognizers can go beyond the past and present with the ability to anticipate future trending patterns.

Finally, the right siders understand the complex role technology and engineering plays in solving the daunting challenges that we face. From climate change to sustainability to energy independence - - the superstar right siders play the important role of societal meaning makers. They provide technology with meaning and explain the relationships and opportunities that technology has for the betterment of humankind. The meaning makers are intellectual players at the interface point between advancing technology and society - - they help create meaning, demonstrate the opportunities, and manage the technological reality.

The Right Siders Club motto - - Genero Exemplar Sententia

Tuesday, June 22, 2010

The Punch and Punch Line

Bad publicity has historically been more like a punch - - like Smokin Joe Frazier. The public outcry and reactions are direct, lumbering, strong, and negative. Public outcry, legal action, threats of product boycotting by the public, Congressional hearings and debates - - direct and predictable action that public relation departments, media consultants, and the board of directors are used to seeing and are comfortably trained to deal with. BP has seen the punch - - political, public, legal, media, and financial. They have had sixty days of Joe Frazier.

The explosion of alternative outlets, such as YouTube, has also produced an environment that is new and unique. The damage and risk, especially in public arenas, is more a function of the punch line. Satirical humor as a form of public outcry and protest - - more indirect than direct in the public relations battle. More Mohammad Ali than Joe Frazier - - more dance and weave than power and punch. But just as effective and just as damaging. Yet much more difficult for the classically trained public relations department or the creativity limited media consultant to deal with. As social networking and alternative entertainment sites expand - - the punch line may become more damaging than the punch. BP has also had sixty days of Mohammad Ali.

The worse the publicity disaster, the greater the risk an organization will have to face both Frazier and Ali - - good luck.

Check out - -

Monday, June 21, 2010

Exxon's OMIS

The ExxonMobil Bible - - OMIS, which stands for Operational Integrity Management System. The document, posted on Exxon's website, provides a framework for facility design, training, operations, handling contractors and implementing change. It calls for rigorous documentation, measurement, and analysis - - a company run by engineers in a highly complex technological environment.

OMIS was developed and implemented after the 1989 Valdez spill. The system has been implemented in 80% of Exxon's operations. The 11 tenets in OMIS are:
  1. Management, leadership, commitment and accountability - - Management establishes policy, provides perspective, sets expectations and provides the resources for successful operations. Assurance of Operations Integrity requires management leadership and commitment visible to the organization, and accountability at all levels.
  2. Risk Assessment and management - - Comprehensive risk assessments can reduce safely, health, environmental and security risks and mitigate the consequences of incidents by providing essential information for decision-making.
  3. Facilities design and construction - - Inherent safety and security can be enhanced, and risk to health and the minimized, by using sound standards, procedures and management systems for facility design, construction and start-up activities.
  4. Information and documentation - - Accurate information on the configuration and capabilities of processes and facilities, properties of products and materials handled, potential Operations Integrity hazards, and regulatory requirements is essential to assess and manage risk.
  5. Personnel and training - - Control of operations depends upon people. Achieving Operations Integrity requires the appropriate screening, careful selection and placement, ongoing assessment and proper training of employees, and the implementation of appropriate Operations Integrity programs.
  6. Operations and maintenance - - Operations of facilities within established parameters and according to regulations is essential. Doing so requires effective procedures, structured inspection and maintenance programs, reliable Operations Integrity critical equipment, and qualified personnel who consistently execute these procedures and practices.
  7. Management of change - - Changes in operations, procedures, site standards, facilities, or organizations must be evaluated and managed to ensure that Operations Integrity risks arising from these changes remain at an acceptable level.
  8. Third-party services - - Third parties doing work on the company's behalf impact its operations and its reputation. It is essential that they perform in a manner that is consistent and compatible with ExxonMobil's policies and business objectives.
  9. Incident investigation and analysis - - Effective incident investigation, reporting and follow-up are necessary to achieve Operations Integrity. They provide the opportunity to learn from reported incidents and to use the information to take corrective action and prevent recurrence.
  10. Community awareness and emergency preparedness - - Effective management of stakeholder relationships is important to enhance the trust and confidence of the communities where we operate. Emergency planning and preparedness are essential to ensure that, in the event of an incident all necessary actions are taken for the protection of the public, the environment and company personnel and assets.
  11. Operations integrity assessment and improvement - - Assessment of the degree to which expectations are met is essential to improve Operations Integrity and maintain accountability.

Saturday, June 19, 2010

Enigmatic Problems

The face of engineering is associated with complex problems. The last two months of media coverage and political debate on the gulf oil spill reinforces this idea. Our list of complex problems continues to grow with an increasing level of complexity. The language of engineering becomes marked with words such as uncertainty, ambiguity, complexity, change, surprise, choice, subtlety, indeterminacy, and uniqueness.

Two other words become important - - ends and means. One can argue that the gulf spill disaster and host of other recent disasters have their foundation in these two words. Drilling in 5,000 of seawater is an example of a enigmatic problem - - as the definitions of "ends" (where to go) and "means" (how to get there) become more ambiguous and the number of variables increases, the difficulty of solving such problems intensifies dramatically.

Engineering needs to be very careful with enigmatic problems. For many such problems, the ends and the means are not only unclear, they are also interdependent. As efforts to solve them proceed, the ends evolve as means are generated. Likewise, as means unfold, new ends become possible which, in turn, may demand new means. Solving our global sustainability problems is not a simple problem - - we don't know where we have to go and we don't know how to get there. Sustainability is a enigmatic problem - - ambiguous and multi-variable "ends" with linked interdependence to the "means."

Chuck Yeager, of The Right Stuff fame, was recently quoted in the New York Times when ask about the Deepwater Horizon accident - - "He said it was important to remember the human element even when dealing with sophisticated systems." Problems with interdependent ends and means issues and technology/human element issues require engineering to engage in both qualitative and quantitative thinking. Historically engineering has had a difficult time bridging the divide between these two modes of thinking. We are trained quantitative thinkers - - numerical values, schedules, cash flows, profit - - we are skilled at the formulas of capitalism.

Qualitative thinking is very different. The tone is one of abstraction, perception, relationships, and, interactions. The subjective variables associated with capitalism. It is one thing to walk into a conference room for a meeting and count the number of people and calculate the gender percentages - - it is another to judge the mood, relationships, and intensity of the participants.

Organizations and academia need to get much better at training, instilling, and discussing directional knowledge - - ideals, motivations, identities, directions, themes, traditions, contexts, and missions. All of these attributes will help the engineer on the bank of a levee or the deck of a drilling platform with meaning, motivation, focus, and orientation. They provide the engineer with direction - - the compass providing him or her with a heading. How are my ideals and direction aligned with the ends and means? It is a tool to help one understand our world of enigmatic problems and the complex interaction between technology and the human element.

Friday, June 18, 2010

Glowing Engineers

Lynda Gratton, a psychologist with the London Business School, has come up with the phrase - - "Glow at work." According to Gratton, individuals that Glow have mastered three distinct areas of their lives - - (1) They have built deeply trusting and cooperative relationships with others, (2) They have extended their networks beyond the obvious to encompass the unusual, and (3) They are on an inner quest that ignites their own energy and that of others.

As outlined in the Spring 2010 issue of Rotman, Gratton outlines her nine facets of Glowing:
  1. People who Glow have five daily habits - - they have realistic and positive expectations of others, they are prepared to share valuable information with others, they act with discretion, they use the language of cooperation, and they make and keep commitments.
  2. People who Glow are able to bring emotional authenticity and analytical rigor to their conversations and use the art of great conversation as the bedrock of their cooperation with others.
  3. People who Glow are astute at acting on the "smell of the place", they know the signs of the Big Freeze and how to avoid it.
  4. People who Glow are skilled at increasing the value of their networks and at balancing their networks between people who are similar to them and people who are very different from them.
  5. People who Glow are skilled at escaping the boundaries that constrain them, they allow for serendipity in their lives and are prepared to meet new people and take untrodden paths to broaden their experience.
  6. People who Glow are adept at finding and moving to boundary-less places. They know how to connect with people and places that encourage them to grow by creating opportunities to jump across worlds.
  7. People who Glow are adept at asking the big questions that spark energy which requires courage and focus.
  8. People who Glow create a compelling vision that sparks energy and is so exciting and engaging that others are drawn to it.
  9. People who Glow craft meaningful and exciting work that stimulates them and others.

Thursday, June 17, 2010

Hiding Complexity

A cornerstone of sustainability is the idea that “less is more.” The idea of austerity has not necessarily been embraced by the engineering community or in our technology. Additional features are seen as necessary advances during periods of intense price competition. These features are viewed as differentiators - - whether consumers understand or actually utilized the additional features.

What about a new era of minimalism, techno-austerity, and frugality - - where reducing complexity, distraction, and frugal innovation comes front and center? Things like the Flip video camera and iPod are seen and respected for their simple, elegant, and functional designs.

Minimalism is especially needed in software. Take the case of a program called Freedom. Freedom was developed by a graduate student in information science at the University of North Carolina at Chapel Hill, Fred Stutzman. The purpose of Freedom is to ward off distraction - - the idea is to reduce continuous partial attention, or the sense that at any point in time you can jump to something else. Launch the $10 program and it asks you how long you would like to disable Internet access for - - you can specify from one minute to eight hours. A second screen asks if you would like local network access to printers and other computers, or none at all. The program requires that you enter your system password, and then neatly severs your information feed.

Freedom hopefully is a crutch - - it is the first step in a behavioral swift. People should rely on their feelings, rather than technology, to dictate what they cannot do. Many will not see the philosophical niceties - - it is all about increased production to them. They want the freedom to engage in uninterrupted and reflective activities - - a world of thoughtful simplicity attempting to keep distractions at bay.

Read more at - -

Wednesday, June 16, 2010

Engineering and Captain Ahab

Deepwater, Enron, Massey Energy, WorldCom, Bernie Madoff - - all good examples of a fundamental flaw in our currently regulatory system. A system of rules and regulations without effective regulators - - a system of too little supervision that encourages corporate recklessness combined with the existence of oversight agencies and authorities that encourages public complacency. From MMS to EPA to SEC to IRS - - an alphabet soup of obvious problems relating to oversight, corruption, and revolving doors. It is no secret - - a quote from today’s Wall Street Journal - - “A Senate panel asked the Securities and Exchange Commission’s inspector general to review the agency’s revolving door, which shuttles many SEC staffers into jobs with the companies they once regulated.”

We spend tens of billions of dollars on new regulations each year - - yet at the same time cut the oversight and enforcement budgets. In the “economy of esteem,” soldiers and firefighters are much nearer the sharp end of the pyramid than the lowly regulatory community. But we seem unwilling or unable (or both) to pay regulators at an appropriate level to attract top talent or to provide public service work with a sense of common purpose. Which did more economic damage during the Great Recession - - fire or poor regulatory oversight? We tend to always be sending the wrong messages - - regulators are an obstacle to thriving fee markets - - regardless of risk reduction, the increase in honest markets, and improvements to the health, safety, and welfare of the public.

Deepwater drilling is a good example of the public’s desire not to care to deeply about regulations and risk - - we want our comforts and affordable gasoline but we don’t want to know too much about where they come from or what makes them possible. We don’t want to hear about the unpleasantness or risks. Like Herman Melville’s Moby-Dick, the public ashore doesn’t want to know about the ugly things that go on at sea. Current technology, from drilling to derivatives to trading algorithms, has outpaced not only governmental regulatory oversight, but also the means of correcting catastrophic failures. It has also outstripped the public’s capacity for understanding and caring along with the political will and fiscal responsibility to adequately support and fund regulatory oversight.

If you stand on the marshes in Louisiana and look south into the Gulf, like Nietzsche said, “And if thou gaze long into an abyss, the abyss will also gaze into thee.” The public, regulatory community, and political class are not going to routinely gaze into the abyss. The real first line of defense in preventing another gulf disaster is the high ethical and high moral standards that we can bring to decks of drill rigs and the banks of levees.

In some respects, the dangers of greed and self-destruction in our whaling past are metaphors for our current quest for more oil. Maybe we should read Moby-Dick again and the world of Captain Ahab to understand the risks of unregulated markets. If we are going to do it - - expand the quest for oil, let’s do it with an informed public, first class regulators, fully funded organizations, and an engineering community with a deeply embedded sense of ethical standards and the moral qualities that define virtue.

Tuesday, June 15, 2010

The Wind Forecast

The landscape of West Texas is being changed with the addition of giant wind turbine farms. Driving from Fort Worth to Amarillo, it is hard not to miss the impact and potential of wind power. People are committing to wind power all over the world - - the European Union has committed itself to getting 20% of its electricity from renewable energy sources, namely wind power. The U.S. has similar goals while China is on track to triple its wind capacity.

But wind is a function of geography and time. The wind has to blow in specific places (like West Texas) and at specific times (in the case of West Texas, preferable in the summer given our electricity demand during the summer months). Capacity does not equal electricity - - that is why wind forecasting is critical.

In the first quarter of 2010, investors poured $14.1 billion into wind power projects. A key component of the required due diligence is to establish the linkage between adequate wind capacity and promised rate of return. The availability of assessment tools can broadly be broken down into three different categories - - measure, correlate, predict (MAP) analysis.

Measurement can be difficult - - complex terrain and forests are problematic. Power output is proportional to the cube of the wind speed - - small variations can provide large distortions. Technology improvements will be helpful with future measurement tools - - the Scottish engineering firm of SgurrEnergy has developed Galion Lidar - - a device that measures wind speed, direction, and shear forces by measuring the distortion of pulsed laser beams as they are buffeted by microscopic wind-borne particles.

With 20% of a nations energy generated by wind power - - prediction in the short-term becomes critical. If you are a grid operator - - you really care about the wind 60-minutes into the future. Look for advances in sensors and three dimensional atmospheric modeling combined with statistical modeling aiding short-term prediction. Specialized prediction firms, such as eWind, will provide prediction services. Artificial neural networks could play a role in the future - - “linking and learning” systems that actually learn over time.

Like weather forecasting in a era of climate change uncertainty - - wind forecasting could increase in importance. A unique field combining advanced technology, engineering, statistical analysis, and the atmospheric sciences - - might be a good future career.

Monday, June 14, 2010

How To Make An Authentic Apology

Lee Taft of Taft Solutions is an apology consultant (which just might be a growth industry) - - he helps companies admit their mistakes even when the confession creates lawsuit liability. Taft is a graduate of both Harvard Law School and Harvard Divinity School - - a unique combination that allows him to focus on the legal issues, but at the same time understand the moral need to address the victims and their needs. Taft is currently teaching this summer at the University of Texas in Austin.

Taft has published the following guidelines and steps for making an apology and meaning it (be sure your actually have something to apologize for!!) - -
  • Stabilize the situation - - give the necessary care. Fix the customer's problem.

  • Investigate - - find out what really happened.

  • Communicate - - tell people what you're doing, when you'll report back, and then do it.

  • Disclose - - if there is no fault, there's no reason to apologize.

  • Admit the mistakes and apologize - - it facts show fault.

  • Create a plan to repair the harm.

  • Change the system so this doesn't happen again - - but remember the difference between forgiveness and reconciliation. A person or group can forgive you and choose not to return to a relationship with you. But would you resume a relationship with someone who had caused you great harm and had not accounted for the harm caused?

Taft provides a critique of BP's Tony Hayward as quoted in the Dallas Morning News on June 13, 2010 - - "He promotes the fact that this is the largest cleanup effort in history. Well, why is that? Is that because this is the largest oil spill in history? He doesn't offer an explanation. What specifically did BP and/or others do that caused this? BP and Hayward should have acknowledged that no words or apology can adequately respond to the disaster."

Sunday, June 13, 2010

Connecting The Hardest Parts

Google does data – connecting the world in terms of data, information, and analytics. Want to know the cheapest hotel in Austin - - the connected world of Google allows you to search and pull data and information efficiently and effectively. Facebook does people - - connecting the world of individuals and communities. What Google is to data - - Facebook is to people. Want to see pictures of Aunt Helen’s new cat - - Facebook provides you the opportunity.

But who and how does one connect the world of data to the world of people in a real-time manner - - especially in those non-trivial endeavors where the health, safety, and welfare of the public are critical? The recent tragic flooding in the Albert Pike campgrounds in the Quachita Mountains in western Arkansas illustrates the paradox of our connected - - unconnected world. As of this Sunday, 18 bodies had been recovered with dozens more unaccounted for after a flash flood in the early hours last Friday.

This particular tragic example illustrates the disconnect between connecting the data rich world with the individuals, groups, and organizations that can actually utilize and implement the data and information. This is especially true with public domain information that has a fundamental requirement to be “pushed” to the general public in times of emergencies. We have the capability and capacity to monitor our natural and physical environment. From weather collection stations to modeling software to river gauging sites - - we have the elements in place to provide information in a real-time manner. Clearly remote areas are a challenge with respect to wireless transmission - - but time and technology can fix this particular issue and problem. If we could have linked data from the National Weather Service, to flow data on the Little Missouri River, and finally to eyewitness weather watchers - - with managers in the campground and individual campers - - the outcome might have been much different. Technology could have made us all a littler smarter – and turning dumb networks into smarter ones has the potential to save people and property.

The linked environment has changed the worlds of economics, commerce, culture, and governance - - we need to focus on those linking algorithms that connect data from our physical environment with people - - especially in the public health, safety and welfare domain. With advances in sensors, the spread of wireless communication, and real-time risk-based modeling systems - - look for “pushed” based public notification systems to make vast improvements worldwide over the next decade.

Saturday, June 12, 2010

Top Talent

The May 2010 issue of Harvard Business Review has an article by Jean Martin and Conrad Schmidt entitled How to Keep Your Top Talent. They studied 20,000 employees dubbed "emerging stars" in more than 100 organizations worldwide over a six year period. They found the following - - 33% of high-potential employees admit to not putting all his or her efforts into the job, 25% believe he or she will be working for another employer in a year, and 20% believe his or her aspirations are quite different from what the organization has planned for them.

Given these statistics, the authors have come up with a "top 10" list of critical components that should be considered for a talent-development program:
  1. Explicitly test candidates in three dimensions - - ability, engagement, and aspiration.
  2. Emphasize future competencies needed (derived from corporate-level growth plans) more heavily that current performance when you're choosing employees for development.
  3. Manage the quantity and quality of high potentials at the corporate level, as a portfolio of scarce growth assets.
  4. Forget rote functional or business unit rotations - - place young leaders in intense assignments with precisely described development challenges.
  5. Identify the riskiest, most challenging positions across the company, and assign them directly to rising stars.
  6. Create individual development plans - - link personal objectives to the company's plans for growth, rather than to generic competency models.
  7. Reevaluate top talent annually for possible changes in ability, engagement, and aspiration levels.
  8. Offer significantly differentiated compensation and recognition to star employees.
  9. Hold regular, open dialogues between high potentials and program managers, to monitor star employees' development and satisfaction.
  10. Replace broadcast communications about the company's strategy with individualized messages for emerging leaders - - with an emphasis on how their development fits into the company's plans.

Friday, June 11, 2010

Year 2030 Urbanization

The McKinsey Global Institute recently published a report, India's Urban Awakening: Building Inclusive Cities, Sustaining Economic Growth (April 2010), that highlights the projected urbanization of the developing world with a view of India. Look at the numbers outlined in the report for India:
  • Five times - - the number by which GDP will have multiplied by 2030.
  • 590 million people will live in cities, nearly twice the population of the United States today.
  • 270 million people net increase in working-age population.
  • 70 percent of net new employment will be generated in cities.
  • 91 million urban households will be middle class, up from 22 million today.
  • 68 cities will have population of one million plus, up from 42 today; Europe has 35 today.
  • $1.2 trillion capital investment is necessary to meet projected demand in India's cites.
  • 700 to 900 million square meters of commercial and residential space needs to be built - - or a new Chicago every year.
  • 2.5 billion square meters of roads will have to be paved, 20 times the capacity added in the past decade.
  • 7,400 kilometers of metros and subways will need be constructed - - 20 times the capacity added in the past decade.

The speed of urbanization will catch the politicians and planners off guard. It took newly 40 years for India's urban population to rise by 230 million. It could take only half that time to add the next 250 million. The speed of this transformation places a huge challenge on the technical, political, managerial, and policy components of managed growth.

How we mange these dense urban environments in the developing world will be extremely important to the rest of us. We must effectively and efficiently fund urbanization - - funding from both the private and public sectors. We must focus on governance - - transparency and accountability will be crucial in developing countries with complex political and social relationships and networks. Integrated and system based planning at all organizational levels will be needed to manage the large increase in urban development. Housing and sustainability are critical concerns and issues. Innovation, creativity, and flexibility will be important attributes for engineers and planners when coming up with potential solutions to problems. Finally, geography comes into play, how will these new urban landscapes look and how will the population be distributed?

Twenty years is not a buffer, it is a constraint -- urbanization in the developing world should not be about waiting for change - - it is planning for it.

Thursday, June 10, 2010

"Distracted from distraction by distraction"

Author Nicholas Carr raises an interesting question in his new book - - “Is Google making us stupid?” The general thesis of Carr’s new book, The Shallows: What The Internet Is Doing To Our Brains (2010), is our electronic revolution and multitasking culture is changing the way our brains work. The electronic world - - from e-mail, to Twitter, to Google, to Facebook, to hundreds of other applications - - has created an environment that divides our attention. A multitasked workplace that has produced a culture of frequent interruptions and a scattering of our thoughts.

Productivity improvement and benefits produced in the Internet Age are balanced against a reduction in deep thinking, the desire and capabilities to constantly monitor events, and the “switching costs” associated with jumping from the report you are writing to checking and responding to e-mail (Picture the design engineer - - from report preparation, to CAD drawings, to specifications, to e-mail requests, to notices on the latest smart phone, to an IP phone system, to modeling software - - all multiplied by five separate projects in an environment where it is difficult to filter the essential from the trivial). Our capacity, quality, and depth of thinking combined with our abilities of filtering information refined after a million years of evolution has run head on into a new information world Carr refers to as “concentration-fragmenting mishmash.”

Carr writes the following:

Our use of the Internet involves many paradoxes, but the one that promises to have the greatest long-term influence over how we think is this one: the Net seizes our attention only to scatter it. We focus intensively on the medium itself, on the flickering screen, but we’re distracted by the medium’s rapid-fire delivery of competing messages and stimuli. Whenever and wherever we log on, the Net presents us with an incredibly seductive blur. Human beings “want more information, more impressions, and more complexity,” writes Torkel Klingberg, the Swedish neuroscientist. We tend to “seek out situations that demand concurrent performance or situations in which [we] are overwhelmed with information.” If the slow progression of words across printed pages dampened our craving to be inundated by mental stimulation, the Net indulges it. It returns us to our native state or distractedness, while presenting us with far more distractions than our ancestors ever had to contend with.

Engineering is one of the impacted professions that needs to think about our intellectual ethic - - a set of assumptions about the nature of our knowledge and intelligence. Our foundation has always been deep and creative thought. What happens to that foundation in an information world that encourages the rapid, distracted sampling of small bits of information from many sources in an ethic of speed and efficiency? How does a profession respond going from an environment of concentration and reflection to one of scanning and skimming?

Wednesday, June 9, 2010

Oil and the Liberal Arts

The editorial page of the June 7, 2010 issue of Engineering News-Record (ENR) has the headline - - The Gulf Oil-Spill Disaster Is Engineering’s Shame. Blunt and to the point - - “Blame engineers for some of the mess . . .” The editorial states:

The whole matter is complicated by fragmented decision-making within firms and among companies. Yet the very definition of engineering as a profession involves an obligation to the greater good of society. The profession prides itself on civic virtue and requires individuals to have a functioning conscience.

The Coast Guard and the Minerals Management Service recently held hearings on the Deepwater Horizon disaster in New Orleans. As reported in The New York Times (June 6, 2010 - - At Issue in Gulf: Who Was in Charge?) is an exchange with the rig’s captain, Curt R. Kuchta:

“It’s pretty well understood amongst the crew who’s in charge.” He said.

“How do they know that?” a Coast Guard investigator asked.

“I guess I don’t know,” Captain Kuchta said. “But it’s pretty well - - everyone knows.”

Looking annoyed, Capt. Hung Hguyen of the Coast Guard, one of the chief federal investigators shook his head. The exchange confirmed an observation he had made earlier in the day at the hearings.

“A lot of activities seem not very tightly coordinated in the way that would make me comfortable,” he said. “Maybe that’s just the way of business out there.”

From Katrina to Deepwater to Challenger - - our way of “business out there” needs to fundamentally change, and change quickly. In the same New York Times article, Tad W. Patzek, chairman of the Petroleum and Geosystems Engineering Department at the University of Texas, Austin, has analyzed reports of what led to the explosion. “It’s a very complex operation in which the human element has not aligned with the complexity of the system,” - - that observation applies to Katrina, Challenger, and to the ongoing gulf response efforts - - it applies to a whole host of engineering endeavors and misadventures.

Math, science, design - - no one is ever going to challenge and dispute the need for engineering depth. Additional engineering depth and a greater understanding of risk and uncertainty might have been a little more helpful in recognizing the dangers and risks in drilling beneath 5,000 feet of seawater. But engineering depth alone is not the only clear answer. This is a fundamental problem marked by a lack of intellectual breadth. It is the point where our complex technical world interfaces with the world of human experience - - with all its goodness and all its flaws. It is the world where some stochastic differential equation defining risk and uncertainty collides into a world of Shakespeare on the deck of a drill rig or the bank of a levee.

In this Shakespearian world of engineers, from BP, Transocean and Halliburton - - all operating with competing goals, interests, pressures, and ethics. It is a world of poor communication, it is no communication - - and when events turn into a national televised reality show - - it is too much communication. It is a world of poor regulatory oversight, it is corrupt regulatory oversight - - it is discarding the principles of ethical behavior and totally ignoring what it means to be a virtuous member of society. It is a world of increasing technological complexity and societal demands bounded by 24/7 media coverage and a political aristocracy with limited or no practical knowledge of engineering, science, and technology.

It is thinking that all the answers are in a Statics book - - that the world is a function of force diagrams and vectors. It is engineers thinking that management, leadership, communication skills, critical thinking skills and the attributes that define virtue - - those are for others. It is the narrowness of engineering as a product of corporate desires versus the expansiveness of engineering as a learned profession.

We need to change - - and we need to change quickly. We need to get much better at the interface between technology and society. We need to get better at the people parts of the business - - the parts defined and measured by the elements in a liberal education that enhance the interchange between engineering and society. We need to have a firmer understanding of the humanities, arts, and social sciences - - the parts that help us define who and what we are as a society.

Yes, it’s about drilling mud, cement and blowout preventers. But the technology is never going to be 100% risk free - - that is where the people parts, the leadership parts, and critical thinking parts all come into play and provide a dominate force. It is standing on the deck of a drill rig in the middle of the ocean with 20 other individuals from six different companies - - where you understand the worlds of Manning and Euler, but you also understand Hamlet and the Shakespearian world of complex decision making.

Tuesday, June 8, 2010

Looking East

With the election over and the coalition government having been formed, the Clegg-Cameron team must get to work on governing. How and what happens in Great Britain provides a contextual roadmap for the U.S in terms of dealing with debt and deficits.

John Lanchester, of The New Yorker, puts it this way in his June 7, 2010 article entitled Party Games:

At the moment, for every four pounds the government spends, one is borrowed from the markets. Those markets will want to be reassured that the government is serious about getting its finances in order. That is going to mean cuts. All three parties went through the campaign promising to halve the deficit by 2014, while being obstinately nonspecific about exactly what they would cut. But to achieve this target the cuts will have to be the sharpest that the U.K has ever seen. Not even Thatcher enacted anywhere near the level of cuts that the coalition will have to impose. It’s unclear if the country is braced for what’s about to happen. “The public has a sort of sense that there’s a problem,” Choate said [Robert Choate, the director of the Institute for Fiscal Studies]. “They’re not daft. They realize that there’s a significant adjustment to come, but they tend to think it can be solved by increasing taxes that they don’t pay and cutting spending that they don’t benefit from.”

I asked Choate how long he thought the problems would take to fix. “Unless the size of the hole turns out to be bigger than the previous government has been suggesting, getting the bulk of the job done in a Parliament looks about right,” he said. A Parliament lasts up to five years, so it is probable that the electorate that votes next time will have just undergone a half-decade of misery. People in Britain say they wanted change, and they’re going to get it, even if it’s not quite what they had in mind. There will be plenty to moan about and - - who knows? - - maybe even some complaining, too.

Monday, June 7, 2010

John Wooden 1910 - 2010

From his book, Wooden: A Lifetime of Observations and Reflections On and Off the Court (1997) - - from a section entitled Learn Forever, Die Tomorrow:

Early on I came to believe that you should learn as if you were going to live forever, and live as if you were going to die tomorrow. What does this mean? In the simplest way, I would explain it like this.

Always be learning, acquiring knowledge, and seeking wisdom with a sense that you are immortal and that you will need much knowledge and wisdom for that long journey ahead. Know that when you are through learning, you are through.

But I want to live the life as if I were going to die tomorrow: with relish, immediacy, and the right priorities. I also will not waste even a minute.

Sunday, June 6, 2010

Rooting Against Bond

In his 2006 book, Creators: From Chauser and Durer to Picasso and Disney, author Paul Johnson makes the observation that making people laugh is one of our more human and creative endeavors. Scott Adams of Dilbert fame embodies humor as creative experiment better than anyone - - expecially in the context of our modern work and business environments.

His investing guide in The Wall Street Journal over the weekend is a classic. Entitled Betting On The Bad Guys, Adams discusses his investment theory of investing in companies he hates. For a cartoonist who hates Apple and Wells Fargo - - one cannot argue with his track record. His current "hate target" is, you guessed it - - BP. Adams writes the following:

Apparently BP has its own navy, a small air force, and enough money to build floating cities on the sea, most of which are still upright. If there's oil on the moon, BP will be the first to send a hose into space and suck on the moon until it's the size of a grapefruit. As an investor, that's the side I want to be on, with BP, not the loser moon.

I'd like to see a movie in which James Bond tries to defeat BP, but in the end they run Bond through a machine that turns him into a "junk shot" debris to seal a leaky well. I'm just saying you don't always have to root for Bond. Be flexible.

How does the Adams "hate method" compare with other investment strategies? He compares his approach to seven other methods. From the "Track Record" (The universal truth of investing: (1) Past performance is no indication of future performance. (2) You need to consider a company's track record. All anyone knows about investing are fundamentally opposites.) to "But What About Warren Buffett?" (Buy quality stocks at reasonable prices and hold them over a long time period. Do you know who would be the first person to tell you that you aren't smart enough or well-informed enough to pull this off? Warren Buffett).

If you walk into a store and hate the employees or come across a company where you hate their business model, remember Adams and his "hate method" and consider investing

Saturday, June 5, 2010

STEM versus Finance

STEM - - students and professionals with a focus on science, technology, engineering, and math. In a world marked by technology and complexity - - one would expect the STEM crowd to be Masters of the Universe. Think again - - for every new Ph.D. in the physical sciences, the U.S. graduates 50 new MBAs and 18 lawyers - - more than half of those with B.S. degrees will enter careers having nothing to do with science. Why in particular does financial engineering attract more of the best and brightest of the STEM crowd than traditional engineering?

Finance -- and the financial services sector understands something a little better than the STEM crowd. The Buttonwood column in the June 5, 2010 issue of The Economist provides some interesting insight into our current dilemma:

Why do people who work in finance earn more than most other people? It is a question that concerns politicians as they debate reform of the industry. It ought also to worry those millions who, as savers and borrowers, are customers of the industry's products.

The article points out the following issues:
  • Banking and asset management were dull professions 50-years ago. But since the 1980s, financial wages have climbed much more quickly than those of engineers. As the article points out - - engineering is a profession that ought to have benefited from technological complexity, but it hasn't when compared to finance.
  • Between 1921 and 1971, British banks averaged a ROE of around 7%, since 1971 they average around 20%.
  • Excess returns in the financial services sector are a function of uncompetitive markets marked by implicit government support, this lowers the cost of finance for leading institutions.
  • A lack of competition is clearly visible in a industry marked by increasing concentration. The proportion of bank assets held by the three biggest U.S. banks has tripled since 1994. This size advantage helps financial institutions in market-making activities - - they have more knowledge of institutional investors' order flow and can position themselves to benefit.
  • The growth of various financial instruments, such as derivatives, are extremely complex and less transparent to customers. It is very difficult to calculate and judge price and value relationships.

Look at your next 401(k) statement sometime - - is the very bright STEM crowd being bamboozled by an industry that competes not on price but on the basis of (probably unrepeatable) past performance? The last sentence in the column makes the best point - - "Whatever the reason, the effect is that the returns that millions of savers hope to earn end up being paid to the finance sector as excess profits."

Friday, June 4, 2010

The Interview Question

A global sample of interview questions -- the quirky ones.
  • How many tennis balls are in this room and why? (Yahoo)
  • Are your parents disappointed with your career aspirations? (Fisher Investments)
  • If I put you in a seated room with a phone that had no dial tone, how would you fix it? (Apple)
  • If you were a brick in a wall, which brick would you be and why? (Nestle USA)
  • How would you move Mount Fuji? (Microsoft)
  • Develop an algorithm for finding the shortest distance between two words in a document. After the phone interview is over, take a few hours to develop a working example in C++ and send it to the manager. (Google)
  • Given a dictionary of words, how do you calculate the anagrams for a new word? (Amazon)
  • How many hair salons are there in Japan? (Boston Consulting)
  • Say you are dead - - what do you think you eulogy would say about you? (Nationwide Insurance)

Thursday, June 3, 2010

History as Destiny

Stephen Green is chairman of HSBC. HSBC is one of the largest banking and financial services organizations in the world. HSBC’s international network comprises around 8,000 offices in 88 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. The firm has some 220,000 shareholders in 119 countries and territories.

Green has been with HSBC since 1982 and has also been an ordained priest in the Church of England since 1988. He has spoken widely on integrity and sustainability in business and on the value of values. His current book, Good Value – Reflection on Money, Morality, and an Uncertain World (2010) was a Financial Times Book of the Year.

Green has the following interesting passage regarding China:

The reemergence of China as a world power is the most important event of the first half of this century. It will be described by many as the “emergence” of China, but in fact we should not forget that it is a return to a lengthy status quo ante - - for eighteen of the past twenty centuries China has been the world’s largest economy. The Economist not long ago described it thus: “China was not only the largest economy for much of recorded history, but until the fifteenth century, it also had the highest income per capita - - and was the world’s technological leader.” As recently as 1820, China accounted for one-third of the world’s GDP while the US accounted for a mere two percent. By 1914 tables had turned, with the US accounting for 19 percent of global GDP and China, which had been almost completely bypassed by the European Industrial Revolution of the nineteenth century, less than 10 percent. But the pattern is changing again: China is returning to the world stage. Since its own internal free-market reforms, in 1978, China’s GDP has grown at an average of around 10 percent a year. Today China is the fastest growing economy in the world, and within twenty years, by many predictions, it will (once again) be the largest.

Wednesday, June 2, 2010

The Simplest Thing is Difficult

From Junger’s War - -

For every technological advantage held by the Americans, the Taliban seemed to have an equivalent or a countermeasure. Apache helicopters have thermal imaging that reveals body heat on the mountainside, so Taliban fighters disappear by covering themselves in a blanket on a warm rock. The Americans use unmanned drones to pinpoint the enemy, but the Taliban can do the same thing by watching the flocks of crows that circle American soldiers, looking for scraps of food. The Americans have virtually unlimited firepower, so the Taliban send one guy to take on an entire firebase. Whether or not he gets killed, he will have succeeded in gumming up the machine for yet one more day. “Everything in war is simple, but the simplest thing is difficult,” the military theorist Carl von Clausewitz wrote in the 1820w. “The difficulties accumulate and end up by producing a kind of friction.”

That friction is the entire goal of the enemy in the valley; in some ways it works even better than killing.

Friction is a good term to describe our current security situation - - where security is not an isolated good, but just one component of a complicated transaction. It costs money, but it can also cost in intangibles: time, convenience, flexibility, or privacy. In the age of terrorism - - security is about preventing adverse consequences from the intentional and unwarranted actions of others. The definition has two important embedded parameters - - our collective ability to intelligently access security trade-offs and our collective ability to understand and manage friction. The Israeli commando raid of a flotilla this week in the Mediterranean Sea clearly demonstrates the complexities and ideas embedded in security trade-offs and the accumulation of security difficulties that end up producing friction.