Thursday, July 29, 2010

Me and My Moleskine

Next time you are at a meeting, glance around the table and observe the number of people who are actually taking notes in something quasi-permanent. Note the ones with the legal pads or the pieces of paper - - take note of the ones that show up without either pen/pencil and paper. The rare individual will show up with the diary-journal with the intent to have a permanent and documented record of the meeting. Our world of bits and bytes is slowly causing us to disconnect from the physical collection and art of listening, writing, and reflecting.

(Note - - At our child's birth classes many years ago, my wife and I were the only ones to show up with something to write with and write on. So, out of 25 couples we were elected group leaders, mainly because the pen and paper gave us the appearance of leaders. At the male/female break-out sessions we were ask to record questions for the entire group. So the first question from my male brethren was - - "When can we have sex with our wives after the birth?" The second question was "Can we change the meeting time for next week due to the conflict with a Cowboys playoff game?" That was the last time I brought pen and paper.)

I use a Moleskine - - and I fully understand that a Moleskine makes no sense in a wired world. Maybe it's the tangibility of writing, or the paper - - maybe it's the process of writing, thinking and reflecting. Maybe it's the balance - - the link between the old and the new. Maybe it's the feel of three dimensions - - or the fact that I can tape stuff into it that might be important someday. Who knows - - every day a new entry, and every six months or so a new Moleskine.

Author William Powers is a Moleskine user - - and he writes the following in Hamlet's BlackBerry: A Practical Philosophy for Building a Good Life in the Digital Age (2010):

Unlike my screens, which thrust words, images, and sounds at me all day and night, my paper notebooks project no information at all. The pages are blank. They invite me to fill them with information, and when I do, it's information of my own choosing that I write with my own hand. Crossing my front yard one morning, for instance, I remembered an obscure historical fact about Madagascar that I'd heard the day before and realized might be useful in a writing project I've got on the back burner. Out came the notebook, in went Madagascar. Having survived the winnowing processes of my consciousness, it had earned a spot on the page, and just the act of writing it down raised its profile in my thoughts. When you're used to clicking keys all day, shaping letters one by one feels exotically earthy, memorable just by contrast.

Wednesday, July 28, 2010

The Training Ground of Animal House

We have lost the ability to meet new people in person. Engineers were never very good at it - - the introverted personality thing. The bits and bytes of our social world also get in the way of a lost art - - walking up to a complete stranger and introducing yourself. One of the things engineers need to focus on is getting beyond their network of engineering and technical friends. Join other types of organizations that you have an interest in - - other professional societies or community service groups - - organizations that have a broader mix of our population. Practice meeting new and different people - - from doctors to lawyers to politicians - - introduce yourself and be prepared to carry on a topical discussion of interest to the whole group that you are meeting with. We all need to revisit the management and social secrets of Animal House (1978) - - just remember, "Hi, Eric Stratton, Rush chairman, damn glad to meet you." (Ok, maybe not exactly like that, but you get the point.)

Tuesday, July 27, 2010

The Producer and the Technical Director

Frederick P. Brooks, Jr. is the author of The Mythical Man-Month (1995). Brooks is Kenan Professor of Computer Scienc at the University of North Carolina at Chapel Hill. He is best known as the "father of the IBM System/360," having served as project manager for its development and later as manager of the Operating System/360 software project during its design phase. Dr. Brooks, according to Wired magazine is writing a new book entitled Design of Design.

Brooks writes the following in The Mythical Man-Month:

The producer and the technical director may be the same man. This is readily workable on very small teams, perhaps three to six programmers. On larger projects it is very rarely workable, for two reasons. First, the man with strong management talent and strong technical talent is rarely found. Thinkers are rare; doers are rarer; and thinker-doers are rarest.

Second, on the larger project each of the roles is necessarily a full-time job, or more. It is hard for the producer to delegate enough of his duties to give him any technical time. It is impossible for the director to delegate his without compromising the conceptual integrity of the design.

Monday, July 26, 2010

Spotting Talent

Spotting project management talent typically involves looking at our pool of project engineers. The process is a bit of a crystal ball exercise - - observing the skills amongst your project engineers and then projecting to a project management role. Three project management skills should be taken into consideration when looking at your project engineers and then projecting to the next level:
  1. Decision Making - - Decision making at the project management level should have a focus on those "Fork in the Road" moments. Every project faces a critical point in which the project team arrives at a certain point in the project path or road - - the spot where decisions must be made regarding the direction or path the team and project should travel. Experience, skill, wisdom - - combined with a desire to be a leader and provide the necessary management functions - - aid the project manager in deciding which path to venture. It might not be the "best path" - - it might be the "least worst path" - - this to is fundamental to decision making. A key question for project engineers moving to the project management level - - does he or she have the necessary experience, capabilities, and attributes to guide a team once they arrive at a critical junction? Do they want to be the one making the decisions at this critical point?
  2. Problem Solving - - Project managers solve problems. Problem solving at the project engineering level typically has a focus on depth - - narrow problems and the required narrow solutions - - that are primarily technical in nature. The constraints were always technical - - performance, operations, and financial. On the other hand, problem solving at the project management level is about managing breadth - - your problems will range from the technical to resource limitations to schedule shortfalls to rate of return. The ability to manage breadth will be a key performance metric as one moves from an environment of 100% technical engineering to a complex mixture of engineering and management.
  3. Coping - - Project managers must have great coping skills - - from the excitement of project celebrations to failures, frustrations, and disappointments. No one is perfect - - no project is perfect. You have to deal with enormously complex problems and people. You must have the inclination and ability to want to learn from mistakes. It is important for the project engineer looking at project management to understand the path to success starts with failure - - you have to learn to be a good failure before you can be a outstanding success. History is full of this example.

Think like a baseball scout - - how will you star project engineers project to the major leagues of project management? Think and observe in the context of decision making, problem solving, and coping.

Sunday, July 25, 2010

Jazzy Nails and Tan Spa

I am in Atlanta for the next several days - - attending my son's freshman orientation at Georgia Tech. The admissions office presented the class demographics and statistics - - one interesting point was the improvement in the gender differentiation in his Class of 2014. His incoming class has the best percentage female enrollment in Tech's history - - 36%. It appears very likely that over the next 10 years Tech might just hit a 50/50 gender split in enrollment. This would be a remarkable achievement at the Mecca of southern engineering manliness.

The enrollment statistics are just one of several positive indicators regarding the potential for improved parity in the engineering professions. The other is the type of businesses locating directly next to Tech to serve the surrounding student population. Anytime someone opens up Jazzy Nails and Tan Spa next to historically the "maleist" part of Atlanta - - one should anticipate change on the horizon.

Saturday, July 24, 2010

Digital Maximalists

The philosophy of our connectedness, both corporate and individual, has two fundamental corollaries. The first is that the more you connect, the better off you are. The second is the more you disconnect, the worse off you are. The limitlessness of digital life is thrilling, but it's also unsettling in several important ways. The most troubling issue is the quality of our connections - - the substitution of causal electronic links for deep and meaningful friendships and relationships. If friendships and strong, lasting relationships represent the gardens and flowers of the human experience - - having 5,000 "friends" on Facebook (which I have seen) represents the weeds of a connected life.

Aristotle saw friendship as essential to human flourishing. He saw his BFFs in three distinct flavors - - those based on usefulness (contacts), on pleasure (drinking buddies), and on a shared pursuit of virtue - - the highest form of all. True friends, he contended, are simply drawn to the goodness in one another, goodness that today we might define in terms of common passions and sensibilities. Aristotle's profound seriousness probably won't transfer very well in the Facebook era. But we clearly have migrated to a society where currying contacts and having lots of pals has become our electronic focus at the expense of Aristotle's third category.

Our connected unconnectiveness accelerates electronically in a world where family life is in turmoil. The sociologist Andrew J. Cherlin points out that "No other comparable nation has such a high level of multiple martial and cohabiting unions." The void left by disintegrating household arrangements and social arrangements are difficult to meaningfully fill with bits and bytes.

Connected unconnectiveness is not immune to gender differentiation. Males, in the best of times, have friendship and relationship issues. It's just not our thing - - women are much better at friendship and relationships. Women take a good situation and add Facebook and make relationships and friendships better. We take a bad situation and add Facebook and we end up with gardens full of weeds. Social norms don't exactly help male friendship management - - culture has rapidity sexualized men's friendships. Two middle age men eating dinner together aren't two middle age men eating dinner together - - they are two middle aged gay lovers on a date.

Our connected unconnectiveness has both time and space variables. At some point, we just want what poet Kenneth Koch outlined with the the following words:

You want a social life, with friends.
A passionate love life and as well
To work hard every day. What's true
Is of these three you may have two.

Friday, July 23, 2010

Mentoring Leaders

A good exercise for leadership training, teaching, and coaching is self-reflection. Reflection in the context of thinking about and writing about observations and thoughts associated with leadership. I had a class several years ago on leadership in my systems engineering academic program. One of our assignments was to write several paragraphs, several times a week on our daily observations and thoughts associated with leadership. From leadership on the global political stage to the workplace - - the goal was to think and reflect deeply on the topic of leadership. I still have my semester long list - - a very worthwhile exercise.

Another exercise is the calendar test - - reflect on the last 90 days and consider:
  • What categories of activities make up your workday?
  • What issues have you spent the most time on?
  • Whom have you spent the most time with?
  • Where did you spend your time (in your office, in meetings, with customers)?
  • What reports and information do you spend time looking at?
  • What business issues capture your quiet time (keep you awake at night, float up when you are going to and/or from work, or surface in conversations)?

Keen observational skills are also critical. Keep a log over a month and document the following - - Which employees tend to speak up first? Which employees have ideas that others follow? Which employees are listened to the most? Which employees are more bold, engaging, or creative? Which employees volunteer (or shy away from) certain assignments? Who does quiet service? Who works to engage others? Reflect on patterns - - pattens that establish the identity of each employee.

Thursday, July 22, 2010

Robert G. Bea, Ph.D., P.E.

Dr. Bea is a civil engineering professor at the University of California at Berkley. He has studied over 630 disaster of all types - - he played a major role in the Katrina investigation. Bea is also an expert on offshore drilling and is currently consulting with the presidential commission on the gulf disaster. He was interviewed on 60 Minutes (but not on Oprah) several months ago regarding his initial thoughts on what might have gone wrong - - he comes across as very smart, very experienced, very problems-are-caused-by-people, and very blunt.

Bea categories disasters into four groups. One involves an organization simply ignoring warning signs through over-confidence and incompetence. He thinks the BP spill falls into that category. Bea has pointed to congressional testimony that BP ignored problems with a dead battery, leaky cement job and loose hydraulic fittings. Bea also has stated that disasters don't happen because of an "evil empire" - - it's hubris, arrogance, and indolence (and like I wrote in a previous post - - two will get you three).

Bea is head of the Engineering & Project Management Program at Berkley were he teaches several classes. One is Human & Organizational Factors - - Quality and Reliability of Engineering. Supposedly he utilizes his own book and materials - - would love to get a copy of his material for this class and the others.

He also has the following on his school website - - The world needs engineers . . . .

whose truth cannot be bought,
whose word is their bond,
who put character and honesty above wealth,
who do not hesitate to take chances,
who will not lose their identity in a crowd,
who will be honest in small things as in great things,
who will make no compromise with wrong,
whose ambitions are not confined to their own selfish desires,
who will not say they do it "because everybody else does it,"
who are true to their friends through good report and evil report, in adversity as well as in prosperity,
who do no believe that shrewdness and cunning are the best qualities for winning success,
who are not ashamed to stand for truth when it is unpopular, and
who have integrity and wisdom in addition to knowledge.

Wednesday, July 21, 2010

Never Before In History

The McKinsey Quarterly looks at the rapid urbanization issues of both China and India in - - Comparing Urbanization in China and India. Both are urbanizing rapidly - - at the same time and at the same pace. The article states:

China and India are in the vanguard of a wave of urban expansion that is restoring the global prominence that Asia enjoyed before the European and North American industrial revolution. By 2025, nearly 2.5 billion Asians will live in cities, accounting for almost 54 percent of the world's urban population. India and China alone will account for more than 62 percent of Asian urban population growth and 40 percent of global urban population growth from 2005 to 2025.

In 1950, India was a more urban nation than China (17 percent of the population lived in cities, compared with China's 13 percent). But from 1950 to 2005, China urbanized far more rapidly than India, to an urbanization rate of 41 percent, compared with 29 percent in India. New research from the McKinsey Global Institute expects this pattern to continue, with China forecast to add 400 million to it urban population, which will account for 64 percent of the total population by 2025, and India to add 215 million to its cities, whose populations will account for 38 percent in 2025.

Never before in history have two of the largest nations (in terms of population) urbanized at the same time, and at such a pace. This process will drive fundamental shifts - - in both countries - - which will have significant consequences for the world economy and offer exciting new opportunities for investors.

Never before in history - - the stakes are high.

Tuesday, July 20, 2010


Malcolm Gladwell, in The Tipping Point: How Little Things Can Make a Big Difference (2000), has an insightful couple of pages on Tom Gau. Gau is or was a financial planner in Torrance, California. He has all the standard tools of a great salesman - - communication, drive, empathy, etc. He also has something extra. And it is a big extra.

Gau makes the argument that what separates a great salesman from an average one is the number and quality of answers they have to the objections commonly raised by potential clients. Gau put together a book - - questions or statements along with their answers. He provided this to his staff of other financial planners. Rather technical and rather standard.

But, and this is a really big but - - the script book of questions and answers alone gets you nowhere. Gau had, according to Gladwell, "some indefinable trait, something powerful and contagious and irresistible that goes beyond what comes out of his mouth, that makes people who meet him want to agree with him." It's energy. It's enthusiasm. It's charm. It's likability. It even goes beyond these attributes - - it is the really, really hard things and mysteries we still don't yet understand - - the subtle, the hidden, the unspoken. It is the seduction of another individual - - with words, with trust, with physical movement - - and the truly gifted can do this in 10 minutes where most people would take hours or days.

Gau - - it is a gift.

Monday, July 19, 2010

Informed, Hip, Cultivated

David Brooks, in his The New York Times column on July 9, 2010 (The Medium Is the Medium), weighs in on the worlds of Internet reading and learning versus books and the library. Traditional reading and learning has been an exercise in slow and deep - - the goal was some level of lasting wisdom. The Internet as learning platform smashes hierarchy with a culture that is egalitarian.

Brooks writes the following:

These different cultures foster different types of learning. The great essayist Joseph Epstein once distinguished between being informed, being hip and being cultivated. The Internet helps you become well informed - - knowledgeable about current events, the latest controversies and important trends. The Internet also helps you become hip - - to learn about what's going on, as Epstein writes, "in those lively waters outside the boring mainstream."

But the literary world is still better at helping you become cultivated, mastering significant things of lasting import. To learn these sorts of things, you have to defer to greater minds than your own. You have to take the time to immerse yourself in a great writer's world. You have to respect the authority of the teacher.

Right now, the literary world is better at encouraging this kind of identity. The Internet culture may produce better conversationalists, but the literary culture still produces better students.

It's better at distinguishing the important from the unimportant, and making the important more prestigious.

Sunday, July 18, 2010

Dr. Sanders To Appear On Oprah

I had the opportunity to film a short segment with Oprah last week - - the actual airing date is still undecided. Harpo Productions did provide me an edited transcript of the show.

Oprah - - . . . please welcome the first engineer to our show, Dr. Steve Sanders. (Applause)

Dr. Sanders - - Thank you Ms. Winfrey, it is a real treat to be here.

Oprah - - Call me Oprah.

Dr. Sanders - - Sorry, yes Oprah. (Laughter)

Oprah - - So, Dr. Sanders, you are the first engineer on our show.

Dr. Sanders - - I don't think that is correct Oprah. Jeff Skilling of Enron and Yasser Arafat of the PLO have been on the show. Both are engineers.

Oprah - - And Jimmy Carter? (Moans)

Dr. Sanders - - Yes, President Carter, but we really don't like to count him. (Applause)

Oprah - - And Herbert Hoover?

Dr. Sanders - - We really don't like to think about that one.

Oprah - - My girls at the leadership academy love the engineers with their hats and trains at the zoo.

Dr. Sanders - - Yes, but . . .

Oprah - - You don't look like a zoo train engineer - - more AARP spokesperson or Flomax model, right ladies. (Applause)

Dr. Sanders - - Thanks Oprah, I'll take that as a compliment. (Laughter)

Oprah - - What exactly is engineering?

Dr. Sanders - - Thanks for asking Oprah. Engineering is the application of science, math, technology, and economics to address and solve practical problems. It is a broad profession that includes activities ranging from designing bridges to building your iPod to broadcasting this show to putting a man on the moon.

Oprah - - So nothing to do with the zoo? (Laughter)

Dr. Sanders - - We design and construct zoos and their supporting infrastructure.

Oprah - - What is your message for us today.

Dr. Sanders - - Well Oprah, my primary message today is the engineering gap that exists between the United States and China and India. Our ability to innovate in a global economy depends on our engineering abilities and talents. The conventional wisdom is that the nation needs to graduate more engineers - - and better engineers - - or India and China will eat our lunch. Part of inability to produce more and better engineers is our indisputable gender gap - - fewer that 20% of engineering graduates are women. If you think about it, perhaps a simple solution to maintaining American competitiveness is to encourage more women to enter engineering. Women have succeeded in larger numbers in fields such as physiology, biology, and social sciences, and they are having increasing success in starting small businesses. Increasingly, engineers and technologists have an advantage in reaching the top, yet in these fields women constitute the smallest minority.

Oprah - - Why are the numbers so low in engineering?

Dr. Sanders - - Probably four reasons. The first is a lack of role models. The focus is male with too many male examples. The second reason is a lack of female mentors. Women make up only 5.2% of tenured engineering faculty. Students feel that they have no one to turn to for help and guidance. The third reason is discrimination. Being in a 80/20 or a 90/10 profession has to lead to treatment as inferiors in business and academia. The fourth reason are the problems and issues of balancing work and family. We still have a huge amount of work as a society to get the balances set correctly - - especially in the engineering professions.

Oprah - - This is good stuff ladies. How can I help? (Applause)

Dr. Sanders - - One is to utilize your media platforms as a means to communicate with young female students, especially members of minority communities, the huge opportunities and rewards that the various engineering professions can offer. The second is to utilize some of your money and power to actually set up programs that encourage, mentor, support - - especially financial - - their potential journey into engineering.

Oprah - - Those are tremendous ideas, Dr. Sanders - - right ladies!! We, especially females and minorities need to think about the opportunities that engineering can offer. I want to thank you for being on the show today!! (Applause)

Dr. Sanders - - The pleasure was all mine, Oprah.

Oprah - - Stay tuned as my dear friend, King James, talks house hunting in Miami. (Wild Applause)

Saturday, July 17, 2010

Easier To Hire For

Management consultant Marcus Buckingham has come up with a list of 34 strengths a leader should have. Buckingham makes the point that some skills are difficult to train for but easier to hire for. His list of strengths has little to do with specific work experience or job skill but a lot to do with the qualities it would take to work well in a specific culture or with a certain kind of customer. The 34 skills are as follows:
  1. Achiever - - Driving relentlessly to get things done and to accomplish.
  2. Activator - - Getting started quickly to take action on decisions.
  3. Adaptability - - Flexing and responding to the demands of the moment.
  4. Analytical - - Looking for patterns, questioning, objective, data-driven.
  5. Arranger - - Jumping in to manage all the variables and find the best layout.
  6. Belief - - Maintaining strong core values around family, spirituality, altruism.
  7. Command - - Taking charge and getting others on board despite risks, differences.
  8. Communication - - Bringing ideas to life through writing, speaking, focusing.
  9. Competition - - Measuring performance by comparing and winning.
  10. Connectedness - - Seeing how everything and everyone is connected, interdependent.
  11. Context - - Looking to the past, the context, for answers about today.
  12. Deliberative - - Being cautious, vigilant, aware of risks, and serious about handling risks.
  13. Developer - - Seeing potential in others and enjoy helping them grow.
  14. Discipline - - Liking routines and structures to maintain productivity.
  15. Empathy - - Turning in to others' feelings and viewpoints.
  16. Fairness - - Treating everyone equally and by consistent rules.
  17. Focus - - Being goal-driven and tangent-avoidant (Great word!!).
  18. Futuristic - - Imagining the future with hope and vision.
  19. Harmony - - Looking for agreement and avoiding conflict.
  20. Ideation - - Getting energized by ideas, connections, insights.
  21. Inclusiveness - - Bringing others in and valuing commonality over differences.
  22. Individualization - - Valuing what is unique and special about each person.
  23. Input - - Acquiring and filing away ideas, things, relationships, images.
  24. Intellection - - Liking to think, introspect, reflect in private.
  25. Learner - - Loving the process of learning and always being engaged in it.
  26. Maximizer - - Driving toward excellence and making something the best it can be.
  27. Positivity - - Praising generously, seeing what is right, optimism.
  28. Relater - - Delighting in close friends and deepening relationships.
  29. Responsibility - - Conscientiously focusing on doing what you promise.
  30. Restorative - - Liking to solve problems, facilitate healing, fix things.
  31. Self-assurance - - Having deep confidence in your strengths, abilities, judgments.
  32. Significance - - Desiring recognition, admiration as a credible professional.
  33. Strategic - - Seeing the consequence and contingencies to chart a course.
  34. WOO - - "Winning Others Over" through getting others to like you.

Friday, July 16, 2010

Three Words

Look for three words to consistently show up in the various reports being developed and written relating to the BP gulf disaster - - Complacency, Arrogance, and Ignorance.

Remember - - Two will get you three.

Thursday, July 15, 2010

Your Dinner Party

You hosted a dinner party last weekend at your home. You invited two different sets of your friends. The first group of friends are the liberal arts bunch - - typically four years of a liberal arts education. This was followed by graduate work at a professional school or a master’s program. They ended up as lawyers, politicians, and teachers. The second group are your engineering friends. They represent a broad cross-section of the profession - - different disciplines and industries. You arrange the tables and the seating in such a manner that your liberal arts friends are all together - - you do the same for your engineering friends. It is organized such that you sit in the middle of the two separate groups. Over the course of two hours you do very little talking - - you only listen to the two groups and you listen very closely. After the party you set down and reflect on what you have heard and learned. You think you have learned two things. The first is that one of the groups knows absolutely nothing about absolutely everything. The second thing is that the other group knows absolutely everything about absolutely nothing. You think about that for a moment and what that means in the context of solving some of our really big national and international problems. You think that to solve big problems and develop effective ideas and solutions - - these two groups need to be on the same page. This thought depresses you a little - - so you go to bed.

Wednesday, July 14, 2010

The Taliban Don't Surf

The CIA (The CIA Factbook - - don't leave home without it) ranks 227 countries in terms of GDP per capita. The highest ranked country is Liechtenstein (between Switzerland and Austria - - I had to look it up), with a GDP per capita of $122,100. The lowest at #227 is the Democratic Republic of the Congo at $300 per person (really tied with Burundi and once you drop to a certain point in the ratings, you need to consider dropping the "Democratic" part of your name).

Afghanistan makes the bottom 10 at #219 with a GDP per capita of $800. It is the poorest of the Stanlands - - Uzbekistan, for example, shows up in the #168 slot at $2,800 per person.

Our goals in Afghanistan have been rather vague in terms of measurable variables. Let's assume that GDP per capita growth is a reasonable goal and performance metric. We obviously don't want to depart from Afghanistan with it slipping to #227, nor is it reasonable to expect that they can overtake Liechtenstein. A more reasonable goal might be to double their GDP per capita - - we get them up to around $1,600 per person. Chad is #194 at $1,600 - - so a goal after 20 or 30 years might be to turn Afghanistan into Chad. Keep in mind this would still produce on outcome that is lower than North Korea (which I thought was on the verge of collapse) at #188 with a GDP per capita of $1,900. Another methodology could involve looking at similar countries - - for example, other narco-countries like Columbia, comes in at #110 with $9,200 per person. This would be an extreme stretch and the probable upper limit, unless the economics of cocaine versus heroin are vastly different.

Since 2001, most sources estimate our "turning Afghanistan into Chad" bill at roughly $300 billion. Approximately $30 billion per year. Afghanistan has a population of 32 million - - a little less than California at 37 million. Running the arithmetic, we spend roughly $937.50 per person in Afghanistan annually. Adding our donated $937.50 to their existing $800 gets them to almost $1,800 - - #189, which is Tajikistan.

It looks to me #189 needs to be the target. Afghanistan and Tajikistan are neighbors - - similar geography, culture, history, language, and economics - - the model Stanland that best fits with Afghanistan. This seems reasonable - - and it gets them up almost to North Korea. You still won't be able to surf Afghanistan. No ocean, no waves. So we could give the $937.50 per person to the citizens of California, where you can surf.

Tuesday, July 13, 2010

Australia Is A Dry Country

Australia is the planet’s driest inhabited continent. The country is recovering from its worst drought ever - - a drought that lasted over a decade and to many was deepened by climate change. Like many countries, including the United States and China, the Aussies look to the sea as a source of drinking water. In one of the country’s biggest infrastructure projects in its history, Australia’s five largest cities are spending $13.2 billion on desalination plants capable of sucking millions of gallons of water every day, removing the salt and yielding potable water. Completion is projected for 2012, when at this time Australia’s major cities will draw up to 30 percent of the water from the sea. Many citizens and experts feel this is the cost of adapting to climate change. Others have a different opinion.

The New York Times covered this story on July 11, 2010 in an article by Norimitsu Onishi, entitled Arid Australia Sips Seawater, But the Drink May Be Costly. The story demonstrated the complexity when issues such as water shortages, climate change, energy consumption, technology, and immigration all collide together. Onishi writes the following:

“Big waste of money,” said Helen Meyer, 65, a retired midwife in Tugun, the town where the northeastern state of Queensland opened a $1 billion desalination plant last year. “It cost a lot of money to build, and it uses a lot of power. Australia is a dry country. I think we just have enough water for 22 million people [the country’s population is projected to rise to 36 million in 2050, from 22 million now]. What are we going to do when we’re up to 36 million?”

The observation and statement by Ms. Meyer points out several fundamental issues in the context of the sustainability debate. The most important issue is a basic definition and scope of what sustainability can, should, and could become. Ms. Meyer points out a direction for sustainability that is “doing less with less.” For water supply and demand to be in a sustainable balance, some consideration of the limits of population grow must be considered. Population growth is this particular context runs directly into the thorny politics and culture of an immigration-friendly government. The “doing less with less” crowd has a desire to see sustainability in the context of fixed and absolute barriers that technology nor public policy cannot or should not breach.

The second group in the sustainability debate embraces technology with “doing more with more.” In this case, more water comes from new sources as a function of more technology. But Australia, like many other places, runs into systems problems with “more with more" attitudes. Fixing one system leads to problems in another system. Desalination is power hungry - - 50% of the total cost is associated with electricity consumption. Power in Australia comes from coal - - solving our water problems may in fact produce a whole new set of unknown problems associated with climate change. The third group is the middle ground and maybe the hardest to implement. It is “doing more with less” - - it is creating additional water capacity without the need for either expensive new water technologies or drastic limits to growth. The middle ground utilizes conservation and increased efficiencies to increase the limits of water resources and supply - - it is a blend of public policy; focused marketing and messaging; and advanced technology. It is also about changes to our culture and life styles - - this makes the third group the most difficult to implement, yet potentially the most successful in the long term.

Monday, July 12, 2010

Breaking Down an iPhone

Labor strikes and unrest have been widely reported in Chinese manufacturing centers over the last several weeks. The strikes and protests are a function of a number - - $6.54. If you have a new iPhone - - the $6.54 is inside your phone. The iPhone, designed by Apple engineers in the United States, is manufactured in China with parts from around the world. Apple won't reveal its suppliers, so experts at iSuppli sometimes have to guess a part's origins. Based on a $600 iPhone 4 - - this is the best estimate of the big picture (Note - - doesn't include price for duct tape):
  • Materials - - $187.51
  • Miscellaneous - - $45.95
  • Assembly - - $6.54
  • Profit - - $360
A sample of the material costs per phone - -
  • Samsung (Flash memory chip) - - $27.00
  • Intel (Radio frequency memory) - - $2.70
  • Texas Instruments (Touch-screen control) -- $1.23
  • AKM (Compass) - - $0.70
  • Dialog (Power management) - - $2.03
Two observations are important - - globalization is about swimming in two directions. The first is engineering and design - - the goal is to swim upstream faster than the competition. You are in a constant struggle for the high value - - knowledge based part of the market. The goal is to get away from commoditization. The second direction is downstream in the context of manufacturing and assembly - - you are swimming away from the $6.54 per phone - - you are trying to find the next China, the next Korea, the next Philippines. The search is for the next low-cost production center. You are also struggling with lowering your $187.51 per phone - - which also involves swimming in two directions at the same time.

Sunday, July 11, 2010

$1,100,880,000 Before Lunch

The context for the liabilities BP will incur with the gulf cleanup must start with the other end of the equation. The world produces nearly 1,000 barrels of oil every second. If those barrels were physically stacked up, the pile would grow taller at the rate of 2,000 miles per hour. This is the primary reason why 80% of the world's oil resources are nationalized and controlled by governments, and most of these governments are controlled by RAVS (Russians, Arabs, and Villains that Smoke).

Given the probable inputs to the equation -- what does the BP output side potentially look like? The output equation has three variables. The first variable is the direct costs of plugging the well and cleaning up the pollution. The best estimate on this particular part of the equation is $40 million a day for a year. This works out to $14.6 billion. BP will probably attempt to tag minority partners and subcontractors with a portion of this -- BP may end up paying something in the $10 to $11 billion dollar range.

The second variable is associated with the fines. Penalties under the Clean Water Act are based on the number of barrels deemed spilled, and range from $1,200 to $4,300 a barrel, depending on the extent of which the leak is the result of negligence. Given the current estimates (and this has been a considerable source of debate and confusion - - maybe for good reason or maybe not) - - the bill for this might reach $17 billion.

The last variable is associated with compensation for lost economic activity, lost federal, state and local taxes and damages to the environment. This is the $20 billion fund that BP voluntarily setup. This is probably too low - - lost tourist and fishing dollars in Alabama, Louisiana, Mississippi, and Florida alone might reach hair-raising figures in the the $15 to $30 billion range.

The high figure on the output side of the equation could run in the $60 billion range - - Carl Sagan type money. But keep in mind the RAVS and oil companies will generate revenue of approximately $1,100,880,000 before I have lunch today.

Saturday, July 10, 2010

Puccinia graminis

The "polio of agriculture" - - the forgotten disease known as Wheat Rust (Puccinia graminis) is making a comeback after a 50-year absence. Wheat rust is a fungal infection that attacks the plant's stem, forming lethal, scaly red pustules. The Romans deified it, and believed that sacrificing dogs warded it off.

Wheat rust has spread 5,000 miles in a decade - - it is now camped at the gates of one of world's breadbaskets - - Punjab (as in northwestern India and northern Pakistan - - religion, geography, water, and now the potential for food supply disruptions - - not what this area needs). According to the July 3rd issue of The Economist, scientists announced the discovery of two new strains in South Africa, the most important food producer yet infected.

When luck and/or science runs out, Puccinia graminis, can destroy the entire harvest in an infected area. a full-blown epidemic in a big wheat-growing area could therefore be catastrophic. In 2007, Kenya lost a quarter of the crop and affected 4/5 of all farms.

Keep an eye on this - - wheat is the world's most widely planted crop and accounts for a fifth of humanity's calorie intake (rice has a similar share with all other foods combined for the rest). The vast majority of the worlds' farmers have no experience with Wheat Rust.

Thursday, July 8, 2010

The End of Men.

The books by author Steig Larsson are a global sensation - - a trilogy of books set in Sweden tracking the exploits of Lisbeth Salander. Salander is the contemporary heroine for our postindustrial economy - - an economy indifferent to men’s size and strength. Her strength comes from her braininess, spunky instinct for survival, and focus.

After completing the third book (The Girl Who Kicked The Hornet’s Nest), I happened to read the cover story of The Atlantic (July/August 2010) by Hanna Rosin - - The End of Men. How Women are Taking Control of Everything. Please note the punctuation in the title of the magazine - - “The End of Men.” - - period versus a question mark.

Rosin does a great job of placing the fictional realities of Salander’s world in the context of our Great Recession. Rosin writes the following - -

What if the modern, postindustrial economy is simply more congenial to women than men? For a long time, evolutionary psychologists have claimed that we are all imprinted with adaptive imperatives from a distant past: men are faster and stronger and hardwired to fight for scarce resources, and that shows up now as drive to win on Wall Street; women are programmed to find good providers and to care for their offspring, and that is manifested in more-nurturing and more-flexible behavior, ordaining them to domesticity. This kind of thinking frames our sense of natural order. But what if men and women were fulfilling not biological imperative but social roles, based on what was more efficient throughout a long era of human history? What if that era has how come to an end? More to the point, what if the economics of the new era are better suited to women?

Once you open your eyes to this possibility, the evidence is all around you. It can be found, most immediately, in the wreckage of the Great Recession, in which three-quarters of the 8 million jobs lost were lost by men. The worst-hit industries were overwhelming male and deeply identified with macho: construction, manufacturing, high finance. Some of these jobs will come back, but the overall pattern of dislocation is neither temporary nor random. The recession merely revealed - - and accelerated - - a profound economic shift that has been going on for at least 30 years and in some respects even longer.

The trend is in the numbers. The evidence is deep and global - - the greater the power of women, the greater the country’s economic success. Women dominate today’s college and professional schools - - for every two men to receive a B.A. this year, three women will do the same. The projected top 15 future occupations, except for two, are dominated by women. Women own 40% of all the private businesses in China. Women hold 51.4 percent of managerial and professional jobs in the United States - - up almost 30 percent from 1980.

Female engineers, with a raw instinct for intellectual horsepower, better communication skills, and greater social skills, are going to knock down the walls of the engineering professions. The old, the embedded, the “long in the tooth” power structures based on profoundly male (and profoundly Caucasian) organizational and business models are going to get left out. We are watching a transformational or tipping point - - women with dominant roles in politics, cultural development, and business management - - this is not a feminist nirvana, all of this is being directed by the mysteries of the marketplace. The market is usually correct - - we need to listen, watch, and embrace all of this. Look into the mirror and repeat after me - - “I will put the seat down, always.” Lisbeth Salander might just be watching

Wednesday, July 7, 2010

A Jubilant Undertaker

Peter Beinart is the author of the recently published The Icarus Syndrome: A History of American Hubris (2010). The book looks at the United States and attempts to answer the question - - "So where does ambition end and hubris begin?" Beinart looks at three time periods in our collective history - - (1) Woodrow Wilson with his progressive global vision, (2) Lyndon Johnson and his Camelot intellectuals that took us into Vietnam, and (3) George W. Bush and the post-cold war neoconservatives.

Beinart writes the following:

What America needs today is a jubilant undertaker, someone like Franklin Roosevelt and Ronald Reagan who can bury the hubris of the past while convincing Americans that we are witnessing a wedding, not a funeral. The hubris of dominance, like the hubris of reason and the hubris of toughness before it, has crashed against reality's shoals. Woodrow Wilson could not make politics between nations resemble politics between Americans. Lyndon Johnson could not halt every communist advance. And we cannot make ourselves master of every important region on earth. We have learned that there are prices we cannot pay and burdens we cannot bear, and our adversaries have learned it, too. We must ruthlessly accommodate ourselves to a world that has shown, once again, that it is not putty in our hands.

Tuesday, July 6, 2010

100-Years of Exploration and Exploitation

Your firm has been in business close to 100-years. You have probably selected one of two paths during your 100-year journey - - you may have taken different routes at different stages during the history and development of your organization. The first path was down the route of exploration. It was a route marked by the search for new knowledge - - the organization was tuned toward moving across the knowledge stages of the development funnel from mystery to heuristic and heuristic to algorithm.

The second route is the pathway dominated by exploitation. Your primary goal is the maximization of payoff from existing knowledge - - basically the honing and refining of an existing heuristic or algorithm. Both exploration and exploitation are critical to the success of an organization and both have the potential to produce enormous value. In many respects the issues are balance, timing, and structure of the industry in which you compete. The major problem is that most organizations choose to focus on one activity, either exploration or exploitation, to the exclusion of the other and to their own detriment.

If all you care about is exploration - - you will not make it to the 100-year marker. The returns needed to fund further exploration will not be generated. You go bust after your one innovative thought. Look at the track record of start-ups - - exploration alone is an unstable business model. But on the other hand, after your one moment of exploration you engage in the steady exploitation model, while never returning to exploration - - you will not make the 100-year marker either. You might outlast the start-ups - - but existing solely on the exploitation model will lead to exhaustion. You can’t exploit the same widget, idea or relationship forever.

The exploration versus exploitation balance is also industry dependent. Apple probably has the best balance of any firm. Is McDonald’s focus on exploration or exploitation - - more exploitation since they run their fast-food algorithm over and over. The typical law firm - - exploitation, running the legal-services heuristic over and over.

Most organizations don’t blend the two forces well very - - too little exploration versus exploitation where the administration of business comes to dominate the invention of business. Too systematically honing and refining versus dynamically moving. Too much analysis and reasoning versus experimentation. Too short-term versus long-term. Too much focus on risk reduction and predictability versus embracing uncertainty and the potential for higher rewards.

What you end up with is exhaustion and obsolescence in a world in which management was so busy running its algorithm that it failed to grasp what customers want and never went on the offensive - - deploying savings and redirected personnel toward consideration of entirely new mysteries - - restarting the organization down the exploration path. They forgot T.S. Eliot - - “The end of all exploring will be to arrive where we started and to know the place for the first time.” We get too comfortable with the administration of business - - too comfortable with history and analytical thinking. The future becomes the big unknown - - where the average manager has been trained and rewarded to look to the past for a proof before making the big decision. Each Sunday these average manager worships at the “Church of Reliability” - - where the “Book of Management” stresses the need to only exploit existing knowledge with a goal of not driving out innovation but rather to protect the organization against the randomness of intuitive thinking.

Monday, July 5, 2010

Heasley's Secret

Linda Heasley is president and CEO of The Limited (of Victoria's Secret fame), based near Columbus, Ohio. Her thoughts on hiring and interviewing - -

Passion. I like curiosity. I like energy level. They have to have a sense of humor. They have to be willing to take a risk. I ask questions around each of those, like, "Give me an example of a situation where you think you took a risk or took a controversial point of view." It's as much about seeing how they addressed issues and situations as it is what they decided to do. They have to be smart. I like people who have demonstrated performance in a number of different places.

I always like to hear what books they read. I like an example of a challenging situation in a business environment where they took a controversial position. As I said, it doesn't matter to me what they decided, but I like to see how they handled it. I like hearing what they do they're not in the office. I like to hear how a direct report would describe you and your management style. I like to hear their philosophy of leadership.

Sunday, July 4, 2010

Spirit and Resilience

Our national spirit is a function of our resilience. Resilience is the ability and courage to bounce back and try again when faced with change. Our greatest national example of this spirit and resilience is Abraham Lincoln. From log cabin and poverty to President - - he lost eight elections, failed in two businesses, and suffered a nervous breakdown. Here is the Lincoln story of resilience - -

1816 - - His parents were forced our of their home. He had to work to support them.
1818 - - His mother died.
1831 - - He failed in business.
1832 - - He ran for the state legislature and was defeated.
1832 - - He lost his job. He wanted to go to law school but couldn't get in.
1833 - - He borrowed money from a friend to begin a business and lost it all by the end of the year. He spent the next 17 years paying off his debt.
1834 - - He ran for the state legislature again and won.
1835 - - He was engaged to be married when his fiance died and his heart broken.
1836 - - He had a total nervous breakdown and was in bed for six months.
1838 - - He sought to become speaker of the state legislature and was defeated.
1840 - - He sought to become elector and was defeated.
1843 - - He ran for Congress and was defeated.
1846 - - He ran for Congress again and won. He went to Washington and did well.
1848 - - He ran for reelection to Congress and was defeated.
1849 - - He sought the job of land officer in his home state and was rejected.
1854 - - He ran for Senate of the United States and was defeated.
1856 - - He sought the vice presidential nomination of the party's national convention and got fewer than 100 votes.
1858 - - He ran for the U.S. Senate again and was defeated.
1860 - - He ran for and was elected, president of the United States.

Friday, July 2, 2010

Born Someplace Else

The impact of globalization has come in three waves. The first wave was the movement of goods and later services. The second wave was the movement of money - - the globalization of finance and investing. Both of the first two waves had their starts in the previous century. The movement of trade and money has been and continues to be a disruptive force at local, national, and international levels. The results of freer trade and the global distribution of financial products and services have been tangible and painfully to many - - to many more the tangibility has been more gain than pain. The interesting issue is one of visibility - - the increased movement of money and t-shirts lacks openness and visibility. Visibility as a function of economics and numbers - - the hidden characters of globalization.

The third wave of globalization, the wave marked by public visibility, is the movement of people. Maybe much more disruptive, because it is much more visible than the first two waves. Visibility from the context of social and cultural disruption - - a shirt made in Mexico can cost an American worker his job. A worker from Mexico might move next door, and send his children to public school and need to be spoken to in Spanish - - globalization at a very local and visible level.

Look for the third wave having a huge impact - - the United Nations estimates that there are 214 million migrants across the globe. People moving just like goods and money. This movement of people has jumped 37 percent the last two decades. In North America alone, this has translated into an 80 percent increase. The migrants also are part of the second wave - - the flow of money. Approximately $317 billion flowed home worldwide last year - - these flows not only sustain families but also help to prop up national economies.

Technology, as with the first two waves, plays a major role. From efficient transportation systems to advanced telecommunication systems - - technology has supported and sped the development of a transnational identity and culture - - which also heightens visibility. Control becomes an important issue. The first two waves have generated well established institutions and policies that attempt to monitor and control the flow of goods and the trade of money. Governments around the world will be tasked to establish similar networks of cooperation with respect to the flow of people. The increased rise of globalization coupled with global inequalities will make this an issue to watch closely.

Thursday, July 1, 2010

Engineering Milkshake Mistakes

Author Clay Shirky, tells the following story in his new book, Cognitive Surplus: Creativity and Generosity in a Connected Age (2010) - -

When McDonald’s wanted to improve sales of its milkshakes, it hired researchers to figure out what characteristics its customers cared about. Should the shakes be thicker? Sweeter? Colder? Almost all the researchers focused on the product. But one of them, Gerald Berstell, chose to ignore shakes themselves and study the customers instead. He sat in a McDonald’s for eighteen hours one day, observing who bought milkshakes and at what time. One surprising discovery was that many milkshakes were purchased early in the day - - odd, as consuming a shake at eight A.M. plainly doesn’t fit the bacon-and-eggs model of breakfast. Berstell also garnered three other behavioral clues from the morning milkshake crowd: the buyers were always alone, they rarely bought anything besides a shake, and they never consumed the shakes in the store.

The breakfast-shake drinkers were clearly commuters, intending to drink them while driving to work. The behavior was readily apparent, but the other researchers had missed it because it didn’t fit the normal way of thinking about either milkshakes or breakfast. As Berstell and his colleagues noted in “Finding the Right Job for Your Product,” their essay in the Harvard Business Review, the key to understanding what was going on was to stop viewing the product in isolation and to give up traditional notions of the morning meal. Berstell instead focused on a single, simple question: “What job is a customer hiring that milkshake to do at eight A.M.?”

If you want to eat while you are driving, you need something you can eat with one hand. It shouldn’t be too hot, too messy, or too greasy. It should also be moderately tasty, and take a while to finish. Not one conventional breakfast item fits that bill, and so without regard for the scared traditions of the morning meal, those customers where hiring the milkshake to do the job they need done.

Engineering has its moments of “milkshake mistakes” - - moments where it missed some of the points that researchers and keen observers like Berstell are able to see. Our engineering “milkshake mistakes” boils down to problems in two areas. The first is a concentration on the product or the thing - - where engineering and engineers assume that everything important about "the thing" was somehow implicit in its attributes, without regard to what role the customers wanted it to play. The fallacy of not understanding the job they were hiring the milkshake for. The second is a narrowness of thought with respect to a particular product and the systems and forces that intersect with the product. It is adopting a narrow view of the type of food people have always eaten in the morning, as if all habits were deeply rooted traditions instead of accumulated accidents. Neither the shake itself nor the history of breakfast mattered as much as customers needing food to do a nontraditional job - - serve as sustenance and amusement for their morning commute - - for which they hired a milkshake.

Engineering “milkshake mistakes” fundamentally goes to the heart of two important design thinking attributes - - the ability to clearly see the world and the ability to place what you see into the proper context.