"Who cares, it's done, end of story, will probably be fine . . ."

On Friday, April 16, 2010, BP engineer Brett Cocales wrote in an e-mail:

"Even if the hole is perfectly straight, a straight piece of pipe even in tension will not seek the perfect center of the hole unless it has something to centralize it.

But, who cares, it's done, end of story, will probably be fine, and we'll get a good cement job.  I would rather have to squeeze that set stuck above the {wellhead}.  So Guide is right on the risk/reward equation."

As Joel Achenbach points out is his excellent book, A Hole at the Bottom of the Sea:The Race to Kill the BP Oil Gusher - - what a disaster this e-mail was.  The book looks at the BP disaster from the engineer's perspective.  Achenbach writes the following about e-mail and words:

"Words are like overpressurized reservoirs.  They can explode.  Words can go rogue, off the reservation, gamboling about the media landscape, pillaging and plundering - - a mess of mixed metaphors being any one possible nightmare.  All that anyone would remember of the April 16 Cocales' e-mail was that awful verbal shrug:"

Who cares, it's done, end of story, will probably be fine . . .

I think words really make a difference - - what you say, how you say it.  A lot of energy needs to go into how you present the idea, the issue, the problem, the solution - - especially in the age of e-mail that lives forever.

Interface Reviews

Periodic project and program reviews are an important tool for reviewing the status and details of work progress at a particular point in time.  Typically it is a great time to review the details of project performance - - cost, schedule, quality, and the meeting of design requirements.  Most often viewed as a control function - - the process allows for change and adjustments.

As a separate step in the project and program reviews, consider having "Interface Reviews."  Think in terms of the systems that interface with the project or program.  Particular review and status updates are critical where one system interfaces with another system.  The term system should be broadly defined.  Physical systems are a given - - where a civil engineering system interfaces with a mechanical system is a source of risk that needs special attention and care.  Several issues are key at interface points - - who or whom is taking ownership and accountability; and have design requirements been fully communicated across the interface point?

Systems are not just physical systems.  Think in terms of the interface between or among subcontractors and partners.  Schedule, cost, and quality need special care at these points.  Regulatory interface points are also key - - have you secured the appropriate permits and approvals?  This type of interface point needs to be clearly visible on the critical path.

Remember the project interface points in your next review - - these can be a big concern and a source of risk.

It's The Same Stuff

Water is important.  Water is critical.  Water is cheap - - to the point the pricing would indicate it has no or limited economic value.  A carrot farmer in the Imperial Valley can get about 30,000 pounds of carrots from one acre of land.  These carrots will need about $114 worth of water to grow.  When I go into my local Kroger's grocery store, the three-pound bag of carrots from California required 217 gallons of water to grow - - and it cost the farmer one penny. 

Our disconnect between water and economic value is not just limited to carrot farms.  Even though it has the same atomic structure, water is weirdly priced.  Consider the following:

• The average home in the U.S. pays $3.24 for 1,000 gallons of water.
• The average home in Las Vegas pays $2.71 for 1,000 gallons of water. 
• A farmer in the Imperial Valley pays $0.06 for 1,000 gallons of water.

Conflict Rivers - - The River Nile

While we were all witnessing revolt and change in Egypt this spring, the Nile just kept on flowing.  The Nile is the world's longest river, starting in the Ethiopian highlands.  Geography has always put the rulers of Ethiopia in a position of power - - yet they have dared never to exploit this power.  Until recently.

While Egypt has been distracted, Ethiopia and the other upstream countries, Burundi, Congo, Kenya, Rwanda, Tanzania, and Uganda, have banded together to rewrite the 1959 treaty that favors Egypt.  Consider the changing facts since 1959 - - Ethiopia has overtaken Egypt as Africa's second-most populated country.  The total population of the upstream countries in 240 million against 130 million for the downstream countries (Egypt and Sudan - - keep in mind that Sudan is splitting.  The southern portion of Sudan could conceivability end up with the upstream coalition). 

So what is Ethiopia up to?  The Grand Millennium Dam - - a planned hydro-power project in the 5.25 gigawatts range.  It is the centerpiece of a plan to increase the country's electricity supply fivefold by 2015.  The intersection of water and energy (one person's "water and energy" is another person's "water or energy") on a conflict river, in a conflict area, in a conflict region.  The Chinese appear to be playing banker.  Keep an eye on the CNN headlines - - "Egypt and Ethiopia quarrel over water."

Excellent article on the subject in the April 23rd The Economist - - The River Nile: A dam nuisance.

The flattening of the world, or not

The High Priest of Flatness, Tom Friedman, explained Globalization 1.0 to all of us in his book The World is Flat.  The book explains ". . . how the flattening of the world happened at the dawn of the twenty-first century, what it means to countries, companies, communities, and individuals, how governments and societies can, and must, adapt."  Clearly globalization has happened, it is happening, and will probably accelerate in the future. 

Flatness has always been a relative term, dependent on context.  Pankaj Ghemawate of the IESE Business School in Spain has a wonderful new book, Globalization 3.0, that makes a powerful argument that what we have really been experiencing is a kind of semi-globalization.  Flatness yes, but  with plenty of mountains.  He has the numbers to illustrate his point.  Consider for example:

• Only 2% of students are at universities outside their home countries.
• Only 3% of people live outside their country of birth.
• Only 7% of rice is traded across borders.
• Only 7% of directors of S&P companies are foreigners.
• Less that 1% of all American companies have any foreign operations.
• Exports are equivalent to only 20% of global GDP.
• Air travel is restricted by bilateral treaties and ocean shipping is dominated by cartels.
• 42% more trade if they share a common language than if they do not.
• 47% more if both belong to a trading block.
• 114% more if they have a common currency.
• 118% more if they have a common colonial past.
• Foreign direct investment accounts for only 9% of all fixed investment.
• Less than 20% of venture capital is deployed outside the fund's home country.
• The world spends $88 billion a year on processing travel documents and in a tenth of the world's countries a passport costs more than a tenth of the average annual income.
• Nearly a quarter of North American and European companies shortened their supply chains in 2008.
• The worldwide Internet has seen governments impose a patchwork of local restrictions on content.
• 60 years ago, two car companies accounted for half of the world's car production - - compared with six companies today.  We are hardly being taken over by a handful of giant companies.
• McDonald's serves vegetarian burgers in India and spicy ones in Mexico.
• Coca-Cola uses both sugar cane and corn syrup, depending on the location.
• MTV in Indonesia - - plenty of "A-lop-bop-a-doo-bop-a-lop-bam-boom" mixed in with five calls to prayer daily.

Globalization is a force and it will probably be a bigger force in the future. One important point - - globalization and long supply chains need a key variable.  Cheap energy.  Take away the "cheap" part, you probably take away some degree of "flatness" also.  Beware of globalization as an ideology - - ideologies never present the facts.  The facts have plenty of mountains within all the flatness.

Welcome to Fiji

Fiji Water is the No. 1 imported bottled water in the United States, besting Perrier and Evian.  President Obama and his family were photographed drinking Fiji Water on election night.  Fiji Water is the leading export of Fiji.

Consider the following report from the United Nations - -

"In the Global Water Supply and Sanitation Assessment in 2000, the coverage of the population in Fiji with access to an improved water supply was recorded as 43% for the rural areas (80% of the population) and 51% for the urban areas (20% of the population) indicating that water coverage throughout Fiji remains low.  This is particularly evident in the rural areas where the Fiji Public Works Department (PWD) considered 51% as an over-optimistic estimate."

The world is flat, but hardly fair.  A country that cannot supply its own citizens adequate water, yet water from an aquifer on the isolated north coast of Fiji's main island - -

• Gets bottled in a state-of-the art factory,
• gets packed up @ 1,000,000 bottles per day,
• gets shipped via the Panama Canal,
• gets consumed in hip clubs in Miami (7,480 miles from Fiji).

Save, pure, and refreshing - - except in Fiji.  We love our bottled water.  From Fiji to the Swiss Alps - - roughly $4.00 per gallon.  Nothing speaks more to the issue of "Energy or Water" than bottled water and shipping.  We're moving one billion bottles of water around a week in ships, trains, and trucks in the United State alone.  Roughly 37,000 18-wheelers moving water around just in the U.S. (and because of the tremendous weight, you cannot pack the trucks full).  And don't forget we recycle only 27% of the plastic bottles in the U.S. - - roughly 36 billion end up in landfills (115 water bottles per person).

Fiji Water is a miniature miracle of the modern global economy and a sign of how unsustainable it has become.

If you don't question the status quo, you're not doing your job

The link between dreaming and doing is discipline.  Doing things differently and doing different things requires planning, openness to input, tweaking , and persistence.  It also requires employees to think like a scientist.  Engineers and managers should understand the value of "test and learn" where a handful of business experiments can potentially yield big benefits.

Consider the seven rules of experimentation, developed by Eric Anderson, a professor of marketing at Northwestern's Kellogg School of Management - -

1. Focus on individuals and think short term. - - The most accurate experiments involve actions to individual customers, rather than segments or geographies.
2. Keep it simple. - - Look for experiments that are easy to execute using existing resources and staff.
3. Start with a proof-of-concept test. - - First establish proof-of-concept by changing variables in whatever combination you believe is most likely to get the result you want.
4. When the results come in, slice the data. - - When the data comes in, look for subgroups because most actions affect some customers more than others.
5. Try out-of-the-box thinking. - - If you never engage in "what-if" thinking, your experiments are unlikely to yield breakthrough improvements.
6. Measure everything that matters. - - Feedback measures must capture all the relevant effects.
7. Look for natural experiments. - - If firms can recognize when natural experiments occur, they can learn form them at little or no additional expense.