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  • Archive for the 'Management' Category

    Book Review: Father, Son, & Co., by Thomas Watson Jr and Peter Petre (rerun)

    Posted by David Foster on 8th April 2014 (All posts by )

    (Yesterday marked the 50th anniversary of the announcement of the IBM System/360 series (original press release here)…seems like a good time to rerun this book review, which I originally posted in 2011)

    Buy the book: Father, Son & Co.

    —-

    When Tom Watson Jr was 10 years old, his father came home and proudly announced that he had changed the name of his company. The business that had been known as the Computing-Tabulating-Recording Company would now be known by the grand name International Business Machines.

    That little outfit?” thought young Tom to himself, picturing the company’s rather random-seeming collection of products, which included time clocks, coffee grinders, and scales, and the “cigar-chomping guys” who sold them. This was in 1924.

    This is the best business autobiography I’ve read. It’s about Watson Jr, his difficult relationship with his father, the company they built, and the emergence of the computing industry. It is an emotional, reflective, and self-critical book, without the kind of “here’s how brilliant I was” tone that afflicts too many executive autobiographies. With today being IBM’s 100th anniversary (counting from the incorporation of CTR), I thought it would be a good time to finally get this review finished and posted.

    Watson’s relationship with his father was never an easy one. From an early age, he sensed a parental expectation that he would follow his father into IBM, despite both his parents assuring him that this was not the case and he could do whatever he wanted. This feeling that his life course was defined in advance, combined with fear that he would never be able to measure up to his increasingly-famous father, was likely a factor in the episodes of severe depression which afflicted him from 13 to 19. In college Watson was an indifferent student and something of a playboy. His most significant accomplishment during this period was learning to fly airplanes—-”I’d finally discovered something I was good at”–a skill that would have great influence on his future. His first job at IBM, as a trainee salesman, did little to boost his self-confidence or his sense of independence: he was aware that local IBM managers were handing him easy accounts, wanting to ensure success for the chief executive’s son. It was only when Watson joined the Army Air Force during WWII–he flew B-24s and was based in Russia, assisting General Follett Bradley in the organization of supply shipments to the Soviet Union–that he proved to himself that he could succeed without special treatment. As the war wound down, he set his sights on becoming an airline pilot–General Bradley expressed surprise, saying “Really? I always thought you’d go back and run the IBM company.” This expression of confidence, from a man he greatly respected, helped influence Watson to give IBM another try.

    The products that Watson had been selling, as a junior salesman, were punched card systems. Although these were not computers in the modern sense of the word, they could be used to implement some pretty comprehensive information systems. Punched card systems were an important enabler of the increasing dominance of larger organizations in both business and government: the Social Security Act of 1935 was hugely beneficial to IBM both because of the systems they sold to the government directly and those sold to businesses needing to keep up with the required record-keeping.

    Read the rest of this entry »

    Posted in Biography, Book Notes, Business, Management, Tech | 13 Comments »

    Radar Wars: a Case Study in Science and Government

    Posted by David Foster on 17th March 2014 (All posts by )

    In 1960, the British scientist/novelist C P Snow gave a lecture–later turned into a book–which was inspired by the following  thought:

    One of the most bizarre features of any advanced industrial society in our time is that the cardinal choices have to be made by a handful of men: in secret: and, at least in legal form, by men who cannot have a first-hand knowledge of what those choices depend upon or what their results may be…and when I say the “cardinal choices,” I mean those that determine in the crudest sense whether we live or die.

    Snow discusses two very cardinal cases in which he was personally if somewhat peripherally involved: the pre-WWII secret debate about air defense technologies, and the mid-war debate about strategic bombing policies. This post will focus on the first of these debates, the outcome of which quite likely determined the fate of Britain and of Europe. (Snow’s version of these events is not universally accepted, as I’ll discuss later.) Follow-on posts will discuss the strategic bombing debate and the issues of expertise, secrecy, and decision-making in our own time.

    The air defense debate had two main protagonists: Sir Henry Tizard, and Frederick Lindmann (later Lord Cherwell.) These men were similar in many ways: both were scientists, both were patriots, both were men of great  courage (involved in early and dangerous aircraft experimentation), both were serious amateur athletes. They were “close but not intimate friends” when they both lived in Berlin–Tizard was a member of a gym there which was run by a former champion lightweight boxer of England, and persuaded Lindemann to join and box with him. But Lindemann proved to be such a poor loser that Tizard refused to box with him again. “Still,” says Tizard, “we remained close friends for over twenty-five years, but after 1936 he became a bitter enemy.”

    Snow, who makes no secret of his preference for Tizard, tells of a conversation with Lindemann in which he (Snow) remarked that “the English honours system must cause far more pain than pleasure: that every January and June the pleasure to those who got awards was nothing like so great as the pain of those who did not. Miraculously Lindemann’s sombre, heavy face lit up…With a gleeful sneer he said: ‘Of course it is. It wouldn’t be any use getting an ward if one didn’t think of all the people who were miserable because they hadn’t managed it.’”

    Some people did like Lindemann, though–and one of them was Winston Churchill, who though still in the political wilderness was not without influence. Indeed, the future PM considered Lindemann (later to become Lord Cherwell) to be his most trusted advisor on matters of science. If Snow’s version of events is correct, Churchill’s trust and advocacy of Lindemann could have driven a decision resulting in Britain’s losing the war before it even started.

    During the inter-war era, the bombing plane was greatly feared–it was commonly believed that no effective defense was possible. PM Stanley Baldwin, speaking in 1932, expressed this attitude when he said “I think it is well also for the man in the street to realize that there is no power on earth that can protect him from being bombed, whatever people may tell him. The bomber will always get through.” Indeed, the problem of air defense was very difficult–the bombers could arrive at any time, and by the time they were sighted, it would likely be too late to get fighters in the air. Maintaining standing patrols on all possible attack routes was unfeasible. The only detection devices were long horns with microphones and amplifiers, intended to pick up enemy engine noise a considerable distance away–but their value was limited to say the least.

    In early 1935, the British government set up a Committee for the Scientific Study of Air Defense, chaired by Tizard. It reported to a higher-level committee, chaired by Lord Swinton, who was the Air Minister. One member of that higher-level committee was Winston Churchill, and he insisted that his favorite scientist, Lindemann (who had been quite vocal about the need for improved air defense), should be appointed to Tizard’s working-level committee.

    Radar had only recently been invented, and was by no means operationally proven, but all of the members of that Tizard committee–with one exception–viewed it as the key to successful air defense. That exeption was Lindemann. While not hostile to radar, he believed the committee should given equal or greater attention to certain other technologies–specifically, infrared detection and parachute mines…the latter devices were to be dropped from above, and were intended to explode after getting caught on the wing or other part of the enemy bomber. He also thought there were possibilities in machines that would create a strong updraft and flip a bomber on its back.

    “Almost from the moment that Lindemann took his seat undisturbed in the committee room,” says Snow, “the meetings did not know half an hour’s harmony or work undisturbed.” Exercising his novelistic talents, Snow imagines what the meetings must have been like:

    Lindemann, Hill, and Blackett were all very tall men of distinguished physical presence…Blackett and Hill would be dressed casually, like academics. Tizard and Lindemann, who were both conventional in such things, would be wearing black coats and striped trousers, and both would come to the meetings in bowler hates. At the table Blackett and Hill, neither of them specially patient men nor overfond of listening to nonsense, sat with incredulity through diatribes by Lindemann, scornfull, contemptuous, barely audible, directed against any decision that Tizard had made, was making, or ever would make. Tizard sat it out for some time. He could be irritable, but he had great resources of temperament, and he knew that this was too serious a time to let the irritability flash. He also knew, from the first speech that Lindemann made in committee, that the friendship of years was smashed.

    Read the rest of this entry »

    Posted in Academia, Britain, History, Management, Military Affairs, Tech | 10 Comments »

    Attack of the Robot Bureaucrats

    Posted by David Foster on 9th March 2014 (All posts by )

    Via Bookworm, here is a truly appalling story from Minnesota. When the fire alarm went off at Como Park High School, a 14-year-old girl was rousted out of the swimming pool, and–dripping wet and wearing only a swimsuit–directed to go stand outside were the temperature was sub-zero and the wind chill made it much worse. Then, she was not allowed to take refuge in one of the many cars in the parking lot because of a school policy forbidding students from sitting in a faculty member’s car. As Bookworm notes:

    Even the lowest intelligence can figure out that the rule’s purpose is to prevent teachers from engaging sexually with children.  The likelihood of a covert sexual contact happening between Kayona and a teacherunder the actual circumstances is ludicrous.  The faculty cars were in full view of the entire school.  There was no chance of illicit sexual congress.

    But the whole nature of bureaucratic rules, of course, is to forbid human judgment based on actual context.

    Fortunately for Kayona, her fellow students hadn’t had human decency ground out of them by rules: “…fellow students, however, demonstrated a grasp of civilized behavior. Students huddled around her and some frigid classmates [sic], giving her a sweatshirt to put around her feet. A teacher coughed up a jacket.” As the children were keeping Kayona alive, the teachers were workingtheir way through the bureaucracy.  After a freezing ten minutes, an administrator finally gave permission for the soaking wet, freezing Kayla to set in a car in full view of everybody.

    As Bookworm notes, this sort of thing is becoming increasingly common. In England in 2009, for example, a man with a broken back lay in 6 inches of water, but paramedics refused to rescue him because they weren’t trained for water rescues. Dozens of similar examples could easily be dredged up.

    The behavior of these bureaucrats is very similar to the behavior of a computer program confronted by a situation for which its designers did not explicitly provide. Sometimes the results will be useless, sometimes they will be humorous, often they will be harmful or outright disastrous.

    Last year in Sweden, there was rampant rioting that included the torching of many cars.  The government of Sweden didn’t do a very good job of protecting its citizens and their property from this outbreak of barbarism. Government agents did, however, fulfill their duty of issuing parking tickets…to burned-out cars. Link with picture.  In my post The Reductio as Absurdum of Bureaucratic Liberalism, I said…

    Read the rest of this entry »

    Posted in Big Government, Education, Germany, History, Human Behavior, Management, Video | 10 Comments »

    Charles Sorensen and Rosie the Riveter Would Appreciate Your Assistance

    Posted by David Foster on 16th February 2014 (All posts by )

    The project to Save the Willow Run Bomber Plant is 75% of the way to its fundraising goal, but still $2 million short.

    In October 1942, Herman Goering mocked American claims about our weapons production capabilities:

    Some astronomical figures are expected from the American war industry. Now I am the last to underrate this industry. Obviously the Americans do very well in some technical fields. We know that they produce a colossal amount of  fast cars. And the development of radio is one of their special achievements, and so is the razor blade…But you must not forget, there is one word in their language that is written with a capital B and this word is Bluff.

    (Citing the above quote in his memoir, Luftwaffe general Adolph Galland observed acidly, “Propaganda may be horrible, but bombs certainly are.)

    The “astronomical figures” turned out not to be a bluff at all, of course, and the figures were turned into reality in large part because of the production techniques pioneered and perfected at places like Willow Run.

    The Willow Run plant, which covered 63 acres, was designed for the single purpose of producing B-24 bombers…and produce them it did, once it got going, at the rate of one per hour. The genesis of the plant lay in a 1940 visit to Consolidated Aircraft, where the planes were then being built, by Ford Motor Company production VP Charles Sorensen–Ford had originally been asked by the government to quote on building some components for the bomber. After watching Consolidated’s process for a while, Sorensen asserted that the whole thing  could be put together by assembly-line methods. (See the link, which is Sorensen’s own story about “a $200,000,000 proposition backed only by a penciled sketch.”)

    Unused since 2010, the plant had been scheduled for demolition, but there is now a project to turn it into a museum that will be focused on  science education and social history as well as aviation history–the Yankee Air Museum is to be relocated there–and the history of the plant itself.  Astronaut Jack Lousma and auto-industry bad boy Bob Lutz are spearheading the effort; the additional funds need to be raised by May 1.

    I hope the new museum will integrate its focus on science & technology and its focus on the war production story to also cover the past, present, and future of American manufacturing, and of manufacturing generally–manufacturing being something that is too little understood and too little appreciated  (beyond the platitude level) in America today.  For example, in this post, which is mainly about employee evaluation, the author says:

    Today’s businesses drive most of their value through service, intellectual property, innovation, and creativity. Even if you’re a manufacturer, your ability to sell, serve, and support your product (and the design itself) is more important than the ability to manufacture. So each year a higher and higher percentage of your work is dependent on the roles which have “hyper performer” distributions.

    This kind of drive-by assumption about manufacturing is frequently encountered in today’s business writings: the assumption that manufacturing is a field inherently lacking in creativity, and (strongly implied in the above quote) that “hyper performers” are not important in this area in the way that they are in sales, product design, and customer service. If the museum can help Americans to understand a little more about manufacturing and its importance, then that will be a valuable thing in addition to its contributions to aviation, WWII, and social history.

    Some books that provide useful information and perspective on Willow Run:

    Freedom’s Forge: How American Business Produced Victory in World War II, by Arthur Herman. An interesting overview of the WWII armaments program.

    I Invented the Modern Age: The Rise of Henry Ford, by Richard Snow. A lot about the early history of the auto industry, with several pages on Willow Run.

    My Forty Years with Ford, by Charles Sorensen. The whole book is very worthwhile. Sorensen gives considerable credit to Edsel Ford for the Willow Run project–Edsel committed $200,000,000 of Ford’s money to the project based only on a rough sketch, with no absolute assurance that government funding would be forthcoming–and indeed for the entire WWII armaments program at the company, Henry Ford himself having adopted what one might call a passive-aggressive attitude toward the whole thing.

    It would be a shame to let the historical artifact that is Willow Run be lost–hopefully, the fundraising efforts over the next couple of months will be successful.

     

    Posted in Aviation, Book Notes, Business, History, Management, USA, War and Peace | 5 Comments »

    It Isn’t Nice to Kick Someone When He’s Down…

    Posted by David Foster on 6th February 2014 (All posts by )

    …but the woes at Sony Corporation remind me of a couple of my posts about the path this company has been taking.

    From March, 2005:

    The New York Times (3/13, registration required) quotes Sir Howard Stringer, the new chief executive of Sony, arguing for mutual benefit between his company’s electronics and entertainment divisions. At the Consumer Electronics Show last month, Sir Howard said, “A device without content is nothing but scrap metal.”

    Following the chain of logic he seems to be developing, we could also argue that a car without fuel is scrap metal…and therefore, auto companies need to own oil companies. Or that computers are useless without software…so all computer manufacturers need to possess large software operations.

    Randall Stoss, author of the NYT article, observes that Sir Howard’s remark is “a platitude beneath mention–unless, perhaps, one were a mite defensive about owning both a widget factory and an entertainment factory.” Stoss goes on to credit the success of the iPod (far greater than Sony’s competitive product) to the fact that Apple has not pursued synergies between device and content…

    A company thrives when it has all that it needs to make a compelling product and is undistracted by fractiousness among divisions that resent being told to make decisions based upon family obligations, not market considerations.

    From September 2012:

    In his Financial Times article Why Sony did not invent the iPod, John Kay notes that there have been many cases in which large corporations saw correctly that massive structural changes were about to hit their industries–attempted to position themselves for these changes by executing acquisitions or joint ventures–and failed utterly. As examples he cites Sony’s purchase of CBC Records and Columbia Pictures, the AT&T acquisition of NCR, and the dreadful AOL/Time Warner affair. He summarizes the reason why these things don’t tend to work:

    A collection of all the businesses which might be transformed by disruptive innovation might at first sight appear to be a means of assembling the capabilities needed to manage change. In practice, it is a means of gathering together everyone who has an incentive to resist change. 

    I’d also note that the kinds of vertical integration represented by the above mergers don’t exactly encourage other companies–which were not competitors prior to the merger but have become so afterwards–to participate in an ecosystem.
    Kay references the work of Clayton Christensen, whose book The Innovator’s Solution I reviewed here.  See also Mergers, Acquisitions, Princesses, and Toads.

     

    Posted in Business, Management, Tech | 19 Comments »

    Both Interesting and Sad

    Posted by David Foster on 23rd January 2014 (All posts by )

    A commenter at a post on value stream mapping, at the Manufacturing Leadership Blog, says:

    I saw a group of women who hated each other for over 20 years come to tears when they realized what the workflow was doing to their relationships.

    Hopefully, outright hate isn’t all that common, but I do suspect that many painful relationship problems in organizations are caused by processes and incentive structures that create conflicts of a pointless, perpetual, and unresolvable nature.

    Posted in Business, Human Behavior, Management | 7 Comments »

    More Obamacare News

    Posted by Michael Kennedy on 18th January 2014 (All posts by )

    The CMS has a new contractor for Obamacare, not just the web site. The previous contractor, CGI Federal, has been replaced rather suddenly.

    “Accenture, one of the world’s largest consulting firms, has extensive experience with computer systems on the state level and built California’s large new health-insurance exchange. But it has not done substantial work on any Health and Human Services Department program.
    “The administration’s decision to end the contract with CGI reflects lingering unease over the performance of HealthCare.gov even as officials have touted recent improvements and the rising numbers of Americans who have used the marketplace to sign up for health coverage that took effect Jan. 1.”

    CGI Federal is the company connected with Michelle Obama through her classmate, a fellow Princeton alumna.

    Read the rest of this entry »

    Posted in Big Government, Economics & Finance, Health Care, Management, Medicine, Politics | 18 Comments »

    Selected Posts from 2013, continued

    Posted by David Foster on 5th January 2014 (All posts by )

    The Power of Metaphor and Analogy. How verbal imagery affects decision-making.

    Not a Single One. Not a single Democratic senator managed to demonstrate enough judgment and courage to go against his Party herd and vote “Nay” on the Hagel confirmation. Also, interesting comments from a political science on the increasing tribalization of the electorate…strongly related to what I call the outsourcing of judgment and conscience.

    Coming Soon, to Places Near You? How French bureaucracy in the 1920s offers a preview of  rampant American bureaucracy in our present era.

    The Reductio ad Absurdum of Bureaucratic Liberalism. Swedish police were unable to suppress the riots, but they were able to issue parking tickets to burned-out cars…reminding me of an old SF story by Walter Miller.

    More on Bureaucracy. Peter Drucker explains why every government must be a “government of paper forms” if it is not to degenerate into a mutual looting society.

    Durbin, Tocqueville, and Freedom of the Press.

    Posted in Human Behavior, Israel, Leftism, Management, Media, Political Philosophy, Politics | 4 Comments »

    Selected Posts from 2013

    Posted by David Foster on 2nd January 2014 (All posts by )

    I’m reviewing my posts over the last year, and will be linking some of them here, in some cases with additional commentary. Here’s the first batch…

    The bitter wastes of politicized America, on the toxic social effects of ever-increasing government power.

    Also relevant to the subject of this post are some of Sebastian Haffner’s observations on inter-war Germany. He notes that during the Stresemann chancellorship, when a certain level of stability and normality was achieved, “there was an ample measure of freedom, peace, and order, everywhere the most well-meaning liberal-mindedness, good wages, good food and a little political boredom. everyone was cordially invited to concentrate on their personal lives, to arrange their affairs according to their own taste and to find their own paths to happiness”…BUT a return to private life was not to everyone’s taste:

    A generation of young Germans had become accustomed to having the entire content of their lives delivered gratis, so to speak, by the public sphere, all the raw material for their deeper emotions…Now that these deliveries suddenly ceased, people were left helpless, impoverished, robbed, and disappointed. They had never learned how to live from within themselves, how to make an ordinary private life great, beautiful and worth while, how to enjoy it and make it interesting. So they regarded the end of political tension and the return of private liberty not as a gift, but as a deprivation. They were bored, their minds strayed to silly thoughts, and they began to sulk.

    I’m afraid that in America today, we also have a fair number of people who expect to have “the content of their lives delivered by the public sphere,” and this is another factor in the growing politicization of absolutely everything.

    The Dream(liner) and the Nightmare (of Social Toxicity). How reactions to the problems with the Boeing 787′s battery system exemplify the declining levels of trust in American society.

    Excusing Failure by Pleading Incompetence.  Hillary Clinton’s testimony on the Benghazi debacle clearly demonstrated her inability and/or unwillingness to understand the nature of executive responsibility. It is truly appalling that anyone could seriously consider this woman for the job of United States President.

    Respect her Authoritah. Nancy Cartman-Pelosi thinks it would be disrespectful to cut congressional salaries because it would reduce the dignity of lawmakers’ jobs.

    Connecting the World. Undersea cables, and their social & psychological impact.

    Posted in Aviation, Civil Society, Germany, Leftism, Management, Politics, Tech, Transportation | 1 Comment »

    Quote of the Day

    Posted by Jonathan on 1st January 2014 (All posts by )

    Caroline Glick, Khodorkovsky and the freedom agenda:

    Both the Iranian democracy activists then and the Ukrainian protesters today demonstrated through their actions that they do not seek the mere overthrow of unrepresentative, repressive governments. They seek freedom, and are willing to work for it. All the Iranians needed then, and all the Ukrainians ask for today, is assistance from foreign powers, just as George Washington’s Continental Army required French assistance to defeat the British Empire.
     
    While those are easy cases to understand, the lesson of Putin’s Russia and of post-Saddam Iraq is that freedom doesn’t sprout from thin air. The only way to plant democracy in nations unfamiliar with the habits of liberty is to cultivate them, relentlessly and unapologetically, over time.

    Posted in Civil Society, Current Events, Iraq, Management, Political Philosophy, Quotations, Russia | 4 Comments »

    The Procurement / Bureaucracy Excuse, and the Drive for Expanded Presidential Power

    Posted by David Foster on 22nd December 2013 (All posts by )

    President Obama has been unwilling to admit that the problems with the Obamacare roll-out might suggest that he needs to work on improving his management skills. Instead, he has chosen to blame the complexities of government bureaucracy, and in particular the complexities of the government procurement process–all matters that have seemed to be rather surprising to him–and this view has predictably been echoed by some in the pundit class.

    I have several thoughts on this matter:

    1) It is not yet clear to what extent the Obamacare systems problems are a function of too much bureaucracy in the procurement process versus too little bureaucracy in that process as employed in this specific case. In particular, were Serco and CGI and other key contractors selected based on the robot-like processes of the Federal procurement system…or was heavy political influence involved? I don’t think we know yet.

    2) A good workman understands the limitations of his tools and materials. We wouldn’t think much of a civil engineer who designed a high-traffic-carrying bridge without paying close attention to the load-bearing characteristics of the steel girders and cables used; nor would we think much of an architect who designed a house in which a family was investing much of their financial net worth without considering the weather resistance of the wood and other materials he was specifying. Shouldn’t Obama, before embarking on a plan to greatly increase the Federal Government’s role in healthcare, have seriously considered the characteristics and limitations of the tools and materials that he was using–the Federal agencies and their policies and procedures–for this purpose? He stands convicted out of his own mouth for not performing this basic level of due diligence.

    3) Whatever the encumbrances of the Federal bureaucracy–and yes, we all know they are significant–nothing prevented Obama from taking a more serious and responsible executive role in supervising the roll-out, and/or putting effective people in key leadership positions. Can there be any doubt that if a person of the quality of General Bernard Schriever, for example, had been put in control of the technology and paperwork process implementation, the odds of success would have been considerably better?

    4) Most important: Obama and his media/academic sycophants refuse to understand the inevitable limitation of government micromanagement.  I’ve previously quoted Peter Drucker:

    Whether government is “a government of laws” or a “government of men” is debatable. But every government is, by definition, a “government of paper forms.” This means, inevitably, high cost. For “control” of the last 10 per cent of any phenomenon always costs more than control of the first 90 per cent. If control tries to account for everything, it becomes prohibitively expensive. Yet this is what government is always expected to do.

    The reason is not just “bureaucracy” and red tape; it is a much sounder one. A “little dishonesty” in government is a corrosive disease. It rapidly spreads to infect the whole body politic. Yet the temptation to dishonesty is always great. People of modest means and dependent on a salary handle very large public sums. People of  modest position dispose of power and award contracts and privileges of tremendous importance to other people–construction jobs, radio channels, air routes, zoning laws, building codes, and so on. To fear corruption in government is not irrational.

    This means, however, that government “bureaucracy”— and its consequent high costs—cannot be eliminated.  Any government that is not a “government of forms” degenerates rapidly into a mutual looting society.

    (I’m confident Professor Drucker would agree that whether the forms are paper or electronic makes no difference at all in this context.)

    As I also noted earlier: the expansion of government into all aspects of human life leads to increasing inefficiency–while the increasing frustration with bureaucracy results in a widespread demand to “make government more responsive” by giving more discretionary authority to administrators and to their political superiors. This is exactly what we are seeing with Obamacare, with the emphasis at present being on an increase of discretionary authority for the political superiors of the administrators. This, in turn, must result in a government which is not only a looting society (Obamacare waivers or special privileges for politically-well-connected groups, for example)  but increasingly a tyranny. Yet at the same time, there will still be enough baroque proceduralization (selectively enforced) to ensure high levels of inefficiency and very high government administrative costs. And the discretionary authority–the movement away from a Government of Laws and toward a Government of Men–must create widespread uncertainty and, consequently, equally widespread economic damage.

     

    Posted in Health Care, Management, Obama, Tech | 13 Comments »

    The Cluelessness Was Not Just About “Tech”

    Posted by David Foster on 20th December 2013 (All posts by )

    Michael Wolff, writing in USA Today, says that Obama’s strange comments about the Obamacare technology debacle are symptomatic of a broader problem: CEO’s being “clueless” about technology.

    Uh, no. The problems with the Obamacare systems do not particularly reflect Obama’s cluelessness about technology, they reflect his complete lack of competence and experience in the field of executive management. Basic executive functions such as organizing work carefully and appropriately, putting the right people in charge, checking up to see how things are going, and making adjustments as necessary rather than just “hoping that something will turn up” are not specific to software and telecommunication systems. I have no doubt that Obama’s approach to management would be equally disastrous if he were running a railroad or a factory or a retail store…even a railroad or a factory or a retail store in pre-computer days.

    The very strong support for Obama among people who write and talk and create images for a living reflected, in many if not most cases, an arrogant belief that their own skill sets were applicable to just about any important task, and a failure to understand that in order to run things effectively, a person has to have some experience in running things, and, even more important, an interest in the process of running things. An individual who has been “bored to death his whole life,” as Obama’s close friend Valerie Jarrett said of him, is most unlikely to either possess such an interest or to develop it.

    Posted in Management, Tech, USA | 6 Comments »

    Musings on Tyler’s Technological Thoughts

    Posted by David Foster on 18th November 2013 (All posts by )

    Tyler Cowen, in his recent book Average Is Over, argues that computer technology is creating a sharp economic and class distinction between people who know how to effectively use these “genius machines” (a term he uses over and over) and those who don’t, and is also increasing inequality in other ways. Isegoria recently excerpted some of his Tyler’s comments on this thesis from a recent New Yorker article.

    I read the book a couple of months ago, and although it’s worth reading and is occasionally thought-provoking, I think much of what Tyler has to say is wrong-headed. In the New Yorker article, for example, he says:

    The first (reason why increased inequality is here to stay) is just measurement of worker value. We’re doing a lot to measure what workers are contributing to businesses, and, when you do that, very often you end up paying some people less and other people more.

    The second is automation — especially in terms of smart software. Today’s workplaces are often more complicated than, say, a factory for General Motors was in 1962. They require higher skills. People who have those skills are very often doing extremely well, but a lot of people don’t have them, and that increases inequality.

    And the third point is globalization. There’s a lot more unskilled labor in the world, and that creates downward pressure on unskilled labor in the United States. On the global level, inequality is down dramatically — we shouldn’t forget that. But within each country, or almost every country, inequality is up.

    Taking the first point: Businesses and other organizations have been measuring “what workers are contributing” for a long, long time. Consider piecework. Sales commissions. Criteria-based bonuses for regional and division executives. All of these things are very old hat. Indeed, quite a few manufacturers have decided that it is unwise to take the quantitative measurement of performance down to an individual level, in cases where the work is being done by a closely-coupled team.

    It is true that advancing computer technology makes it feasible to measure more dimensions of an individual’s work, but so what? Does the fact that I can measure (say) a call-center operator on 33 different criteria really tell me anything about what he is contributing the the business?

    Anyone with real-life business experience will tell you that it is very, very difficult to create measurement and incentive plans that actually work in ways that are truly beneficial to the business. This is true in sales commission plans, it is true in manufacturing (I talked with one factory manager who said he dropped piecework because it was encouraging workers to risk injury in order to maximize their payoffs), and it is true in executive compensation. Our blogfriend Bill Waddell has frequently written about the ways in which accounting systems can distort decision-making in ultimately unprofitable ways. The design of worthwhile measurement and incentive plans has very little to do with the understanding of computer technology; it has a great deal to do with understanding of human nature and of the deep economic structure of the business.

    Read the rest of this entry »

    Posted in Book Notes, Business, Economics & Finance, Management, Systems Analysis | 14 Comments »

    The Rot Comes from the Top

    Posted by Margaret on 15th November 2013 (All posts by )

    Remember last year’s scandal about the Secret Service goings-on in Cartagena? The trouble started when one of them stiffed a prostitute.

    Insurance companies have been in bed with Obama/Obamacare from the beginning. Yesterday he tried to stiff them by royal decree.

    Good role model for his underlings, no?

    Posted in Management, Obama, Politics | 7 Comments »

    Obamacare, WWII, and Why Effective Leaders Need Strong Subordinate Leaders

    Posted by David Foster on 10th November 2013 (All posts by )

    Over at Sister Toldjah, Phineas cites an email which notes:

    Putting things in perspective: March 21st 2010 to October 1 2013 is 3 years, 6 months, 10 days.  December 7, 1941 to May 8, 1945 is 3 years, 5 months, 1 day.  What this means is that in the time we were attacked at Pearl Harbor to the day Germany surrendered is not enough time for this progressive federal government to build a working webpage.  Mobilization of millions, building tens of thousands of tanks,  planes, jeeps, subs, cruisers, destroyers, torpedoes, millions upon millions of guns, bombs, ammo, etc. Turning the tide in North Africa,  Invading Italy, D-Day,  Battle of the Bulge, Race to Berlin – all while we were also fighting the Japanese in the Pacific!!  And in that amount of time – this administration can’t build a working webpage.

    To be fair, the Obamacare support system is more than just a “webpage”…it also encompasses various back-end information-exchange systems. Still, it is a system that did not require the development of any truly new technologies or any conceptual breakthroughs in the use of existing technologies. Compared to any of a large number of WWII technology, manufacturing, and logistics efforts…proximity-fused ammunition, airborne radar, computer-based codebreaking, mass-production of airplanes and ships, the petroleum pipeline under the English Channel…the Obamacare support system is a very small thing indeed.

    History and experience teach us that large, complex, time-critical programs only get done successfully when they are run by individuals who are tough-minded, possessed of practical wisdom, and willing to put their careers on the line to accomplish the goal…and when higher authority is willing to delegate sufficient scope and empowerment to such leaders. A couple of years ago, I wrote about one example of such a leader: General Bernard Schriever, who ran USAF ballistic missile programs.

    In order to achieve his goal of delivering Atlas and other missile programs in the required time frames, General Schriever found it necessary to break a lot of china. For example, when Secretary of the Air Force Harold Talbott, ordered him to relocate certain missile facilities from the west cost to the midwest (supposedly based on industrial dispersion for survivability, but actually probably driven by political factors) Schreiver flatly refused, citing his “prior and overriding orders” to get the program done in the shortest feasible time. By then a general, Schriever stuck by his position on this even when Talbott threatened him that “Before this meeting is over, General, there’s going to be one more colonel in the Air Force!”

    I don’t think people with strength of character like that of Bernard Schriever do very well in the Obama administration or that they remain with it for very long. A man who can say, as Obama did, “I think that I’m a better speechwriter than my speechwriters. I know more about policies on any particular issue than my policy directors. And I’ll tell you right now that I’m gonna think I’m a better political director than my political director” is a very small man. Small men tend to hire and retain only other small men and women.

    And small men and women don’t run large and complex projects effectively.

     

    Posted in Aviation, Health Care, History, Management, Obama, USA | 19 Comments »

    How to be an Executive Who Learns/Does Not Learn

    Posted by David Foster on 3rd November 2013 (All posts by )

    Here’s David Cote, CEO of Honeywell Inc:

    Your job as a leader is to be right at the end of the meeting, not at the beginning of the meeting.

    And here’s Barack Obama, President of the United States:

    I think that I’m a better speechwriter than my speechwriters. I know more about policies on any particular issue than my policy directors. And I’ll tell you right now that I’m gonna think I’m a better political director than my political director.

    Is it likely that a person with the latter worldview will come out of a meeting knowing/understanding more than he did when he went into it?

    Posted in Management, Obama, Politics | 8 Comments »

    “I Am Not a Crook”

    Posted by David Foster on 2nd November 2013 (All posts by )

    …said Richard Nixon, famously. Comes now Joe Biden, with “I am not a geek.” Specifically, in responding to questions about the problems with the Obamacare website and its supporting systems, Biden said:

    “Neither (the president) or I are technology geeks and we assumed that it was up and ready to run.”

    I don’t think the main problems with this implementation have to do with a lack of geekitude–most likely, there are many quite competent software developers working on this project–but rather with a lack of effective management. (And if there is a shortage of competent developers on the project, well, that’s a management issue, too, isn’t it.)

    Real managers, real executives, don’t assume that important things will be ready when they’re supposed to be ready, and they aren’t satisfied with superficial answers to superficial  questions, either. These effective leaders are people who have developed effective questioning skills so they can find out what is really going on. They establish open, non-fear-based organizational cultures so that people with concerns feel able to bring them forward. As I noted in my post about Benghazi (excusing failure by pleading incompetence), it is the responsiblity of an executive to establish an information and decision-flow architecture…including clear assignment of responsibilities…to ensure that the right things are seen and acted upon by the right people at the right time. Failure to do this..and to maintain and tune the system over time…will predictably result in catastrophes.

    Later in the interview with Biden, the Vice President also said he didn’t know the specifics of why the website isn’t working, but that he was told the platform “is fine, but they have to change an awful lot of the inputs.”

    “Look, all I know is they talk about 50,000 lines of this and this, I don’t know the technical reasons,” Biden said.

    ”So I don’t know, I wish I could tell you, that’s why I became a lawyer,”

    A pretty flippant response to a serious situation. Slow Joe might not be able to understand the technical reasons for the failure, but he should be able–if he were competent at his job–to investigate and understand the management reasons for the failure.

    Some of the questions that come to mind about this debacle are: How were the contractors selected? Why was it decided to have the government (CMS) act as prime contractor, rather than choosing an external company for that role? What do the contracts with the outside contractors actually specify, in terms of deliverables? What remedies are provided in the contracts for failures in delivery? If these remedies are inadequate, why did the government not require that they be more stringent? What coordination vehicles were there between the government group writing and interpreting the Obamacare regulations and the separate group that was attempting to act as prime contractor? Was there a single individual in charge? What project scheduling and tracking methods were employed throughout this effort?

    These are not issues that are specific to software technology–the above questions are ones that any good executive, whether his background is in construction or in theater or in wholesale distribution, would understand that he should ask.

    A United States President is not elected as a philosopher king; he is elected to run the executive departments of government and to faithfully execute the laws passed by Congress. The members of the present administration have repeatedly demonstrated their utter incompetence to perform these tasks.

    An administration that seeks endless expansion of government’s role–but is at the same time completely incompetent at carrying out basic executive tasks–will drive expanding circles of chaos throughout ever-broader reaches of American society and the American economy.

     

    Posted in Big Government, Health Care, Management, Tech | 23 Comments »

    A Critical Insight.

    Posted by Michael Kennedy on 1st November 2013 (All posts by )

    Today, Belmont club has a post, with a link to another blog post, that I think explain a lot of the Obamacare fiasco.

    Fernandez begins with a discussion of Obama’s technique with favored columnists.

    get him in an off-the-record setting with a small group of opinion columnists — the David Brooks and E.J. Dionne types — and he’ll talk for hours. …

    “It’s not an accident who he invites: He reads the people that he thinks matter, and he really likes engaging those people,” said one reporter with knowledge of the meetings. “He reads people carefully — he has a columnist mentality — and he wants to win columnists over,” said another. …

    These people are, like him, unsophisticated in technology. They are lawyers or journalists and the numbers of math and science courses represented in the room are few.

    The other blog post is titled “Government is magic.”

    Our technocracy is detached from competence. It’s not the technocracy of engineers, but of “thinkers” who read Malcolm Gladwell and Thomas Friedman and watch TED talks and savor the flavor of competence, without ever imbibing its substance.

    These are the people who love Freakonomics, who enjoy all sorts of mental puzzles, who like to see an idea turned on its head, but who couldn’t fix a toaster.

    This strikes me as a huge insight into why this administration doesn’t understand the trouble it is in.

    Read the rest of this entry »

    Posted in Big Government, Chicagoania, Education, Health Care, Human Behavior, Management, Politics, The Press | 14 Comments »

    Willow Run Plant Needs Help

    Posted by David Foster on 18th August 2013 (All posts by )

    The Willow Run plant, a 63-acre factory, was designed for the single purpose of producing B-24 bombers…and produce them it did, once it got going, at the rate of one per hour. The genesis of the plant lay in a 1940 visit to Consolidated Aircraft, where the planes were then being built, by Ford Motor Company production vp Charles Sorensen–Ford had originally been asked by the government to quote on building some components for the bomber. After watching Consolidated’s process for a while, Sorensen asserted that the whole thing  could be put together by assembly-line methods. (See the link, which is Sorensen’s own story about “a $200,000,000 proposition backed only by a penciled sketch.”)

    Unused since 2010, the plant had been scheduled for demolition, but there is now a project to turn it into a museum that will be focused on  science education and social history as well as aviation history–the Yankee Air Museum is to be relocated there–and the history of the plant itself. Several million $ must be raised by October 1 to save the plant; astronaut Jack Lousma and auto-industry bad boy Bob Lutz are spearheading the effort.

    An additional $3.4 million needs to be raised by October 1 if the plant is to be saved and the museum project is to go forward. You can contribute here.

    Posted in Aviation, Business, History, Management, USA, War and Peace | 15 Comments »

    “Benign Arrogance”

    Posted by David Foster on 13th August 2013 (All posts by )

    Interesting stories and thoughts from Kathleen Fasanella:

    “I thought you meant everybody el….”

    Posted in Business, Human Behavior, Management | 5 Comments »

    Free Introductory Webinar Today: Lean Government – An Introduction, by Steve Elliott

    Posted by leifsmith on 9th July 2013 (All posts by )

    Siera is devoted to teaching things that are steps along the way to America 3.0 (Bennett & Lotus). Delivery of efficient governmental services, in a way respectful of customers, is one of those steps.

    On July 9, noon Denver time, we will offer, online, a free live introduction to a 10 webinar course on “Lean Government,” created by Steve Elliott, recently with the Boulder Country Treasurer’s Office (Colorado).

    Steve is president of Constant Improvement Consulting, Inc. based in Longmont, Colorado. He has decades of experience in the public, private, and nonprofit sectors as a manager, business owner, trainer, and consultant.

    He was instrumental in the creation and adoption of Colorado House Bill 11-1212, which officially made Colorado a Lean Government.

    When Steve was at the Treasurer’s Office they returned tens of thousands of dollars to the County as a result of their lean management innovations.

    Course description and information:

    http://www.sieralearn.com/free-webinar-kicks-off-lean-government-webinar-series

    Please go to the above link at least 30 minutes before the start of the presentation. The registration procedure will take only a minute or two, and you will be sent a link to the presentation.

    Posted in America 3.0, Big Government, Civil Society, Management | 6 Comments »

    Seriously Pathetic

    Posted by David Foster on 7th July 2013 (All posts by )

    In 2008, Michael and Xochi Birch sold Bebo, which is some kind of social networking company, to AOL—for 850 million dollars.

    Things didn’t go too well, and in 2010, AOL sold Bebo to a private equity firm for 10 million dollars.

    Things continued to not go so well, and Michael Birch has bought the company back–for 1 million dollars. He doesn’t know exactly what he’s going to do with Bebo now, but plans to have fun trying to reinvent it.

    I think what often happens in such situations is this: if a company is so clueless about its market that it fails to either develop internally the product for which there is a critical emerging need…or to acquire the product externally before the prices go out of sight…then it winds up paying an exorbitant price. The price will be one that makes sense economically only if the acquiring company is able to obtain truly stellar results on its new property…but typically, the same cluelessness that led to the product shortfall in the first place will also lead to an inability to successfully integrate or even effectively manage the acquisition.

    Posted in Business, Management, Tech | 8 Comments »

    Worthwhile Reading & Viewing

    Posted by David Foster on 30th June 2013 (All posts by )

    What archaeologists are finding in the lost city of Heracleion

    10 qualities of exceptional interviewers

    Is too much collaboration hurting worker productivity?

    12 old words that survived by getting fossilized in idioms

    Some photos of the New York subway being built

    How typeface can influence the believability of written communications

    How a kids’ clothing consignment business…started as a small home business and now operating in 22 states…is being threatened by mindless government regulation

    Speaking of government regulation…Indiana man faces possible jail time for nursing a bald eagle back to health

    Another fine photo essay from Bill Brandt: in the footsteps of Hemingway

    Paintings that look like photos. More photo-realistic artwork here. (via Don Sensing)

    On the failure to learn from history

    Posted in Big Government, Business, History, Human Behavior, Leftism, Management, Photos | 4 Comments »

    RERUN–Be Afraid

    Posted by David Foster on 25th June 2013 (All posts by )

    (Originally posted in July 2009. I’m re-running it now for obvious reasons)

    Many Unhappy Returns, by Charles Rossotti, is the story of Rossotti’s experiences as IRS Commissioner, which position he held from 1997-2002–having previously spent his career in the private sector and been cofounder & chairman of American Management Systems Inc. I picked the book up for a dollar at a library book sale, thinking it might offer an interesting case study on the challenges of managing and improving a very large bureaucratic organization.

    And I’m sure it does. On the very first pages of the book, though, are some stories which are very relevant to our current political situation.

    During the 1990s, public dissatisfaction with the IRS reached new levels, resulting in a series of Congressional hearings beginning in 1996. Rossotti excerpts some of the stories told by taxpayers (and IRS agents) at these hearings, and grim reading they are indeed.

    For example, a woman from California told of her 14 year struggle to pay off a tax debt incurred by her first husband prior to their 1983 divorce. “Kafka himself could not have invented this real-life tale of an ordinary person caught in a maddening bureaucratic maze with no maps, no exits, and no explanation,” says Rossotti. Her ex-husband had gotten all the notices, but she alone had gotten the bill for interest on the unpaid balance. When she tried to pay it, the IRS repeatedly refused to accept payment, telling her she didn’t owe anything and even sending her refunds. But years later, the IRS threatened to put a lien on her new husband’s home because of her prior “debt.” She paid it but five years later, her second husband’s salary was levied for payment on the same “debt,” leaving the couple with only $18 a week to live on.

    “The IRS is judge, jury, and executioner–answerable to none” said the woman in her Congressional testimony.

    An IRS agent–the only one willing to testify without concealing her identity–claimed that it was an intentional policy of IRS management to pick on weak taxpayers to make the IRS’s statistics look better. She said that “to the IRS, vulnerabilities can be based on a perception that the taxpayer has limited formal education, has suffered a personal tragedy, is having a financial crisis, or may not necessarily have a solid grasp of their legal rights”…that “if the taxpayer does object or complain, every effort will be made by the IRS to run up their tax assessment, deplete their financial resources, and force them to capitulate to IRS demands.”

    A Newsweek story said that “According to more than a dozen agents…(management) pushed for ever more property seizures from delinquent tapayers, even though the IRS manual says such moves should be a final resort, riding roughshod in some cases over their rights to appeal. They closed cases an sometimes slapped on levies and liens prematurely–which boosted the enforcement stats that the IRS rewards with cash awards for top officers.” There’s lots more of this stuff in Rossotti’s book.

    Government is inherently dangerous. As a Delaware construction contractor said during the hearings, “believe me, when the resources of the government are unleashed on you, you are in trouble, no matter how good your case.” And this point is not specific to the IRS.

     Reading these stories reminded me of a passage that has been attributed to George Washington:Government is not reason, it is not eloquence, it is force; like fire, a troublesome servant and a fearful master. Never for a moment should it be left to irresponsible action.It’s not clear that this quote really came from George Washington–but whoever said it, it captures an important truth. Yes, government is essential, but it is inherently very dangerous and there must be constant vigilance to keep this danger in check. Yet the dangers to individuals that come from a tremendous expansion of government seem entirely invisible to the “progressives” who currently dominate our national politics. This despite the fact that over the last century, hundreds of millions of people have been killed by their own governments and billions more subjected to lifetimes of unnecessary poverty.

    And I would assert that the organizational and systems issues involved in enforcing the IRS regulations fairly, although not simple, are far less complex than those involved in a national healthcare program. And the time criteria are much more stringent in healthcare–a delay of a week usually won’t matter in an IRS case; in a healtcare situation, it may literally be a matter of life and death.

    In virtually every aspect of American life, we are now seeing efforts to vastly expand government power, while ignoring or minimizing the dangers associated with such expansion.

    Original CB discussion thread here

    Posted in Civil Liberties, Management, Political Philosophy, Politics, USA | 6 Comments »

    RERUN–The Age of Blather

    Posted by David Foster on 22nd June 2013 (All posts by )

    (Originally posted in May 2009. A recent post by Captain Capitalism reminded me of my post about Mindless Verbal Taylorism…while searching for it, I came across this post, which indeed seems due for a rerun.)

    Diana Senechal, guest-blogging at Joanne Jacobs, tells the following story:

    I run two lunchtime literature clubs at my school. The fourth graders just finished reading A Little Princess. During our discussions, I encourage delving into the text and discussing it on its own terms. I am not a big fan of “accountable talk,” “making predictions,” “making connections,” and so forth when they assume precedence over the subject matter itself.

    One student brought up the part where Sara spends her money on hot buns for a beggar girl. “She made a self-to-self connection,” the student said. I felt sorry that students are learning such ghastly terminology, however well meant. Why are students not encouraged to say, “She understood how the girl felt” or “She felt compassion for the girl”?

    Why, indeed? It’s bad enough to impose verbiage like “self-to-self connection” on college students: to do it to a 4th grader is really unforgiveable. It adds nothing to understanding–indeed, it very likely interferes with the true understanding and appreciation of the story by creating an emotional distance.

    Strange, awkward, and unnatural verbal formulations, used ritualistically and without contributing to understanding, are becoming increasingly common in our society: although this phenomenon is arguably at its worst in education, it is by no means limited to that field. These word and phrases are not similar to the traditional jargon of a profession or trade. “Self-to-self connections” is not the same kind of thing as “amp” or even “kanban.”

    Mark Helprin, in an essay about art, writes about people who are so obsessed with their tools and techniques that they lose sight of the substance of the work:

    Modernism is by necessity obsessed with form, much like a craftsman obsessed with his tools and materials. In my climbing days we used to call people like that “equipment weenies.” These days you can see it in fly-fishing, where not a few people go out once a year with $5,000-worth of equipment to catch (maybe) $5-worth of fish. What should have been the story of the man, the stream, and the fish becomes instead a romance between the man and his tools. In this century the same thing happened in art.

    Athough Helprin is talking here about art, the same excessive focus on methodology is visible in other areas as well.

    Who are the people who perpetrate and cling to these fake-erudite verbal formulations? I suspect that they are generally those who have an education which is extensive–in terms of total years spent in the classroom–but not deep.

    Bruce Fleming, who teaches English at the U.S. Naval Academy, has some interesting thoughts on the teaching/misteaching of literature, which are highly relevant to this topic. Excerpt:

    Literary study in the classroom nowadays offers views of the work of literature rather like the views of Mt. Fuji in Hokusai’s celebrated spring series on “100 Views of Mt. Fuji.” In each view, the mountain, while present, is frequently tiny and in a corner, viewed (in the most famous print) beyond the crest of a wave whose foam seems to make fingers at the edges, or (in another) through a hoop that a barrel-maker is shaping.

    Those are not the front-and-center shots on a postcard. They foreground the angle of the mountain, its treatment, much the way a literature professor does with a funky viewpoint that got him or her tenure. Of course the postcard shot has its own point, but in a real sense it’s more neutral than the angled treatment. It doesn’t push our noses in its approach: It defers to the object it is depicting. We’re far more conscious of the treatment of Mt. Fuji in an artsy Hokusai print than we are in a postcard shot. And that means, we’re all but compelled to see the mountain the way it’s presented, rather than being able to work on our own presentation. That’s why literary studies is intrinsically coercive.

    I think the blatherification of America is an important issue. It inhibits clear thought. It is harmful to the enjoyment of art and of literature. It is destructive of intelligent policy-making in both business and government.

    What say you? Do you agree that blatherification is happening and that it matters? Thoughts on causes and possible countermeasures?

    Original CB discussion thread here.

    Posted in Academia, Arts & Letters, Management, USA | 21 Comments »