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  • Archive for the 'Management' Category

    Diseconomies and Dysfunctions of Scale

    Posted by David Foster on 24th November 2019 (All posts by )

    Why are short-line railroads able to survive, and sometimes thrive, in an industry dominated by a few giant companies?  An article at Railway Age suggests some answers. These points are relevant, I believe, in other industries as well.  To excerpt summarize the points in the article:

    –Short lines are formed with a much lower manpower cost structure that includes more-flexible work rules.

    Short lines are very effective at negotiating service and shared capital project business deals with their face-to-face local customers. That was always a hurdle when the corporate headquarters of a railroad like Conrail was hundreds of miles away in Philadelphia compared to sites like Cairo, Ill., or Kewaunee, Wisc. 

    –Short lines are focused directly upon industrial development along their limited geography service tracks. They are not distracted by competitive locations that want their location to be the next job creation site.

    –Short lines have a simple way to calculate customer profitability as a guide for managing their service responsiveness.

    –There is an ease of doing business with short lines. The difficulty of transacting business has long been an internally acknowledged Class I issue. Local small railroads have successfully addressed this with local managers dealing one-on-one with local customers.

    –The short line railroads have worked to grab growth opportunities. They developed local community and state railroad DOT programs that gave them access to development and rehabilitation capital.

    Most of these advantages could, in principal, be achieved by the large railroads through improved organization design and better internal measurements/incentives. And similarly in other industries…but it rarely seems to actually work out that way.  Re the profitability-measurements point, the article notes that Class I’s have tried for decades to calculate and then share with their remote train crews information about branch line financials. The Class I’s even tried to create regional cluster profit centers that would better focus attention on local branch line customers and new business development.  The results were at best a mixed success.

    and hence

    Selling off or otherwise leasing “troubled lines” to a smaller company typically became the favored big railroad divestiture business process.

    Any thoughts on similar factors at work in other industries?

    Posted in Business, Management, Transportation | 17 Comments »

    Regular and Irregular Channels

    Posted by David Foster on 18th November 2019 (All posts by )

    Some of the witnesses at the ongoing Congressional hearings seem quite disturbed at the use of “irregular channels” for decision-making and implementation, supplementing and bypassing the “regular” channels. (here, for example) Reminds me of a Churchill story…

    In February 1940, Churchill was not yet Prime Minister but rather was First Lord of the Admiralty. He received a letter from a father disappointed that his son had been turned down for a commission, despite his qualifications and his record. Churchill suspected class prejudice and wrote to the Second Sea Lord, saying that “Unless some better reasons are given to me, I shall have to ask my Naval Secretary to interview the boy on my behalf.”

    The Second Sea Lord, unhappy with the meddling from above, responded to the effect that it was inappropriate to question the decisions of “a board duly constituted.” To which Churchill replied:

    I do not at all mind “going behind the opinion of a board duly constituted” or even changing the board or its chairman if I think injustice has been done. How long is it since this board was re-modeled?… Who are the naval representatives on the board of selection? Naval officers should be well-represented. Action accordingly. Let me have a list of the whole board with the full record of each member and his date of appointment.

    General Louis Spears was present when Churchill, after taking the above hard-line, saw the candidates. After chatting with the boys, Churchill explained the matter to Spears:

    “They have been turned down for the very reason that should have gained them admission. They are mad keen on the Navy, they have it in their blood, they will make splendid officers. What could be better than that they should rise higher than their fathers did? It is in their fathers’ homes that they grew to love the Navy, yet they have been turned down because their fathers came from the lower deck,” and he pouted and glared with fury.

    Read the rest of this entry »

    Posted in Britain, Current Events, History, Management, Miscellaneous, Organizational Analysis, Politics, Trump | 16 Comments »

    Book Review: Red Plenty, by Francis Spufford

    Posted by David Foster on 27th October 2019 (All posts by )

    Red Plenty by Francis Spufford

    —-

    The idea of centralized economic planning is a very seductive one.  It just seems to make sense that such planning would lead to more efficiency…less waste…and certainly less unnecessary human suffering than an environment in which millions of decision-makers, many of them in competition with one another, are making their own separate and uncoordinated decisions, resulting in pointless product redundancy, economic cycles driving unemployment, and lots of other bad things.

    Red Plenty…part novel, part nonfiction…is about the Soviet Union’s economic planning efforts as seen from the inside.  The characters include factory managers, economic planners, mathematicians, computer scientists, and “fixers.”  Published in 2010, Red Plenty is now quite timely in view of the current vogue for socialism in American political discussion.

    Marx drew a nightmare picture of capitalism, when everything was produced only to be exchanged; when true qualities and uses dropped away, and the human power of making and doing itself became only an object to be traded.  The alternative? A dance to the music of use, where every step fulfilled some real need, did some tangible good, and no matter how fast the dancers spun, they moved easily, because they moved to a human measure, intelligible to all, chosen by all.

    How might this actually be accomplished? Stalin mocked the idea that planning an economy required much in the way of intellectual depth or effort.  Get the chain of command right, Stalin seemed to be saying, build it on the right ideological principles, and all that was left was a few technical details, a little bit of drudgery to be carried out by the comrades at Gosplan with the adding machines.  But it turned out to be a little more complicated than that.

    Maksim Maksimovich Mokhov is one of the lords of the Gosplan file room, in which there are hundreds of folders, each tracking the balances and plans for a particular commodity. A good man, who takes his job seriously, Maksim has risen as high as you could go at Gosplan before the posts become purely political appointments..his was the level at which competence was known to reach its ceiling…Not just a mechanical planner, he realizes that the file folders  cast only the loosest and most imperfect net over the prodigious output of the economy as the whole, and has worked to understand the stress points, the secret path dependencies of the plan.  His specific responsibility is the chemical and rubber sector, and he is particularly concerned, at the time when he enters the story, about problems in the viscose subsector.

    Arkhipov, Kosoy, and Mitrenko run one of the most important plants in the viscose supply chain, and they are three worried men.  The plan goals aren’t being met, and they know that the path to career death is separated by only a few percentage points of plan fulfillment from the other one, the upward path, the road to glory and local fame. (A couple of decades earlier, it wouldn’t have been just career death on the table.) This plant makes two viscose-derived products, yarn and tire cord.  The yarn line works fine, the tire cord line, not so much…but no problems with the machine can be found.  There is no prospect of getting a replacement machine in any relevant timeframe.

    Arkhipov and his associates come up with a plan to solve their problem…read the book to see what it is and how it turns out.

    Nikita Khrushchev, in September 1959, told a crowd that “the dreams cherished for ages, dreams expressed in fairytales which seemed sheer fantasy, are being translated into reality by man’s own hands.”  Modern technology, combined with the benefits of a planned economy would make it possible.

    Because the whole system of production and distribution in the USSR was owned by the state, because all Russia was (in Lenin’s words) ‘one office, one factory’, it could be directed, as capitalism could not, to the fastest, most lavish fulfillment, of human needs.  

    The American exhibition in Moscow in mid-1959 (site of the “kitchen debate” between Khrushchev and Nixon) was attended by 3 million Soviets (including some of the characters in this book), and although many of them thought that the American claims of broad-based prosperity were exaggerated or worse, the experience surely helped feed the longing for a better life for the Soviet Union’s ordinary people.

    Leonid Vitalevich Kantorovich pioneered the application of mathematics to the optimization of economic activities…these methods surfaced as a possible toolkit for the planning organizations circa 1960. Could these methods help achieve Khrushchev’s stated goal of broad-based prosperity?

    For example, consider several factories, producing a common set of products but with different efficiency characteristics.  Which products should be made by which factories in order to optimize overall efficiency? A set of equations can be constructed representing the constraints that must be observed–labor, machine utlization, etc–and the relative weighting of the variables to be optimized.  Although these techniques have been used to a considerable degree in capitalist countries, they would seem tailor-made for a starring role in a planned economy.  Selling the new methods in the Soviet Union, though, could be tricky:  the linear-programming term “shadow prices”, for example, sounded like something that might have politically-dangerous overtones of capitalism!

    One of the first applications involved potatoes, the distribution of same. The BESM (computer) is using Leonid Vitalevich’s shadow prices to do what a market in potatoes would do in a capitalist country–only better. When a market is matching supply with demand, it is the actual movement of the potatoes themselves from place to place, the actual sale of the potatoes at ever-shifting prices, which negotiates a solution, by trial and error.  In the computer, the effect of a possible solution can be assessed without the wasteful real-world to-ing and fro-ing, and because the computer works at the speed of flying electrons rather than the speed of a trundling vegetable truck, it can explore the whole of the mathematical space of possible solutions, and be sure to find the very best solution there is, instead of settling for the good-enough sollution that would be all there was time for, in a working day with potatoes to deliver.

    And even in the planned Soviet economy, there is still a market in potatoes, right here in Moscow, the leftover scrap of capitalism represented by the capital’s collective-farm bazaars, where individual kolkhozniks sell the product from their private plots…The market’s clock speed is laughable.  It computes a the rate of a babushka in a headscare, laboriously breaking a two-rouble note for change and muttering the numbers under her breath…No wonder that Oscar Lange over in Warsaw gleefully calls the marketplace “a primitive pre-electronic calculator.”

    So put the BESM to work minimizing distance that the potatoes have to travel..a proxy for efficiency and freshness:  price is not a consideration, since the state selling price of potatoes has been fixed for many years.  But BESM can only work with abstract potatoes: Not, of course, potatoes as they are in themselves, the actual tubers, so often frost-damaged or green with age or warty with sprouting tublices–but potatoes abstracted, potatoes considered as information, travelling into Moscow from 348 delivering units to 215 consuming organizations…The economists recognize the difficulty of getting a computer model to mirror the world truly.  They distinguish between working at zadachi, ‘from the problem’, and of fotografii, ‘from the photograph’…This calculation, alas, is from the photograph.  It deals with potato delivery as it has been reported to Leonid Vitalevich and his colleagues.  There has been no time to visit the cold-stores, interview the managers, ride on the delivery trucks. But the program should still work.

    The author notes that “the idea that the computer had conclusively resolved the socialist calculation debate in socialism’s favour was very much a commonplace of the early sixties.”

    But despite all the planning paperwork, despite the attempts at computerization, people like Chekuskin remain essential to keep the Soviet economy functioning at all.  He is a fixer, he works the system to ensure that his customers–factories, for the most part–can get the parts and materials they need in order to keep operating.  Before the revolution, he was a salesman: now, the economic problem is not selling, but buying.  Chekuskin explains what a real salesman was, back in the day:

    You’re thinking of some fellow who works in a sales administration, sits by his phone all day long like a little king, licks his finger when he feels like it, and says, “You can have a litttle bit”…That’s not a salesman.  You see, the world used to be the other way up, and it used to be the buyers who sat around examining their fingernails, hard enough as that is to imagine.  A salesman was a poor hungry bastard with a suitcase, trying to shift something that people probably didn’t want, ’cause back in those days, people didn’t just get out the money and buy anything they could get their hands on.  They had to be talked into it.”

    But with Communism, the things changed.  Back then, people didn’t want to buy.  Now, they don’t want to sell.  There’s always that resistance to get past.  But the trick of it stays the same:  make a connection, build a relationship.

    Volodya, is a young propagandist recently assigned to the huge locomotive plant in Novocherkassk, a dismal town that also features a university.  Unfortunately, it was classified by the planners as a “college town”, in need of the calorific intake required to lift pencils and wipe blackboards, but there were forty thousand people living and working in the industrial zone out by the tracks now, and between the students and the loco workers, a locust would have been hard put to it to find a spare crumb. White bread was a distant memory, milk was dispensed only at the head of enormous queues.  Sausages were as rare a comets.  Pea soup and porridge powered the place, usually served on half-washed plates.

    Eventually, people can’t stand it anymore–and decisions by two separate planning organizations have the result that on the very same day, food prices are increased and so are the production quotas at the locomotive factory.   There is a raucous mass protest, featuring signs like MEAT, BUTTER, AND PAY and CUT UP KHRUSHCHEV FOR SAUSAGES.  The loco plant manager, Korochkin, does not handle the situation well, and the rage grows.

    The ensuing catastrophe is vividly described as it is observed by the horrified Volodya.  Troops open fire on the protestors:  26 people are killed an 87 wounded.  Death sentences and long prison terms are handed down.

    This was a real event:  it happened in 1962.  News about the events did not appear in the state-controlled press for thirty years.

    Read the rest of this entry »

    Posted in Book Notes, Capitalism, Deep Thoughts, Economics & Finance, Leftism, Management, Markets and Trading, Russia, Systems Analysis, Tech | 37 Comments »

    Sputnik Anniversary Rerun–Book Review: Rockets and People

    Posted by David Foster on 4th October 2019 (All posts by )

    Today being the 62nd  anniversary of the Sputnik launch, here’s a rerun of a post about a very interesting book.

    Rockets and People, by Boris E Chertok

    Boris Chertok’s career in the Soviet aerospace industry spanned many decades, encompassing both space exploration and military missile programs. His four-volume memoir is an unusual document–partly, it reads like a high school annual or inside company history edited by someone who wants to be sure no one feels left out and that all the events and tragedies and inside jokes are appropriately recorded. Partly, it is a technological history of rocket development, and partly, it is a study in the practicalities of managing large programs in environments of technical uncertainty and extreme time pressure. Readers should include those interested in: management theory and practice, Russian/Soviet history, life under totalitarianism, the Cold War period, and missile/space technology. Because of the great length of these memoirs, those who read the whole thing will probably be those who are interested in all (or at least most) of the above subject areas. I found the series quite readable; overly-detailed in many places, but always interesting. In his review American astronaut Thomas Stafford said “The Russians are great storytellers, and many of the tales about their space program are riveting. But Boris Chertok is one of the greatest storytellers of them all.”  In this series, Chertok really does suck you into his world.

    Chertok was born in Lodz, Poland, in 1912: his mother had been forced to flee Russia because of her revolutionary (Menshevik) sympathies. The family returned to Russia on the outbreak of the First World War, and some of Chertok’s earliest memories were of the streets filled with red-flag-waving demonstrators in 1917. He grew up on the Moscow River, in what was then a quasi-rural area, and had a pretty good childhood–“we, of course, played “Reds and Whites,” rather than “Cowboys and Indians””–swimming and rowing in the river and developing an early interest in radio and aviation–both an airfield and a wireless station were located nearby. He also enjoyed reading–“The Adventures of Tom Sawyer and Huckleberry Finn met with the greatest success, while Harriet Beecher Stowe’s Uncle Tom’s Cabin gave rise to aggressive moods–‘Hey–after the revolution in Europe, we’ll deal with the American slaveholders!” His cousin introduced him to science fiction, and he was especially fond of Aelita (book and silent film), featuring the eponymous Martian beauty.

    Chertok remembers his school years fondly–there were field trips to study art history and architectural styles, plus a military program with firing of both rifles and machine guns–but notes “We studied neither Russian nor world history….Instead we had two years of social science, during which we studied the history of Communist ideas…Our clever social sciences teacher conducted lessons so that, along with the history of the French Revolution and the Paris Commune, we became familiar with the history of the European peoples from Ancient Rome to World War I, and while studying the Decembrist movement and 1905 Revolution in detail we were forced to investigate the history of Russia.” Chertok purused his growing interest in electronics, developing a new radio-receiver circuit which earned him a journal publication and an inventor’s certificate. There was also time for skating and dating–“In those strict, puritanical times it was considered inappropriate for a young man of fourteen or fifteen to walk arm in arm with a young woman. But while skating, you could put your arm around a girl’s waist, whirl around with her on the ice to the point of utter exhaustion, and then accompany her home without the least fear of reproach.”

    Chertok wanted to attend university, but “entrance exams were not the only barrier to admission.” There was a quota system, based on social class, and  “according to the ‘social lineage’ chart, I was the son of a white collar worker and had virtually no hope of being accepted the first time around.” He applied anyhow, hoping that his journal publication and inventor’s certificate in electronics would get him in.” It didn’t–he was told, “Work about three years and come back. We’ll accept you as a worker, but not as the son of a white-collar worker.”

    So Chertok took a job as electrician in a brick factory…not much fun, but he was soon able to transfer to an aircraft factory across the river. He made such a good impression that he was asked to take a Komsomol leadership position, which gave him an opportunity to learn a great deal about manufacturing. The plant environment was a combination of genuinely enlightened management–worker involvement in process improvement, financial decentralization–colliding with rigid policies and political interference. There were problems with absenteeism caused by new workers straight off the farm; these led to a government edict: anyone late to work by 20 minutes or more was to be fired, and very likely prosecuted. There was a young worker named Igor who had real inventive talent; he proposed an improved linkage for engine and propeller control systems, which worked out well. But when Igor overslept (the morning after he got married), no exception could be made. He was fired, and “we lost a man who really had a divine spark.”  Zero tolerance!

    Chertok himself wound up in trouble when he was denounced to the Party for having concealed the truth about his parents–that his father was a bookkeeper in a private enterprise and his mother was a Menshevik. He was expelled from the Komsomol and demoted to a lower-level position.  Later in his career, he would also wind up in difficulties because of his Jewish heritage.

    The memoir includes dozens of memorable characters, including:

    *Lidiya Petrovna Kozlovskaya, a bandit queen turned factory supervisor who became Chertok’s superior after his first demotion.

    *Yakov Alksnis, commander of the Red Air Force–a strong leader who foresaw the danger of a surprise attack wiping out the planes on the ground. He was not to survive the Stalin era.

    *Olga Mitkevich, sent by the regime to become “Central Committee Party organizer” at the factory where Chertok was working…did not make a good first impression (“had the aura of a strict school matron–the terror of girls’ preparatory schools”)..but actually proved to be very helpful to getting work done and later became director of what was then the largest aircraft factory in Europe, which job she performed well. She apparently had too much integrity for the times, and her letters to Stalin on behalf of people unjustly accused resulted in her own arrest and execution.

    *Frau Groettrup, wife of a German rocket scientist, one of the many the Russians took in custody after occupying their sector of Germany. Her demands on the victors were rather unbelievable, what’s more unbelievable is that the Russians actually yielded to most of them.

    *Dmitry Ustinov, a rising star in the Soviet hierarchy–according to Chertok an excellent and visionary executive who had much to do with Soviet successes in missiles and space. (Much later, he would become Defense Minister, in which role he was a strong proponent of the Soviet invasion of Afghanistan.)

    *Valeriya Golubtsova, wife of the powerful Politburo member Georgiy Malenkov, who was Stalin’s immediate successor. Chertok knew her from school–she was an engineer who became an important government executive–and the connection turned out to be very useful. Chertok respected her professional skills, liked her very much, and devotes several pages to her.

    *Yuri Gagarin, first man to fly in space, and Valentina Tereshkova, the first woman.

    *Overshadowing all the other characters is Sergei Korolev, now considered to be the father of the Soviet space program although anonymous during his lifetime.  Korolev spent 6 years in labor camps, having been arrested when his early rocket experiments didn’t pan out; he was released in 1944.  A good leader, in Chertok’s view, though with a bad temper and given to making threats that he never actually carried out.  His imprisonment must have left deep scars–writing about a field trip to a submarine to observe the firing of a ballistic missile, Chertok says that the celebration dinner with the sub’s officers was the only time he ever saw Korolev really happy.

    Chertok’s memoir encompasses the pre-WWII development of the Soviet aircraft industry…early experiments with a rocket-powered interceptor…the evacuation of factories from the Moscow area in the face of the German invasion…a post-war mission to Germany to acquire as much German rocket technology as possible…the development of a Soviet ballistic missile capability…Sputnik…reconnaissance and communications satellites…the Cuban missile crisis…and the race to the moon.

    Some vignettes, themes, and excerpts I thought were particularly interesting:

    Read the rest of this entry »

    Posted in Aviation, Big Government, Biography, Leftism, Management, Military Affairs, Russia, Society, Space, Tech | Comments Off on Sputnik Anniversary Rerun–Book Review: Rockets and People

    Summer Rerun — Book Review: Life in a Soviet Factory

    Posted by David Foster on 3rd August 2019 (All posts by )

    Bitter Waters: Life And Work In Stalin’s Russia by Gennady Andreev-Khomiakov

    A fascinating look at the Soviet economic system in the 1930s, as viewed from the front lines of that system.

    Gennady Andreev-Khomiakov was released from a labor camp in 1935, and was fortunate to find a job as a book-keeper in a sawmill. When the factory manager, Grigory Neposedov (a pseudonym) was assigned to run a larger and more modern factory (also a sawmill), he took Gennady with him.

    Although he had almost no formal education, Neposedov was an excellent plant manager. As Gennady describes him:

    He was unable to move quietly. Skinny and short, he moved around the plant so quickly that he seemed to be running, not walking. Keeping pace with the director, the fat chief mechanic would be steeped in perspiration…He rarely sat in his office, and if he needed to sign some paper or other, you had to look for him in the mechanic’s office, in the shops, or in the basement under the shops, where the transmission belts and motors that powered the work stations were located…This enthusiasm of his, this ability to lose himself completely in a genuine creative exertion, to give his all selflessly, was contagious. It was impossible to be around Neposedov without being infected by his energy; he roused everyone, set them on fire. And if he did not succeed in shaking someone up, it could unmistakely be said that such a person was dead or a complete blob.

    With his enthusiasm and dedication to his factory, Neposedov comes across almost as a Soviet version of Hank Reardon (the steel mill owner in Ayn Rand’s Atlas Shrugged), with this difference–Nepodesov could throw himself as enthusiastically into bureaucratic manipulation as into his technical and leadership work. All of his skills would be needed to make this factory a success.

    Although the sawmill had modern equipment, it was producing at only a fraction of its design capacity. One of the problems was energy: the plant was powered by a 200HP steam engine, and whoever had built the place had spent almost all of the budget on other equipment, leaving very little for the boiler. The original boiler that came with the plant turned out to be useless, and was replaced with a salvaged boiler..this worked, but was not in good shape and produced only about half the steam needed to run the engine–and the plant–at full power.

    At this point in history, and in this particular corner of the Soviet economy, the amount that was available to be paid to workers was strongly related to the output of a plant. And workers at this sawmill were becoming increasingly desperate, on the point of actual starvation. Neposedov, aided by Gennady, pusued a three-part program of improvement: (1)fix the boiler, (2)improve the workflow (as we would now call it) within the plant, and (3)put in place an incentive system for the workers.

    New “pipes” for the boiler were somehow obtained (I think “pipes” in this context refers to boiler flues) and the workflow was continuously analyzed and improved. The most interesting part of the story, though, deals with the incentive program. The plant manager apparently had discretion to put such programs in place as long as he could pay for them out of increased output. (As the book describes it, there were extensive accounting systems in place throughout the Soviet economy–indeed, Lenin had once gone so far as to say “Socialism is accounting.” The accounting seems a bit similar to what you would find in a multidivisional American company with extensive intracompany transactions.) The incentive system that Gennady designed for this sawmill was based on very sharp pay increases for the workers when production exceeded target–so that, for example, you could double your pay by producing only 25% over target. (Actually, the plan paid collectively by group and by shift, rather than on an individual basis.)

    The incentive plan, together with the repaired steam boiler, resulted in very high production–140%, then 160% of target–and correspondingly high pay for the workers. Gennady had some nervous moments when he feared he had made a mistake in the calculations and the cost of the additional wages would exceed the amount generated by the new production….a mistake like this could easily have landed him back in Siberia, or worse. But it turned out that the new system was indeed sustainable.

    The local Communist Party leadership, while pleased with the increased production, was disturbed that the propaganda buzzwords of the day were not being implemented. “Socialist competition” was hot at the time, and the Party organizer insisted on competition at the individual worker levels, not just the group and shift level.

    Read the rest of this entry »

    Posted in Big Government, Book Notes, Business, Economics & Finance, Leftism, Management, Russia | 4 Comments »

    Manufacturing in the USA

    Posted by David Foster on 9th June 2019 (All posts by )

    A website devoted to that topic:  Reshoring Manufacturing

    Posted in Business, International Affairs, Management, USA | 13 Comments »

    Before D-Day, There Was Dieppe

    Posted by David Foster on 1st June 2019 (All posts by )

    June 6 will mark the 75th anniversary of the Normandy Invasion.  Most Americans surely have at least some knowledge of this event…but relatively few are aware that there was an earlier amphibious assault on occupied Europe. The attack on the French port of Dieppe took place on August 19, 1942. The objectives were twofold. First, the attack was intended as kind of a “feasibility test” for the large-scale invasion which was to take place later. As stated by General Sir Alan Brooke, “If it was ever intended to invade France it was essential to launch a preliminary offensive on a divisional scale.” Second, the attack was intended to convince Hitler that an invasion was more imminent than it in fact was, thereby leading to the diversion of German forces from other areas.

    The troops assigned to Dieppe were mostly Canadians–5000 of them. There were also British commandos and a small number of American Rangers. Eight destroyers were assigned to the operation, along with 74 Allied air squadrons.

    The attack was a disastrous failure. In the words of military historian John Keegan: “When the badly shocked survivors of that terrible morning were got home and heads counted, only 2,110 of the 4,963 Canadians who had set sail the day before could be found. It became known later that 1,874 were prisoners, but of these 568 were wounded and 72 were to die of their wounds, while 378 of those returning were also wounded. Sixty-five percent of the Canadians engaged had therefore become casualties, almost all of them from the six assaulting infantry battalions, a toll which compared with that of July 1st, 1916, first day of the Battle of the Somme and blackest in the British army’s history. The 2nd Canadian Division had, for practical purposes, been destroyed…Strategic as well as human criteria applied in measuring the scale of the disaster. All the tanks which had been landed had been lost…lost also were 5 of the 10 precious Landing Craft Tank. And, auguring worst of all for the future, the damage had been done not by hastily summoned reinforcements, but by the forces already present; the 3 Canadian battalions which had stormed the central beach had been opposed by a single German company–at odds, that is, of 12 to 1…” If one defending unit could stop an attacking force with 12 times the numbers, a successful invasion would be impossible. Keegan: “(the disparity between the power of the attack and the defense) clearly could not be overcome merely by increasing the numbers of those embarked for the assault. that would be to repeat the mistakes of the First World War, when the solution of greater numbers resulted arithmetically in greater casualties for no territorial gains.”

    Captain (later Vice-Admiral) John Hughes-Hallett summarized the lessons of the failure in a report written shortly after the fact. To quote Keegan once again: “‘The lesson of Greatest Importance,’ his report capitalized and italicized, “Is the need for overwhelming fire support, including close support, during the initial stages of the attack,’ It should be provided by ‘heavy and medium Naval bombardment, by air action, by special vessels or craft’ (which would have to be developed) ‘working close inshore, and by using the firepower of the assaulting troops while still seaborne.’”

    The lessons of Dieppe were taken seriously. Keegan goes on to describe the naval firepower assigned to the actual D-day landings carried out by Canadians at Juno Beach: “Heaviest and furthest out were the two battleships Ramillies and Warspite…They both mounted four 15-inch guns and there were two more in Roberts, their accompanying monitor. Their chief task was to engage the large-calibre shore batteries between the Orne and the mouth of the Seine, but so great was their range–over eighteen miles–that they could in emergency be talked in on any target in the British bridgeheads…Immediately port and starboard of the lowering position was disposed a line of twelve cruisers, the smallest, like Diadem, mounting eight 5.25 inch guns, the largest, like Belfast, twelve 6-inch. Both were covering the Canadian beaches…In front of the Canadian lowering position manoeuvred the supporting destroyers, eleven for the Juno sector…And immediately in ahead of the assault-wave infantry was deployed a small fleet of support landing-craft: eight Landing Craft Gun, a sort of small monitor mounting two 4.7 inch guns; four Landing Craft Support, bristling with automatic cannon; eight Landing Craft tank (Rocket), on each of which were racked the tubes of 1,100 5-inch rockets, to be discharged in a single salvo; and eighteen Landing Craft Assault (Hedgerow), which were to fire their loads of twenty-four 60-lb bombs into the beach obstacles and so explode as many as possible of the mines attached to them.”

    In addition to the need for very heavy naval firepower, the D-day planners learned another lesson from Dieppe: rather than immediately seizing a port, or landing in close proximity to one, they avoided ports altogether, landing supplies initially over an open beach and leaving the capture of a port for a later phase in the operation.

    Keegan quotes are from his book, Six Armies in Normandy.

    There is much talk in management and consulting circles these days about the need for organizations to “embrace failure”…much of this talk is fairly glib and does not always consider that certain kinds of failures are truly catastrophic from a human/strategic/economic point of view and are indeed worthy of stringent efforts to prevent their occurrence.  When failures–catastrophic or otherwise–do occur, it is incumbent on responsible leadership to seriously analyze the lessons to be learned and to apply that knowledge diligently.  In the case of Dieppe, that work does indeed appear to have been done.

    Posted in Britain, France, Germany, History, Management, Military Affairs, USA | 53 Comments »

    Book Review: The Caine Mutiny

    Posted by David Foster on 18th May 2019 (All posts by )

    The Caine Mutiny by Herman Wouk

    —-

    (reposted in honor of Herman Wouk, who died yesterday at the age of 103)

    Just about everyone has seen the movie based on this book, featuring Humphrey Bogart’s famous performance as Captain Queeg.  The movie is indeed excellent–the book is even better, and contains a lot that is absent from the film.  And while the film ends basically after the court-martial scene, the book continues to follow the USS Caine and  key characters for the duration of the war.  In this review, I won’t worry about spoilers re plot elements that were included in the movie, but will try to minimize them as far as other aspects of the book are concerned. After summarizing the story, I’ll comment on some of the issue raised by the book. (A 2005 article, referencing The Caine Mutiny, refers to Wouk as “the first neoconservative.”)

    Lieutenant Commander Philip Queeg, a rigid and insecure man, is appointed during WWII to the command of Caine, a decrepit old destroyer-minesweeper…the ship and its slovenly-appearing crew are described as being part of the  “hoodlum navy.”  This is Queeg’s first command, and he is desperately concerned to make it a success, deeply afraid of making a mistake which will lead to his failure.  Ironically, it is specifically this fear of failure and perceived need for perfection which is responsible for many, perhaps most, of his troubles. When Caine runs aground the first time Queeg takes her out, he fails to submit the required grounding report for fear of higher authority’s reaction. When the ship cuts her own towline while assigned to target-towing duty, Queeg cannot make up him mind whether or not to attempt recovery of the drifting target–and radios in for instructions.  Incidents like these do not inspire confidence in Queeg on the part of his superiors.

    The officers and crew of Caine also lose confidence in the captain as his obsessive-compulsive behavior becomes increasingly problematic.  As a result of several incidents during combat, there are also concerns about Queeg’s personal courage. While no one aboard Caine likes Queeg once they get to know him, the captain’s most vocal critic is an officer named Thomas Keefer, an intellectual who is an aspiring novelist. Keefer has a cynical attitude toward the Navy, which he refers to as “a master plan designed by geniuses for execution by idiots,” and advises Willie Keith, a young officer who is his subordinate,  that “If you’re not an idiot, but find yourself in the Navy, you can only operate well by pretending to be one.”

    The ship’s executive officer is Steve Maryk. In civilian life a commercial fisherman, Maryk now hopes to make the Navy his career. Maryk is a fine seaman and a good leader, but not a highly-educated man–he is somewhat in awe of Tom Keefer’s intellectual attainments.

    In repeated conversations, Keefer tells Maryk that the captain must be mentally ill, using psychological jargon and concepts that Maryk does not pretend to understand. Maryk is concerned enough about Queeg’s behavior that he begins keeping a “medical log” on Queeg, with the idea of presenting this to higher authority if necessary and possible. The time seems right when Caine shares an anchorage with the battleship carrying Admiral Halsey:  Maryk takes his log, takes Keefer in tow, and heads over to the New Jersey to see if they can speak with the Admiral.  But Keefer, at the last moment, chickens out, asserting that Halsey, with his experience aboard large well-managed ships, would never be able to understand the state of things aboard a hoodlum-navy ship like Caine, and that raising the issue with him would only get the two of them in trouble.  Feeling unable to make the case without support, Maryk gives up on talking to Halsey and the two officers return to Caine.

    But soon thereafter, the old ship encounters a typhooon. Fleet course is 180 degrees, due south–away from the wind–and Queeg refuses to adopt the safer course of heading into the wind even though communication with other ships, as well as radar contact, has been lost.

    An unbelievably big gray wave loomed on the port side, high over the bridge. It came smashing down. Water spouted into the wheelhouse from the open wing, flooding to Willie’s knees. The water felt surprisingly warm and sticky, like blood. “Sir, we’re shipping water on the goddamn bridge!” said Maryk shrilly. “We’ve got to come around into the wind!”

    “Heading 245, sir.” Stilwell’s voice was sobbing. “She ain’t answering to the engines at all, sir!”

    The Caine rolled almost completely over on its port side.  Everybody in the wheelhouse except Stilwell went sliding across the streaming deck and piled up against the windows.  The sea was under their noses, dashing up against the glass.  “Mr Maryk, the light on this gyro just went out!” screamed Stilwell, clinging desperately to the wheel.  The wind howled and shrieked in Willie’s ears.  He lay on his face on the deck, tumbling around in salt water, flailing for a grip at something solid.

    Read the rest of this entry »

    Posted in Arts & Letters, Book Notes, History, Human Behavior, Management, Military Affairs, Nautical Book Project, Reruns, Transportation | 9 Comments »

    A Truly Courageous Business Decision

    Posted by David Foster on 7th April 2019 (All posts by )

    Today marks the 55th anniversary of IBM’s announcement of the System/360 line…which made obsolete virtually all of its then-existing products.  The 360 line established a common architecture for machines of widely-differing price and performance characteristics, with the individual product implementations of this architecture differing considerably.  The goal was compatibility, so that customers could upgrade without extensive rewriting of programs.  Consolidating IBM’s diverse computer systems into this single system architecture was a bold decision; truly, a bet-the-company decision: in the end, it paid off, with devastating consequences for the ‘Seven Dwarfs’ who were IBM’s competitors at the time…but the implementation was frighteningly stressful.  A good article on the project recently appeared in IEEE Spectrum.

    Tom Watson Jr, who ran IBM during this time period, discusses the 360 project extensively in his superb memoir, Father, Son, and Co.  I reviewed it here–highly recommended.

    Posted in Book Notes, Business, Management, Tech | 21 Comments »

    The 737 MAX and the Death of MIL-STD-499A SYSTEM ENGINEERING MANAGEMENT

    Posted by Trent Telenko on 24th March 2019 (All posts by )

    One of the life experiences that comes with being a three decade veteran of military procurement is you have been around long enough to know where all the important bodies are buried — case in point, the Boeing 737 MAX.  What we are seeing in the two recent 737 MAX crashes is the the 20 year accumulation of professional toxic waste and decay in Boeing management that came with the first Clinton Administration’s cancellation of MIL-STD-499A SYSTEM ENGINEERING MANAGEMENT.

    737 MAX Jetliner in South West Airline Colors.

    I was e-mailed a link today to this Daily Kos post on the 737 MAX :

    Did Boeing ignore basic SW engineering principles?
    Thursday March 21, 2019 · 8:34 AM CDT

    and this passage just jumped out:

    A few software engineering principles:

    • Software engineering 101: validate your inputs.
    • Software engineering 201: when something goes wrong, provide useful data to the human.
    • Software engineering 301: for life-critical decisions, avoid single point of failure.

    Until today, I had thought that aviation was *good* at software engineering. But my faith is shaken by the New York Times description today of what went wrong with the Boeing 737 MAX.

    The above passes my professional “Bozo Test” of whether the poster knows what he is taking about regards software development.  He does.

    This is where that “military procurement life experience” I mentioned comes in.  The timing of the development of the 737 MAX MCAS software was roughly 20 years after the Clinton Administration cancelled the majority of Mil-Specs in the mid-1990’s and in particular the one for system engineering management.

    See:

    MIL-STD-499A (NOTICE 1), MILITARY STANDARD: SYSTEM ENGINEERING MANAGEMENT (27 FEB 1995) [NO S/S DOCUMENT]., MIL-STD-499A (USAF), dated 1 May 1974, is hereby canceled without replacement.

    Read the rest of this entry »

    Posted in Big Government, Crime and Punishment, Crony Capitalism, Current Events, Management, Military Affairs | 71 Comments »

    Worthwhile Reading

    Posted by David Foster on 27th January 2019 (All posts by )

    Why do journalists love twitter and hate blogging?

    The legacy of China’s Confucian bureaucracy.  Related:  my previous post on the costs of formalism and credentialism.

    Stroking egos does nothing for students — raising expectation does.

    Magic and Politics.

    Related to the above:  Witches: the new woke heroines.

    Legos, marketing, and gender.  “In 1981,” says a woman who as a child was pictured in a Legos ad back then, “LEGOs were ‘Universal Building Sets’ and that’s exactly what they were…for boys and girls. Toys are supposed to foster creativity. But nowadays, it seems that a lot more toys already have messages built into them before a child even opens the pink or blue package.”

    What will be the economic impact of China’s increasing emphasis on economic control and preferential treatment for state-run enterprises?

    What is the fastest the US economy can grow?

    Midnight at the Gemba. Kevin Meyer visits the night shift at the medical-device molding plant he was running.

    Posted in Blogging, Business, Capitalism, China, Culture, Economics & Finance, Management, Media, Religion | 12 Comments »

    2018 Reading

    Posted by David Foster on 14th January 2019 (All posts by )

    Some books that I read and liked over the last year…

    The Future is History, Masha Gessen.  Russia during the last days of Communism, during the transitional age, and under Putinism, viewed through the personal stories of numerous individuals.

    On Tangled Paths, Theodor Fontane.  The author has been called “The Jane Austen of Germany.”  In this novel,  it is the *male* protagonist who is under pressure to marry into money to save his family from financial disaster.  Good character development and a vivid portrayal of Berlin in the 1870s

    The Bounty:  The True Story of the Mutiny on the Bounty, Caroline Alexander.  The famous mutiny, the events leading up to it, and its aftermath.  A much more favorable interpretation of Captain Bligh’s character than the usual view.

    Red Star Under the Baltic, Victor Korzh.  Memoirs of a Soviet submarine commander who served in a little-known theater of WWII.  The author writes largely from an engineering perspective, and in addition to combat episodes he describes the remarkable efforts that were necessary to keep the submarine in operating condition–including such things as repurposing the bow thruster drives, while at sea, to replace the failed stern thruster drive system.

    A Pocketful of Stars and other books in the Applied Topology series by Margaret Ball, which I reviewed here.  Don’t let the Applied Topology tag scare you off; no math is required to read and enjoy.

    Born Fighting:  How the Scotts-Irish shaped America, James Webb.  Some interesting history and perspectives.  It’s worthwhile to read this book in conjunction with Thomas Sowell’s Black Rednecks and White Liberals.

    A Vagabond Journey Around the World, Harry Franck.  In 1904, this recent college graduate decided to travel around the world starting with no money at all.  (He modified this plan to carry enough cash to pay for photographic supples.)  Very interesting, though long.  Franck made and wrote about numerous other trips, including a 1930s visit to the Soviet Union which he documented in A Vagabond in Sovietland.

    A World on Edge:  The End of the Great War and the Dawn of a New Age, Daniel Schoenpflug.  The author paints the environment in the immediate aftermath of the War by telling the stories of individuals ranging from Harry Truman, Ferdinand Foch, Crown Prince Willhelm of Prussia, Arnold Schönberg, Kathe Kollwitz, Walter Gropius, and Ho Chi Min to many lesser-known individuals such as a former sailor of the German Navy and a Cossack woman named Marina Yurlova.

    Tragedy & Challenge:  An Inside View of UK Engineering’s Decline, Tom Brown.  The problems and fate of British manufacturing companies, as seen by an individual with extensive experience as an executive and board member.  There’s a review here.

    The Tyrant’s Daughter, J C Carleson.  Fifteen-year-old Laila lived a privileged life in her unnamed Middle Eastern country, where her father was absolute ruler.  Then he was killed in a coup, and she escapes with her mother and brother to a suburb of Washington DC…where she faces both the problems of fitting in at her new school and the haunting question of whether her father was indeed the monster that he is portrayed by the American news media.  This is positioned as a YA (teenager)  book, but is IMO also good reading for adults.  The author is a former CIA agent.

    The Theme is Freedom, John Dos Passos.  A collection of essays by this “Lost Generation” writer.  I quoted his observations about some of his Leftist comrades of the 1920s, here.

    Several more, which I may review individually and/or in a future batch.

    I’m currently reading a novel of the American Revolution called Celia Garth, which I learned about from a discussion at Bookworm.  It was highly recommended by Sgt Mom, among others.  I’m really liking it so far.

    Posted in Arts & Letters, Book Notes, Business, Civil Liberties, Europe, History, Management, Russia, War and Peace | 29 Comments »

    Sneaky Robots and Robotic Bureaucrats

    Posted by David Foster on 10th January 2019 (All posts by )

    An artificial intelligence program was assigned the task of turning satellite images into street maps.  It was graded by comparing reconstructed images (reconstructed from the map) and comparing them with the original; also, by the clarity of the street map.  The grades were used by the program to continually improved its performance.

    But what the program sneakily learned to do was to encode details of the original image into the street map, in a manner invisible to humans, thereby optimizing its grade on the reconstructed image…independently of how well the street map…which was the actual desired product…actually reflected the original image.

    Humans, also, often respond to incentives in ways very different from those expected by the designers of those incentives…as many creators of sales commission plans and manufacturing bonus plans have discovered.  Bureaucracies, especially, tend to respond to the measurements placed on them in ways that are not consistent with the interests of the larger organization or society that they are supposed to be serving.  See Stupidity, Communist-Style and Capitalist-Style and The Reductio ad Absurdum of Bureaucratic Liberalism.

    Posted in Big Government, Business, Deep Thoughts, Management, Russia, Tech | 1 Comment »

    Sputnik Anniversary Rerun – Book Review: Rockets and People

    Posted by David Foster on 4th October 2018 (All posts by )

    Today being the 61st  anniversary of the Sputnik launch, here’s a rerun of a post about a very interesting book.

    Rockets and People, by Boris E Chertok

    Boris Chertok’s career in the Russian aerospace industry spanned many decades, encompassing both space exploration and military missile programs. His four-volume memoir is an unusual document–partly, it reads like a high school annual or inside company history edited by someone who wants to be sure no one feels left out and that all the events and tragedies and inside jokes are appropriately recorded. Partly, it is a technological history of rocket development, and partly, it is a study in the practicalities of managing large programs in environments of technical uncertainty and extreme time pressure. Readers should include those interested in: management theory and practice, Russian/Soviet history, life under totalitarianism, the Cold War period, and missile/space technology. Because of the great length of these memoirs, those who read the whole thing will probably be those who are interested in all (or at least most) of the above subject areas. I found the series quite readable; overly-detailed in many places, but always interesting. In his review American astronaut Thomas Stafford said “The Russians are great storytellers, and many of the tales about their space program are riveting. But Boris Chertok is one of the greatest storytellers of them all.”  In this series, Chertok really does suck you into his world.

    Chertok was born in Lodz, Poland, in 1912: his mother had been forced to flee Russia because of her revolutionary (Menshevik) sympathies. The family returned to Russia on the outbreak of the First World War, and some of Chertok’s earliest memories were of the streets filled with red-flag-waving demonstrators in 1917. He grew up on the Moscow River, in what was then a quasi-rural area, and had a pretty good childhood–“we, of course, played “Reds and Whites,” rather than “Cowboys and Indians””–swimming and rowing in the river and developing an early interest in radio and aviation–both an airfield and a wireless station were located nearby. He also enjoyed reading–“The Adventures of Tom Sawyer and Huckleberry Finn met with the greatest success, while Harriet Beecher Stowe’s Uncle Tom’s Cabin gave rise to aggressive moods–‘Hey–after the revolution in Europe, we’ll deal with the American slaveholders!” His cousin introduced him to science fiction, and he was especially fond of Aelita (book and silent film), featuring the eponymous Martian beauty.

    Chertok remembers his school years fondly–there were field trips to study art history and architectural styles, plus a military program with firing of both rifles and machine guns–but notes “We studied neither Russian nor world history….Instead we had two years of social science, during which we studied the history of Communist ideas…Our clever social sciences teacher conducted lessons so that, along with the history of the French Revolution and the Paris Commune, we became familiar with the history of the European peoples from Ancient Rome to World War I, and while studying the Decembrist movement and 1905 Revolution in detail we were forced to investigate the history of Russia.” Chertok purused his growing interest in electronics, developing a new radio-receiver circuit which earned him a journal publication and an inventor’s certificate. There was also time for skating and dating–“In those strict, puritanical times it was considered inappropriate for a young man of fourteen or fifteen to walk arm in arm with a young woman. But while skating, you could put your arm around a girl’s waist, whirl around with her on the ice to the point of utter exhaustion, and then accompany her home without the least fear of reproach.”

    Chertok wanted to attend university, but “entrance exams were not the only barrier to admission.” There was a quota system, based on social class, and  “according to the ‘social lineage’ chart, I was the son of a white collar worker and had virtually no hope of being accepted the first time around.” He applied anyhow, hoping that his journal publication and inventor’s certificate in electronics would get him in.” It didn’t–he was told, “Work about three years and come back. We’ll accept you as a worker, but not as the son of a white-collar worker.”

    So Chertok took a job as electrician in a brick factory…not much fun, but he was soon able to transfer to an aircraft factory across the river. He made such a good impression that he was asked to take a Komsomol leadership position, which gave him an opportunity to learn a great deal about manufacturing. The plant environment was a combination of genuinely enlightened management–worker involvement in process improvement, financial decentralization–colliding with rigid policies and political interference. There were problems with absenteeism caused by new workers straight off the farm; these led to a government edict: anyone late to work by 20 minutes or more was to be fired, and very likely prosecuted. There was a young worker named Igor who had real inventive talent; he proposed an improved linkage for engine and propeller control systems, which worked out well. But when Igor overslept (the morning after he got married), no exception could be made. He was fired, and “we lost a man who really had a divine spark.”  Zero tolerance!

    Chertok himself wound up in trouble when he was denounced to the Party for having concealed the truth about his parents–that his father was a bookkeeper in a private enterprise and his mother was a Menshevik. He was expelled from the Komsomol and demoted to a lower-level position.  Later in his career, he would also wind up in difficulties because of his Jewish heritage.

    The memoir includes dozens of memorable characters, including:

    *Lidiya Petrovna Kozlovskaya, a bandit queen turned factory supervisor who became Chertok’s superior after his first demotion.

    *Yakov Alksnis, commander of the Red Air Force–a strong leader who foresaw the danger of a surprise attack wiping out the planes on the ground. He was not to survive the Stalin era.

    *Olga Mitkevich, sent by the regime to become “Central Committee Party organizer” at the factory where Chertok was working…did not make a good first impression (“had the aura of a strict school matron–the terror of girls’ preparatory schools”)..but actually proved to be very helpful to getting work done and later became director of what was then the largest aircraft factory in Europe, which job she performed well. She apparently had too much integrity for the times, and her letters to Stalin on behalf of people unjustly accused resulted in her own arrest and execution.

    *Frau Groettrup, wife of a German rocket scientist, one of the many the Russians took in custody after occupying their sector of Germany. Her demands on the victors were rather unbelievable, what’s more unbelievable is that the Russians actually yielded to most of them.

    *Dmitry Ustinov, a rising star in the Soviet hierarchy–according to Chertok an excellent and visionary executive who had much to do with Soviet successes in missiles and space. (Much later, he would become Defense Minister, in which role he was a strong proponent of the Soviet invasion of Afghanistan.)

    *Valeriya Golubtsova, wife of the powerful Politburo member Georgiy Malenkov, who was Stalin’s immediate successor. Chertok knew her from school–she was an engineer who became an important government executive–and the connection turned out to be very useful. Chertok respected her professional skills, liked her very much, and devotes several pages to her.

    *Yuri Gagarin, first man to fly in space, and Valentina Tereshkova, the first woman.

    *Overshadowing all the other characters is Sergei Korolev, now considered to be the father of the Soviet space program although anonymous during his lifetime.  Korolev spent 6 years in labor camps, having been arrested when his early rocket experiments didn’t pan out; he was released in 1944.  A good leader, in Chertok’s view, though with a bad temper and given to making threats that he never actually carried out.  His imprisonment must have left deep scars–writing about a field trip to a submarine to observe the firing of a ballistic missile, Chertok says that the celebration dinner with the sub’s officers was the only time he ever saw Korolev really happy.

    Chertok’s memoir encompasses the pre-WWII development of the Soviet aircraft industry…early experiments with a rocket-powered interceptor…the evacuation of factories from the Moscow area in the face of the German invasion…a post-war mission to Germany to acquire as much German rocket technology as possible…the development of a Soviet ballistic missile capability…Sputnik…reconnaissance and communications satellites…the Cuban missile crisis…and the race to the moon.

    Some vignettes, themes, and excerpts I thought were particularly interesting:

    Read the rest of this entry »

    Posted in Aviation, Big Government, Biography, Leftism, Management, Military Affairs, Russia, Society, Space, Tech, Transportation | 4 Comments »

    Humor…Machine and Human

    Posted by David Foster on 23rd September 2018 (All posts by )

    There have been some articles lately, in Financial Times and The Wall Street Journal for example, concerning efforts to give Artificial Intelligence systems something resembling a simulated sense of humor.

    Interesting research, perhaps, but at this juncture I’m less concerned above providing a sense of humor for AI systems than maintaining a sense of humor for human beings.  Several professional comedians have commented about the increasing difficulty of doing comedy in an environment of hysterical political correctness.  But even more important is the degree to which fear of denunciation and mobbing seems to be affecting personal life and workplace behavior.

    Effective organizations, at least in this country, have tended to involve a certain level of easy interaction–including kidding around–among people.  What happens when we lose this?

    I suspect that the productivity impact, although hard to measure directly, will be quite significant.  As will the impact on the happiness and mental health of individual humans.

    Posted in Business, Deep Thoughts, Human Behavior, Leftism, Management | 9 Comments »

    Summer Rerun: The Five-Pound Butterfly Revisited

    Posted by David Foster on 17th September 2018 (All posts by )

    Several years ago, the WSJ wrote about the tendency of many companies to do hiring based on a long string of highly-specific (and excessively-specific) requirements. One person interviewed remarked that “Companies are looking for a five-pound butterfly. Not finding them doesn’t mean there is a shortage of butterflies.”

    Since that article was written, the five-pound butterfly effect has probably gotten worse rather than better in the business world. (Until very recently–see below.)  But hunting for five-pound butterflies also seems to be increasingly affecting other areas of life, including college admissions and the search for love and marriage.

    First I’ll talk about the five-pound butterfly effect in a business context and then develop its applicability to other areas. The WSJ article mentioned a company that makes automobile bumper parts and was looking for a factory shift supervisor. They eliminated all candidates who didn’t have a BS degree, even though many had relevant experience, and also insisted on experience with the specific manufacturing software that was in use at the plant. It took six months to fill this job (during which time the position was being filled by someone who wouldn’t ultimately be chosen for it.) Another company, Wabtec, which makes components for railcars and buses, insisted on knowledge of a specific version of the computer-aided design system it uses, even though the differences between that version and the earlier version were not all that great.

    And as the article (which focused mainly on engineering jobs) didn’t mention…there were certainly talented salespeople who didn’t get hired this week because they lacked specific experience with the particular sales automation or customer resource management system being used..knowledge that they could have easily picked up during their first week or two on the job.

    As I said in my original post inspired by the WSJ article: It’s a basic reality of life that you can’t optimize everything at once. So, if you insist on a perfect fit for certain things, you are probably getting less of some other attributes–and these may be ones that matter more. I’d personally rather have a salesman who has demonstrated (for example) skill at managing the customer politics in a large and complex sale than one who has specific experience with the Snarkolator CRM system. It’s a lot easier to train for the second than for the first.

    Similarly, if a newly-hired mechanical engineer doesn’t work out, the cause will probably not be his lack of experience with the latest version of a CAD system. More likely, it will be a lack of good design intuition…or poor interpersonal skills…or an inability to integrate mechanical design with electrical and electronics aspects of the same product…or fit with the cultural style of the organization. Maybe he comes from an environment where he was closely supervised, and the new environment is more open and requires more self-starting…or vice versa. These things are not easily represented in “checklist” form, as is knowledge of a specific software package and version, but they matter a lot. The problem with increasingly long lists of requirements is that they tend to shortchange those things that cannot be easily compressed into a yes/no format, and also tend to screen out potential employees whose extreme excellence on certain criteria could well make up for their deficiencies in others.

    Moving from work to love…there are apparently a lot of single people (especially women, it seems) who have developed long checklists for prospective partners. (It’s rumored that one woman had something like 350 items on her “mandatory” list.) As in the work environment, long checklists tend to delay the search..but more important, they can shortchange the factors that matter most. If someone insists on a prospective husband who is an investment banker with a good sense of humor and cooks gourmet meals and really likes kids, then she might, if she is very lucky, eventually find someone who satisfies all these criteria to some degree…but the sense of humor might not be quite as great, and the liking for kids not quite as strong, as if she were willing to compromise on the investment banker and the gourmet meals criteria. (And, of course, there are plenty of factors that operate below the conscious level and can’t be meaningfully represented on a checklist at all.)

    (Update 9/17/18:  There are some indications that, as full employment gets closer, more employers are willing to compromise on educational requirements, and also experience requirements.)

    Read the rest of this entry »

    Posted in Academia, Blogging, Education, Human Behavior, Management, USA | 10 Comments »

    On Trusting Experts…and Which Experts to Trust

    Posted by David Foster on 30th July 2018 (All posts by )

    August 1, 1914. As Europe moved inexorably toward catastrophe, Kaiser Wilhelm II was getting cold feet at the prospect of a two-front war. When a telegram arrived suggesting that the war might be contained to a Germany-vs-Russia conflict, the Kaiser jumped at the opportunity.

    The telegram was from Prince Lichnowsky, the German ambassador in London, reporting on a conversation with the British Foreign Secretary, Sir Edward Grey. As Lichnowsky interpreted Grey’s remarks, England would stay neutral–and also guarantee France’s neutrality–if Germany would confine herself to attacking Russia and would promise not to attack France. (Which was a misinterpretation–but more on that later.)

    Immediately, the Kaiser called in General von Moltke, the Chief of Staff, and gave him his new marching orders: turn around the troops destined for the attack in the west, and redirect them to the eastern front. Barbara Tuchman writes of Moltke’s reaction.

    Aghast at the thought of his marvelous mobilization wrenched into reverse, Moltke refused point-blank. For ten years, first as assistant to Schlieffen, then as his successor, Moltke’s job had been planning for this day, The Day, Der Tag, for which all Germany’s energies were gathered, on which the march to final mastery of Europe would begin. It weighed upon him with an oppressive, almost unbearable responsibility…Now, on the climactic night of August 1, Moltke was in no mood for any more of the Kaiser’s meddling with serious military matters, or with medling of any kind of the fixed arrangements. To turn around the deployment of a million men from west to east at the very moment of departure would have taken a more iron nerve than Moltke disposed of. He saw a vision of the deployment crumbling apart in confusion, supplies here, soldiers there, ammunation lost in the midle, companies without officers, divisions without staffs, and those 11,000 trains, each exquisitely scheduled to click over specified tacks at specified intervals of ten minutes, tangled in a grotesque ruin of the most perfectly planned military movement in history.

    “Your majesty,” Moltke said to him now, “it cannot be done. The deployment of millions cannot be improvised…Those arrangements took a whole year of intricate labor to complete…and once settled, it cannot be altered.”

    “Your uncle would have given me a different answer,” the Kaiser said to him bitterly.

    It was not until after the war that General von Staab–Chief of the Railway Division and the man who would have actually been responsible for the logistics of the redirection–learned about this interchange between Moltke and the Kaiser. Incensed by the implied insult to the capabilities of his bureau, he wrote a book, including pages of detailed charts and graphs, proving that it could have been done.

    So, what happened here? The Kaiser trusted his military expert, von Moltke–but the real expert in railway operations (and this was substantially a railway question)–disagreed. At the time of decision-making, von Staab’s personal opinion was never even solicited.

    Clearly, what the Kaiser should have said when faced with Moltke’s opposition was “Tell von Staab to get his ass in here, and let’s talk about it.” (Or however a German Emperor would have phrased that thought.) Indeed, there was particular reason to do this, given that the Kaiser evidently had some serious concerns about Moltke–as evidenced by his passive-aggressive “your uncle would have given me a different answer” comment.

    Read the rest of this entry »

    Posted in Book Notes, Britain, Germany, History, Human Behavior, Management, Military Affairs, War and Peace | 17 Comments »

    Summer Rerun: Nice Work, by David Lodge

    Posted by David Foster on 7th July 2018 (All posts by )

    Nice Work by David Lodge

    What happens when an expert on 19th-century British industrial novels—who is a professor, a feminist, and a deconstructionist–finds herself in an actual factory?

    This not being a time-travel novel, the factory is a contemporary one for the book’s setting in mid-1980s Britain.  It is a metalworking plant called Pringle’s, run by managing director Vic Wilcox.  Vic is not thrilled when his boss  (Pringle’s is owned by a conglomerate) suggests that he participate in something called the “shadow” program, designed to make academics and businesspeople better-acquainted with one another, but he goes along with the request.

    Robyn Penrose, literature professor at a nearby university, is also not thrilled about her nomination to participate in the program, but she is concerned about her job in an era of reduced university funding, and also thinks she had better do as asked.  The way the program works is that Robyn will be Vic’s “shadow,”  joining him at the plant every Wednesday, sitting in on his regular activities, and learning just a bit about what is involved in managing a business.

    Vic is a self-made man, not well-educated and with few interests outside work.  He is acutely aware of the danger that faces Pringle’s under the current economic climate, and is resolved that his factory will not join the long list of those that have been tossed on the scrapheap.

    There is nothing quite so forlorn as a closed factory–Vic Wilcox knows, having supervised a shutdown himself in his time.  A factory is sustained by the energy of its own functioning, the throb and whine of machinery, the unceasing motion of assembly lines, the ebb and flow of workers changing shifts, the hiss of airbrakes and the growl of diesel engines from wagons delivering raw materials at one gate, taking away finished goods at the other.  When you put a stop to all that, when the place is silent and empty, all that is left is a large, ramshackle shed–cold, filthy and depressing.  Well, that won’t happen at Pringle’s, hopefully, as they say.  Hopefully.

    Robyn and Vic dislike each other on first meeting:  Vic sees Robyn’s profession as useless, which Robyn sees Vic’s managerial role as brutal and greedy.  She is appalled by what she sees in her first tour of the factory..especially the foundry:

    They crossed another yard, where hulks of obsolete machinery crouched, bleeding rust into their blankets of snow, and entered a large building with a high vaulted roof hidden in gloom.  This space rang with the most barbaric noise Robyn had ever experienced…The floor was covered with a black substance that looked like soot, but grated under the soles of her boots like sand.  The air reeked with a sulphurous, resinous smell, and a fine drizzle of black dust fell on their heads from the roof.  Here and there the open doors of furnaces glowed a dangerous red, and in the far corner of the building what looked like a stream of molten lave trickled down a curved channel from roof to floor…It was the most terrible place she had ever been in her life.  To say that to herself restored the original meaning of the word “terrible”:  it provoked terror, even a kind of awe.  To think of being that man, wrestling with the heavy awkward lumps of metal in that maelstrom of heat, dust and stench, deafened by the unspeakable noise of the vibrating grid, working like that for hour after hour, day after day….That he was black seemed the final indignity:  her heart swelled with the recognition of the spectacle’s powerful symbolism.

    But still:

    The situation was so bizarre, so totally unlike her usual environment, that there was a kind of exhilaration to be found in it…She thought of what her colleagues and students might be doing this Wednesday morning–earnestly discussing the poetry of John Donne or the novels of Jane Austen or the nature of modernism, in centrally heated, carpeted rooms…Penny Black would be feeding more statistics on wife-beating in the West Midlands into her data-base, and Robyn’s mother would be giving a coffee morning for some charitable cause…What would they all think if they could see her now?

    Read the rest of this entry »

    Posted in Academia, Book Notes, Britain, Business, Human Behavior, Management | 1 Comment »

    Worthwhile Reading

    Posted by David Foster on 1st July 2018 (All posts by )

    A thoughtful post about walls and freedom:

    A city without walls was not a city. Anyone could march in and take over, give commands, and force the residents to obey. Without being able to defend yourself, you could not be counted among the free peoples. You were dependent on the good graces of someone else, be it a noble, a bishop, or hired soldiers. Walls meant the ability to defend your rights and liberties, to keep out unwanted people and protect what was good and valuable.

    Sultan Knish writes about Cybersecurity and Russia:

    “Why the hell are we standing down?”  That was the question that the White House’s cybersecurity coordinator was asked after Susan Rice, Obama’s national security adviser, issued a stand down order on Russia.

    Tolerance for ambiguity as a key factor in career success:

    Too many recent graduates, however, approach their job descriptions the way they did a syllabus in college—as a recipe for winning in a career. They want concrete, well-defined tasks, as if they were preparing for an exam in college. “Excelling at any job is about doing the things you weren’t asked to do,” said Mary Egan, founder of Gathered Table, a Seattle-based start-up and former senior vice president for strategy and corporate development at Starbucks. “This generation is not as comfortable with figuring out what to do.”

    Information and Gossip:

    Now, it so happens that at no point in history, except during the postwar period, did people receive news without being conveyors of news. That nuclear family, where people — pop, mom, 2.2 kids, one dog — are watching TV, receiving information and not transmitting.

    Is loneliness fueling the rise of political polarization?

    Many individuals no longer have the communal and social connections they once had, such as religion, ethnic culture, and family. The only connection many have left is their political party, and that forms their identity. And because of the closeness this has to their identity, they become more tribal and defensive when that party is attacked.

    The lifecycles of large corporations

    Posted in Business, Economics & Finance, History, Human Behavior, Management, Politics | 15 Comments »

    Automation, Aviation, and Business

    Posted by David Foster on 10th April 2018 (All posts by )

    A thoughtful post about the impact of automation in aviation, and how some of the problems occurring in this field are also relevant to potential problems with automation in business:

    Since the 1980s, automating various flight management operations has contributed to a profound improvement in air transport safety and effectiveness. But a related human issue — automation dependency — has emerged as a significant challenge to further improvements in safety levels. Automation can contribute to diminishing manual flying skills and increasing complacency, as pilots avail themselves of automatic flight management and navigation systems to aid much of their decision-making.

    In some cases, pilots don’t fully understand the automatic processes controlling their sophisticated aircraft. The ironic enquiry “What’s it doing now?” is sometimes heard in the cockpit, as pilots struggle to figure out the actions of the “automatics”, as these systems are referred to on the flight deck.

    Crucial as this is in the cockpit, automation dependency is equally problematic in many businesses today, whenever there is a disconnect between what managers think is going on and what is actually happening. The automation in question is not just technological, but also pervades the processes, algorithms, and reporting on which managers rely to inform their decision-making.

    Aviation is addressing this phenomenon as a major problem and is seeking solutions. We suggest that many companies should do the same before their “business automatics” put them at risk of losing control.

    RTWT

    Reminds me of this aviation classic, a 1997 talk by an American Airlines pilot:  The Children of Magenta.

    See also: Automation is Fragile, People are ‘Antifragile’ and my posts When Humans and Robots Communicate and Blood on the Tracks

    Posted in Aviation, Business, Management, Tech, Transportation | 19 Comments »

    Worthwhile Reading & Viewing

    Posted by David Foster on 4th March 2018 (All posts by )

    Bioluminescence at American Digest

    Some thoughts on storytelling

    Peer influence among adolescents as a driver of transgenderism

    Sarah Hoyt: “Have most institutions, stores and corporations, most large human organizations, gone stone stupid?”

    3-D printing in the manufacture of GE’s new turboprop engine

    Jim Grant, the well-known observer and analyst of interest rates, asks “what will futurity make of the (so-called) PhD standard that runs our world?” and suggests that, after a major market crash, explanations will include “My generation gave former tenured economics professors discretionary authority to fabricate money and fix interest rates.”

    Reminds me:  Danielle DiMartino Booth, who took a job at the Fed following a successful career on Wall Street, remarked that she did not experience discrimination on account of her sex…but she did face serious prejudice against her on account of not having a PhD.

    Posted in Economics & Finance, Human Behavior, Management, Organizational Analysis, Science, USA | 22 Comments »

    Are Those Robots Slacking Off on the Job?

    Posted by David Foster on 23rd January 2018 (All posts by )

    Much concern is being expressed these days about technological unemployment driven by robotics, artificial intelligence, etc.  But labor productivity numbers have been more in the direction of stagnation than in the direction of a sharp break upwards…see for example this BLS analysis.  Note especially Chart 5, which compares productivity growth in three periods:  1947-2007, 2001-2007, and 2009-2016.

    See also this piece, which looks at total factor productivity across continents.

    So, what is going on here?  Why have the remarkable innovations and heavy corporate and government investments in technology not had more of a positive effect on productivity?  I have my own ideas, but am curious about what others think.

    Posted in Business, Economics & Finance, Management, Tech, USA | 6 Comments »

    Worthwhile Reading

    Posted by David Foster on 4th January 2018 (All posts by )

    Cold Spring Shops:  Losing the Intellectual Tradition.  He cites Joy Pullman, who in turn quotes Hillsdale College president Larry Arnn:

    We’re living in a time as if some blight has come across the earth. Something fantastic, something deep, something old, something elevated, something high is basically being obliterated.

    Also from Cold Spring Shops:  Collaboration creates mediocrity.  I would rephrase this to say that collaboration can create mediocrity, especially when used as an unthinking buzzword and deployed as a pseudo-religion…after all, the purpose of basically all organizations is to allow people to collaborate, in various ways, to do what they could not do individually.  But shallow thoughts about collaboration and de-leveling and de-siloing and de-hierarchicalization are indeed in many cases detracting from the serious work that needs to be done on organizational design.

    At Politico: The secret backstory of how Obama let Hezbollah off the hook.  See also a response to this story from The DiploMad.

    Related, from Roger Simon:  Iran protests expose mainstream media as reationary, not liberal.

    Three from Sarah Hoyt:

    Childhood memories:  The things that stay

    The importance of feedback:  Breaking the Gears

    Of course they do:  When the Left bullies, they pose as anti-bullies

    Posted in Academia, Business, Crime and Punishment, Education, Leftism, Management, Media, Terrorism | 12 Comments »

    2017 Reading, continued

    Posted by David Foster on 23rd December 2017 (All posts by )

    A Prophet Without Honor, by Joseph Wurtenbaugh.  An outstanding work of alternative history.

    It is now known that when Hitler remilitarized the Rhineland in 1936, his forces were under orders to withdraw if faced by serious opposition by the (then-much-superior) French and British militaries.  But these countries did not take action, being focused on their economic problems and convincing themselves that the German move wasn’t really much of a threat.  But they didn’t know about the Withdrawal Order.  What if they had?

    Some of the characters are fictional, others are real people imagined as following different trajectories.  The central figure is a German officer named Karl von Haydenreich; he has become friends with American officer Dwight Eisenhower and this friendship will prove critical in changing the course of history.

    Very well-done, should not be missed.

    The Hard Thing About Hard Things, Ben Horowitz.  Advice about running a startup from a venture capitalist…the author is cofounder of the VC firm Andreessen Horowitz.  A lot of worthwhile points, some of which should be obvious, others not so much so.

    Understanding what you did wrong if you hired an executive who did not work out:  Horowitz goes through several possible causes of the failure, including this:

    You hired for lack of weakness rather than for strengths.  This is especially common when you run a consensus-based hiring process.  The group will often find the candidate’s weaknesses, but they won’t place a high enough value on the areas where you need the executive to be a world-class performer.  As a result, you hire an executive with no sharp weakness, but who is mediocre where you need her to be great.

    On excessive focus on quantitative metrics:  “Management purely by numbers is sort of like painting by numbers–it’s strictly for amateurs.”

    I especially like Horowitz’s emphasis on the importance of organization design, and the point that all such designs are compromises…indeed:

    The first rule of organizational design is that all organizational designs are bad.  With any design, you will optimize communication among some parts of the organization at the expense of other parts.  For example, if you put product management in the engineering organization, you will optimize communication between product management and engineering at the expense of product management and marketing.  As a result, as soon as you roll out the new organization, people will find fault with it, and they will be right…Think of the organizational design as the communications architecture for your company.  If you want people to communicate, the best way to accomplish that is to make them report to the same manager.  By contrast, the further away people are on the organizational chart, the less they will communicate. The organizational design is also the template for how the company communicates with the outside world.

    The book was inspired by this thought:  “Every time I read a management or self-help book, I find myself saying, ‘That’s fine, but that wasn’t really the hard thing about the situation.'”  For example:

    The hard thing isn’t hiring great people.  That hard thing is when those ‘great people’ develop a sense of entitlement and start demanding unreasonable things…The hard thing isn’t dreaming big. The hard thing is waking up in the middle of the night in a cold sweat when the dream turns into a nightmare.

    Fifty Inventions that Shaped the Modern Economy, by Tim Harford.  Includes not just the sort of things that would typically show up in an ‘inventions’ list, but also such things as double-entry bookkeeping, tradable debt, the welfare state, and the department store.

    Regarding the latter, Harford credits Harry Gordon Selfridge, who worked for Marshall Field, with creating the concept.  Key to the new stores was the idea that “just looking” was okay, indeed was to be positively encouraged.

    Selfridge swept away the previous shopkeepers’ custom of stashing the merchandise in places where sales assistants had to fetch it for you…he instead laid it out in the open-aisle displays we now take for granted, where you can touch a product, pick it up, and inspect it from all angles, without a salesperson hovering by your side…Shopping had long been bound up with social display: the old arcades of the great European cities, displaying their fine cotton fashions–gorgeously lit with candles and mirrors–were places for the upper classes not only to see but to be seen.  Selfridge had no truck with snobbery or exclusivity.  (When he opened his London store), His advertisements pointedly made cleaer that the ‘whole British public’ would be welcome–no cards of admission are required.”

    Harford also mentions an Irish immigrant to America named Alexander Turney Stewart.  It was Stewart who introduced “the shocking concept of not hassling customers the moment they walked through the door. He called this novel policy ‘free entrance.”  Stewart also introduced the concept of the clearance sale and established a no-haggle pricing policy for his good.

    Discussion of inventions such as the department store provides a useful reminded that so many of the things we take for granted–with ‘things’ including assumptions about ways of doing things as well as tangible objects–haven’t always existed; somebody had to think of them and drive them into reality.

    This post to be further continued.

    Posted in Book Notes, Business, Customer Service, Entrepreneurship, Europe, Germany, History, Management, Organizational Analysis, Tech | 4 Comments »

    Culture, Innovation, Victory, and Defeat

    Posted by David Foster on 21st October 2017 (All posts by )

    (Today being Trafalgar Day, it seems like a good time to rerun this post)

    In 1797, a Spanish naval official named Don Domingo Perez de Grandallana, wrote a thoughtful document on the general subject “why do we keep losing to the British, and what can we do about it?”  His thoughts were inspired by his observations while with the Spanish fleet off Cape St Vincent,  in a battle which was a significant defeat for Spain, and are relevant to a question which is very relevant to us today:

    What attributes of an organization make it possible for that organization to accomplish its mission in an environment of uncertainty, rapid change, and high stress?

    Here are de Grandallana’s key points:

    An Englishman enters a naval action with the firm conviction that his duty is to hurt his enemies and help his friends and allies without looking out for directions in the midst of the fight; and while he thus clears his mind of all subsidiary distractions, he rests in confidence on the certainty that his comrades, actuated by the same principles as himself, will be bound by the sacred and priceless principle of mutual support.

    Accordingly, both he and his fellows fix their minds on acting with zeal and judgement upon the spur of the moment, and with the certainty that they will not be deserted. Experience shows, on the contrary, that a Frenchman or a Spaniard, working under a system which leans to formality and strict order being maintained in battle, has no feeling for mutual support, and goes into battle with hesitation, preoccupied with the anxiety of seeing or hearing the commander-in-chief’s signals for such and such manoeures…

    Thus they can never make up their minds to seize any favourable opportunity that may present itself. They are fettered by the strict rule to keep station which is enforced upon then in both navies, and the usual result is that in one place ten of their ships may be firing on four, while in another four of their comrades may be receiving the fire of ten of the enemy. Worst of all they are denied the confidence inspired by mutual support, which is as surely maintained by the English as it is neglected by us, who will not learn from them.

    The quote is from Seize the Fire, by Adam Nicholson.

    Read the rest of this entry »

    Posted in Anglosphere, Book Notes, Britain, France, History, Human Behavior, Management, Military Affairs, Society, War and Peace | 19 Comments »