Organizational chaos or Conspiracy?

[Updated: This post was updated at 11pm Central to include the link to Matt Macowiacks tweet as a great example.]It’s easy to fallback on the current debacle in the US administration as a massive conspiracy. Conspiracies work for people who are afraid, and lack experience, conspiracy theory assumes someone is in charge.

Organization chaos theory was a big thing at the end of the 1980’s, Tom Peters book “Thriving on Chaos: Handbook for a Management Revolution” blazed a path of revolution for the newly minted management consultants through the mid-1990’s. I’ve no idea what they teach in business schools these days, but it’s fallen out of favor. It would again be easy to ascribe the current administrations chaos to a few people with out of date ideas based on Peters chaos theory, especially since Peters ascribed a lot of the justification for chaos theory on a changing global economy and technology.

I’ve experienced organizational chaos. I worked on 12 corporate acquisition projects. Many went ahead, some didn’t make financial sense, and others just were not a good business fit. They included small and large, including a $2.4 billion dollar company with some 4,000 staff, to another with just 60 employees.

In many, especially startups, either before or during acquisition if it proceeded, the management and organization went into chaos meltdown. This could often be sensed by the lack of clarity from the top, either in CEO or in Management. They couldn’t quantify how they were going to achieve the goals and objectives they’d claimed, or the product or technology didn’t do what they claimed.

In the acquisition due diligence you could spot tell tale signs. They were spending too much time in meetings and staff briefings on handling things that had already happened. Insufficient resources were applied to actual problems, it seemed cheaper to deploy marketing to attempt to distract from the cause of the problem that admit the problem and put plans in place to fix it.

As I wrote in “How False Stories Spread And Why People Believe Them

Constantly making false or inaccurate claims, using false data, or more importantly watching something on cable news and then twisting it to fit your own agenda is a dangerous game.

What it appears is that rather than being a massive conspiracy in action, the administration is exhibiting all the classic symptoms of an organization in chaos. Not good chaos as described by Peters

An organization should go back to the core of their existence, review their vision and mission and work and adopt a more customer-responsive approach.

By being curious in doing business and dealing with problems creatively, they can survive in the chaos theory.

Instead in a purely chaotic way.

The President has fired or lost many key staff for the smooth running of any administration, let alone a new one. It’s not just the headline staff, it’s some of the key underlying staff, like Cory Louie, the White House’s now former chief cybersecurity officer.

Louie “was forced to resign,” according to an editor at The Atlantic, who was the first to report his exit, despite initially saying that he was a member of the Secret Service. The story was apparently corroborated by ZDNet, who spoke to unnamed sources on the matter. There are many other examples.

Losing key staff, combined to having a number of alpha male types in charge of entirely new departments, with ideas and a catalog of actions against the very departments they now head; combined with a leader who can articulate nothing more complex than grand but simple ideas, results in exactly what we see, chaos.

You can hope that Steve Bannon is really in charge on the conspiracy, but in reality, that probably isn’t happening. He is likely just another pillar of a collapsing system, wanting to do big things quickly and competing with other alpha males to get the attention they so desperately crave and causing chaos in their wake.

This tweet is a prime example. Mistakes were made, the amount of time spent covering up, debating, and otherwise obfuscating the mistake would be out of proportion to the initial mistake, it also sews distrust, and bolsters the conspiracy theorists.

Whatever you think of the current administration’s politics, policies and programs, so far they’ve done very little except sign a bunch of pandering political executive orders. The “muslim ban” was ineffective in implementation, and probably illegal. The worst thing about it was that it just picked on “easy” countries, least likely to fight back. The Wall, Healthcare reform and almost everything else is just hot air. None backed by actual legislation. By this time in the Obama and Bush administrations, they’d got both solid, published plans, or written, and in the case of Obama, actual approved legislation.

Let’s see what form the legislation takes and who it benefits before coming back to conspiracy theories.

The 3Minutementor, founded and run by former colleague and personal friend, Nigel Dessau, has a useful guide to why strategy fails. It’s a useful checklist to compare the administration’s actions.

Episode 130: Why do strategies fail? from The 3 Minute Mentor on Vimeo.

Finally, here are some useful references on organizational chaos and complexity.

  1. Applications and Limitations of Complexity Theory in Organization Theory and Strategy – David L. Levy, University of Massachusetts, Boston, Massachusetts 
  2. Chaos Theory and Organization – Raymond Thietart, École Supérieure des Sciences Economiques et Commerciales. Bernard_Forgues, EMLYON Business School

Can America afford it’s rural communities

We hear a lot about the “takers” in America, a classification for, usually inner-city people who survive on benefits, unemployment, housing, medical, food stamps and more. Mostly the venom about takers also contains a racial element, it’s directed at black and minority groups who many assume benefit from Government programs without paying in.

It’s not often directed at the President himself, but as the New York times pointed out last year, Trump himself could be the ultimate taker.

Picture of small town America decaying
Decaying Texas – Mark Cathcart

What we don’t hear much about is the affordability of rural towns, and even many of the suburbs. One of America’s greatest strengths, it’s size, is also one of it’s biggest problems, small town sustainability. I’m no expert on the economy and sustainability, but if you drive long distance in America away from the Interstates, you can see the problem everywhere. Decaying towns, decaying infrastructure, slowing or declining population growth. I own and subsidize a rental home in one such town in Texas.

Back in 2014, I made my only drive from Austin TX to Boulder CO with my Mum, on what was to be her last grand tour. What struck me at the time were the endless poor quality roads, and the nearly, seemingly deserted small towns.

We covered 2,500 miles, mostly north west Texas, also New Mexico, and Colorado. On the way back we went via Taos, Santa Fe, and Roswell and then back through west Texas.

They had almost no choice in terms of food, restaurants and shops. I wrote this blog post “Decaying Texas”. It has a couple of slideshows of pictures taken along the way home.

The question of affordability will be right in the headlights in the coming years of the Trump administration. Almost every major program that the administration seems to want to change or cut will have a major impact on these rural societies. Downsizing the Federal government, a project of the Cato Institute, says:

Even if rural subsidy programs were administered efficiently, they represent an unfair redistribution of wealth. In many ways, rural Americans are better off than urban and suburban Americans. They enjoy cheaper housing, cleaner air, less congestion, and other advantages. So people who live in rural areas should not be a privileged class receiving special subsidies.

The Cato Institute couches the benefits in the usual political-speak weasel words as “Scholars at Cato believe that cutting the federal budget would enhance personal freedom, increase prosperity, and leave a positive fiscal legacy to the next generation.”

Rural communities for the most part exist to allow the exploitation of the land and resources. Hence the reason why America’s size is a strength, there is plenty to exploit. From farming for cattle, corn, wheat, to mineral extraction, to oil and gas fracking, America has it in abundance.

However, most of the infrastructure to support the communities is decades or more old and needs investment to sustain. Building roads, laying pipelines for water, sewage, telephone and internet service are expensive per capita. Roads particularly require a massive subsidy given the distances involved and the low number of people they service.

Trump Pence sign
Image: thehill.com / Getty Images

What is clear is that the new administration wants to cut regulations, budgets, and “Make America Great Again” #MAGA. I fear though for these communities, as they are likely to become unintended consequences of poorly thought through, and rushed changes in policy.

Education
School choice has been a great boon for suburban America. It has also been a positive benefit for the re-segregation of schools. Rich, often white people move from urban centers to suburban centers where they not only have choice, but can have their choice subsidized through vouchers, funded at the expense of public schools whose budgets are impacted by funding vouchers. Forget the furor about DeVos and if she is even qualified as U.S. secretary of Education. What is clear is that if she chooses to drive her professed support for school choice through vouchers as a policy, rural education will be screwed. Rural areas, without huge subsidy, will not have choice. Private businesses are not going to rush into towns and build new alternative charter schools, they can never make money from them.
If the alternative is distance learning, it has a double impact. 1. Distance or e-learning has typically less than optimal results, 2, by opting for choice through voucher, the local public schools are further devalued by lower attendance and either great subsidy, or lower budgets. This is a major issue, as schools in rural areas don’t just teach children, they are major social hubs for community interaction. Destroying public schools in rural areas, will further destroy their communities.  The Atlantic has a great article covering DeVos and the potential impact on rural schools and communities.
Health care (ACA and replacement)
This blog post was kicked off while driving to swimming this morning. I heard this Colorado Public Radio (CPR) piece on the rural hospitals fears for post “Obamacare”. Like schools, access to medical facilities in rural America is crucial to their survival(literally). Asides from concerns of access to healthcare and the affordability of it, the thing that struck me about the CPR interview was that  San Luis Valley Health in Alamosa provides 670 jobs and is the region’s largest employer. This is consistent with what I’ve observed elsewhere in Colorado and Texas, both large and small towns with massive health care employment.
In the UK, where the National Health Service (NHS) employees around 1.6-million people, making it the world’s 5th largest employer. The NHS is notionally is single organization, the NHS employs just under 2.5% of the UK population. Using the US Bureuau of Labor Statistics data for 2009, health care employment in private-sector health care industry employees just shy of 11-million people, add to that 100,000 of the 350,000 at the Veterans Administration, and then all the small town public health care clinics that deal with vaccinations etc. and it’s safe to say some 12-million work in health care in the USA. So, nearly 3.75% of the American population work in healthcare.
Health care in the US is much more expensive than the UK and most other developed countries in the world. This is in part due to the massive over provision and duplication of healthcare facilities. The simplest way to reduce the cost of Government programs, would be to drastically cut the provisions that support poor, rural communities. Make them travel further, pay hospitals less for the procedures, make fewer people qualify for the programs. That is exactly what these rural and small regional hospitals are concerned about, as discussed in the earlier referenced CPR piece.
Environmental Protection (EPA)
As I type this blog entry, Trump Administration EPA head, Scott Pruit is making his first address to the EPA (I’m not listening). This blog isn’t about his and the administrations dislike of the EPA and it’s regulatory overreach and climate actions. However, through executive orders that have frozen grants and programmes that impact some renewal and rejuvenation projects in rural areas and poor communities. What most won’t understand are the number of programmes the EPA supports and provides for small, rural communities and also for Native Americans. It’s unclear what the side effect of the major changes to the EPA will have on these programmes, or if they will just become Pruitts shrapnel.
Infrastructure (DOT)
While the President talks up his infrastructure goals, and decries the state of the roads, bridges and airports, outside of the wall, it’s not clear the Administration understands how much we currently spend and how poorly we budget and account for infrastructure. It’s already clear that Drivers are not paying their fair share, and that we are swimming in debt for road expansion and funding. It is hard to imagine that fiscal conservatives, the GOP and the TEA party are going to swallow more debt on a massive scale to fund this. In many rural areas, pot holed roads are being downgraded already to gravel roads also known as “unpaving“. States, cities and municipalities account for infrastructure in entirely the wrong way. They assume infrastructure itself has no value in their financial statements. They depreciate the assets over the course of its useful life until it has a no value. The problem is at that point, you can’t simply walk away.
As Strong Towns pointed out “Current accounting practices do not bear any relation to the future cash flow or the actual financial health of the city. When cities take on obligations, they should be properly accounted for as liabilities, not assets.” Given Rural towns tax base, population and business are declining, they are hit even more substantially by the errors in accounting from the past.
Agriculture (USDA)
There is significant investment by way of investment and development grants in rural areas, as well through crop subsidies. The top subsidized commodities are Feed grains, mostly corn, cotton, wheat, rice, soybeans, and dairy. Many of these would be uneconomical if the mega-corporations and farming cooperatives went unsubsidized.  America currently pays around $20 billion per year to farmers in direct subsidies as “farm income stabilization” via farm bills. These bills pre-date the economic turmoil of the Great Depression with the 1922 Grain Futures Act, the 1929 Agricultural Marketing Act, and the 1933 Agricultural Adjustment Act creating a tradition of government support.(Source: Wikipedia).
USDA goes way beyond that, it runs three other major programs through these agencies: Rural Housing Service, the Rural Utilities Service, and the Rural Business-Cooperative Service. They spent $6.5 billion in 2016 alone. USDA has about 100,000 employees, and is represented in most counties, in every state in America. It’s responsibilities include USDA oversees school lunches, meat inspection, food stamps, the Forest Service, rural electrification and much more. It’s total budget is some $140 billion in programs. The late pick of Georgia Governor Sunny Perdue concerned many in the rural community, some of his actions as Governor raise more questions, especially on his brand of rural endorsement. As governor, Perdue was caught in a more than a few scandals involving his businesses and personal property deals. He is also the first from a southern state, where rural and agriculture challenges are very different from the mid-west.
Housing (HUD)
For many people HUD stands for the “U” in Housing and Urban Development, they mostly focus on urbans areas, nothing could be further from the truth.  HUD operates many rural programs, in many cases funds pass through state agencies or other entities to rural communities. As well as development and assistance grants, HUD invests around $6.2 billion per year to provide affordable housing to low-income residents. Much of this through guaranteed low interest mortgages. How these programs will fare under Ben Carson is unknown. But without clear differentiation between urban and rural communities, many in the GOP and Administration will be going after cutting back HUD in general. HUD is also a major contributor to disaster assistance and provides many grants, relocation programmes and more.

Image: The Daily Herald – Mark Black | Staff Photographer
In an era when the GOP have spent forever convincing everyone that TAX=BAD, and portraying city folk as moochers and takers, can we really afford rural communities anymore? It’s very likely that these rural communities will experience the bulk of the pain from the Administration policy changes. Not through a single policy change, or executive order, but but through death by a thousand cuts.
If that happens, there will be no one but the current Administration and the Republican party to blame.

How False Stories Spread And Why People Believe Them

One of the most valuable lessons the administration will learn, is that they cannot control the media, or social media. Constantly making false or inaccurate claims, using false data, or more importantly watching something on cable news and then twisting it to fit your own agenda is a dangerous game.

The more accurate and transparent the administration is, the less conspiracy theory talk there will be, the less time it will take to manage the media, the more the administration can focus on what they really want to do. This is a hard lesson to learn, but essential.

Otherwise everything gets stuck in the mire. Too much time denying, too much time correcting, too much time covering up, too much time on internal meetings trying to decide what to do and how to handle it. All that causes stress, wastes time, and drives distrust between staff members as they don’t know who to believe.

Back in December 2016, Dave Davies on NPR Fresh Air, spoke at length to Craig Silverman, Media Editor of BuzzFeed News about fake news. If you didn’t hear it, it’s well worth a listen. It’s especially relevant based on my slow but inexorable move to delete my facebook account.

Time for a new deal?

Involuntary under-employment, the bitter price of austerity; Involuntary migration, the bitter fruit of concetrating decent jobs in small areas.

Neither globalization nor electricfied fences can fix this. It is delusional to believe that Britain or America can prosper sustainably when neighbouring nations are in a crisis.

Subtlety and leadership we cant expect from Trump and May. This is a great series of short video op-eds from BBC Newsnight.

Political Correctness and being liberal

if you mean I’m someone who can have a civil conversation without reverting to juvenile name calling, swear words and who thinks a man can do better than trying to be offensive by using slang names for women’s anatomy, then I take your attempt at intimidation and wear it with pride.

It’s always amusing when people try to dismiss you by accusing you of being “politically correct or PC” or worse still, a “liberal”.

I guess because it’s inauguration day, feelings are running high. I’ve tried to stay away from political discourse on facebook, until a friend posted a clip from Elizabeth Warren grilling the CEO of Wells Fargo bank, the point of the post was to ask for accountability.

One of the few responses was from “Jim”. I’ll call him that here, because, well, that was his name. In his response he didn’t much address the accountability point of the post, but fairly quickly turned to attacking Elizabeth Warren, calling her “a douche bag“.

And so I posted, and the response I got back was to call me one of the “PC crowd”. I’m always amused when people try to use that as an insult. Called one of these “names” don’t be intimidated.

pc

 

Brexit and the economy

There are plenty of people who think the current state of the UK economy is a cause for celebration.  Lots of numbers up including employment.

This belies the uncertainty ahead,  and while the UK Pound continues to be at an effective 20% discount to the US Dollar,  resources,  people,  products and services in the UK are effectively cheap.

While this is likely to continue,  those celebrating it as a result inside the UK should think again. In so much as individuals and business in the UK can acquire all the raw materials they need for manufacturing and business in the UK,  it would be great. Sadly,  apart from personal service,  there are few to no products in the UK made entirely in the UK from UK Raw material.

Exceptions are of course energy, oil,  gas, wind,  solar.  Add to that nuclear power,  and outside of the labor,  technology requirements, the UK is expanding.  Add to this government endorsed push for increased fracking,  often overriding local wishes and you have one sector that is somewhat protected.

The rest economy though,  doesn’t look so good. Anything bought overseas,  finished goods,  imported food, and raw materials will increase in price overcome coming months and years until the cable(UKP/USD)  resets to something like the $1.50 mark.

FYI. Most futures contracts and supply contracts sources from overseas are priced in USD,  even if they don’t involve US companies or US resources.

So,  what do the currency experts say? The following is the XE Market Analysis for December 30th 2016.

Not so happy new year.

Sterling has been trading with a heavy tone in the final week of 2016 trading, making a two-month low versus the dollar, a seven-week nadir against the euro and a one-month low versus the yen. The pound has now more than reversed the gains seen from early November, when the BoE adopted a neutral policy bias, through to early/mid December. The pound remains over 17% down versus the dollar since the Brexit vote in late June, and by some 12% in the case against the euro. BoE MPC member McCafferty last week warned that rising inflation and slowing global growth would hit the supply side of the economy in 2017, and there is a general view that UK growth will be sub-optimal over the next year as Brexit-related uncertainties drag on. Cable support is at 1.2200, while initial resistance is at 1.2297-1.2300, which encompasses the year-end holiday-season highs, ahead of 1.2344-50. We anticipate a return to levels around 1.2100.

Giant fleet of small scheduling nightmares

In tenuous link between my recent posts on automation, here and especially here, where back in November I discussed autonomous vehicles and their impact on employment. I also said:

While many cities are salivating over the ability of self-driving, autonomous vehicles to fix their broken road and transport infrastructure, that’s missing the point.

Sometime between then and last weekend I became a weekend subscriber to the (Boulder) Daily Camera, a great local paper for the Boulder/Denver metro area. Right on queue, my first Sunday paper was laying in the snow on the drive this weekend and I opened it up and parsed it during the day. One item that particularly caught my eye was Dave Kriegers main editorial entitled “Imagine a giant fleet of tiny buses“.

serveimageI grabbed a pen, marked the editorial up, scribbled in the margins and sat down on Monday morning and wrote an open forum letter. It didn’t get published, I have no idea if it’s policy not to publish corrections on staff written op-ed pieces, or they just didn’t think it interesting enough to include?

Since a big fuss has blown up about an Uber self driving car today, running a red light yesterday(in full transparency, Uber self driving development has a big office here in Louisville that is a build-up from the Uber acquisition of Microsofts Bing mapping service.) I thought I’d turn Mondays open forum letter into a blog post.

This also lets me correct one misstatement. Self-driving cars will help with congestion theoretically. In heavy traffic, they will drive at a regulation speed, a safe distance from the vehicle in front, thus avoid the hard braking and the impact that can have on several miles of traffic.

It is hard to respond to Dave Kriegers editorial imaging “a giant fleet of tiny buses” in 300-words, but I’d like to have a try.

First, I completely agree with his sentiment that if you keep trying the same old thing, you’ll keep failing. However, when it comes to his “giant fleet of small buses” he falls into the same trap most transport ‘imagineers’ do when the come to self-driving vehicles. For the sake of brevity, let’s assume they’ll be electric; let’s assume they can dock themselves; let’s assume they have a slightly better range than current electric cars.

Dave jumps to the conclusion that less space will be needed for parking. Sort of, except the cars have to be charged somewhere. But yes, they could be charged in either fields or reclaimed parking garages outfitted with self-docking chargers. Dave then makes the confusing jump to the conclusion that “[they] could reduce congestion because fewer cars would serve more people”.

Anyone that’s given any serious thought to scheduling and transportation would understand implicitly that that isn’t true. It’s implied because it fits the paradigm of autonomous vehicles. If 20,000 people want to get into Boulder today between 7:15am and 9:00am in their own unshared transportation, and the demand is the same in the era of self-driving cars, then, you’ll have the same number of journeys. Add in the recharging trips, the fact that using Daves logic, there will be less self-driving cars, then some of those cars will have to drive in and out and back into Boulder, actually increasing the number of journeys and therefore contributing to the congestion.

If we take Daves “less parking space” claim at face value, then what will the space formerly used by parking garages be used for? Green space… err no, more offices/accommodation, with the potential to further increase the number of journeys and congestion.

Don’t get me wrong, self-driving cars are great, but until we have flying cars they will only help indirectly with congestion won’t help with congestion. The only way is shared transport. Bus Rapid Transport isn’t it either. Trams, street cars, metro-rail are the only real fix.