#63 Capitalizing on Jewels…or Was that Joules?

28 Saturday Jun 2014

Posted by Jordan Abel in Innovative Thinking: Ideas and Products, Possible Solutions, Societal Issues

(Readers: Please note the blog about the 5th revolution in the US is constructed as a story. While not all chapters are linked, after reading a few recent entries, you might want to start at the beginning. More about the blog and about the author. )

Scene: Italian restaurant. Jordan and friends, Ms and daughter, Maggie. Having dessert and coffee. Dinner starts Entry #61.

Maggie: “OK, so you are working on a project to rebuild US manufacturing. I’ve got a question.”
Jordan: “Fire away.”
Maggie: “Does more US manufacturing mean more pollution?”
Ms: “Yeah, Jordan, why does it seem that increased manufacturing always means more pollution. There must be a better way. Let’s hear it smart guy.”
Jordan: “You guys are tough…and asking a good question.”
Ms: “We’re waiting for the answer.”
Jordan: “The answer is economic growth and pollution are not inextricably linked.”
Maggie: (Looking at her mother) “Does he always talk like this?”
Ms: “Usually worse. More eco-babble, please.”
Jordan: “Economic growth can occur using clean energy – solar, wind, etc.”
Maggie: “Solar seems OK but wind uses those large propeller things. They’re ugly, make lots of noise and kill birds. Isn’t there any type of clean energy?”
Jordan: “Yes. Thermal and kinetic energy.”
Ms: “Tell us more, please.”
Jordan: “Let me give you a couple of examples. Ms, think back to when you were a kid. Its summer time.”
Ms: “Hot and sticky in Louisiana.”
Jordan: “Was there a garden hose at your house?”
Ms: “Dark green.”
Jordan: “Did you ever get a drink out of the hose?”
Ms: Yes but the water was so hot we had to let it run for a while before we could drink it.”
Jordan: “Next example. Maggie, where do you want to pretend to be?”
Maggie: “Back in Newport Beach.”
Jordan: “Alright. Now take off your sandals and walk through the parking lot to your car.”
Maggie: “I live on the beach and don’t have to walk through the parking lot.”
Jordan: “Your answers sometimes remind me of your mother.”
Ms: “Jordan, be nice to us and I’ll buy dinner.”
Jordan: “You know what I meant. And yes, I will be nice. You know I like both of you very much.”
Maggie: “Back to the example…and I will play along.”
Jordan: “Good. Go to the store and walk across the parking lot in your bare feet.”
Maggie: “Can’t. The asphalt is too hot and my feet will burn.”
Ms: “Where are you headed with these examples? A garden hose and an asphalt parking lot.”
Jordan: “Each is an example of the effect of thermal energy.”
Maggie: “You’re saying the water and the parking lot were made hot by the sun and nothing else.”
Jordan: “Exactly. And heated for free by the sun.”
Ms: “So back to your project. How can we capture thermal energy for free and replace energy from say coal or oil?”
Maggie: “Besides oil, coal…even natural gas…are expensive compared to free. Coal, oil and natural gas have lots of pollution.”
Jordan: “We’re getting better are reducing pollution from fossil fuels but zero is hard to beat.”
Ms: “What can we use thermal energy for?”
Jordan: “The most obvious is heating, especially water. Heating water takes lots of energy.”
Maggie: “How much does it cost every month to heat water?”
Jordan: “Spoken by someone who must live in Newport Beach.”
Ms: “Jordan, you are on the edge of not getting me to pay for dinner. Be nice.”
Jordan: “The comment was such an opening I could not resist. Anyway, depends on the area but to heat water costs $40-$50 per month.”
Ms: “That’s more than I realized. $50 bucks is more than 25-30% of my monthly electric bill.”
Maggie: “Can you convert thermal energy into electricity?”
Jordan: “Yes. A simple approach is making water hot enough to turn to steam. The steam then turns a generator and makes electricity. In many ways like a power plant fueled by coal but without the pollution.”
Ms: “Let’s not turn dessert and coffee into a physics lesson. I’m too old to go back to high school.”
Maggie: “You gave us two examples. Thermal and what was the other one?”
Jordan: “Kinetic energy. Easiest way to think about kinetic energy is the energy of an object in motion.”
Maggie: “Like a car or truck or motorcycle.”
Jordan: “Good examples.”
Maggie: “So the faster the car goes, the more kinetic energy?”
Ms: “And I suppose the heavier truck has more kinetic energy.”
Jordan: “I know you want to skip the physics lesson but the formula for kinetic energy, or KE, is ½ mass times velocity squared.”
Ms: “In the words of Ricky Ricardo, ‘Splain that, please.’”
Jordan: “Half the weight of the object multiplied by the square of how fast it is going.”
Maggie: “Say a rock weighs 10 pounds. And as you carry it you accidentally drop it on your foot. The KE would be ½ weight of the rock – 5 pounds – times the square of how fast the rock was going when it hit your foot – say 10 miles per hour. So KE would be 5 (pounds) times 100 (10 mph x 10 mph).
Jordan: “You got it.”
Ms: “So, if we’re in the car, KE at say 40 mph is not simply 2x KE at 20 mph but 4x KE at 20 mph. The square of 20 is 400 and the square of 40 is 1600.”
Maggie: How do they measure KE anyway? What’s miles per hour times pounds? Even I know that won’t work.”
Jordan: “The measurement is joules.”
Ms: “I like that measurement. Maggie, we could take the car and have a jewel crash. A little ding could be a ruby incident. A fender bender could be an emerald crash. And totaling the car would be a diamond crash.”
Maggie: “I could tell my hubby, ‘Gee honey, I’m your queen. And he’ll ask why. Then I can tell him I had an emerald crash today in the car.’ That sounds a whole lot better than ‘I dented the front fender.’”
Jordan: “The measurement is spelled ‘j-o-u-l-e-s,’ not ‘j-e-w-e-l-s’.”
Ms: “Too bad. I thought we were on to something.”
Maggie: “OK, Jordan, other than wrecking the car, how does one capture kinetic energy?”
Jordan: “One of my favorite examples is capturing the energy of waves in the ocean. Any kind of wave, actually, but waves in the ocean have the most energy.”
Ms: “What do you do, build some device to convert waves to electricity?”
Jordan: “As a matter of fact, I’m part of a group that designed such a device. We’re not the only ones working on converting kinetic energy to electricity.”
Maggie: “But capturing KE…and thermal energy…are ways to generate electricity without any pollution. And the energy cost is free.”
Ms: “Why isn’t this country adopting more of these ideas? We seem to be fighting innovative ways of generating electricity with little or no pollution. Resisting this makes no sense to me.”
Jordan: “Unless you are in a business that’s going to be replaced.”
Maggie: “But that’s a losing battle. Otherwise we still be riding around in buggies pulled by horses.”
Jordan: “I agree, but a lot of people are fighting it. I think that attitude is changing. We have a real desire among a lot of people to make changes. People are starting to call the events the last months the beginning of the 5th US Revolution. The people also elected a new Congress and demanding Congress get something done. I’m actually hopeful.”
Ms: “Glad to hear that.”
Maggie: “Guys, the waiter is here. Let’s have some more coffee.”

(To be continued)

#62 More about Creating Wealth. What’s Fair and What’s Game.

25 Wednesday Jun 2014

Posted by Jordan Abel in Causes of the Revolution, Economics, Societal Issues

≈ Leave a comment

(Readers: Please note the blog about the 5th revolution in the US is constructed as a story. While not all chapters are linked, you might want to start at the beginning. There are also some sections of interest — #41-60. More about the blog and about the author. )

Scene: Italian restaurant. Jordan with long-time friend, aka “Ms” and daughter, Maggie, whom Jordan knows but has not seen in years. Conversation is continuation of Entry #61 and resumes after dinner is served.

Ms: “I’m anxious to hear your definition of ‘fair-and-square’, especially since the youngster here is married to a mutual fund manager.”
Maggie: “Yes, Jordan, please define ‘fair-and-square.’”
Jordan: “Alright. Let’s take mutual funds. Maybe the entire finance industry.”
Ms: “This should be good. You might manage to alienate both of us. Or have you forgotten I worked at a bank for a while.”
Jordan: “Well, here goes. Banking is very important to commerce. The securities market is also very important. Both functions can help the country’s economy grow.”
Maggie: “He’s OK so far…but really hasn’t said much.”
Ms: “Foot not in mouth yet so please continue.”
Jordan: “What I view as the problem is when the bank and the securities traders…”
Maggie: “Spell that please.”
Jordan: “T-r-a-d-e-r-s.”
Maggie: “I thought you might have said traitors.”
Jordan: “The problem is when banks and securities traders start moving money back and forth with no benefit to the populous.”
Ms: “What do you mean?”
Jordan: “Banks and securities firms should be focused on creating wealth for the country. When wealth is created everyone benefits.”
Maggie: “What’s wrong with just trading securities?”
Jordan: “Without wealth creation, then trading becomes a zero-sum game. In a zero-sum game, there is a winner…and a loser.”
Ms: “I’m still not sure what you mean. Define wealth creation.”
Jordan: “Simply put, taking raw materials and making something of more value that the individual parts.”
Maggie: “You’re talking about like making a car.”
Jordan: “Yes. There are lots of examples of manufacturing. At the end of the day, the value of the product is worth more than the raw materials used to make it…including any cost for labor.”
Ms: “What about medicine? Is that manufacturing. Certainly expensive and the cost is a whole lot more than the individual parts. What about banking? Hotels?”
Jordan: “All your examples are considered services. No new wealth is created for the country.”
Ms: “But some doctors make lots of money…”
Maggie: “…especially plastic surgeons in Southern California.”
Jordan: “Individuals performing a service – plastic surgeons to use your example – can get rich. But the surgeon got rich because money was transferred from one person’s pocket to another. No new wealth was created, merely a transfer of money between people.”
Maggie: “”Ok, what about securities traders. They way you’re talking, you probably consider them traitors with a ‘t’.”
Jordan: “If we are talking about trading stocks, I have no problem. Because stocks are linked to an organization that is supposed to make a profit.”
Maggie: “Pardon me for my ignorance, but what else gets traded besides stocks?”
Jordan: “There are trades where one person essentially bets interest rates will go up and other person bets interest rates will go down.”
Ms: “Sounds like gambling to me.”
Jordan: “Gambling is exactly what it is. Other than a few instances, such trades are no different than rolling dice in Las Vegas.”
Maggie: “Are you opposed to gambling?”
Jordan: “Not at all as long as…repeat as long as one gambles with his or her own money.”
Ms: “Whose money is being gambled?”
Jordan: “Yours.”
Ms: “Mine? How?”
Jordan: “Banks, mutual funds, securities brokers all use your money to gamble in a part of the market that has little, if any, regulation. And when the gamble goes bad…as it did in 2008…the firms beg for a bailout from Washington. Your money.”
Ms: “Why should they get a bailout?”
Jordan: “Because you and Maggie and many other people would get the royal shaft when the firm went bankrupt.”
Maggie: “That does not seem fair.”
Jordan: “For much of the securities trading, if you are the little guy, the game is the proverbial ‘Heads I win. Tails you lose.’ And if I lose really big, you lose even more.”
Ms: “So when things go really bad on Wall Street, they ask for some type of taxpayer bailout.”
Jordan: “You got it.”
Maggie: “Has it always been like this?”
Jordan: “No, not to this degree. Securities trading on Wall Street has always been subject to some insider trading and favoring the larger players. For many years most of the money these guys traded was their own. When it’s your own money, most people take less risk. That all changed in the 1990’s.”
Ms: “You talking about the repeal of the Glass-Steagall Act?”
Jordan: “Ms, sometimes you amaze me. Yes, Glass-Steagall was passed in the early 1930’s to prevent securities firms from trading with client’s money. It was repealed in the late 1990’s. Lots of shenanigans since.”
Maggie: “Why can’t congress reinstate Glass-Steagall?”
Jordan: “There was an effort after 2008-2009 crash but no real progress. Banks and investment houses basically bought off congress…pardon me…encouraged members of Congress to take the teeth out of the proposed reinstatement.”
Maggie: “Any chance now. We have a new Congress.”
Jordan: “Maybe. The revolution resulted in a new Congress. What the new Congress considers fair remains to be seen.”
Ms: “Jordan, you talk a good game. What are you doing to address the problems in this country?”
Jordan: “Haven’t lost your touch with the harpoon, have you?”
Maggie: “Yes, Jordan, what are you doing besides yapping?”
Jordan: “And just like your mother. Well, guys, the last few months I’ve been working on a project to help rebuild manufacturing in the US.”
Ms: “Doing this on your own?”
Jordan: “Project for POTUS.”
Maggie: “POTUS? What’s that or who’s that?”
Ms: “I forget how much knowledge one acquires with age. POTUS stands for President of the United States.”
Maggie: “Wow. That’s impressive. You’re a big dog.”
Jordan: “Part of a team working on the project.”
Ms: “When does it go public?”
Jordan: “Don’t know exactly but soon. I’ll let you know.”

Dessert arrives. To be continued.

(Want a PDF version for Entries #1-10, #11-20, #21-30 formatted as an e-book? Entries #31-40 available soon. Click links for download. America’s 5th Revolution Volume I (Entries 1-10), America’s 5th Revolution Volume II (Entries 11-20), America’s 5th Revolution Volume III (Entries 21-30)

#61 Herpes Handbags? So, What’s Not Fair?

21 Saturday Jun 2014

Posted by Jordan Abel in Back Asswards Thinking, Causes of the Revolution, Economics, Societal Issues

≈ 3 Comments

(Readers: Please note the blog about the 5th revolution in the US is constructed as a story. While not all chapters are linked, after a few recent entries, you might want to start at the beginning. More about the blog and about the author. )

Scene: Italian restaurant. Jordan and friends, Ms and daughter, Maggie.

Jordan: “Great to see both of you. Maggie, your mother and I had dinner a few weeks ago. It’s been years since we’ve seen each other. Bring me up to date.”
Maggie: “Short version is finished college. Got married. Got divorced. Moved to California and started working in high-end fashion.”
Ms: “Really high-end fashion. Maggie is too polite to mention she managed a fashion store in Beverly Hills.”
Jordan: “Wow. That’s impressive. What kind of stuff did you sell?”
Maggie: “Probably a better word than ‘stuff.’ We sold women’s shoes, handbags, other kinds of accessories. All fairly high-end.”
Ms: “High end is an understatement. Outrageously expensive.”
Jordan: “Coming from you, it must be expensive.”
Maggie: “Excuse me but the waiter is here to take our order.”
Jordan: “Speaking of giving orders. Maggie, you remind me of your mother. Do this. Do that. I think what we have is a case of ‘Like mother, like daughter.’”
Ms: “Jordan, let’s order as Maggie is suggesting.”

(Order complete. Waiter leaves.)

Jordan: “Just how expensive are these handbags? A thousand, two thousand?”
Maggie: (Laughing) “Two thousand would be our Wal-Mart model.”
Ms: “Add some more money.”
Jordan: “OK, five thousand.”
Maggie: “You’re still cold. Try $20,000 plus.”
Jordan: “$20k for a handbag? What’s it made out of, dinosaur skin with kryptonite locks?”
Ms: “You’re not far off. They use some really exotic skins and precious metals.”
Jordan: “Does anyone really buy this stuff?”
Maggie: “Each handbag is a limited edition. We usually have a waiting list.”
Ms: “There’s even a market for used handbags. Not used a lot, but still used.”
Maggie: “A few years ago a college student starting buying used handbags and reselling on eBay. In a couple of years he built a very nice business.”
Jordan: “There was an article in the NY Times about the guy. He was selling herpes handbags…”
Ms: ”…Jordan, those are not herpes handbags. They’re Hermes handbags. Hermes. Got it?”
Jordan: “Hermes handbags, herpes handbags, what’s the difference? You’ve been screwed either way.”
Ms: “You are awful. And in front of my daughter.”
Maggie: “Mom, I’m not some kid. Besides, I think calling it a herpes handbag is pretty funny.”
Jordan: “Anyway, there was some controversy because the used bag man left one company and went to Christie’s Auction House. Is a used bag man like a used car salesman?”
Ms: “Sometimes I just have to shake my head when I hear you talk.”
Jordan: “Really, this all seems rather stupid to me.”
Maggie: “That’s because you’re not a woman. It is a big deal. There is a real market for used bags.”
Jordan: “Funny, I know a few old bags and no one seems interested in them.”
Ms: “Careful. Were you talking about me?”
Jordan: “Did I say you were an old bag?”
Maggie: “You guys always talk to each other like this?”
Ms: “He’s usually not so polite. Must be because you’re here.”
Jordan: “C’mon, Ms. When have I not been polite to you?”
Ms: “Well, OK. You do always respect me…in the morning.”
Maggie: “Children. Back to the story, please.”
Jordan: “I don’t really care what people do with their money. But I do think when one company files suit to stop a used bag salesman from going to another company to sell used bags, the country’s value system has gotten out of whack.”
Maggie: “BH…I mean Beverly Hills…has always been a little out of whack.”
Jordan: “True, but at some point sanity needs to take over. Selling handbags that cost more than many people earn all year seems over the top. And waiting lists!”
Ms: “Are you implying that’s not fair?”
Jordan: “I suppose I am.”
Maggie: “What’s not fair? I mean didn’t these people earn the money fair and square?”
Jordan: “Earned yes. Fair and square? A lot of times, not really.
Ms: “Here’s dinner. Hold that thought.”
(To be continued)

#60 Being Fair. Part of POTUS’ Project on Manufacturing

18 Wednesday Jun 2014

Posted by Jordan Abel in Causes of the Revolution, Innovative Thinking: Ideas and Products, Personal Stories, Possible Solutions, Societal Issues

≈ Leave a comment

Scene: Jordan and Matt, Jordan’s Office

Jordan: “Matt, thanks for taking time to talk again.”
Matt: “Jordan, the least I could do. You spent a lot of time preparing for the POTUS project. My guess is these comments will be a good add.”
Jordan: “Hope so. Some of the ideas stem from actions by GM. Others are based on recent experience.”
Matt: “OK, let’s get started. What’s the theme? What idea…or ideas do we want to add?”
Jordan: “The idea might seem obvious or naïve or both. And it might be. I want to talk about fairness.”
Matt: “Mmmm, that is interesting. And talking about ‘fairness’ does seem appropriate. We never talked specifically about it. Implied, yes but not fairness as a specific topic.”
Jordan: “Reason I bring it up is some recent experience and a conversation with a long-time friend. I was going to say old friend but she would not like that.”
Matt: “What happened?”
Jordan: “Incidents with the cell-phone company and airlines and TSA. The conversation with my friend led to a discussion of an earlier incident with GM – not product but culture.”
Matt: “I need some details to help understand the issue.”
Jordan: “I figured you might. Rather than take your time now, I wrote several papers describing what happened.”
Matt: “Good. I’ll read those later. What was your conclusion?”
Jordan: “Simple. Fairness is a critical component for long-term success of an organization.”
Matt: “Keep going.”
Jordan: “Do you deal with people or companies that have a ‘heads I win, tails you lose’ approach?
Matt: “Not if I can help it.”
Jordan: “Everyone feels the same way. Why get the shaft in every situation?”
Matt: “So how does fairness affect POTUS’ policy on rebuilding US manufacturing?”
Jordan: “Fairness needs to be a key component. We talked a lot about how GM became a money machine and then started to focus on earnings and slid into bankruptcy. And then the turmoil over ignoring obvious safety issues.”
Matt: “You’re saying…if I hear you correctly…the overarching issue for GM’s downfall was fairness, or really lack of fairness.”
Jordan: “Fairness for customers. Fairness for employees. Fairness for suppliers. And fairness for people who sell the product.”
Matt: “What about fairness for the community?”
Jordan: “Great point. You’ll see in one of the write-ups that I think GM’s chairman in the 1980’s, Roger Smith, took revenge on Flint, Michigan.”
Matt: “Really? I’ll read the paper. Now, how do we translate fairness into some policy recommendations?”
Jordan: “Take your question about fairness to the community. Tell me why as a country do we encourage states to recruit businesses from other states?”
Matt: “Economic development, I suppose.”
Jordan: “Economic development for whom? The policy forces a winner and a loser. The state where the business moved considers itself the winner. The state where the business moved from is the loser. In fact, there is probably a net loss when add the incentives are added up. The US as a country gains nothing by the move. ”
Matt: “What about competitiveness of the company moving? Lower wages will make the company more competitive.”
Jordan: “That’s often the argument but it’s not necessarily true. In fact, I’d claim it is not true far more often than true. Why not increase worker productivity enough to offset any wage differential?”
Matt: “You think companies can really increase productivity to offset wage increases?”
Jordan: “Did we talk about the company I ran in California?”
Matt: “Not sure. What’s relevant?”
Jordan: “Short story is with some changes to the manufacturing process we reduced labor cost dramatically.”
Matt: “How much?
Jordan: “We could have doubled the wages of workers in California and paid workers in China zero and still come out ahead.”
Matt: “What? You could pay workers in California twice what they were making. Then pay workers in China nothing and still have lower costs?”
Jordan: “You got it. And the reason is twofold. First reason is increased productivity. By the way, we did not lay off any workers. We actually added workers.”
Matt: “You added workers and increased output? That’s un-American.”
Jordan: “I know. Counter intuitive, huh? The second reason is all the other costs associated with producing in a remote location.”
Matt: “You had a term for that. I remember now…a holistic approach to cost.”
Jordan: “Taking all costs into account.”
Matt: “Is that example a one-of-a-kind or are there more examples?”
Jordan: “An example few people know about is the coal industry.”
Matt: “Not a very popular topic, especially among environmentalists.”
Jordan: “Not a very popular topic among former coal miners either.”
Matt: “What do you mean, former coal miners? Still lots of coal being produced in the US.”
Jordan: “Actually, production is higher than during the 1970’s.”
Matt: “What about employment. You said former miners.”
Jordan: “Productivity is way up. We need to confirm these numbers but I think employment is down from about 250,000 miners to only about 50,000 today.”
Matt: “That’s all that work in coal mining? That’s a blip on the employment radar screen. That’s it?”
Jordan: “All because of productivity.”
Matt: “Makes you wonder why some politicians claim environmental laws will destroy coal mining jobs.”
Jordan: “The coal industry destroyed the jobs through productivity.”
Matt: “That’s a good and bad example for POTUS. Good because technology can increase output. Bad because of reduced employment.”
Jordan: “We need a balanced policy in manufacturing policy. Companies should adopt technology but not just dump workers on society. They have an obligation to their employees.”
Matt: “How can that policy work? Sounds like socialism. Won’t such a policy just encourage companies to produce outside the US?”
Jordan: “Not if the policy is structured properly. We’re talking about being fair. If some people view being fair as socialistic, then so be it. But being fair does not mean being equal.”
Matt: “You’re really hammering on being fair. Few people ever talk about companies being fair.”
Jordan: “Lack of fairness is why we had a revolution. In fact, lack of fairness has been the cause of each revolution in this country…”
Matt: “…and, if you think about it, elsewhere as well.”
Jordan: “So why not make being fair part of the manufacturing policy recommendations for POTUS? Maybe fair should be part of every policy in Washington.”
Matt: “Jordan, you might be on to something. Get people to move away from hard-core ideology…”
Jordan: “…which most ideologues do not really understand…”
Matt: “…and focus on fairness. Sounds so simple.”
Jordan: “It is simple. Start addressing problems with the premise, ‘What’s fair?’ Then work out the details.”
Matt: “Listen, I gotta run. And I need to start drafting a formal paper for POTUS. But I want to make sure we include your thoughts about fairness.”
Jordan: “I’ve written a couple of papers on fairness. I should write a couple more.”
Matt: “If you want. But I’m a reporter. I’m used to working from interviews with people. If it’s OK with people you talk to, just record the interview and send me the audio or the transcript.”
Jordan: “Alright. We each have our assignments.”
Matt: “Let’s keep in touch and meet periodically.”
Jordan: “Deal. And just to be fair, I’ll buy coffee next time.
Matt: “No, just to be fair, I’ll buy.”
Jordan: “Get out of here.”

#59 Customers Unite. Out with the Bean Counters.

14 Saturday Jun 2014

Posted by Jordan Abel in Back Asswards Thinking, Personal Stories, Societal Issues, Stupid Is as Stupid Does

≈ Leave a comment

Scene: Jordan and JC continuing earlier conversation.

JC: “OK, tell me the airline story. Given all the miles you’ve travelled, this must be a good one.”
Jordan: “It’s more about an organization’s culture and being fair.”
JC: “What happened?”
Jordan: “Friday afternoon, I’m in Houston, headed back to Charlotte on USAir. Everyone boards. Then the captain announces the maintenance crew is working on the plane and it will be another 30 minutes or so. Emphasis on ‘or so.’”
JC: “Not a good start.”
Jordan: “2 to 2½ hours pass and everyone is ordered off the plane.”
JC: “No doubt you were toward the back of the plane.”
Jordan: “Yep. Huge line at the gate and only one ticket agent. So, being the genius that I am I decide to go to the ticket counter in the terminal to get help.”
JC: “So now you are back where you were three hours ago — in the terminal needing to get past security again.”
Jordan: “While in line, I call USAir 800 number and the agent arranges a flight on United. Flight leaves in about 45 minutes from the same terminal.”
JC: “And you have a new reservation number.”
Jordan: “All I have to do is go to the United kiosk, punch in the number, get a ticket and off I go. I’m a happy camper.”
JC: “So what became the problem Mister Happy Camper?”
Jordan: “The kiosk accepts the reservation number and then spits out a message, ‘See ticket agent.’”
JC: “Big line to see the agent?”
Jordan: “No. the agent is in a different terminal.”
JC: “So United has ticket kiosks and gates in this terminal…and I assume counter space…but no agents.”
Jordan: “You got it.”
JC: “So did you head out to the next terminal?”
Jordan: “No. I once again applied logic…mistakenly. I go to security and show them my boarding pass for the USAir flight and the reservation number for the United flight.”
JC: “Given this story, they must not have let you through. Why not?’
Jordan: “Because, according to TSA, the USAir flight had departed…
JC: “…even though the plane was at the gate right outside the security checkpoint.”
Jordan: “They refused to accept any type of reasoning. Nor would they even look to see if the plane was at the gate and 100 people waiting in line for help. Only comment from TSA agent, ‘You need a new ticket. Go to the other terminal.’”
JC: “Not sure if TSA has back asswards thinking or just stupid is as stupid does. You hardly fit the profile of a terrorist. Next?”
Jordan: “Off to Terminal B.”
JC: “How far is it?”
Jordan: “Half mile at least.”
JC: “Was there a shuttle close by?”
Jordan: “Train downstairs. Of course, I got to the bottom of the escalator as the train pulled out. So I walked briskly to Terminal B, found the United desk and presented my information.”
JC: “Let me guess. ‘Sorry sir, you are too late.”
Jordan: “Yes and followed by an unfriendly ‘We can’t help you. You need to go back to USAir.’”
JC: “So back down the escalator and if Murphy’s Law holds true the train was there this time.”
Jordan: “Murphy was right. ‘Whatever can go wrong, will go wrong at the worst possible time.’ Since I am now to the point where I will leave Saturday at the earliest, I don’t need to rush and then train is there.”
JC: “So back to USAir and what happens.”
Jordan: “After about 30 minutes in line I get to an agent and tell my story. She starts to write-up some information and I ask if she wants an ID?”
JC: “And…another issue?”
Jordan: “No. The only humor in the whole fiasco. She says to me, ‘No ID. No one would make up a story like that.’ She then proceeds to book a hotel.”
JC: “Decent digs?”
Jordan: “Yes, a 3-star, maybe 3½. And met a couple of other people on the shuttle who were on the flight.”
JC: “Got out OK the next day?”
Jordan: “Yes. And the night before had dinner with one of the other people on the flight. Turns out he had the same problem with United. Had a flight but the time required to get to a ticket in the other terminal caused him to miss it. He was worse off since luggage was on the canceled flight.”
JC: “USAir never unloaded the luggage?”
Jordan: “Apparently not.”
JC: “What I take away from this story is yet another example of bean counters looking at cost and not the customer.”
Jordan: “How so?”
JC: “USAir knew there was a serious problem with the plane at least an hour before departure. They spent that hour and another two hours trying the same fix over and over and expecting a different outcome. And Houston is not a hub so they mechanics are not as sophisticated as say in Charlotte, which is a hub.””
Jordan: “What the pilot said was the problem occurred on landing and he told the maintenance crew what the problem was. Most people in maintenance have a sense of how hard a problem is to fix…and if they are qualified to fix it. A lot of times the fix requires special equipment.”
JC: “So if the pilot identified the problem at landing, the maintenance crew should have been able to determine whether they could fix it or needed more expertise.”
Jordan: “USAir had more than enough time to call Charlotte or Phoenix or even contract another mechanic in Houston – some airline must have a hub there – and at the worst fly in a mechanic or fly in another airplane.”
JC: “USAir is bad but who really qualifies as ‘stupid is as stupid does’ is United Airlines. Having gates in one terminal and no one to help. No doubt some bean counter figured United could save a few thousand dollars per year by not having a ticket agent.”
Jordan: “The same bean counter assigns no value to customer’s time going back and forth between terminals, no cost to possible missed flights and certainly no value to customer satisfaction.”
JC: “You going to fly United any time soon?”
Jordan: “Not if I can help it. As frustrated as I was dealing with USAir, dealing with United was even more frustrating.”
JC: “The TSA agent is right up there with United in terms of not being fair. Through no fault of your own, the flight was cancelled. Through no fault of your own, United does not have a ticket agent in the terminal with the gate. In addition, you already passed security for your flight at that same TSA checkpoint. Yet they refuse to let you through security that you went through earlier.”
Jordan: “If asked, TSA would probably claim they could not let me through for reasons of national security.”
JC: “They let you through once but would not let you through again. I think that is stupid and unfair.”
Jordan: “But TSA suffers no consequence for not being fair.”
JC: “But you do and so do a lot of other people.”
Jordan: “Not to bring up General Motors again…”
JC: “…but you will.”
Jordan: “The report of why GM did not fix the ignition switch for more than 10 years indicated employees were encouraged not to bring up problems.”
JC: “Don’t rock the boat. The pressure to conform must have been intense. Knowing there was a clear safety problem and yet virtually no one openly talked about it and no one led an effort to fix it. In fact, the report said some employees hid info about the problem, even lawyers.”
Jordan: “GM was not fair to customers and not fair to employees. USAir and United…and remember ATT…were not fair to customers.”
JC: “Let’s not forget our friends as TSA.”
Jordan: “Right. Each organization fostered a culture that encouraged employees to ignore the customer, no matter how illogical or unfair the behavior.”
JC: “You have got to work with Matt and make sure a section on consequences of these type behaviors gets into the report for POTUS on rebuilding US manufacturing. I know ATT, United, USAir and TSA are services organizations, not manufacturing. But I think attitudes and cultures that evolve in manufacturing companies eventually migrate to service companies as well.”
Jordan: “JC, I will meet Matt again. Your observations about culture in manufacturing migrating to service organizations is a good one.”
JC: “OK. So what Engine Charlie Wilson said years ago still holds true today. What’s good for General Motors is good for the country and vice versa. Say goodbye Jordan.”
Jordan: “Goodbye JC. And thanks.”

#58 More about Being Fair. Do Companies Really Understand?

11 Wednesday Jun 2014

Posted by Jordan Abel in Back Asswards Thinking, Personal Stories, Stupid Is as Stupid Does

≈ Leave a comment

(Readers: Please note the blog about the 5th revolution in the US is constructed as a story. While not all chapters are linked, after a few recent entries, you might want to start at the beginning. More about the blog and about the author. )

Scene: Jordan and JC continuing earlier conversation.

JC: “Jordan, I need to leave pretty soon. But, if you ask me, which you haven’t, I think the POTUS project needs to be expanded beyond General Motors.”
Jordan: “I agree. GM is what POTUS asked me to focus on.”
JC: “And you have. But your experience extends well beyond GM. You need to at least include some other ideas, especially about the importance of being fair. Besides not being fair has been a big problem for many companies, not just GM.”
Jordan: “Funny you mention other companies. Two incidents that happened to me recently point that out in spades. I’m not sure either company remembers why they are in business.”
JC: “Let me guess. One is a cell phone provider and the other a cable company.”
Jordan: “You got one right – the cell-phone provider. The other is an airline.”
JC: “Alright, what happened? Start with the airline. No, changed my mind…
Jordan: “…a prerogative of women.”
JC: “Jordan, now, now. Be careful. Like I said, I changed my mind. Start with the cell-phone provider.”
Jordan: “I get a new smart phone.”
JC: “iPhone?”
Jordan: “No LG. I have the phone a little over two weeks…16 days actually…and then have a problem. Take it back to the ATT store where I bought it. But, like the good service-minded company that ATT is, they refuse to switch it out.”
JC: “Why?”
Jordan: “Because I’ve had the phone for more than two weeks.”
JC: “What do they do, if anything?”
Jordan: “Sent me to an ATT service center, about 20 minutes away.”
JC: “Service center fix it?”
Jordan: “No. The tech…let me rephrase that…the alleged technician said nothing was wrong. Before reaching that conclusion, the tech erased all the information on the phone.”
JC: “What happened next?”
Jordan: “I get the phone back and sent on my way with the claim that nothing is wrong. After 30 minutes or so, I figured out a solution that sorta, kinda solved the problem. At least enough that I could continue to use the phone. My fix worked for about six months then no more.”
JC: “Did ATT finally fix it?”
Jordan: “Tried to fix it then said the phone was defective. They agreed to replace it, except…”
JC: “…except what?”
Jordan: “There was no replacement phone in stock at the Service Center. Seems odd but I don’t work at ATT. Anyway, the plan is to ship a phone from somewhere.”
JC: “When?”
Jordan: “Next business day for sure and maybe next calendar day. But now it’s mid-afternoon Friday and ATT is unwilling to guarantee delivery to the house on Saturday. I tell them I will be in Houston Monday and ship to that office. But do not ship to the office Saturday because no one is there on weekends.”
JC: “Let me guess. ATT ships to Houston for delivery Saturday.”
Jordan: “Exactly. And then it gets delivered again Monday.”
JC: “So now you have a new phone. What’s the problem?”
Jordan: “ATT only sent the back half of the phone, not the front half. So I had to take the old phone apart and put the new phone together.”
JC: “For an MIT guy that must have been a no brainer.”
Jordan: “It was easy but the phone still does not work. I have to find an ATT store to activate the phone.”
JC: “OK, what about the old back half.”
Jordan: “The store that activates the phone will not take the broken half. I am supposed to send it back.”
JC: “So now what?”
Jordan: “I get busy all week and take off for Charlotte with the back of the old phone but not the box.”
JC: “Just get another box.”
Jordan: “I would have except the shipping label is in the box in Houston. I called ATT, told them the situation and they said to take the broken phone to the service center in Charlotte where all this started. The Service Center would then mail the phone back to wherever broken phones go.”
JC: “Seems simple enough. End of story?”
Jordan: “No. Get to the Service Center and they refuse to take the phone…but did give me a new box…”
JC: “…but no shipping label.”
Jordan: “In the meantime I am getting texts and robo calls from ATT asking me where the phone is.”
JC: “What’s next? By the way, you making up this story? Seems too bizarre.”
Jordan: “I’m not creative enough to make up a story like this. So back to Houston, find the box, put the old phone in it, use their label and mail it.”
JC: “Let me guess, again. ATT claims you still have the phone.”
Jordan: “You got it. I call ATT to explain I mailed the box and the guy at ATT asks me for the tracking number off the return label.”
JC: “Didn’t ATT send you the label?”
Jordan: “Yes. ATT does not have a record of its own tracking number. And then the guy at ATT has the audacity to tell me if I can’t find the tracking number and the phone is lost, I get to pay $300-$400.”
JC: “Gee, that seems fair to me. ATT sells you a defective phone. Finally replaces the phone. Then insists it’s your responsibility to tell ATT its own tracking number. If the phone…broken phone…is lost somewhere along the line, even though not your fault, they will charge you $400.”
Jordan: “Good way to build customer relations, right?”
JC: “By the way, did it ever get resolved?”
Jordan: “I don’t know if the broken phone ever got back to ATT. But 7-8 days after the ATT guy told me it was my job to find the tracking number, I get a text saying to the effect ‘All is well and we love you as a customer.’”
JC: “Whew! ATT has a new definition of ‘fair.’ You are responsible to overcome our incompetence. If you can’t, then you pay us even more money.”
Jordan: “Have you got time for another story about fairness – this time the airlines?”
JC: “Yes, but I need to get rid of this coffee first.”
Jordan: “Me, too.”

#57 Being Fair Is Good for GM and Good for the Country

07 Saturday Jun 2014

Posted by Jordan Abel in Back Asswards Thinking, Causes of the Revolution, General Motors, Personal Stories, Societal Issues, Stupid Is as Stupid Does

≈ Leave a comment

(Readers: Please note the blog about the 5th revolution in the US is constructed as a story. While not all chapters are linked, the story might be more meaningful by starting at the beginning.)

Scene: Coffee shop with Jordan and JC. Catching up on recent events. They’ve finished their first cup.

JC: “Thanks for buying my coffee refill. You’re so generous.”
Jordan: “You’re welcome. Next time, you buy…dinner.”
JC: “So when you look back at what went wrong at GM, is there one overriding issue that comes to mind?”
Jordan: “Yes. And I am not sure I actually said this to Matt. GM’s downfall started when it stopped being fair.”
JC: “Stopped being fair? Jordan, that seems odd and naïve, especially from you. You want companies to be fair? What planet are you living on?”
Jordan: “Think about it? Do you deal with people or companies you don’t think are fair? They must win and you must lose.”
JC: “Occasionally, we all end up with the short end of the stick. But I try to avoid situations where I am always the loser and getting screwed.”
Jordan: “That’s what I mean. Everyone makes mistakes and not every situation is fair. But people try to stay away from situations where ‘heads I win, tails you lose.'”
JC: “Now give me an example. And not just the car stuff.”
Jordan: “OK. Do you know what COLA means?”
JC: “Cost of living allowance.”
Jordan: “Hey, you’re good.”
JC: “Jordan, most everyone knows what COLA means. So tell me the story, already.”
Jordan: “I don’t remember the exact year…sometime in the early 1980’s…and the economy was in a mild recession. Car sales were down and GM was under pressure to maintain profits. More self-induced pressure but that was the claim.”
JC: “And who was captain of the GM ship at the time?”
Jordan: “Roger Smith.”
JC: “Oh, Mister ‘focus-on-cost’ himself. This story should be good.”
Jordan: “So Squeaky decides all salaried people should sacrifice some compensation in order to help earnings.”
JC: “Everyone was to sacrifice? Across the board?”
Jordan: “All salaried employees. And Smith decides the most equitable way is to stop paying COLA. That way no one has to take a salary cut.”
JC: “How is…or was COLA calculated at GM. I know for Social Security, COLA is a percentage of benefits. Everyone gets an increase, say 2-3%. The higher the benefit payment, the higher the amount of the COLA increase. A benefit of $1,000 per month would receive $30 more per month. A base benefit of $2,000 per month would get $60 more per month.”
Jordan: “COLA was different at GM. COLA was not tied to salary amount. COLA was a specific dollar amount. And COLA was paid each quarter, not every month. The amount was linked to the UAW contract.”
JC: “You in the UAW? I mean really. ‘Look for the union label…’ That’s really funny.”
Jordan: “C’mon. By linking COLA for salaried employees to the UAW, GM thought it would deter people from joining the union.”
JC: “So Squeaky…I mean Mr. Smith…decides fair means every salaried person should give up COLA. But COLA for salaried is the same dollar amount, whether the person is chairman of the board or a mail clerk. That seems like a new definition of fair.”
Jordan: “That was Smith’s definition of fair. For Smith, COLA was barely pocket change. For lower-paid staff, eliminating COLA meant a noticeable pay cut.”
JC: “What really troubles me about the story is Smith not understanding what’s fair. If everyone had to give up say 5.0% of salary, then people would not like it…but they might understand…and think its fair. But pocket change to one person and 5.0% to another is not fair. For the lower-paid employees, that might have been grocery money.”
Jordan: “I hear you. Before announcing the plan, I wonder if Smith discussed it with anyone or if he did, if anyone tried to talk him into making it more fair?”
JC: “This story is maddening…and probably all too typical. How do we make sure CEO’s and Boards of Directors of companies become more fair? I’m convinced if POTUS wants to rebuild US manufacturing, there needs to be strong emphasis on companies being as fair as possible.”
Jordan: “Telling stories like the one about taking away COLA is a good start. Everyone…well, most everyone…will understand that was not fair.”
JC: “Here’s another fairness issue. Fast forward to GM post bankruptcy, which is a whole lot more recent. GM starts recalling millions of cars. What was it for… something to do with starting the car?”
Jordan: “The ignition switch.”
JC: “That’s it. What really happened?”
Jordan: “Short answer is GM was still run by bean counters. GM saved about $1 per car by not fixing a design flaw in the switch. Then GM spent hundreds of millions, maybe a billion dollars or more, to recall the cars and fix the problem.”
JC: “What about all those people who died?”
Jordan: “When the switch failed, the power to the rest of the car, including the airbags was cut off.”
JC: “How many people died?”
Jordan: “We’ll never know exactly. Initial reports indicated 13 or so…but likely more.”
JC: “That’s awful. Why didn’t they fix the problem?”
Jordan: “I’m not trying to defend any actions by GM. But most people have no idea how complicated an automobile is…and how driver’s abuse it.”
JC: “Stuff happens. I understand that. But what’s not fair is the way GM knew about the problem for 10 years and never fixed it.”
Jordan: “I agree. But the report said the problem was confined to a group, not all of GM.”
JC: “Not fixing a problem is a reflection of corporate culture. And culture starts with the CEO. Worse yet, from what I read, the lawyers were some of the main culprits. Jordan, when you were at GM, was there a culture of burying problems…I don’t mean for 10 years…or even five years. And did a bunch of bean counters and even worse a bunch of lawyers effectively run the company?”
Jordan: “The problem would have been fixed…and quickly.”
JC: “That’s my point. GM ran amok. Why? And, you know why.”
Jordan: “GM management go so focused on trying to generate earnings by controlling cost, it lost sight of why it was in business.”
JC: “And, oh great GM historian, when did that culture begin to change?”
Jordan: “You know when. With the reign of Roger Smith.”
JC: “You know something, Jordan, as much as I agree with your assessment of GM changing starting under Roger Smith, GM was not alone. The United States when thru a similar transition starting at the same time.”
Jordan: “You mean under Ronald Reagan?”
JC: “Yes. Just take a look at some basic economic statistics, especially median household income. We talked about this before. Upper incomes started to gain and lower incomes remained flat. The disparity got worse, and worse and worse. Then the disparity became so great…and so unfair…that people revolted. The unfairness resulted in US having its 5th revolution.”
Jordan: “Point well taken. And lesson for the project for POTUS.”
JC: “And the lesson is ‘Why being fair is good for General Motors and good for the country.’ I know, a variation on what Engine Charlie Wilson said but still true.”

#56 Catching Up with JC. Can’t Shake GM.

04 Wednesday Jun 2014

Posted by Jordan Abel in Causes of the Revolution, General Motors, Personal Stories, Societal Issues

≈ Leave a comment

(Readers: Please note the blog about the 5th revolution in the US is constructed as a story. While not all chapters are linked, the story might be more meaningful by starting at the beginning.)

Scene: Coffee shop with Jordan and JC. Catching up on recent events.
JC: “Jordan, old boy, where have you been? Besides, you look awful.”
Jordan: “Thanks for the compliment JC. Nice to see you, too.”
JC: “Seriously, where have you been? You OK?”
Jordan: “I’m fine, I think. And I appreciate your concern.”
JC: “So, where have you been?”
Jordan: “Holed up in my office on an assignment for POTUS.”
JC: “Some project where you’ll be put on double-secret probation if you tell me?”
Jordan: “Nothing secret…at least no one told me not to discuss it.”
JC: “So what is it?”
Jordan: “POTUS is developing a plan to rebuild US manufacturing. He asked me to use my knowledge of and experience at GM for any lessons that might be helpful.”
JC: “You’ve been away from there for a while. Besides GM seems to be in a lot of trouble.”
Jordan: “That’s one of the lessons. How did GM go from the world’s leading company to basically a so-so player…at least in the car business?”
JC: “You have to write all the stuff yourself?”
Jordan: “No, fortunately. POTUS’ office assigned a reporter.”
JC: “I came by your office the other day and saw Matt…”
Jordan: “Pardon me for interrupting but his involvement you have to keep quiet. We don’t need a bunch of people claiming liberal bias before the report is written. Forget you saw him. But, he has been a great help.”
JC: “But why the haggard look?”
Jordan: “Talking about GM…or at least what I know about GM…during the early years was great fun. And frankly, truly inspiring. They did a great job.”
JC: “A lot of those years Sloan was in charge, right?”
Jordan: “How did you know that?”
JC: “Remember, I’m an American history major. Plus I read a lot. Plus I’ve known you since you could barely see over a split-rail fence.”
Jordan: “A very long time.”
JC: “When you said you were going to the Sloan School at MIT…I knew about MIT but not Sloan…I did some research on who Sloan was.”
Jordan: “So you read up on Alfred P. Sloan.”
JC: “And his middle name was Pritchard. So there.”
Jordan: “You are good. Anyway, telling the story about GM quit being fun when we started to discuss the 1980’s under Roger Smith.”
JC: “You were at Buick, then, right? From all you’ve said that was a great assignment.”
Jordan: “Buick was loads of fun. And I’d like to think I helped.”
JC: “So what’s the conflict, already?”
Jordan: “Until Matt starting probing, I’d never put the Smith regime in proper context. I’d thought about a lot of what went on but never put all the pieces together or really assessed the impact.”
JC: “And what was your conclusion?”
Jordan: “Smith…aka Squeaky in certain circles…put GM on the path to bankruptcy.”
JC: “You think intentionally?”
Jordan: “No but he intentionally caused harm to parts of GM.”
JC: “Such as?”
Jordan: “Such as the UAW and such as Flint, MI.”
JC: “Why?”
Jordan: “I don’t know exactly why. But I think Squeaky believed the UAW members made too much money.”
JC: “And therefore were effectively stealing money from GM…or at least taking it unfairly.”
Jordan: “More like taking part of Squeaky’s bonus.”
JC: “But why Flint?”
Jordan: “Because GM was forced to recognize the UAW after a sit-down strike at Fisher Body #1 in Flint.”
JC: “When was that strike? Late 1930’s?”
Jordan: “1936-37. And I don’t think Smith ever forgave the workers in Flint for the strike…or the people who supported the workers.”
JC: “I don’t want to dredge up old stories but I can tell by your voice talking about the decline of GM has been painful.”
Jordan: “The pain only gets worse the more we talk about GM post 1980. Let’s get a refill.”

usrevolution5

~ USA Headed for a 5th Revolution! Why?

Monthly Archives: June 2014

#63 Capitalizing on Jewels…or Was that Joules?

#62 More about Creating Wealth. What’s Fair and What’s Game.

#61 Herpes Handbags? So, What’s Not Fair?

#60 Being Fair. Part of POTUS’ Project on Manufacturing

#59 Customers Unite. Out with the Bean Counters.

#58 More about Being Fair. Do Companies Really Understand?

#57 Being Fair Is Good for GM and Good for the Country

#56 Catching Up with JC. Can’t Shake GM.