Two recent editorials by economists suggest that private sector accountants aren’t the only ones tempted to inflate and misstate the numbers to please their bosses:
US Unemployment Rate is Actually 8%
An economist at the University of Chicago argues that the US government, under both Republican and Democratic administrations, has been playing fast and loose with unemployment numbers to make themselves look better. Not only is the real unemployment rate 8% and still rising, but with temporary and part-time work making up most of the ‘new’ jobs, there is little doubt that under-employment, which no government dare develop an accurate measure of, has now soared past the 50% mark.
Productivity Data Assume We’re Neither Working Harder Nor Exporting Jobs
The senior economist at Morgan Stanley reveals that the reported jobless economic recovery, which Bush officials are so euphoric about, not only ignores the impact of massive “offshoring” of service jobs to cheaper third world countries, but also uses ‘nonsensical’ data on the average work week. The data assume that the average worker spends the same 35 hours a week working as s/he did a generation ago, which is demonstrably wrong. In fact one of the factors exacerbating the joblessness of the recovery is that employers prefer to pay (or cajole) their employees to work longer hours, double shifts, and large amounts of overtime, rather than search for, train and provide benefits to new workers and then, if sales fall again, lay them off and pay severance. As a consequence, the average work week, which is the denominator on which productivity data is based, is wildly understated, and hence productivity data are wildly overstated.
…And the Collapse of the US Dollar Portends Worse to Come
The two charts above illustrate that the free fall of the US dollar against other currencies (the chart against the pound and yen is similar) continues unabated. While the Bush regime, always reliably thinking short term, seems to see no harm in this, it poses disastrous longer-term dangers for both the US and world economies, as I’ve reported earlier. Watch for the Euro to replace the US dollar as the global currency standard within a few months. Then watch all hell break loose. The staggering Bush-created US debt, which is behind all this, is pushing us to global economic collapse.
November 30, 2003
November 29, 2003
November 28, 2003
|My new laptop has an upgrade called a UXGA screen. I’m told this gives you 25% more pixels to the inch (50% more per square inch), which results in a crisper, more legible picture. This has three consequences that I’ve just started to grasp.
The first consequence is that, with 1600 pixels displayed on a 12″ wide screen (note that the advertised 15.4″ screen size is a diagonal measure, which shows the contempt marketers have for their customers — measure your screen if you don’t believe me), what you see is no longer what you get. When I display a North American letter-size page in ‘page/print view’ at 100% on my screen, it is not 8.5″ x 11″ on the screen, but rather 72% of those dimensions. But because of the higher pixel count it is as legible (even to my poor eyesight) as the ‘full-size’ page, so I don’t have to magnify it to see what it will really look like on the page.
The second consequence is that, under my 3-column Radio blog theme, since the size of the two sidebars is fixed, the width of the centre area is immense (see screenshot above). Even some of my long articles all fit on a single screen with no scrolling whatever. But the consequence is that I have to remember to limit my graphics to about 450 pixels wide, since readers with less screen real estate than I have will get wonky results (graphics pushed off the right end of the page, and right sidebar gone completely) if I exceed that limit. On my screen the 450 pixels are just over 3″ wide, so small they look absolutely miserly. And the 200-pixel-width maximum graphics I wrap text around, newspaper style, take up only an inch and a half of the nine inches of my centre column. So text wrap that looks fine on small screens looks just silly on mine.
The third consequence, which I just discovered last night, is that the 7.5″ tall window on my screen (nine inches less the toolbar spaces top and bottom), because it actually displays 10″ of legible text on UXGA, shows a complete North American letter-size page on the screen with no scrolling. This is a huge advantage for on-screen editing of Word documents. It finally achieves what I complained about last Spring — that screens should be tiltable 90 degrees so you can actually read a page on a ‘page’. In fact, depending on margin sizes, I can even review two pages side-by-side on the screen at the same time — An editor’s dream come true.
You would think I would like, or even find vindication in, a book that predicts an imminent ecological holocaust. After all, that’s what the hundreds of scientists who developed and urged passage of the Kyoto Accord did. And my articles in these pages on environment and overpopulation have done the same. So I was surprised at my reaction to The Fourth Turning: An American Prophecy, by William Strauss and Neil Howe.
And this book, written in 1997, during the dot com boom and before the Bush bust and 9/11, predicted this:
A global terrorist group blows up an aircraft and announces it possesses portable nuclear weapons. The US and its allies launch a pre-emptive strike. The terrorists threaten to retaliate against an American city. Congress declares war and authorizes unlimited house-to-house searches. Opponents charge that the president concocted the emergency for political purposes. A nationwide strike is declared. Foreign capital flees the US.
This is predicted to happen ‘around’ 2005, and to be the catalyst for The Fourth Turning, a twenty-year period of crisis that will transform Anglo-American society and perhaps the world, as happened in roughly 80-year intervals since the middle ages (the most recent fourth turnings being, going backwards in time, WW2/Great Depression, the Civil War, and the American Revolution.
It is human nature to look for patterns, and find them fascinating and sometimes useful. And the authors have done their homework thoroughly, and even offer a whole chapter on how to prepare for the coming apocalypse, though it appears perhaps it has started a few years early. I guess what bothers, even infuriates me about this book is not the lessons from history, which are intriguing, but the whole ‘prophecy’ flavour of it. While many people have warned that our selfishness and neglect of our fellow man would cause the have-nots to rise up against the haves, and others have warned that our neglect of the environment will cause cataclysmic climate change and disastrous biodiversity loss, these guys are saying that the apocalypse is written in the stars, foreordained no matter how well we had looked after our fellow man and our environment. There is something about that fatalism, that predestination, that rubs me the wrong way. It says, in short, it doesn’t matter what we do and when we do it. It is the great catholic cop-out: It is not in our control, what we do ultimately makes no real difference, so go ahead and do whatever the hell you want, but don’t forget to ask forgiveness for your sins, and that will make it all OK.
It’s worth reading, because it’s provocative, well-researched, and a good summary of Anglo-American history. But I have a mark on my wall caused by hurling it across the room when I reached the wringing-of-hands sections. So buy the soft-cover edition.
The intriguing graphic above is from a Rutgers University study asking whether 9/11 was indeed the catalyst for the Fourth Turning. The graphic is available in a legible wall-sized version on the site.
November 27, 2003
A few years ago, the Centre for Business Innovation at Cap Gemini published a study called Measures that Matter, which indicated that, more than any other factor (and they looked at management skill, brand recognition, product quality and customer satisfaction), a high degree of innovativeness creates value for a company, value that is reflected directly in a higher P/E ratio for the company’s stock.
The problem with this finding is that there is no objective way to assess how innovative a company is. We tend to rely on anecdotes (3M’s post-it notes, Wal-Mart’s reinvention of the retailing model) because although we can’t really define innovativeness, we recognize it when we see it. A newer report from Eric Chen and Kathryn Ho of Cap Gemini has now produced a model, shown in the chart above, that makes the process of recognizing and measuring innovativeness a bit easier and less subjective.
The study starts by defining innovation as a robust creative process that turns out a very distinct output with significant impact on the market. Because it is market-focused, rather than internally-focused, I think this is an excellent definition, even better than the one in my own paper on the subject. Then the chart above provides a scale for assessing the degree of innovativeness of a particular idea, or of the whole stream of innovations that emanate from a company, by gauging where they sit on this three-dimensional grid. The further ‘out’ on the grid in each dimension, the greater the innovativeness.
The authors indicate that the Segway vehicle, for example, would be far along in both the creativity and distinctiveness dimensions, but until and unless it really finds its market, it would barely register on the third, impact, dimension. Another example given in the article, which is ‘out there’ in all three dimensions of innovativeness, is the invention in the 1950s of the butterfly variation of the breaststroke in swimming, which so changed the dynamic of the breaststroke that it had to be categorized as a separate swimming style from then on. Very inventive, very distinctive in the ‘competitive market’, and market-transforming.
The article also reminds readers that innovativeness is more than just invention of new products — it extends to:
Not all companies want or need to be highly innovative in all these ways, and along all three dimensions of innovativeness. But any company that is so fixated on efficiency improvements that it has stopped being innovative at all is a business at the end of its life cycle. Time to bail out.
In addition to looking at how far out in each of the three dimensions of innovativeness a company’s recent innovations have been, the authors suggest that companies ask three questions to assess the state of their innovation culture:
November 26, 2003
Some caveats on the above lists:
Photo: Ruth Fremson/NYT taken at Walter Reed Army Medical Center
I‘ve read a half dozen “layman’s” explanations of trackback, and I confess I still didn’t really understand it until yesterday. I also somehow thought it was connected to comment notification, which it isn’t. For those as befuddled as I was, here’s my attempt to explain it. If this just confuses you further, I apologize in advance.
Trackback simply lets another site know that you have a post referring to it on your own site. Read the previous sentence until it makes sense.
Sometimes when you’re reading someone’s blog you want to comment directly on their site. But sometimes you want to pursue the discussion on your own site. If so, and provided the other site has trackback enabled (i.e. the word ‘trackback’ appears below each post, as illustrated above) this is what you do (Movable Type users, I’m told, must use this ‘bookmarklet’ process instead of OPTION A):
Now when you post your article, the number in brackets beside the word ‘trackback’ below the post on the other site you referred to will increase by one, and when someone clicks on the word ‘trackback’ on the other site they’ll see en extract from, and link to, your referring article. In other words, you’ve established a 2-way link between your article and the post on the other site.
To allow others to trackback to your site, you need to ‘enable’ trackback. The process to enable trackback on your site depends what blogging tool you use. For Radio users the enabling process (you just have to do it once) is here.
What the bulleted instructions above describe is called an ‘outbound trackback’. From the perspective of the owner of the other site it’s an ‘inbound trackback’ to them.
Once you’re enabled, you can practice on this post if you like. If you do, I’ll reciprocate when I see your trackback by posting a trackback to one of your articles, so you can see how it works the other way. It all makes more sense when you’ve done it once or twice. The only drawback is that, having given your readers a third way to respond to your articles (besides comments and e-mail), now you have to check out your inbound trackbacks as well, to get the complete picture of what people thought of your article.
As for comment notification, it’s just an e-mail sent to your inbox each time someone posts a comment on (or trackback to) one of your blog posts. This is available so you don’t have to scour back through comments threads on your old posts to see if there are any new comments. The process to enable this also depends on which blogging tool you use. For Radio users the enabling process (you just have to do it once) is here.
Postscript: Tests for readers pinging me:
November 25, 2003
I‘ve now finished Charles Handy’s Age of Unreason and Age of Paradox. They were both written a little over a decade ago, and the thinking in them is dated, almost quaint, coming as it did before the dot com boom and bust, the ‘offshoring’ of jobs and the events of 9/11. In these two volumes, Handy grapples with the future of organizations and their inability to balance the needs of shareholders with those of employees, suppliers, customers and the community. He laments the soullessness of modern corporations and their abject failure to deliver the global prosperity and equity that advocates of globalization and ‘free’ trade had promised. He describes the resultant paradoxes — such as half the people working absurd hours while the other half are un- or under-employed, and the paradox of productivity:
Economies have traditionally grown , in measured economic terms, by turning unpriced work [e.g. child care, senior care, home repairs and maintenance, which most of us used to do ourselves] into priced work because that work can then be counted. The irony [in this economy] is that, although the economy appears to grow, the work that is done may actually be reduced. By pricing the work, we turn ‘activity’ into ‘jobs’ and create employment, but then some work gets too expensive for most customers to afford and so no longer gets done at all. And in many cases we can’t do it ourselves for free because we’ve forgotten how to do it. The activity disappears. By pricing work we can actually destroy work, but we will never notice it because it never got counted in the first place…
The new growth sector for work is the do-it-yourself economy [looking after the young, the old and the sick, doing our own repairs and maintenance, growing our own food, plus self-employment and the underground economy]. As more and more people get pushed out of organizations [in the endless pursuit of more 'productivity'] it makes good economic sense for them to do themselves what they used to pay others to do…when they now have more time than money. But this new growth sector is largely invisible [it is not measured as 'productive' because it is not 'paid work'. It is the precise reversal of what had happened in the traditional economy].
Handy goes on to contrast the Anglo-American adversarial culture, reflected in the business ‘kill or be killed’ competition ethic and the justice system (“a conflict between opposites is the best recipe for fairness”) with the European/Asian ‘trinitarian’ culture (“looking for solutions which can reconcile or illuminate the opposites”), reflected most famously in the French motto “liberty, equality, fraternity”, where the third element serves to mitigate the inherent tension between the first two.
The meat of the two volumes is the prescription for a ‘federation’ model of business to replace the old ‘hierarchical’ model. The federation model entails balancing business control between the centre (management) and the ends (front line), and requires adoption of two principles: twin citizenship where each worker becomes a ‘member’ of both their front-line business unit and the larger organization, and subsidiarity where the tiny centre is voluntarily ceded just enough authority by the front lines to look after needed coordination, resource allocation and crisis intervention decisions. Handy quotes a 1931 papal encyclical to illustrate just how important it is to keep the centre from becoming too powerful: “It is an injustice, a grave evil and a disturbance of right order for a large and higher organization to arrogate to itself functions which can be performed efficiently by smaller and lower bodies.” Citing Occam’s Razor, Handy asserts that the centre must be both “as small as it can be and as large as it has to be”.
Most of this is consistent with the principles I’ve espoused earlier for what I call New Collaborative Enterprises (NCEs) — self-selected, self-managed groups of equal partners (members) who possess complementary non-redundant skills and expertise in a field of endeavor, making a living together following a set of agreed-upon principles that place members’ well-being (as each member defines it) ahead of profit.
Handy, at least in his 1994 thinking, would suggest that a pure World of Ends in business is just too anarchic — that there has to be some ‘centre’ left to coordinate the ends, just as the human body cannot function without a brain. I would hope that a decade later he would be prepared to go the final step and acknowledge that, just as our Earth organism seems to be able to function (sorry, theists, I’m about to offend you again) without a central guiding hand, so too should human enterprise (as it did for the first three million years of our existence on Earth). Modern technology is ultimately all about connection, and I believe we are now so well connected, business-to-business and business-to-customer, that we are within reach of a true World of Ends where central management is obsolete. The grey dot in the World of Ends chart above, in other words, is just ‘the network’.
What may be needed is a ‘virtual federation’ of independent businesspeople and NCEs. I don’t believe such a Federation needs to have any authority, or any employees, or make any decisions, but, just like the Internet, it needs a central registry, and some databases and social networking tools to link together businesspeople, NCEs and customers. It would serve some of the functions of an employment agency, but do so completely transparently, allowing members to contract with each other and with customers through its auspices and technologies. It would serve some of the functions of a business incubator, allowing independent businesspeople to create new NCEs and to identify other people with whom they would like to make a living, either for the term of a customer contract, or for a lifetime. And it could serve some of the social and financial (but not political) functions of a Buying Group or Trade Association, gathering information and collecting and remitting funds on behalf of member NCEs to receive volume discounts from suppliers and hence giving Federation members the same economies-of-scale benefits that large organizations and oligopolies receive, with none of the associated costs (financial and other) of such large organizations. I’ve been involved in the organization of Buying Groups, and they are interesting creatures: very lean and collaborative, and only limited by the deep distrust that businesses in our Anglo-American culture have for their competitors.
I’d propose that the Federation obtain all its tools, databases, collaboration spaces and technologies organically and without cost to members, by voluntary contributions from members, built collaboratively by the members for the members in the members’ spare time. Don’t impose infrastructure, in other words, let the members compare and tinker and choose what works for them.
And I’d propose that any individual could be a member of the Federation, and create or join NCEs, provided they are not restricted by their current employer from contracting independently to supply goods or services. Corporations could not be members — they bring too much restrictive baggage to the collaboration table to be of value to the members.
So how might this work in practice? Before I provide an example, here’s a caveat: It would of course be naive of me to suggest that old-fashioned employer-employee relationships and hierarchies will magically melt away in favour of the type of flexible, egalitarian, socially responsible NCE that I outline above and in my earlier articles. It would be equally foolhardy to try to mandate certain standards of social organization as a condition of membership in the Federation — the consequence of that would be to provoke others to set up a less restrictive, and inevitably more successful, Federation of their own. So let me coin a broader term than NCE, called Non-Restrictive Business (NRB) to refer to any organization in any form that does not contractually limit its members to working only with other members of that same organization.
OK, now here’s an example. ABC Bank decides it wants to provide weblogs and other social software to its researcher-analysts, newsletter publishers, and subject matter experts, to facilitate communication with other employees and with customers and suppliers. The Bank decides to outsource the project. It would go to the Federation database and do one of the following:
The Bank could of course also send RFPs to established corporations that supply such services. But once the Federation grows to have millions of members in thousands of NRB’s, each with letters of recommendation from previous happy customers, with one-stop shopping, no ‘limited’ corporation will be able to compete on price or competency with the vast market of expertise that the Federation offers. And if you’re a member of the Federation or the buyer for an NRB yourself, you will almost inevitably buy from other members. Eventually, the ‘limited’ corporations will free their members to join the Federation, or convert into NRBs themselves so that all their members can join.
The logical first members of the Federation will be independent consultants, technologists, and other ‘information professionals’. But I can see other freelancers — health care providers, financial advisors, just about anyone in a service industry (which is most of us these days) jumping on board. And once you start getting researchers, distributors, job-shop manufacturers, and marketers, you start to have the makings of the business World of Ends in the diagram above, flexibly contracting with each other, and eliminating the big corporate middlemen who currently skim most of the profits and make all the decisions.
I’m currently putting together a Business Plan for the Federation and both a Business Plan and a Charter for three sample NCEs. Since the concepts are so radically new, these documents will need collaborative input from interested readers and leading business innovators before we can actually start building these bold new organizational forms. I’ll post the drafts here, of course, but I’m also looking for some business and technology A-listers to spread the word and expose these ideas to a larger and more critical audience. Stay tuned.
|Each year I put together a crossword puzzle to include with our Christmas cards. For those that have the time and inclination, you can print out and solve this year’s edition below. The answers are here.
1 Card game
1 Windows suffix for music
November 24, 2003
|There has been a lot of pleading lately, from people across the political spectrum, for Democrats and liberals to ‘develop a real policy to deal with terrorism’. In the absence of this, the argument goes, every terrorist act plays into the hands of the Republicans and the neocons, giving them ‘I told you so’ justification for their ‘anti-terrorist’ actions (at least in the minds of the 50% of Americans who still buy the Bush con that unilaterally attacking Iraq had something to do with fighting terrorism). And in such an atmosphere, irresponsible idiots like Tommy Franks are advising terrorists that if they want to turn the US into a paranoid police state, the answer is simple: just pay one wacko in the US to detonate one dirty bomb anywhere in the country.
If the Bush regime is struggling next year to get re-elected, the best shot in the arm they could get would be more terrorism. In fact the Republicans now are almost fully invested (politically, and, with taxpayer money, financially) in the exaggerated and inept “war on terrorism”. No wonder, then, that the bozo ‘president’ says “bring it on”.
The point he’s missing, which most of the mainstream media are too lazy to bring up, and which the Democrats are either too timid or too disorganized to articulate, is that in a free country in the 21st century there is no defense against terrorism. The laughably inadequate, ill-thought out Bush-Ashcroft ‘security measures’ are a complete joke, easily circumvented by a terrorist group with even a small modicum of intelligence. I can think of half a dozen terrorist acts that would put Tommy Franks’ ideas to shame, and probably cost less, and which all the security measures implemented and promised in future freedom-erasing Patriot Acts don’t even begin to address. But unlike Franks, I’m not about to sell them to a magazine for terrorists to read. The concentration of power in the West automatically brings with it enormous vulnerabilities (as the incompetents in the Ohio power industry demonstrated clearly to twenty million of us in two countries last summer).
Quite simply: If someone wants to kill three thousand or three million Americans, in spectacular fashion, they can and will find a way to do it, any time they damn well please. The technology is available and inexpensive and all the ‘security measures’ in the world cannot stop it. It is simply naive wishful thinking to believe otherwise. This is what conservatives, fueled into a rage by 9/11 and armed with the muddle-headed thinking of ‘eye for an eye’ religious teachings that simply don’t work in a modern, global society, can’t and won’t accept. Cowboy analogies just don’t apply any more: Just because the answer to armed desperados in the Old West was a strong police and military presence and every citizen armed to the teeth, doesn’t mean the answer to armed terrorists in the New West (terrorists armed largely with technologies we sold to them, or which they stole from us) is an endless, bankrupting, freedom-sacrificing series of wars, overseen by a police state with Orwellian surveillance of everything and everyone and Star Wars and mini-nukes to ‘out-gun’ the bad guys. But this is exactly what Bush and the neocons are prepared to turn the West into, and they’re furious with ‘treasonous’ individuals and countries that don’t share their zeal.
Yes, the Democrats and liberals do need a policy to deal with terrorism. If we don’t have one, any major terrorist act in 2004 guarantees a Bush re-election. But our policy needs to recognize that terrorism is a reaction, not an action. People who attack the West, and Western forces, ideas and institutions are reacting to our actions and ideas that to them are absolutely abhorrent — the invasion of their countries, militarily, culturally, and economically, by Western troops, moral depravity, crass consumerism, spiritual sacrilege, and the power of money over man. It’s not our ‘freedom’ that they hate, it’s the imposition of Western culture that overwhelms them in their own countries and threatens everything they believe in. They don’t really care what Americans do in their own country, which is the real reason so few terrorist acts are carried out on American soil.
There is no defense against terrorism, but there is a viable policy to deal with it. Problem is, it’s a hot potato: no one really wants to adopt it, because it looks weak and it costs a lot. That policy is to stop attacking countries that don’t espouse Western values, and leave them to evolve in their own way at their own rate. That policy is to invest the billions that the US is now spending on arms, to instead provide those countries with humanitarian aid — money and supplies for education, infrastructure-building, medicines, and civilian technologies and training in how to use them. No strings attached except that we need to be able to audit to ensure the money and technologies are used for their intended purposes. Nothing to be paid back. In fact, for countries whose foreign debt to us is crushing them, making them economic slaves to us, we need to write that debt off. Goodwill is the only dividend we need.
If we did this, there would be nothing for terrorists to react to. And while there will always be a few deranged minds in the world who will blow up government buildings and commit other dreadful acts, and while under the auspices of the UN we may still need to intervene together to deal with leaders who inflict genocide or other massive cruelty on their own people or their neighbours, for the most part such a policy of incessant investment in nation-building will inevitably produce a world that is more peaceful, less harsh, and yes, safer and more secure for all of us than the one we live in today.