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August 19, 2006

Planning For The 20th Century

Evidently, officials at Ford -- the company that yesterday announced drastic cuts in auto production -- have been working hard over the past several years planning for success in the 20th century through betting on cheap interest rates and low gasoline prices to support a product line featuring SUVs. We are, of course, smack in the middle of 2006. But, on Friday, Ford officials contended that "no one in the industry could have anticipated that gasoline prices would remain so high".

No one.

In the industry.

Or, did they mean, "No one at Ford"?

Actually, no one ought to be surprised by the Ford production cuts. They are a natural consequence of me too, inside the boxplanning aimed squarely at solving strategic problems defined through the rear view mirror.

The auto industry has been aware of the core dimensions of the shifting strategic landscape for well over a decade -- arguably two decades. These shifts are profound. They inevitably call for a fundamentally different business model -- one that demands innovation and deep, behavior and skill change. Those, in turn, have always -- always -- meant that the solutions would require trading off today's profits, shareholder value, jobs, benefits and salaries (both union and executives) for tomorrow's sustainability.

Those at Ford, GM and elsewhere have confronted the question, "Are we willing to take real risks -- risks that might upset the financial markets, the unions and our executives?"

"Or, can we somehow find a way toward a viable future through luck and incremental, deck-chair (I mean, parking spot) rearranging?"

These are not easy questions. The executives, unions and other decision makers deserve our sympathy for the difficulty they find themselves in. But in choosing the incrementalist approach, those involved have wreaked real world damage on tens of thousands of families and, in part, they have done so out of obeisance to shareholder value fundamentalism.

They have picked short term value over a blended values approach that includes, but does not worship as false idol, value itself.

Posted by Doug Smith at 12:59 PM | Permalink

August 17, 2006

Exploding Mortgages V

From Billmon writing about the housing bubble:

"But what makes things different -- and potentially more exciting -- this time around are the gaudy new financing gimmicks Kevin mentions: no money down loans, interest-only mortgages, ARMs that reset to truly usurious rates, etc. If and when these loans blow up, and they will, it could leave many home "owners" with no alternative but to sell and sell quickly -- or simply mail the keys back to the bank."

Who is responsible for this situation?

In our popular culture, the responsibility will get placed largely on the customer - on individuals who signed up for exploding mortgages.

Caveat emptor -- buyer beware -- has a long and important history and some of the responsibility always should lie with the customer.

But in a world where place still fostered shared values, individuals were much more likely to be bouyed in their choices by the shared wisdom of extended yet present family and neighbors who lived nearby and participated meaningfully in their shared lives. Folks would not let folks sign up for exploding mortgages.

Most of us no longer live in a world of places. We live in a world of markets, networks, organizations, friends and family. In this new world, an extraordinary amount of responsibility for the safety, sanity and sustainability of our society rests with organizations -- because organizations are where we come together for an experience of community -- of thick we's -- that allow us to ask and answer: What difference do we wish to make -- together -- to the world we live in?

Our long history of markets in a world of places does not always serve us best in answering this. The singularity of the profit motive arose in a world of places because place itself fostered shared values that moderated the effects of businesses operating out of self-interest. Today, our most prevalent shared values - that is, predictable patterns of belief and behavior -- happen because of markets, networks and organizations -- not places. Of these, organizations are the most important: they set the tone of what matters, of what we really stand for.

While undertandable from a standpoint of history, what most private sector organizations really stand for is profit. But, that is neither sustainable nor sufficient in our new world. It has led, for example, to widespread and entrenched shareholder value fundamentalism every bit as virulent as religious fundamentalism. That, in turn, leads to financial institutions, realtors, mortgage brokers, speculators and others who -- as thick we's -- make it their shared purpose to build profits and shareholder value at any cost without regard for other values.

That, in turn, leads to exploding mortgages.

Responsibiity? Customers? Yes, somewhat.

The core responsibility lies however with the folks who show up to work every day in companies that create and sell exploding mortgages. And until a critical mass of employees and executives of those companies figure out they are responsible for the horrendous things happening to their 'customers' -- and their customers' families and children -- we will continue to move blindly and recklessly through a world we refuse to take responsibility for.

Posted by Doug Smith at 11:25 AM | Permalink

August 14, 2006

Stuck On One's Own Flypaper

"See the engineer hoist by his own petard" is an ancient adage about the law of unexpected consequences. Many centuries ago, engineers in armies would contruct 'petards' -- wooden boxes filled with gunpowder -- and use them to blow holes in fortified gates and walls. The unintended consequences included premature explosions that injured or killed the engineers and those around them. "Hoist by his own petard" has ever since meant "blown up by his own bomb".

In one of their now favorite but after the fact rationalizations for the war in Iraq, folks in the Bush Administration like to talk about the 'flypaper strategy' -- the notion that by fighting terrorists in Iraq, we don't have to fight them elsewhere. There are many problems with the logic of this assertion -- the number and spread of terrorism has risen dramatically after the invasion of Iraq, there are attacks and foiled attacks in lots of nations other than Iraq, and Sadaam Hussein really had little to do with the terrorists who attacked the United States. And there is also this: Shouldn't we prefer and actually seek to fight them elsewhere -- since that's where they are most dangerous?

But, in an update on being hoist by one's own petard, we also must ask: who exactly is stuck on the flypaper in Iraq?

Posted by Doug Smith at 12:19 PM | Permalink

August 13, 2006

Up Close And Personal

One of the recurring themes over the nearly five years of war in Afghanistan and nearly three-and-a-half in Iraq has been the Bush admiinstration policy to discourage photographs and video of the coffins returning home. In our new world of markets, networks, organizations, friends and families, a relentless stream of coffin imagery would risk conveying one element of the human cost of war -- and do so in a way that might personalize that cost to folks beyond the freinds and families of the brave men and women who make the ultimate sacrifice. Moral philosophers -- indeed, any human being who would like to consider him or herself moral -- would argue that personalizing the costs of war is a necessary element in making war moral and justifiable. Such folks might or might not continue to support the war; but, the point is that mere abstractions (e.g. a number of dead and injured) do not bear the weight of intense, real information and meaning. Indeed, even pictures of coffins would be less real than the visit families receive from military officials bearing the bad news. Still, in our world of markets, networks and organizations, there is a premium on ensuring that our democracy is strengthened through information that matters to making choices.

Having said all that, a recent set of experiments cast an additional and unexpected perspective on the morality of choices like war that put human beings in harm's way for larger purposes. The experiments have to do with time frame and raise a profound point about the value of information before another human being is put in danger rather than after that person has been injured or died.

In the first of these two experiments, participants are told that they are standing on a train platform watching the immenent approach of a runaway train. There are five people who have fallen on the tracks and are helpless to get out of the way. Next to the participant on the platform stands a very large man.

Question: Would you push the large man onto the tracks to absorb the impact of the train and save the five people?

85% of respondents say, "No."

Second experiment. Same situation. Only this time, instead of a large man standing next to the participant, there's a switch that, if pulled, will send the on rushing train to another track out of sight on which, the participant is told, stands one person.

Question: Would you pull the switch?

The majority of respondents say, "Yes."

Among the many interpretations about how reason and emotion battle to explain this difference is what one might call the 'eye contact' factor. In the first experiment, the large man is more real than is the person standing on the tracks in the second experiment. A second and critical explanation also points to the difference between specifically using a human being as an instrument in the first experiment versus the sense that the death in the second experiment is a 'by product'.

When the United States attacked Afghanistan one month after September 11th, the facts known at the time and subsequently verified on the ground were that the Taliban government housed Osama bin Ladin, Osama bin Ladin had ordered the September 11th attacks, and the attack on Afghanistan would give U.S. forces a reasonable chance of capturing Osama bin Ladin.

In light of this, it's worth asking if you were the decision maker, whether and how much it would have changed your decision had you personally met the men and women of the U.S. armed forces who would be put in harm's way in Afghanistan versus not having met them but knowing that some would die and be injured as a consequence of a choice to go after bin Ladin?

When the United States attacked Iraq a year-and-a-half after September 11th, the stated reasons for doing so included charges that Sadaam Hussein had weapons of mass destruction, had the delivery capability to use them on the United States, had direct contacts with Osama bin Ladin and actively supported the September 11th attacks. Subsequent to the invasion, each of these stated facts turned out to be false -- and that those making the decisions knew or should have known they were false.

It's worth asking if you were the decision maker (and you knew or should have known the stated reasons were false), whether and how much it would have changed your decision to invade Iraq had you personally met the men and women of the U.S. armed forces who would be put in harm's way in Afghanistan versus not having met them but knowing that some would die and be injured as a consequence of a choice to go after bin Ladin?

Now, over five years after invading Afghanistan (and failing to capture bin Ladin) and over three-and-a-half years after invading Iraq (and failing to achieve the security and stability that Donald Rumsfeld names as conditions to a military victory -- let alone the many conditions he describes as critical to overall success), it continues to be worth asking yourself -- as a moral person -- if it would make any difference to you in continuing to 'stay the course' in either or both of these theaters of war were you required to meet every man and women sent to their possible death or injury as a precondition to your choice to use them as instruments for your policy? And, would you answer differently if you were not required to meet them; but, rather, only thought of them as abstractions on a different track?

Posted by Doug Smith at 01:04 PM | Permalink

August 06, 2006

Casting Call

Wanted: A presidential impersonator.

The body politic of the United States of America is in need of a president. According to Constitutional rules, however, an actual president is not even a theoretical possibility until January 2009. Until then, the nation must do the best it can without a real president. (Although, it's clear, the nation should do the best it can to establish processes for qualifying potential holders of the actual office in order to avoid repeating the mistake of having an empty office for another four years beyond January 2009.)

This casting call, then, is for men (or, if remarkably talented and physically able, women) who bear a sufficient resemblence to George W. Bush and have the requisite skills to impersonate George W. Bush. The job, however, is not -- I repeat NOT -- to be a comic. The comical aspects normally associated with impersonators are specifically not asked for and all who audition with that in mind will be rejected. Simply put, we are long past the point where there is anything even remotely funny about the emptiness in the office of president.

Instead, we are looking for a serious, sober and responsible impersonator. Someone who can pretend -- credibly pretend - to actually perform the functions of a president. Once selected, we will ask this presidential pretender to travel the nation engaging citizens in dialogue and discussion about the major challenges facing our nation. This will demand that the person selected be willing to dedicate the time needed to read and otherwise learn about the contexts, backgrounds, principles and related materials and thoughts normally associated with what the holder of the presidency is accountable for knowing. Among the first such briefing materials will be succinct background memoranda on the rule of law, the Constitution, having an open mind, asking for thoughts from those who disagree and mastering the basics of the actual subjects on which the presidential impersonater will speak.

In requiring this preparation, we are asking the presidential impersonator to recognize that his or her job is not -- again NOT -- to impersonate George W. Bush. Rather, in the physical guise of looking like George W. Bush, the presidential impersonator is requried to act like a president. This will at first be difficult for audiences to comprehend because it will demand them to observe two seemingly contradictory phenomena: (1) a person looking and talking like George W. Bush; and, (2) a person looking and sounding like a president.

Still, we must work with what we have. Our hope is that the presidential impersonator will soon enough overcome the difficulties of audience expectations upon seeing "George W. Bush" and find some credible space within to portray an actual president. We do not demand that the presidential impersonator have an extraordinarily high IQ or any other 'special' talents. All we ask is that the presidential impersonator actually take the responsibilities of that high office seriously -- to seek through engagement with citizens to actually pretend to be interested in governing a nation instead of ruling it, to lead by helping to increase shared and real understanding instead of destroying the possibility of such things, and to seek to discover and exercise wisdom and accountabilty for choices instead of operating on unschooled instinct and ideology.

Put differently, we are seeking someone who actually would like to be a president and to take a responsible, sober shot at doing the job. We hope to provide audiences the experience of what things might be like if we had a president. This, too, will demand audiences to give the presidential impersonator a chance -- to avoid shouting and storming and uncivil actions. But, it is our hope, that if a persidential impersonator actually showed the willingness and capacity to speak to real audiences instead of artificially controlled and selected audiences, that the audiences and the citizenry will remember how they can contribute to civil discourse even in the face of disagreement.

We expect the selected person to spend the next three months or so preparing for 'going on the road'. Once the presidential impersonator is ready, we will implement a marketing plan that takes the presidential impersonator to venues in which he (or she) can interact with citizens every single day until January 2009. We will enlist the support of both new and traditional media in covering these appearances. And we expect a series of books, documentaries, movies, musical numbers, etc as well as sponsorships and advertising to support the entire enterprise.

In seeking the qualified presidential impersonator, we hope to provide the appearance of leadership as a 'second best' alternative to the absence of leadership that necessarily results from the fact that the office of President of the United States is now empty.

Posted by Doug Smith at 02:59 PM | Permalink