Minerva Meeting Report: 10 November 2009

Consultants Meet to Discuss Structure, Methods

Six consultants gathered at CAP Sonoma's Conference Room on November 10, 2009.  The purpose of the session was to figure out how to make the delivery of pro bono consulting services to Non-Profits more effective, more productive. 

Adhering to a model offered by member Merith Weisman, Sonoma State University, the group wrestles with a new approach: not just charity but collaboration and reciprocity.  The idea that both the consultants and the NP's are learning...from each other and the process.

Pictured from the left are: Julie Kawahara, Jerry Green, Doug McCorkle, Merith Weisman, Lomesh Shah.  Next meeting is 24 November 2009, 4pm at CAP Sonoma, 1300 North Dutton, Santa Rosa.

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Silicon Valley Startup CEO Gets Existential

Does All This Stuff Really Matter, Contribute to a Greater Good?

Greed, capitalistic greed he calls it, the normal driver for technology startups and their investors, may be the hollow promise that it just might be. Waxing prophetic, in a rare moment, the CEO of a startup in Silicon Valley gets real with me and wonders aloud: what's the purpose of all of this? "This" being the drive towards bigger machines, more memory, more CPU power, more sophisticated graphics...

This CEO is not a client of mine nor a friend; just an acquaintance met under relaxed circumstances. (No, it's not Tesla; just a logo for a startup.)

So, this guy, Ted, we'll call him, he ponders, in a somewhat hopeful voice:
"...all of these pioneers and technology. Silicon Graphics, for example, we now have the techology for very lifelike conditions on the computer...who's benefiting? We can have 6 year olds, and up, playing video games that seem more realistic. Is that a great thing? Or, Pixar can do animation that we only dreamed of. Great stuff contributing to the social good?

The model is simple: Come up with a quasi-breakthrough idea (Einstein had a couple!), get some financing from "Angels" and VC's, assemble a talented and motivated team -- give them a significant equity position (so they'll be motivated by the payoff too), work your ass off, cash in when you go public, if you're lucky, and then what? Then, do philanthropic work?

At 8pm, there are at least a few folks people still working in his shop, quietly and seemingly alone at their workstations: heads tilted somewhere between their keyboards and their multiple computer screens, some 30" or larger, and I ask: "why are they still working." Jerry looked at me with a sense of incredulity: "We've got a lot to do...the other guys, the ones who have 3,000 employees or so, they can leave at 5:30...not us."

This imperative he has just laid out seems obviously logical but carries its own subterranean stress with it: the next steps are clear to him. At this point in the company's life, he talks about a, let's say, second round of financing like my wife and I would talk about what to make for dinner. This is a culture I would not buy in to; I'd run and I would try not to look back. Is there something fundamentally flawed with me? Or, am I getting old and just can't understand what's behind a job title like "serial entrepeneur?"

Workers: "Jittery and Compliant?" What About Consumers?

Reports of Highest Number of Tax Extensions

A short meeting with our Financial Advisor, Jerry (not his real name), on Friday, yielded some fascinating information about the behaviors of consumers, taxpayers. A few months ago, I posted a piece about workers being "jittery and compliant" but consumers are showing signs of stress from financial woes --- in a slightly different way.

His report had to do with his own clients as well as those of his CPA peers. First, Jerry tells me, quite soberly, that his clients are cancelling appointments without decent reasons. And, when they do show up, many of them -- many more than usual -- are, sort of, dazed. The way he describes it to me makes me think of the deer or bunny, frozen in the car's headlights: paralyzed.

So, Jerry says they show up but they can't really talk about the situation, their situation. He's a sweet and gentle guy so I think he knows the limitations in this context. This is only one piece of the story.

The story's other source are the CPA's whom Jerry works with: their report is that they have never filed as many extensions as they have this year. Why? Their clients can't get their act together to bring in all of the paperwork; just can't pull the stuff together. Dazed, they say.

So, how has this state of affairs been so well shielded from the media? Is it possible that this is a story they're deliberately overlooking?

Does the Internet Have Any Compassion?

Music Store Puts in Question: Compassion in Commerce



"More Compassionate than the Internet" Reads Their Home-made Sign







Last Friday, as I was leaving a coffee meeting with a new business acquaintance, I was broadsided by the most simple, and perhaps clever, form of advertising: the sidewalk sandwich board.



Now, I'm left wondering: does the Internet have any compassion? Any at all? This blog entry, representative of more than a few minutes of my time (I have the hardest time getting pictures into these posts): will it get noticed? Will I get a response? Is it "monetizable?"



I think the music store with its board is making a point: the Internet is impersonal, uncaring. Unless one has an "inside guy," most of these sites are unapproachable. I thought it was a stroke of genius when PayPal got "Customer Service Reps."



The interesting piece of study for me is that the Internet, as a tool, as a device, is moving so swiftly forward that the inertia pulls up seeming neanderthals, like me, in the wind of its wake. Like a bullet train whisking me along; it's anything but friendly. Scary is more like it. Wild.



I love movies and, often, I'm educated by them and given lines that I like to share in conversation. This one comes from "Jurassic Park" when Jeff Goldblum's character, a Chaos Theory scientist, soberly states to John Hammond, the flea circus pioneer cum dinosaur cloner: You were so busy asking "could you" that you never thought to ask "should you." Reminds of large bank bailouts, too.

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Tissue Quality Links to Customer Satisfaction at Major Teaching Hospital

Goldratt and Theory of Constraints Applies to Customer Service Perceptions

Eliyahu Goldratt in The Goal, originally published in 1984, hypothesized that we need to eagerly search out the "constraints" in the system that are preventing higher performance, throughput. I'm going to use that Theory to examine the results of a tiny change that improved customer perceptions in a major teaching hospital's Ob/Gyn unit that performs ultrasounds and other radiological services.

The problem is that cost-cutting for this hospital has gotten out of hand. Nurses are ferrying patients on gurneys back to their rooms because they've saved money by laying off two "transporters." Myopia at its
best.

But, this story is about a box of Kleenex -- premium facial tissue. This Ob/Gyn unit, often, has to break bad news to its patients: malformed fetuses; stillbirth; stunted growth whose origins are a mystery. So, the mothers, and fathers, find themselves in tears after these scans and subsequent consultations.

The hospital, in another cost-cutting measure, provided facial tissues that were so cheap and flimsy that it literally took a whole box for some patients. That was the report from one M.D. She personally invested in the Kleenex, ahem premium facial tissues; patients felt cared for. Without even knowing it.

This is a classic case of applying Goldratt's theory to the Customer Service / Satisfaction dimension and shift thinking about what it takes to delight a customer, or a group of customers. It also demontrates, with ease, how short-sighted cost cutting measures can be. In the early 80's, one of the tenets during the recession was to cut the fat, not the bone; now, it seems we don't even know where the meat is: keep the Kleenex.

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Malcolm Gladwell: "Socially Horrifying" Tactics Can Yield Winners

David Beats Goliath More of the Time Using These Strategies

Malcolm Gladwell, author of Outliers and Blink, writes in The New Yorker on how the underdogs win battles, basketball games, simulated water wars.  What lessons from these illustrations can we apply to the business world? 

In Goliath's time, duels with Philistines were a formal affair: they began with the crossing of swords. David, a shepherd, "came at Goliath with a slingshot and staff because those were the tools of his trade." He brought a shepherd’s rules to the battlefield.

A young girls' basketball team in Redwood City, California -- while not as talented or as tall as their competitors -- used the "full court press" to bewilder their opponents and force them to make more mistakes.  The smaller girls would steal the ball and, then, make high-percentage layup shots.

Their Coach, one of the girls' dads, cricket and soccer player and new thinker/software pioneer, made his analysis: It was as if there were a kind of conspiracy in the basketball world about the way the game ought to be played, and Ranadivé thought that that conspiracy had the effect of widening the gap between good teams and weak teams.

Thirdly, a computer scientist named Lenat developed an artificial intelligence program to help win a war game competition. What he found proved to be "socially horrifying."

But, Eurisko didn't have that kind of preconception, partly because it didn’t know enough about the world.” So it found solutions that were, as Lenat freely admits, “socially horrifying”: send a thousand defenseless and immobile ships into battle; sink your own ships the moment they get damaged.

Detective of fads and emerging subcultures, chronicler of jobs-you-never-knew-existed, Malcolm Gladwell's work is toppling the popular understanding of bias, crime, food, marketing, race.  What does his theory about "socially horrifying" tactics tell us?  That there are "gentleman's rules" by which all competitions engage?  That there are tactics, while valuable and effective, which can be repugnant? 

Some would just call this stuff, these "inappropriate" methods  "out of the box" thinking.  I'd be in that court; time for some big change.  Break the norms. 

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Sensitive Dependence on Initial Conditions

Basic Foundations of "Systems" Theory
Finds an Application In The Real World of Socialism

A close friend, now living in suburban Chicagoland, who grew up in Holland / The Netherlands shared a piece from the Sunday NY Times Magazine, May 03, 2009: "Going Dutch -- How an American in Holland learned to love the European welfare state." Russell Shorto is the writer.

The BIG lesson I gleaned from his thorough comparison of the cultures had to do with how Holland became so defined by its sense of interdependence. And, therefore, a system of government and rules that is, at one time, highly opportunistic -- they are fervent capitalists -- but also spins a latticework of cooperation. Some call it socialism.

What's this got to do with business? This situation touches on one of the underpinnings of "Systems Theory" or as it used to be called in the old days: "Chaos Theory." One of the tenets of this new science is that a system's outcome can often be traced to the conditions that existed at the outset of that system: sensitive dependence on initial conditions.

Holland? More than five hundred years ago, land was prized; the advancing sea was the nemesis which had to be battled. But, my land, next to yours, could be compromised if you didn't take care to keep out the water from your land. If I'm going to farm on dry land, yours has to be dry, too.


What kind of country comes out of cooperation like that? Legal euthanasia. Legalized, free and government sponsored heroin clinics. A pension while unemployed. These are the trappings of the Dutch culture. One that has learned, first hand, about the logic of cooperation: the better you do, the better we all do. They even pay the unemployed to go on vacation. The logic? If you're depressed, you're probably not going to do very well at finding a job.

I digress: Holland's culture, today, has some features that could be a product of those challenges that the population faced 500 years ago: they figured out, without bashing each other, that they needed to work together, find common ground. What was good for the one was good for the many. The country, now, is a system whose structure and operation is a sensitive product of those initial conditions.

A modern application? What I do today, however small, could have lasting implications down the road. For example, an auto company's response, in the 1970's let's say, to the encroaching incursion of, let's say, a Japanese automaker. Without being coy, is it possible that GM's response, more than 30 years ago, could have determined how things are turning out now? It's not impossible.

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Don't Hug the Bean Counters

Ph.D.'s Models Didn't Predict Collapse

The U.S. Treasury couldn't keep up with the complexity of the financial instruments that Wall Street was creating. As a result, they relied on the Street's risk analysis folks to tell them what the real risks were. (This is akin to having the fox guard the hen house.)

The Ph.D.'s -- theoretical physicists, physical chemists, etc. -- calculated risks based on statistics from earlier models. Models created long before sub-prime mortgages were being written in a fast-appreciating real estate market fueled by cheap money from Asia.

The Treasury Department couldn't predict the collapse because they had no roadsigns indicated there were dangers ahead -- ROAD OUT AHEAD! DANGER! FALLING ROCKS! Any one of those might have worked. But, they weren't driving and they almost weren't a passenger: they had no idea there was even a cliff on that road.

Recent information suggests that the money we (the U.S. government, that is) have been giving to A.I.G., the insurance giant, as part of the TARP bailout, has been used to pay off "mortgage insurance policies" to French, Swiss and German banks. So what. Yeah, not important.

What is important is the reality that the folks that do the numbers -- run the numbers, create the pro forma's, generate the spreadsheets -- have only been helpful to businesses as analysts who are able to look backwards. Rarely, have many of them been prescient enough to eek out a view of the future that was all that helpful, or even benign.

I love my accountant; he's a great guy and he loves his daughter. But, I'm not going to hug him; he follows the rules and, in the process, keeps me out of trouble with authorities. If I ran my life according to his views, I think my interpretation would be to stay in bed most days. Even though that wouldn't be his intent; at least I couldn't get taxed for staying in bed.

All of this discussion leads me to conclude that the people doing the numbers -- nice folks, well intentioned folks -- shouldn't be running the business. I'll give them hugs some other time.

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Toyota Dealer: 1% in CSI Rating = $500K

Tangible Impact of Customer Satisfaction

Right now, regardless of where the dealership is located -- Dubai, England, Canada, U.S. -- sales of new cars are down. The major source of cash flow to prop up these companies comes from vehicle repair and maintenance. (Duh!)

So, my friend Jerry (not his real name, ha!) is part of a team developing and selling software into Auto Dealership Service Departments. Their program streamlines service delivery through better scheduling, more effective time management of the technicians, etc.

Most of these dealerships, especially Toyota's, are aware of the impact of Customer Satisfaction on gross revenues. The rule of thumb is this: for every change of one percent (1%) in the Customer Satisfaction Index for a given dealer, there is a $500K impact in annual revenues.

Yes, of course, this would have held true during the "good times" (which seem pretty far away right now) but the impact is still there. Customer satisfaction does impact the bottom line.

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Capitalism: Our Best Option?

One of the Most Inefficient Methods for Organizing Markets and Economies

So, it wasn't like someone woke up one day and said: "Let's organize our markets around supply and demand, skills, exploitation of free market opportunities." That's what we got, though.

As I work to find new clients and new problems to solve, it's clear to me that capitalism is, at best, highly inefficient. It's also about the only thing that works fairly well with humans. At least, at this point in our evolution.

How did this come to me? Well, I'm looking for new clients and...even being humble, it's pretty clear that I have some unique talents. But, here's the rub, look at what I have to go through to get some opportunities to help...Wouldn't it be more efficient if there were some central clearing house that was in charge of delegating work and projects to people like me? They would be able to match up talents and personalities with needs and...we'd be off.

Personally, I think this is a great idea. Until my neighbor has dinner with the guy in charge of handing out the assignments and says, in a rather gruff voice, "Uh, my cousin Vinny needs some woik, so yaw gunna giv 'em some woik, right? Aw, dat beautiful dauda of yaws is going to need some new " Well, you get the point. I'll stick with capitalism. I got my own cousin Vinny to take care of.

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