Link to Investors

Here is a link to my writing parter's reprint of an article we wrote a few years ago. Given the state of the stock market over the last couple of weeks, it still seems timely. investors by Allen and Bryan

Priming the pump

The world economy grew, in per capita terms, at over 3 per cent during the 1960s and 70s but since the 1980s it has been growing at the rate of 1.4 per cent per year (1980–2009).

Despite rising inequality since the 1980s investment as a ratio of national output has fallen in all G7 economies (the US, Japan, Germany, the UK, Italy, France and Canada) and in most developing countries

According to the Economic Policy Institute the top 10 per cent of the US population appropriated 91 per cent of income growth between 1989 and 2006, while the top 1 per cent took 59 per cent.

In other words, we need the electric pump of the welfare state to make the water at the top trickle down in any significant quantity.

This thing is broke!

At one point in my carrier I was managing a contract repair facility for an Army training system for the Viper light anti-tank weapon. When I first got to the field site there were lots of complaints that the Viper training system didn’t work.

After finding almost every trainer turned in tagged as not working passed all the functional tests and did in fact work properly, I discovered that the method of sighting the device to the laser transmitter was very crude and inaccurate. The real problem was that the system was not shooting where the sights were aimed.

I made a cradle that held the device on a precision fixture used for aligning the optics of a different training device and aimed it at a field test device that indicated how much higher or lower and left or right the laser was pointed.

Once the tester read “0 by 0” the sight decal could be applied and the system did indeed shoot where it was aimed and the complaints stopped. Well, sort of stopped. They stopped at my field site but since we were a training center, troops from many other Army posts came to us for training. When they returned home the questions of why that same trainer could get simulated kills at my site but not at their home station became an issue.

The real lesson was that the customer thought the training device was not working when in fact the laser was working fine, just not aiming where the operator intended. Listen to your customer for symptoms but not necessarily for causes and they become a valued part of your troubleshooting process.

Turning failure into success

I found an article on my blog reader “Feedly” that was about how to turn disappointment into success and it was more of the useless pap that people who have no clue how to actually turn that disappointment into success spew out.

They broke the things that happen down into 4 basic groups:

•    A desired outcome does not occur.

•    A desired outcome does occur but does not produce the feelings or results we expected.

•    Our personal and/or professional expectations are unmet by ourselves or another.

•    An undesired, unexpected event occurs that is in conflict with what we wanted or planned.

All of the definitions are spot on except for the third one “Our personal and/or professional expectations are unmet by ourselves or another”. It is wrong because success and failure are not about my expectations it’s about accomplishing or not accomplishing the task at hand.

The article then explained that; “What makes these unwanted surprises even harder to accept is our attachment to the way we expected things to go”.

Nonsense! What makes these unwanted surprises hard to except is that you didn’t get the result you PLANNED and WORKED VERY HARD for. When you plant some flowers and they don’t grow you are disappointed because you did all the work, expended all that effort and no flowers.

Turning failure (no flowers) into success (flowers) is very different from changing your attitude about no flowers, yet everything I read and everything people say about turning failure into success is about attitude.

When you apply for a job, success is getting the job and failure is not getting the job. Turning failure into success is about not getting that particular job and then finding a way to actually get that same job. Finding a different job is not turning that failure into success it is creating a new and different success.

While that new success may solve the problem of no job you can’t pretend that you turned the first failure into success.

No one plants flowers without the expectation that they will bloom and you will see the pretty flowers. The flowers blooming is why you plant flowers in the first place. If they don’t bloom you might plant a new batch of seed and try again. That’s not turning failure into success, that’s properly called starting over.

I can feel bad about the failure, accept that it’s just what happened and start over or pick a new direction and my attitude can help me do all of that. Mistaking a new beginning for success is self-delusion.

Reviewing what happened and figuring out what you might have done wrong so you can correct for it or not make the same mistake again is a real and necessary part of growing your abilities. It’s also possible to discover a way to fix whatever failed the first time and actually turn that failure into success. For example you are driving to a meeting and get a flat. Your trip is stopped and that’s a failure. Putting on the spare tire is turning that failure (that one unique stoppage) into success only if you get to your original destination on time.

Any real advice about turning failure into success must explain how to get the original, desired result. All the advice about attitude is about accepting that different result (no flowers) as positive and while that will certainly help you get over the disappointment and that’s a good thing; it is very different than changing the no flowers into flowers.

Utopia

In many science fiction stores automation nearly always led to greater material possessions AND more leisure time for the average person. This view was predicated on the savings created by more production with less effort being equally shared between all levels of society. So what happened to this utopian view of the future? Simple really, the stories author’s forgot that there is no inherent reason for the people who can keep that wealth to themselves to share with anyone else.

The business owner will always, out of self-interest, attempt to keep as much of the profits for herself as she can. And in their defense, why not? Their efforts in financing the automation, their foresight in making that investment created the ability to make more with less effort.

The one little problem with the idea that the business owner should keep as much of the profits as possible is that any money he pays his employees gets spent to buy the things those employees need to live or to increase their standard of living. That money goes out to other people and ends up coming back as people buying the goods or services of the original company.

The more you keep the less your potential customers have to spend with you.