Three Sigma Systems

In Tibetan, authentic presence is wangthang, which literally means, ‘field of power’… The cause or the virtue that brings about authentic presence is emptying out and letting go. You have to be without clinging.

Chogyam Trungpa

My wife is a Physical Therapist. She has explained to me that walking upright, which is a means of locomotion most fully expressed by human beings, is actually quite remarkable. The process is one of taking a stable system and intentionally driving it into a state of instability — falling — and then regaining stability, over and over again.

First we stand. Next we hurl ourselves forward into a fall. We then catch our fall and regain our stance. If you watch a human infant learning to walk, you will see this instinctual process unfolding quite clearly.

The process of knowing (of creating knowledge) is very similar to this. We construct a stable explanation of the world and stand on it. As the world changes beneath our minds, we fall. As we fall, we struggle to reconcile our explanation of the world in order to reassert a stable stance.

In ideology and dogma, we try to cling to a stable stance — a truth — from which we will no longer fall and from which we need no longer move forward. But the world does not comply with our attempts to avoid our fear of falling. The world changes beneath our clinging minds and, sooner or later, we must fall despite our best efforts.

Since the world is always changing beneath our minds,  the length of the fall we will take in knowing will be greater the longer we try to avoid falling. The danger of relying on ideology and dogma increases over time. History is filled with tales of fatal falls.

There is another option though. We can chose to master the art of knowing in much the same way we master the art of walking.

Like walking, the process of knowing — this falling forward —- goes unexamined in our everyday experience. To change this — to depart the habit and master the art —- we must be letting go in much the same way as the infant learns to walk by falling. To move forward, we must step off the brink of our belief, stepping into the fall, and trust that we will survive. In this way our knowing becomes more powerfully useful given our aims and intentions. Our journeying minds can then take us where we chose to go!

I call this process surfing the wave of knowledge creation.

The nature of knowing is the central problem of human existence. Some images came to mind as I thought about this. You might want to contemplate this, as I did— or not.

Our being in the world “out there” is probably something like this:

Read more…

In my previous post I divulged the secret of success: “opacity“.

By masking your intentions and knowledge from others, you create information asymmetry the gives you an unbeatable edge. The asymmetry produced by intentional deception is the key to understanding why free-market theory does not enable prediction and is therefore, not viable as theory. It is rather, a dogmatic ideology that serves con-artists, bandits, and other masked men.

I offer the following video clip from the movie “The Princess Bride” as a case-in-point illustration of how an opaque masked man of modest mental faculties defeats “the smartest man in the world”.

(Be sure to take notes!)

PB.mov.ff

This post is a bit rocky and I have vacillated between whether to delete or not-to-delete. Since my blogging policy is to never delete (”The moving hand having writ, moves on..”), I will let it stand but I ask that you please read the comments accompanying this post, which may or may not help matters. If you use my secret of success, be aware  that I make no warranty, express or implied, that your results will be any better than those realized through random chance. Special thanks to John Dowd for thinking on this.

Today I am going to tell you the secret of success. When I say success, I mean the process of acquiring wealth, power, and influence that exceeds by orders of magnitude, that of mere mortals. Successful people are the top dogs that dominate the crowd and, because of their domination, they are often described as “leaders”, though that attribution is debatable. They are the corporate executives, politicians, financiers, gamblers, pundits and preachers who seem to end up running the show wherever the show is being run.

Over the course of my 30 year career as a business consultant I have rubbed shoulders with quite a few successful people. For most of that time, my relationship with these individuals was, as they say, strictly business. My knowledge of them was limited to the workplace. Although no one who knows me would ever accuse me of being obsequious, my relation with power tended to be one  in which I tolerated and even cultivated, a foggy subservience to those who retained me and signed my paychecks. To put it quite bluntly, my job was to give advice, but never to the extent that the advice given would  jeopardize my survival. I reasoned, as a favorite professor advised  many years ago, you can’t influence the system if you are cast out from that system. You also can’t pay the rent. Read more…

As we begin the year 2010, many of us resolve with sincere intentions to cast off our bad habits. But as we all know, shaking off bad habits is easier said than done. Real change requires that we dredge up from the dark abyss of our habitual minds, a new and self-critical awareness of the patterns and assumptions that have chained us to behaviors that lead us toward ruin. Only then we can start acting in less ruinous ways.

The abyss of our habitual thinking is not only a source of our individual fallibility. It also lies the heart of our fallibility as a nation of people. It’s time to examine some of our assumptions and change what we are doing for the better.

NOTE: This post really got out of hand. I wanted it to be shorter but I ran out of time.

2010 Resolve: Transform our system from one that sets people and nations against one another into one that brings people and nations together.

1: Our Worst Bad Habit

Our nation, the United States of America, was founded by a group of insurgent “terrorists” determined to throw off the religious, economic, and legal conventions imposed upon them by their mother nation.

As seen at that time, from the British point of view.

Our system was born in self-righteous violence and perhaps not surprisingly, we have continued to create and continuously improve a system that reliably and predictably produces ever increasing violence. As the timeline illustrates, in the 233 years since our founding we have been almost continuously involved in war against other nations of people.

At a minimum, we can identify about 55 distinct wars, although by some accounting the number exceeds 200. By any enumeration, our penchant for warring is clear enough, and lest you think that we make mostly wars of necessity in defense of our homeland, consider that among our wars only two, WWII and 911, represent actual attacks on upon our nation (our Revolutionary War being in itself, an insurgency instigated by us and conducted upon British colonial soil). One list  includes 35 instances of outright invasions initiated by the United States. The US Department of the Navy lists 234 instances in which the United States has “projected” its military might abroad from 1776 to 1993, excluding “covert actions”.

This does not mean that all of the wars we have been involved in were necessarily “all bad”. I mean, Hitler and his Nazi’s definitely needed some serious attitude adjustment. It just means that we do a lot of warring.

An examination of our history reveals that, with exception of the Civil War and wars against the American Indigenous peoples, the vast majority of our warring enterprises have been carried out on the soil of other nations in acts intended to acquire territory or to influence the affairs of those nations. These acts were often described as righteous moral callings, in which it was our “Manifest Destiny” to bring to ignorant and oppressed peoples the virtues of our ideas about freedom and democracy. In fact though, it seems there was usually some economic motivation lurking beneath our veneer of moral rectitude (wink, wink).

Approximate Locations of US Military Actions 1776 to Present

In addition to warring on other nations, our system also reliably and predictably produces warring among ourselves. Although our Civil War stands out in bold relief, a less obvious but clearly related war has been ongoing in our nation. This continuous, low-level conflict is one that pits race against race, haves against have-nots, and gender against gender. It seems that our system is a never-ending font of adversarialism in which there is an endless churn of victims and victimizers—an unending war between the righteous and the damned, the powerful and the powerless. One measure of the conflict within is the rate at which we imprison our fellow citizens.

Top 10 Imprisonment Rates (Relative to highest)

What is it that turns so many of our fellow citizens into criminals?

Read more…

“Performance pay for teachers would quadruple under bill approved by Hill”, Anderson, Washington Post, Sunday, December 13, 2009

Contrary to their own collective interests and the interests of their clients (students), many educators appear to be buying into the numbers game. The Lotto game mentality has been systematically prosthelytized throughout our culture. Why should educators not buy in when in many states, gambling finances the educational enterprise?

Poker is said to be a game of skill but the skills it rewards are counting, cunning, and deception. The casino credo trades productive skill and craftsmanship based in theory and method, for chance, superstition, and cleverness. In a zero-sum system, we should not be surprised when our children learn to be skilled victims and victimizers.

Skinner put forth a mechanistic theory of learning and educating and his theory serves the poker-playing Alphas among us, quite well. Another theory says that the process of learning occurs in an interdependent community, and educators will do better when they organize schools and classrooms as communities in which every member, teacher, administrators, and students alike, make their contribution to the process as a whole. In common purpose, variation and diversity drive a learning process in which knowledge is created and everybody wins.

Yesterday, Paul Krugman kicked off his Column with an observation that goes to the crux of THE PROBLEM. He wrote:

When I first began writing for The Times, I was naïve about many things. But my biggest misconception was this: I actually believed that influential people could be moved by evidence, that they would change their views if events completely refuted their beliefs.

Paul, a Nobel Prize winning economist, understands that the affairs of humanity must be viewed from a very practical standpoint rather than from the standpoint of dogmatic ideology. As an economist, he believes in managing market activities by trying to keep the playing field level through rules and regulations and by continuously tweaking economic settings. His view is analogous to  navigating an automobile along roads and highways. Observe the traffic laws and try to stay between the lines. Speed up or slow down as conditions dictate, and hope that nothing breaks down catastrophically. I disagree with his economic theories, but at least his evidence-based view contrasts powerfully with belief-based views, such as ideological free-marketism asserting that unfettered markets will naturally self-equilibrate.

At a fundamental level, our ability to understand the world must be based in some belief. But the nature of that belief varies. Most belief is dogmatic. It is immunized against disconfirming evidence. It stands the learning process on its head by placing conclusions before evidence. In my life’s experience, it appears to me that there is no antidote to this poisonous process of bending evidence to foregone conclusions.

A regrettably rarer form of belief is one in which we believe that our beliefs about a world that is in continues flux, are by their very nature always imperfect and fallible. Belief in the fallibility of belief instructs us to constantly listen for signals given off by the voices of the processes in which we are immersed. In conditional belief, we believe that we must use those signals to continually transform our system of belief in accordance with our aims and the new evidence that is always forthcoming.

The only constant is change. Belief that fails to embrace the fallibility of belief, is no more than blinding stupidity.

I was greeted this morning by an insightful  ”JCS Online” post by my friend, Gregory Mercurius Nixon. As I understand it, he is arguing that even our emotional experiences, those “feelings” we imagine to be most pure and elemental, are inexorably bound up in our symbolic nature. Our experience in its entirety, is cooked into a symbolic stew such that we can never again experience the world or ourselves, in the raw. This is the cornerstone of a theory of knowledge.

Greg signed-off with the following quote:

‘As compared with the other animals man lives not merely in a broader  reality; he lives, so to speak, in a new dimension of reality. There  is an unmistakable difference between organic reactions and human  responses. In the first case a direct and immediate answer is given to  an outward stimulus; in the second the answer is delayed. It is  interrupted and retarded by a slow and complicated process of thought.  Yet there is no remedy against this reversal of the natural order. Man  cannot escape from his own achievement. He cannot but adopt the  conditions of his own life. No longer in a merely physical universe,  man lives in a symbolic universe. Language, myth, art, and religion  are parts of this universe. They are the varied threads which weave  the symbolic net, the tangled web of human experience.’ (pp. 24-25)

Cassirer, Ernst (1944). *An essay on man: An introduction to a  philosophy of human culture*. New Haven/London: Yale University Press.

Crucifixion, P. Picasso, 1930 (The tangled web of human experience)

Doc, it hurts when I do this!

There’s an old joke that goes like this:

A guy goes to the doctor and says, “Doctor, doctor, it hurts when I bend my arm like this. What should I do?”

The doctor answers, “Stop bending your arm like that.”

On this blog site, I have repeatedly argued against cyclical models as predictive. Now comes a new and fascinating book entitled “This Time is Different: Eight Centuries of Financial Folly“, by economists Carmen M. Reinhart and Kenneth Rogoff. The authors use newly acquired historical data to argue that the recent economic crisis is wholly unexceptional. It is merely one more financial market driven boom-bust incident in a chain of incidents going back more than 500 years.

Read more…

GDP Up!

October 29th, CNN-Money lead article: “Economy finally back in gear: Government says GDP grew 3.5% in third quarter, ending a year-long string of declines and coming in better than forecasts“.

Readers of this blog already know that I regard the stock market as a misleading leading indicator. Is GDP a better predictor?

Two lynchpins to understanding the work of Dr. W. E. Deming are the nature of “measurement” and “optimization” of a system. The efficacy of measurement depends on what we choose to measure and why. The concept of optimization counsels us to remain steadfastly committed toward our aims, based in our values, and cautions us against reliance on any single measure.

What does GDP really mean and is maximizing GDP a desirable thing?

GDP is widely used as a summary statistic said to be indicative of the overall well-being of a nation’s economy.

First off, here’s what GDP looks like to most economists:

It is translated into english as:

GDP = private consumption + gross investment + government spending + (exports - imports)

So what does it mean?

Read more…

In the October 29, 2009 New York Times, financial commentator Floyd Norris offers up a solution to excessive executive compensation and the bubbles that plague our free enterprise system. In his article, ”To Rein In Pay, Rein In Wall St”, he suggests that Wall Street profits need to be dampened through regulatory intervention that increases transparency, limits risk, and breaks up “to big to fail” institutions, to make them more competitive. His analysis of Wall Street money churning is excellent, but  is his tangled web of regulations a auseful approach?

WILLIAM OF OCKHAM (1280 – 1349)

The wisdom called Occam’s Razor asserts the principle that, all things being equal, the simplest theory or solution to a problem should be favored. If we really do believe that market demand is driven by consumers seeking the “best” return for their dollar, and that competing for the customer’s dollar will drive companies to compete with one another to create product and service that customers desire, then we should abide by that theory. We should remove the obstacles and let the market fundamentals work.

How can we do this?

King's X?

The solution is as simple as Occam’s Razor itself. There need be one and only one rule in conducting transactions. TELL NO LIES!

All we need to do is require that every purveyor disclose, to the best of their ability, all of the details about the product or service they deliver in exchange for the customer’s dollar. If we make deception by inclusion or omission a crime, the consumer will be able to rationally compare and choose between products and services. Let the best supplier win!

For example, require that automakers disclose vehicle specs, safety data, environmental impact, failure records over time, customer satisfaction data over time, AND actual cost of production, marketing, distribution, and sales. If the customer has a question that is not on the disclosure list, then require the seller to answer honestly or find the answer or confess ignorance.

If an automaker feels that this data places him at a competitive disadvantage, then let him change the product so that the data will be more advantageous.

Complete honesty and transparency underly the fundamental thesis of free market fundamentals. Competition for consumer dollars only works if the customer has the information needed to choose. Only with complete and transparent information can the customer compare products and serivces in order to decide just how much extra to pay based on the value he or she assigns. In the automaker example, the price the customer is willing to pay under these conditions will contain the profit to be realized and distributed among the automotive supply chain players.

When it comes to financial investemnt, sellers should be required to fully disclose the statistical data that quantifies the risk of an investment. This is no different than disclosing the data that is readily available for various games of chance played at gambling casinos around the world. If a Wall Street investment wizard feels an investment risk is to complex to quantify, he or she must simply say, ”I   H A V E   N O   I D E A”.

Adam Smith and the "Invisible Hand"

In other words, let free market work!

Does this sound naive? Won’t people fudge the truth anyway, you say?

Sometimes sellers will lie. They will make false claims or claim a truth for which there is no evidence. But when they do this, the truth will come out at some point down the line. Their crimes of irresponsibility will be detected and punishment and compensation will be extracted. They can either do better, or pay the price for their deception and ignorance.

———————-

If you conclude that “tell no lies”  cannot work, then there is a fundamental problem with Adman Smith’s theory of the market’s “invisible hand” that is guided by rational self-interest.

As is clear in his notorious 14-points, Dr. W. E. Deming was adamantly opposed to the use of motivational incentives by management. He saw goals, targets, performance evaluations, and pay-for-performance schemes as destroyers of the system of people. He said the correct function of management is to “remove obstacles to joy and pride in workmanship”. I have suggested that the very ideas suggested by motivational theory might be best abandoned. My suggestion is one of those ideas that I think of as bordering on the edge of chaos. It challenges conventional thinking and pushes our thinking envelope.

In this post I use an engineering analogy to explain how the idea of motivation may lead us in the wrong direction.

Note: For the sake of continuity, I have created a new category called “Motivation” that gathers my blog posts on the subject so that readers can look back at previous entries on the subject.

I am a great fan of John McPhee, who writes a good deal about the contradictions produced by the hubris of technologists who push buttons, pull levers, drive bulldozers, and otherwise bully our environment by “motivating” it to fit our needs and desires. The following analogy was inspired by the essays included in his book, “The Control of Nature“, which I commend to your attention.

Analogical argument in favor of repurposing organizational management

Imagine that there two engineers who have been tasked to come up with a plan for getting water to a location called B from its current location called A.

Remove obstacles to the flow

Engineer 1 is an ambitious fellow. He draws up a plan to move the water in a straight line by motivating it up and over mountains using pumps and siphons. He argues in favor of his plan by saying that by “motivating” the water he can direct it along the shortest and most reliable path to point B.

Engineer 2 is an older and wiser fellow. He proposes a much longer path that follows a gravity line from A to B. His plan does not require pumps or siphons. He argues that, by understanding the behavior of water, he can gently channel it to point B. He has no need to “motivate” the water. He only needs to understand how it behaves and REMOVE OBSTACLES to the flow.

The designs of both engineers will likely achieve the target outcome (RFP specs) in the short run but, keeping in mind that neither will be perfect,  which theory — to motivate the water or to let water’s inherent behavior do the work — will set in motion the fewest contradictions (problems) in the longer run?

Of course, people are not water. People flow uphill!

Over this morning’s coffee my wife, Monica, and I discussed my penchant for infuriating people. She told me that the root cause of this problem is that in conversation, others perceive in me, an insufferable arrogance. It struck me that she was probably right. Although I do not feel that I am arrogant, my assertive approach in conversation does seem to affect people that way. Our conversation got me thinking about Ron Pereira’s post on the subject of “humility” as a key characteristic of effective leaders. In my recent posts on leadership, I suggest that study of the personality traits of leaders is not a useful path toward the improvement of leadership, but I can’t help but wonder if I could become more effective in my enterprises if I were to somehow improve my approach in conversation in order to convey less arrogance and more humility.

Since you can’t get anywhere if you don’t know where you’re going, I decided that my first question should be, what do we mean by the concept of “humility”?

Humility and Humiliation – Two Sides of the Same Coin?

As usual, Merriam-Webster’s Online Dictionary goes roundabout, saying that humility is the “quality or state of being humble”. Following Webster’s lead, I looked up “humble” and found that it is defined as meaning:

1 : not proud or haughty : not arrogant or assertive
2 : reflecting, expressing, or offered in a spirit of deference or submission <a humble apology>
3 : ranking low in a hierarchy or scale : insignificant, unpretentious b : not costly or luxurious <a humble contraption>

Having already learned from my wife that in conversation, I convey an assertiveness and arrogance that creates problems, I realized that I would need to search more deeply .

The wonderful Online Etymology Dictionary informed me that the word humility can be traced back to circa 1315, from O.Fr. humilité, from L. humilitatem (nom. humilitas) “lowness, insignificance,” in Church L. “meekness,” from humilis “humble.” Read more…

In my post, “Forward Thinking about Leadership” I proposed a set of questions that come to mind when we begin thinking about leadership as part of a system rather than as a set of personality attributes assignable to individuals. Here are some thoughts about possible answers to the first question. (I would very much like to hear other people’s thoughts on this subject as well.)

If we were actually capable of independent action, there would be no need for leadership. I would do my thing, and you would do yours. Life would be a random walk of every-man-for-himself. But in the course of our lives, we are never independent actors. We are inexorably woven into a set of collaborative relations consisting of family, friends, workplace, community, nation, and world.

As an extreme-case mind experiment, try to imagine an action you have taken or might take that is in some way, not systematically interconnected with the actions of others.

In 2004 I crossed several thousand miles of ocean as a solo sailor. At first blush, it seems that this qualifies as independent action. Not really. My course was set for some distant safe harbor, built and inhabited by others. My boat and all the tools on my boat were the embodiment of designs envisioned and realized by others. The  navigation charts I used and books I read were ongoing conversations with others. Even my brief periods of sleep were punctuated by dreams populated with imagined others.

My solo sailing venture entailed a system of action in which I served as both leader and follower. In leading, I made decisions about where and when to go. As a follower, I was led by the designers of  my boat, equipment, charts and guides, and the wisdom of the many others who had shaped my knowledge and understanding of seafaring. I was never alone. I was always leading and following. My seemingly self-aimed actions were led by the system of tools and knowledge that I had acquired from others in the course of a lifetime of sailing.

One conclusion to be drawn from this example is that leading and following are always present in every human enterprise. You simply can’t escape it.

So what is the part we call leading? Read more…

This past weekend, I happened upon a blog entry by Ron Pereira on his LSS Academy site, entitled Level 5 Leadership. The Level 5 reference is from a bestselling business book called “Good to Great“, by Jim Collins. Ron posed the following question:

“So, it seems the two primary characteristics of the Level 5 Leader are straight forward – be humble while holding fast to the path you feel is best for the organization no matter how difficult it may be. I’d like to turn it over to you, are in 100% agreement with this leadership style? Do you think Level 5 Leadership is essential for a company to succeed?”

Since Ron posed the question, I answered, if somewhat tactlessly, ”Complete nonsense! Such claptrap is worse than useless, it is harmful.”

(Read Ron’s original post and my comments here.)

Those who know me say that I have have a real knack for subtlety — NOT! When its comes to discussions of leadership, I am fed up with the disastrous nonsense that is routinely peddled as authoritative science in business literature. “Good to Great” is just another example of this sort of nonsense.

The distinctly American cult of personality has produced a nation in which great leadership and great followership have all but disappeared amdist an anarchy of petty, self-interested, rabble  With pseudo-science of this sort, it is no surprise that the U.S., supposedly the master of innovation and enterprise, is fast degenerating into a third rate economic power that is systematically substituting  money churning con-artistry for the hard work of creating great products and services that help to make peoples’ lives better. Read more…