Issues of the Day

Although I have a point of view on most things, I am sometimes surprised by how someone else sees an issue or news that paints an issue in a new light. Here is what I read today that fit into these categories.

First, news that is completely surprising -- the Wall Street Journal reports on the school in Los Angeles that cost nearly $600 million to build -- much more than it cost to build the Staples arena not far from this school. I have tended to have the view that good money follows bad in financing of public schools, yet, I had no idea of the extravagance heaped on the Robert F. Kennedy Community Schools complex. And, for the most part, the people approved this expenditure through bond issues. The amenities at this school ready to open in a few days include vaulted ceilings and "florid murals of Robert F. Kennedy." A person overseeing this venture noted that there was no price for having good taste. The one thing that was not shocking to me was a track record for a similar glitzy, high-dollar venue in L.A. (Roybal Learning Center) -- it badly underperformed compared to the overcrowded and non-descript school it was meant to supplement.

Second, George Will's Washington Post op-ed, shares the thinking of Walter Russell Mead regarding the climate change issue. According to Mead the apparent slowdown of the climate change zeitgeist is somewhat predictable because its movement fifty years ago was one of skeptics of government and conventional thinking. The environmentalists took on such "scientific" movements like urban renewal and nation building. They were close cousins of economic Libertarians who also had a disdain for government solutions. Now the environmental movement is Big Brother, driven by a government and scientific consensus that has little toleration for skeptics. In any case, Mead's point of view is interesting and one I had not thought of before.

These things might give one pause -- especially those working and studying at college -- for not thinking there is another side. Of course, when these arguments tend to support your point of view you are more likely to read them.

Benedictine Monks

Just spent a most enjoyable day-and-a-half up at Conception Abbey with our Executive MBA class. Among other great things that happened during the stay, Father Curran addressed the class and gave an interesting contrast to the Benedictines that run the Abbey and the Jesuits who were formed about 1000 years later.

The monks are very much a community -- it is embedded in who they are. For them retirement is the grave as they are committed to staying true to the rigorous routines of the Abbey schedule (at least 4 prayer times, all done together and 6 a.m. vigils -- every day). The motto for the monks is prayer and work and they do plenty of both. All of them have a vocation that contributes to the operation of the monastery, which boasts a beautiful Basilica, circa 1891. For these folks plans involve centuries. The delightful Abbot Gregory, for example, has been at Conception for nearly 40 years. The genesis of the Benedictine order is 1500 years ago.

Jesuits, on the other hand, use the motto "Contemplation in Action," which fits them quite well and their mission of education. Reflection is a core value, starting with the spiritual exercises developed by Ignatius. The Jesuits spend much of prayer alone rather than in group. Importantly, they look to serve where the world is; nearly all of their 28 U.S. universities operate in urban areas. As Father Curran noted, however, despite this contrast [the strategy person in me sees the interesting positions these two order present that clearly differentiate them] they are linked because it was the Benedictines who took in an injured Ignatius for convalescence. And it was here that he developed the Spiritual Exercises and later the Jesuit order. Thus, Father Curran was able to make the connection of these somewhat related orders while clearly showing how they are distinct.

Converse All Stars

Back in the early to mid-1970s when I played high school basketball, the canvass high top sneaker was a popular shoe for serious ball players. But soon after that the canvass shoes were replaced by the much better built (support and traction) and designed (leather) next generation shoes -- by the mid 80s Nike had established the Air Jordan's, which fetched a healthy sum of money.

Anyway, the Converse All-Star canvass I figured had gone the way of the dinosaur, though I admit seeing them worn by young people who definitely were not ball players. A few weeks ago as I took my 13-year old daughter shoe shopping we were discussing options she and her friends look for in shoes and the Converse high tops came up -- THIS was now fully immersed in shoe fashion for teenage girls and boys (not to mention other demographics including toddlers). My daughter did not buy the shoes, but on a flight to San Francisco last month I sat next to a young girl wearing -- red Converse high tops. Of course, my impression is probably predictable: "How the heck does this shoe have any demand!"

You have to love American capitalism (or I should say global capitalism). A shoe brand started in 1917 with the original Converse All-Stars, rejuvenated mid-century by the celebrity of Chuck Taylor, and apparently completely washed up by the mid 70s with advent of leather sneakers is repackaged and marketed for a new purpose -- design footwear ("ugly" design footwear). And apparently fetching about $45 a pair -- for 2-ply canvass and rubber. Interestingly, a few years ago the company (now owned by Nike) changed the design to 1-ply canvass creating a different texture and look. Not surprisingly, customers rebelled. They weren't buying the shoes for their quality -- it was the look! Much like Coca Cola coming out with new coke because they thought it was about taste that people drank Coke.

With my new awareness, I will be taking a look on the Rockhurst campus this year looking for my old High School "sweat-heart" on the feet of 21st Century coeds that won't be looking for any kind of performance from them except their quirky retro style (the style was popularized apparently by punk bands and then more regular celebrities). Another example that markets are created not discovered.

Chevrolet Volt

I am reading about Chevrolet's new eco-friendly car the Volt. A couple of days ago it was officially panned by the New York Times as a first-class LEMON. The car costs a whopping $41K with all the features and convenience of a $15K economy car. This after millions of dollars invested through grants, not to mention the millions spent by the company to develop. Most predict that it will not be a more than a niche--even the company came up with that assessment even though the $1.5 Billion (yes, that is BILLION) is be lavished on consumers as an incentive for them to buy these . A couple of years we could laugh at such business folly, but of course as taxpayers we have majority ownership of GM.

It would be easy to jump to the conclusion that the Volt is the idea of a government bent on pushing an environmental agenda, but the Volt was conceived well before GM became Government Motors. No, the Volt was a strategic decision made by the management that got GM bankrupt in the first place. Bad management can happen without government intervention.

What interests me is what will happen if there truly is no market for this seeming misfit of a car. The problem with government ownership is that even a cash strapped government can foist lots of resources to an endeavor (think NASA in the 60s and any war effort). Two problems with that in the case of GM's Volt. First, having access to money too easily will not likely incent market innovation, something that is sorely needed in the battery or hybrid car markets (same with alternative energy: the cost of the alternative is just too high to be competitive). Companies that are lean and not flush with resources can often outmaneuver those behemoths where resources come too easily. Second, if the government can create incentives that impact the demand side of the business--i.e., offer rebates for making the purchase, it creates a conflict of interest with competing products. That is, the government is part of both sides of the transaction (seller and buyer) and will certainly create the appearance of being unfair if not actually being that way.

I do know that at $41K, the Volt is priced well beyond my means and I don't expect to see many in the Rockhurst parking lots.

April Madness

It's April, time for April-May madness . . . er, okay not the same as March Madness, which has become institutionalized with "brackets" and lots of televised games. I quit filling out brackets several years ago and have paid more attention to the pro game.

I do like to follow sports teams and apply it to principles of management. A few years Michael Lewis wrote "Moneyball," a great story about baseball and how small budget teams were able to create successful strategies. In basketball, I follow the Utah Jazz who have their own way of doing things that has proven successful for a small market franchise.

Kevin Arnovitz of ESPN writes today about their system and how management from the players, coaching staff, and general manager are all aligned to that system. It reminds me a bit of the Japanese who started learn production, famously at Toyota, as a way to make cars. They could not afford the high capital of assembly plants used in the U.S., so developed cooperative systems that over a long period of time created efficiencies that could not be matched by U.S. firms. Many have tried to copy the lean systems of Toyota, but often fail because their systems all the way across are not aligned with it.

The Jazz team, as reported by Arnovitz, keep their players longer than most teams because their system demands familiarity and repetition. Ten of the 13 players on their team are second round draft picks or undrafted. They look for players that can play their flex system. They are all in to their flex system -- they run all the time; a system that requires coordination and discipline not always found in the free flowing NBA game. This from Arnovitz is telling "Utah doesn't swap players in and out of their organization very often. The Jazz build around a core group of young players -- often second-round picks and castoffs -- and invest a great deal of training and expertise in those players. It's one thing to run these sets over and over again to achieve full command of the offense, but quite another to do it with the same core of personnel."

They have a plan and follow it and depend on the people (coaches and players) to implement at high level of commitment. By the way, the only thing not really aligned is the Utah Jazz label itself -- Jazz and Utah are exactly a match. The franchise, however, is imported from New Orleans and the owners have decided to keep the existing brand name rather than try to create value in a new one.

Teams

I have not watched a lot of college basketball this year (and I did not do any March Madness bracket), but did take in the two games this past weekend for K-State and Baylor. College students more and more get involved in team projects or are part of teams in other sports -- and sometimes rue having to try and manage the difficult team dynamics or uneven individual efforts. Yet, these games show how potent good teams are.

In both games where a spot in the final four was on the line, K-State and Baylor fell short because they played better teams. In both cases the Big 12 teams had equal if not superior talent but their play often turned too individualistic where one player tried to do it himself (it may have also been due to an offensive strategy that limited other options). The winning teams also had "stars" but they didn't try to take over on their own -- which means they didn't take as many bad shots.

Too bad for the Big 12 -- they had great opportunities to get into the final four. Hats off, however, to teamwork.

Student Paper -- Part IV

Here is the ending of the student memoir I have been posting this week (See prior posts for the first parts of this paper. Enjoy . . .

A few days ago I asked a fellow student what his major was. When he said Biochemistry, I asked, “Pre-med?”
“Pre-dent,” he said. “You?”
“I’m pre-med, but I’m not a science major.” I hesitated. “I’m actually majoring in English.”
I waited for the usual response: the startled look, the assurance that I must be insane. It’s the same reaction I get from English majors when I tell them I’m pre-med. But he just sort of shrugged, as if this were not such a big deal.
“I like to read and write,” he told me. “By the end of the week I’m tired of using the analytical side of my brain, so I write crazy poetry.”
As I walked away, I wondered what had happened to all the well-rounded people in America. It may be one of the greatest flaws in our education system. For some reason we grow up thinking that we need only appreciate one subject, understand one thing. The two poles are usually the humanities at one end and math and science at the other. Why the separation? They’re all just as much the same as they are different. Each discipline needs another. If everyone were to recognize this, I think they would find learning more enjoyable. It’s part of the rediscovery process. The less we appreciate, the more we lose.
I’m not sure how much of our second sight we can get back. I keep searching for it, only to find that most of the time, I’ve struck it unawares, glimpsing that other world for a priceless fragment of a second. But I’ve made progress. Sometimes, now, there are days I can look at the undulating peaks and valleys of the sine function and see in it the same spark of life I perceived, at age five, in a paperclip.