EclecticLip

(originally written Jan 25)

I’m in training pretty much the whole week — which fact one of my horoscopes must’ve predicted.  I mean, there are so many of them floating out there, that one of them must’ve been right!

 

The past couple days covered FMEA, an engineering topic so obscure I’ll give the unabbreviated name (Failure Modes and Effects Analysis) and immediately move the story forward.  We were fortunate to have had a great teacher — a grizzled veteran of industry who tossed out great one-liners such as:

 

"an FMEA without action [items] is called Charmin — because if you print it on softer paper, THEN it has a function"

         (Charmin is a brand of what polite butlers would refer to as ‘bathroom tissue’)

 

"product development is a failure factory"

 

          ….as well as the sentence clause,

" — not that it ever happens here — "

 

delivered each time he described a wince-worthy product development process which had indeed, never happened here. 

 

He also described how a good FMEA meeting ideally comprises the design engineer, a reliability engineer, a facilitator, and a fourth engineer playing the role of "The Opposer".  (Or as they say in the Biblical Hebrew, "Satan".    )

 

 

It turns out this fellow was a co-op student at Ford when FMEA’s were brought there in the 1970’s, due to the tendency of the Ford Pinto to explode in rear-end collisions, as a $4-per-vehicle fix was deemed too expensive.  Though to be fair, that doesn’t account for inflation; according to an unverified internet source, such a fix would cost a whopping $20 today.  That totally changed your perspective, didn’t it? 

 

In crisis, Ford brought in experts from NASA — which had regrettably extensive experience with exploding products — who brought in this FMEA technique.  So, as our teacher wryly noted, FMEA’s are actually rocket science, ported over from the Space Program which invented them.  The very Space Program which employed a colleague on an unsuccessful Mars Lander.  (Not the one which missed the planet; the other one, which stopped phoning home.)

 

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Come to think of it, it’s turning out to be quite the lesson week for me.  At the weekend gold show — bereft of decent freebies, apart from some USB drives — the busiest company booth was from some no-name junior exploration company (read "investing lottery-ticket") which had set up a big-screen TV, broadcasting the big Packers-Bears NFL game.  During commercial breaks, the marketing rep would mute the screen and begin a spiel about how "today’s game is brought to you by XYZ Resources; we have millions in cash flow, hot properties, and you need to buy our stock" — though better-finessed than my paraphrase.  They even had a functioning popcorn-maker to feed the crowd.  Pure genius.  Pity his company has a snowball’s chance in hell.  

 

Then there was the fellow I bumped into, wearing a suit; made of brown corduroy.  See, lessons all around! 

(originally written Jan 17; posted Jan 23 as part of some backfill) 

Now that the Globe and Mail’s GlobeInvestor site has mutual fund performance data for calendar 2010, I decided to check in on ubiquitous business-channel commentator and investment guru Dennis Gartman’s performance this year.  As you may recall, his ETF (exchange traded fund — basically, a mutual fund that trades as a stock) did rather poorly last year.  Outperformed by 98.3% of mutual funds (!) in calendar 2009, I calculated his SAT-equivalent score to be 288.

This is based on the assumption that SAT scores follow a normal distribution, and are scored such that the median (50th percentile) scores 500, with each standard deviation representing 100 points.  As such, scoring in this system would look like:

• 99.8th percentile: 800    (top 0.2%)
• 98th percentile:    700    (top 2%)
• 84th percentile:    600    (top 16%)
• 50th percentile:    500
• 16th percentile:    400    (bottom 16%)
•   2nd percentile:   300    (bottom 2%)
•   0th percentile:    200    (bottom 0.2%)

The good news is that Dennis did much better than last year; indeed, his shareholders actually made money! 

The bad news is that his 3.8% return for shareholders put him in the 18th percentile.  That is, 82% of mutual funds beat him.  (9452 of the 11577 GlobeInvestor tracked.) 

As such, his SAT-equivalent score for 2010 is…  410.
 

At this time I should note that investments are a poor reflection of a person’s financial prowess — last I checked, Mr. Gartman convinces people to pay $400/month for his advice, despite his track record!  Clearly, he’s got amazing skills.  Or at least, chutzpah.  …can you imagine how much he’d charge if he actually outperformed the market? 

Further context:

- half of all mutual funds tracked by GlobeInvestor gained 8% or more in 2010 (SAT-equivalent of 500).

- the Toronto Stock Exchange Index gained 14.2%, which would’ve placed it among the top 16% of mutual funds (1810 / 11577).  This is consistent with the rule-of-thumb that only 20% of mutual funds beat the index in any given year.

- because his ETF started at $10 in 2009 and stood at about $9.33 at end-2010, Gartman’s investors lost about 7% in a two-year period during which the TSX index rose 46% (from 9234 to 13530; and that doesn’t include dividends).  So over the past two years, the Gartman portfolio has underperformed the index by 50%!  Though a pecuniary pundit of Mr. Gartman’s self-assurance would surely dismiss that as a temporary underperformance of “only” 50%. 

A long-time proponent of the “A3″ reporting format (which aims to summarize a problem and its solution in a roughly 11″ x17″ sheet of paper) it was a delight to cover Understanding A3 Thinking in the book club. 

Having authored some epic reports and PowerPoint slide decks in my time, the prospect of condensing findings into a single – albeit large – sheet of paper, immediately piqued my interest.  It also brought to mind the quotation by Antoine de Saint-Exupery:

Perfection is achieved, not when there is noting more to add, but when there is nothing more to take away.
 

Consider that it’s standard form to report out insights in essay format, with complete sentences; this is as inefficient as incandescent lighting.  In Edison’s invention, only a few percent of the energy output is light (the rest is waste heat).  In a technical report I’d be surprised if more than 20% of the words relate to the discoveries; I’d bet most of the words are “filler” required to make the communication of information, conform to grammatical rules. 

While Understanding A3 Thinking did cover the guidelines Toyota uses for A3 reports (e.g. emphasizing visual methods, instead of verbal methods, for explanation) it suggested the overarching value was to ingrain rigorous problem-solving discipline in the employees.  Over the course of the problem-solving, engineers submit A3’s to their supervisors and other senior staff, who provide guidance and suggestions, both on problem-solving approach and data presentation. 

As such, by the time an A3 report is finished, it will have gone through extensive “peer review” (or “superiors’ review”) which helps improve the quality of the findings, the presentation, and the problem-solving skills of the author — who may in turn pass these best practises to future junior employees.
As always, if you enjoy the book summary, please consider supporting the authors by purchasing a copy. 

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Understanding A3 Thinking - summary

[originally written July 28.  Posted Nov 18.] 

While stuck, iPodless, in a near-interminable supermarket lineup the other week, I swallowed my dignity and perused the celebrity magazines near the cash register.  And you know what?  They’re actually pretty good!  While I’m veering into fiction, the fashionista in line behind me complimented me on my Vibram Five Finger shoes — the first footwear I ever bought to make a fashion misstatement.  I’m planning to take casual Fridays to the next level. 

__(’Read the rest of this entry »’)

As a preamble, let me note it’s not my normal manner to poke fun with a bayonet — this is a special little something I reserve for pompous commentators of such oracular conceit that they greet all others’ views with a dripping disdain. 

To be clear, I’m sure that — like George W. Bush — Dennis Gartman is a nice man.

I’m also confident that — like George W. Bush — Dennis Gartman is a victim of the Dunning-Kruger Effect, which causes the cripplingly incompetent to think they’ve got exceeding expertise.  (To be fair, Dunning-Kruger is epidemic in the financial sector; how many “expert” mutual fund managers actually beat the index?  There is no cure.)

Lastly, I’m certain that — like George W. Bush — Dennis Gartman still has enough fans that this qualifies as “pricking the powerful” as opposed to “kicking the downtrodden”.

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I’ll chatter more about SeaWorld in due course, but wanted to comment briefly on the San Diego Zoo’s “pandarrific” showcase exhibits, featuring China’s monochromatic bears.  Fascinatingly, the Zoo doesn’t own them; the pandas are loaned from China.  Like so much American prosperity. 

Despite their current vegetarian diet, pandas’ ancestors were carnivores, so they have a fairly short digestive tract.  As such, they don’t derive much nutrition from bamboo.  As such, they spend up to 14 hours a day eating — not altogether unlike cruise ship passengers.    Interestingly, the pandas only like the inner portion of the bamboo shoots; they’d “peel off” the outer strip of the bamboo shoots with their teeth — not unlike kids eating those “cheese-strings” sold in supermarkets today.  There was also a panda cub, sleeping in the treetops, ignoring the flashing cameras and cooing humans.  Preoccupied with panda life, the orca-patterned ursines were oblivious to the merchandising empire they supported on their furry little shoulders.

__(’Read the rest of this entry »’)

We read The Human Side of Enterprise recently, wherein Douglas McGregor (that’s McGregor, not MacArthur!) contained the wisdom nugget that:

“management gets the labour relations it deserves”.

I doubt McGregor coined the expression — it’s the kind of pithy phrase that floats around for years before being credited to a famous person — but it rings no less true. 

The general theme is a karmic one: if management mistreats labour, labour will eventually form a feisty union.  And contrarily, if management treats its employees well, union relations will tend to be amicable (if there even is a union).  Furthermore, while trust and respect grow slowly over time (like pearls!), bad memories have a way of lingering for a very. long. time.

In that context, I wonder if management in the West is still paying for the bad karma it earned during the Industrial Revolution.  If the explosion of industrial wealth was shared more equitably, or barons weren’t so slow to improve working conditions / recognize workers’ rights, perhaps labour unions wouldn’t've become so militantly anti-management.  Heck, maybe Marx and Engels wouldn’t've even been inspired to write their little pamphlet!

I’m perfectly unfamiliar with labour relations / extent of union militancy in other countries, but it would shock me if the Nordic economies (or Japan, with its fairly egalitarian corporate pay scales) have similarly confrontative labour relations.  After all, it’s difficult to have a class struggle if the different “classes” of employees (management, labour) enjoy reasonably equitable pay, and decent working conditions.  And I’d expect that economies with a heritage in the British Industrial Revolution tradition (US, UK, Canada, Australia) would have more confrontative unions.  After all, those union traditions would’ve been born in a desperate context of obscene wealth and even-more-obscene squalor.

So it would seem reasonable to consider militant unions a form of karma — a carryover from the bad ol’ days (correction: the very bad old days) of the Anglo economic tradition, when owners really should’ve cared more about their employees.  And given how long it can take for bad karma to dissipate, I imagine confrontational labour relations will be a feature of industry in these cultures, for a long time to come.

In my literary travels, I recently learned that Helvetica was originally called… Neue Haas Grotesk.  And indeed, the name was changed for marketing reasons.

That reminds me of the case of the Chilean sea bass, the yummier-sounding fisheries label for the creature otherwise known as the Patagonian toothfish...

(image from Wikipedia)

It occurred to me recently that Garry “Ironman” Unger — who played with the Red Wings in ‘70-’71 and with the Oilers in the early 1980’s, might’ve been the only guy ever to have played in the NHL with Gretzky, Howe and Messier, the three top scorers in the league’s history. 

(Incidentally, Ron Francis, the NHL’s 4th all-time highest scorer, played with Howe in ‘79-’80 in Hartford.  But Marcel Dionne, #5 all-time, only started with the Red Wings in ‘71-’72, the year after Howe retired.)

A quick check online suggests that — there was one other NHL’er to share dressing rooms with Howe, Gretzky and Messier in his NHL career.  And that was a journeyman by the name of:

- Jeff Brubaker  (three games with Howe; four games with the Oilers in ‘85-’86)

Looks like there was one near-miss as well:

- Nick Fotiu  (most of ‘79-’80 with Howe; and one game with Edmonton in ‘88-’89, the year after The Trade)

(Originally written Dec 2009; posted April 2010)

I ran into one of my old Classical Studies professors at a Starbucks recently.  It was fun catching up; it was sobering to think those days were about twenty years ago.  Back then, Brian Mulroney (!) was Prime Minister and the ground-breaking, subversive, edgy cartoon TV show was The Simpsons.

Smalltalk aside, we discussed the recent Landmark Edition of Herodotus, the Greek historian known variously as “the father of history” and “the father of lies”.  This is because he’s generally reliable (for an ancient historian) on Greek matters — and hilariously unreliable for anything outside of Greece (being, the other 99% of the world).  To his credit, he does tell his readers that he’s just reporting what all these foreign sailors have told him.  Which begs the question of why he spent so much time with foreign sailors. 

Though one line in his Histories suggests that Pheonicians circumnavigated Africa millenia before Europeans, Herodotus is most famous for telling Greek audiences that in India, fox-sized ants would get covered in gold dust while digging their burrows, which the locals would collect with whatever passed for the “Swiffer” of that era.*  But they’d have to be careful, because these ants were so fierce, they would eat camels.  The more mundane reality is that folks in a part of Pakistan have harvested gold dust from the coats of marmots for centuries.  And there is a type of scorpion in that region dumb enough to chase camels.  Ah, the miracle of mistranslation! 

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* this is separate from the Golden Fleece legend.  If the latter has historical roots, it would most likely be the ancient practise of using sheepskin to collect gold dust floating down rivers in the Black Sea area.  (The sheepskin was cheap, available, and renewable, and had lots of surface area with which to catch the particles.)