Process Map

Leadership... what is leadership?

I’ve taken a lot of little seminars on the subject through various positions training myself and my co-workers on the subject.  And there are obvious key elements they always teach you:

Integrity, dedication, magnanimity, humility, openness, fairness, assertiveness, and a sense of humor; all very important leadership qualities… having good coping skills and the ability to think factually rather than emotionally. 

But the most important leadership skill I’ve ever realized is the ability to stop being a cog in the wheel.  I hate more than anything else when a corporation puts forth an initiative or comes up with a new buzz-word and all of middle-management starts throwing the word around like it was the most amazing thing they’ve ever heard.

The word of the day is “XXX” we might as well all be on Sesame Street.  And what’s worse is when it gets pushed down through the ranks and misinterpreted.  It’s sort of like that game I played as a kid at girl guide camp where one person whispers something in your ear, you whisper it to the next person and so on and so on and by the time it gets to the end the word is completely misconstrued. 

The most important leadership skill they should be teaching is common sense.  Buzz words have their place; we need to call things something and we need to be able to describe different methodologies and frameworks.  If not how would Taiichi Ohno have become famous throughout the manufacturing community?  But learning to speak Japanese hasn’t made me a better leader.  Learning his methods and common sense way to reduce waste, decrease variation in a process and sort, set in order, shine standardize and sustain did.

5S is a method for cleaning and organizing a work station.  Brilliant... absolutely, but before hearing that word common sense should have already told me that a more organized and well-managed area would be easier and more productive to work in.

Management frameworks of any kind are just that a Framework.  A basis to teach and describe best practices, perfect tools for growing young leaders, but beyond that common sense needs to come in to play.  Instead of corporations brainwashing middle-managers with mountains of spreadsheets and fancy charts and telling them follow this exact step by step guide and everything will be better.  We need to start teaching people to think for themselves.

Act with integrity, have dedication, but most of all Think for yourself!  If it doesn’t make sense don’t do it!

It seems lately we are all caught up with what the latest buzz word guide told us to do.  Policy says do it this way, so do it this way... No exceptions.  Well as a leader there are always exceptions, every situation is different and applying a one-size fits all solution to every problem is just the wrong way to get ahead.

The mentality of mass-production

I think something is seriously wrong with a world where you sit around a boardroom table at work dreaming about hurricanes so you can sell more building products then laugh about it like it's no big deal. But in a world of mass-production and millions of people’s livelihoods depending on manufacturing based pay cheques how do we change it?

 In another conversation we discuss the low price of Natural Gas today and how much money we could save if we stopped burning our high-cost by-product (waste) and switched the system to use more gas, and then people laugh when I say “Natural Gas is not a sustainable long-term solution”.

 Then I read in the news that the premier of British Columbia is promoting Natural Gas as a safe and natural energy source.

Consider for a second how close the British Columbia and Alberta Natural Gas reserves are to the Juan de Fuca fault line... The very fault line that everyone already knows will one day create the largest and scariest earthquake anyone has ever seen. This by the way is not speculation or myth; it is a proven scientific fact. The only thing not known is when, but we know it eventually will.

In order to extract Natural Gas we pump a massive amount of water and chemicals deep into the earth fracturing its core, and creating a mini-earthquake deep underground which releases the gas into underground pools (reserves) so it can be extracted. With every little earthquake we create we risk contaminating our clean water source with the chemicals used to create these earthquakes and we slowly shatter the core of our earth... The core of the planet we live on. The more dependent we are on Natural Gas the more we shatter this, and the deeper the cuts... doesn't this petrify anyone???

 Of course not, because the people doing the fracking are getting huge paycheques to do it. Yes they know it's scary, yes they know it's wrong. But they need to eat. And they’re in debt way over their heads because money's been cheap the last few years thanks to the whole banking / derivative scandal the world economy is still slowly trying to recover from.

If your family were in deep financial trouble and someone offers you a fat pay cheque that will easily let you keep your nice suburban house with all your toys what are you going to say?  And what if you’re the guy sitting at the boardroom table making the big decisions.  You have a family to support to.  We are already living in a world of mass-production, we’ve already killed the little guy and are all eagerly shopping at WalMart for absolutely everything because it’s cheap and we all have debt so who would ever pay more for something when you could get it for less.

Somehow we need to change how we think. Being the lowest cost producer is the name of the game for any major manufacturer today.  The lowest cost always wins the race.  I took economics class, and I have my degree in commerce this was the very first thing they taught me.  But is it right?  How do we change the minds of a global society so dependent on a fiat based-monetary system that the financial statements aren’t the only reports we need to look at.

I work in manufacturing and we have a fabulous environmental department, we all talk about Environmental Compliance as do many large corporations, we all want to do the right thing.  But at the end of the day the real problem is that every individual person in every major corporation out there is driven by the same incentive.  Their pay cheque, and that’s not a corporate problem, that’s a societal problem.  You can blame the big bad corporate names out there, but remember Corporations are run by people and all people have individual objectives.

As a society we all value our individual material possessions above all else.  You can say that you don’t, you can try to tell me that you’re different and you’re better than everyone else.  But we all have debt we all have mouths to feed and the cost of food and clothing are increasing at a rapid rate.  At a macro-economic level we need to understand that the more we consume the more energy we need to produce, whatever it is we are producing.  And because everything on earth is somehow connected the cost of everything will continually increase, like compound interest except with everything.

 I don’t know the answer, I just know something has to change.

The guy sitting at a table making large decisions in New York has no idea what the guy in Northern Alberta just had to start hauling water because the well he's been using to feed his cows for the last 100 years has just been contaminated by the chemicals we use to frack the earth.  He just knows Natural Gas is suddenly cheaper than oil and some government official told him it was cleaner too, so he actually feels like he's making a green decision.  A decision he'll be happily celebrating with BBQ'd Alberta steak!

Usury Today

Today the Bank of Canada put an interest rate hike on the back burner.  Why is that a bad thing?

"The rich ruleth over the poor, and the borrower is servant to the lender" -- Proverbs 22:7

Usury is the practice of making money out of nothing; moneylending.  Today it is the crutch of everything in our society; governments have borrowed trillions from other governments.  People have borrowed thousands from financial institutions and we are all being crippled from the effect.  Greece is going bankrupt – so are the US, the UK, Germany, France, Italy, The Netherlands, Spain, Ireland, and Japan all trillions of dollars in the hole.

Aristotle said “The most hated sort of moneymaking, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural use of it. For money was intended to be used in exchange, but not to increase at interest. And this term Usury which means the birth of money from money, is applied to the breeding of money, because the offspring resembles the parent. Wherefore of all modes of making money this is the most unnatural” (384–322 BC)

During the Middle Ages usury was deemed biblically prohibited to Christians on punishment of eternal damnation.  Christianity forbade it for centuries.  Jews however were allowed to lend money to non-Jews, but could not lend money to fellow Jews.  This began a deep resentment by many Christians of the Jewish community as far back as 300 AD.

But what about the opportunity cost of money?

If money was created to allow trade and to maximize talent, why should someone with too much money be prohibited from lending to someone who does not have enough?  And if they do help out their fellow neighbor, what did they give up?

If person A lends money to person B, the money they lent B could not be used to make more money, because it would be tied up until B was able to pay it back.  But if A could have kept that money and invested it they could probably have made a return on that investment.  Say 10%.

Well because A gave up the ability to make that 10% by helping out B, why then shouldn’t A be allowed to charge B 10% interest on the loan?  That way A doesn’t lose anything and B still gets help.

And then what about a reward for added risk? 

If A had kept that money and invested it safely in a sure thing, he would be guaranteed to receive his 10% payment.  However if he lends it to B, who is likely to go bankrupt because of his many other financial problems he may never see his money again.   Why should A lend to B and risk losing the 10% return?  B could offer a risk incentive and agree to pay back 12%.  If A thinks the risk is worth the extra 2% he will lend to B after all.

The needs of some and the ability of others created a huge black market and few could deny the benefits of moneylending even if the bible condemned it.  By the 16^th century and during the Golden Ages of Exploration immense wealth was brought to Europe.  Explorers needed loans to fund their trips and the wealthy wanted both a return on their investment and a payment for risk.

Martin Luther (1483–1546) and John Calvin (1509–1564), lead the reformation starting the separation of church and state.  They said the bible can’t condemn usury by saying it is ok for Jews and not for Christians.  If it is ok for Jews it must be ok for everyone.  They made lending publically acceptable and by the end of the 16^th century the Lutherans and the Calvinists had created a protestant revolution – Capitalism was born.

Well Capitalism is a wonderful thing.  It created the Wealth of Nations Adam Smith wrote about.  The more money lent and the freer trade became the wealthier everyone got.  Economics was born with all its bubbles and cycles and people and countries continued to lend and to borrow.

So back to today – what is the problem with lower interest rates?

Lower interest rates promote money lending and boost the economy.  Which is great because this is exactly what we need right now.  The problem is that we are really just extending the problem.  The more people are able to borrow the more they can buy driving up the price of goods. 

If money is too easy to get supply and demand says prices will increase.  More people can buy new houses, therefore they will pay more for those houses and soon inflation takes over.

In the short term this is great, but then rates need to start trending up to slow growth.  If we allow growth to get out of control prices get out of control and when the bubble bursts we will have overextended our lines of credit beyond what we can manage – rates will have to go up because the government will have to pay back the money they borrowed beyond what they can manage and we won’t be able to afford the payments.  Then poor Canada will follow the trend of all the other leading nations.

Interest rates have been exceptionally low for a good ten years now, and we need to start the trend up. Unfortunately we as a nation can’t start trending up until industry picks up because people will never be able to afford the increase while they are still sitting at home on lay-off.

So, it is good that the bank isn’t raising rates too quickly, even though it needs to happen at some point.  But it means industry isn’t able to meet the difference and the economy will continue in a dismal state until at least 2012.  We need to pay back debt rather than continually lowering our payments, but we need industry to create jobs and boost income to afford the increase, this might be a problem with all the other countries trillions in debt.

http://www.huffingtonpost.com/2009/11/30/10-countries-with-huge-de_n_374458.html

http://www.theobjectivestandard.com/issues/2007-fall/morality-of-moneylending.asp

http://www.ctvbc.ctv.ca/servlet/an/local/CTVNews/20110906/mark-carney-bank-of-canada-interest-rates-110906/20110906/?hub=BritishColumbiaHome

http://www.cbc.ca/news/canada/story/2011/08/10/canada-interest-rates.html

Just because I love Red Wine

http://smarteconomy.typepad.com/smart_economy/2011/06/red-wine-exercise-in-a-bottle-resveratrol.html

A glass a day for those of us who sit all day is a good thing.  How great is that.

There is a market for anything...

"Don't buy 'fresh' semen online, warns Health Canada"

Read more: http://www.canada.com/health/fresh+semen+online+warns+Health+Canada/5324386/story.html#ixzz1Wtdl43KD

This is proof there is a market for almost anything, I don't know about you but I don't think buying this product online is a very good idea.

Mining, mining and more mining

  

Gresham's law -- "bad money drives out good"

Lately all anybody is talking about is mining.  There are new mines in Ontario, new mines in BC, new mines in the Yukon.  Most of my memorable life mining has been a dying trade so why all the sudden is everybody going mining?

Could this be the start of the Gold Standard’s return?  It's definately making a lot of news lately, so what does that mean to you and me?

Once upon a time people traded grain for goats and daughters for land.  Then different cultures evolved and created different types of money.  It was somewhere between 30 BC and 14 AD that Augustus Caesar reformed the Roman monetary system and started issuing gold and silver coins as a primary means of trade.  Augustus brought Rome out of a century of civil war and into a golden age of history.

Fast forward about 1500 years and whole world wanted gold.   Columbus discovered America; Spanish pirates plundered the sea, we had the California gold rush.  And by the mid-1800’s most countries had adopted the Gold Standard as a way to standardize monetary transactions.

The gold standard meant that all paper money was backed by gold; you didn’t have to carry around actual pieces of heavy gold or silver.  However, paper money was guaranteed by something real, the government could only issue as much paper money as they had gold in storage to back it up with.

A brilliant and secure idea – no government could allow spending beyond their means because the GDP was spread evenly and you could only trade until the backed money was gone.  This created a golden era, which worked wonderfully until World War I happened.  During World War I countries spent a lot of money on warfare, more than they had gold in their vaults to support.  So they said, “Let’s forget the gold standard and just print what we need”.

Unfortunately when a county prints money without backing it up – hyperinflation happens.  There is more money out there and it is easier to get so it is then worth less; and the less it is worth the more it takes to buy the same product.  Kind of like the housing market back in 2005.  If mortgages are easy to get then there are more buyers and less houses available so prices explode. 

If the government can print as much money as they want it is easy for people to get, product demand is high so supply is low and prices on everything skyrocket.  Of course if proper controls are put into place, such as a Federal Reserve to ensue a government doesn’t just print as much as they want it should be fine for money not to be backed by a precious metal.

Money not backed by gold of course is called Fiat money.  With Fiat money, a government has the ability to control its own destiny by controlling the amount of notes in the market simply printing more or less and keeping that limit in check.

The Fiat system is wonderful in that the economy can be controlled; and if managed correctly recessions can be avoided.  Unfortunately most countries have no need to switch to a Fiat system unless they are deep in debt, in which case they are just creating their own inflation.

The US has switched back and forth several times to avoid recessions:

1785-1861 – Gold Standard

1862-1879 – Fiat System

1880-1914 – Gold Standard

1915-1925 – Fiat System

1926-1931 – Gold Standard

1931-1945 – Fiat

1945-1968 – Gold

And back and forth a couple more times, until the Fiat system in 1973 which stands today.

Why do they need to keep switching? Because human nature says if we can get away with it we will.  Countries always start a fiat system with good intentions, but as times get tight the temptation to print a little extra always seems to creep up until finally their dollar is devalued.

So here we are today.  The US dollar is in the toilet, the world is in recession and everybody is talking about Gold. 

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8638644/Return-of-the-Gold-Standard-as-world-order-unravels.html

So what does this mean to us?  A lot more mining – we need gold!

Going back to Columbus, the pirates and the gold rushers a gold backed currency means “he with the most gold has the best standard of living”.

The biggest disadvantage is that the wealth of the nation is depended on their supply of gold.  This restricts the government’s ability to manage the economy, and growth is limited.

I’m not sure going to a Gold Standard is even possible given the amount of debt in the global market today.  The US owes more money to China than they have in Gold reserves by about a couple trillion dollars.  But there is definitely a push by some to look at this.

I suppose what it really means to us, only time will tell.  I think lending will be harder to come by and we will be forced to live within our means a little more.  However looking back in history the most enlightened times were those under a gold standard.

http://economics.about.com/gi/o.htm?zi=1/XJ&zTi=1&sdn=economics&cdn=education&tm=40&gps=443_389_1020_550&f=00&tt=2&bt=0&bts=0&zu=http%3A//www.ex.ac.uk/%7ERDavies/arian/amser/chrono.html

http://useconomy.about.com/od/monetarypolicy/p/gold_history.htm

http://kwaves.com/fiat.htm

http://useconomy.about.com/od/monetarypolicy/p/gold_standard.htm

http://homes.chass.utoronto.ca/~floyd/dickbook.html