#26 By Degrees (1999)

All Rights Reserved © 1999 Thomas W. Day

Many of us who attended US colleges in the last couple of decades will admit that our academic careers were . . . less than academic. Little rich boys and girls, whose parents paid for their "education" mostly majored in non-stop partying. Less rich boys and girls, who paid for their education with student loans and grants, mostly majored in sucking up to the people who provided the money; with minors in identifying courses that wouldn't negatively affect their GPA. The least rich of all, those who paid for their own education out of their own pockets, majored in getting in and out of college in the shortest amount of time with minimum cost. Only freshmen and a few very dense sophomores waste time trying to locate the educational part of higher education. Those intent on becoming educated either give up on college and head into the real world where they can educate themselves or suffer through the paper-gathering phase of life and try to suffer as little permanent brain damage as possible during their academic incarceration.

The problem with colleges is that they are the home port for every corporate malfunction described in a Dilbert cartoon. Corruption, lethargy and indolence, inefficiency, and nepotism are all SOP (stupid office practices) in academia. If you can't do, teach. If you can't do or teach, administrate. If you can't do, teach, or administrate, there's always research. In Academia, we've created a home for every sort of incompetent.

The idea that the worst run organizations in the country, our disheveled and dishonest universities, can find the gall to offer "Master of Business Administration" degrees is as unlikely as your local YMCA Jazzercise instructors offering a "Masters of the Universe" self-defense class. How many times have you said, "I sure am impressed with my school's Admissions Office?" When was the last time you heard "enrolling for classes in this school is easy as ordering a pizza by phone!" Or how about "the thing I love about my school is that, after four years of shelling out tens of thousands of dollars, my college didn't make a single mistake on my transcript." On the other hand, if you've ever uttered any of the above sentences, you're going to be very happy in an MBA program. If you often thought "I can't imagine doing a better job than this school is doing," you can skip the "corporate internship" and go straight to a Ph.D. and a Business Department professorship or a CEO's desk.

Life never lets us down in the humor department, though. Not only are universities churning out MBA degrees, but companies seem to prefer losers with that useless credential to experienced employees with skill and ability. Many of the Fortune 500 types won't put you in the mail room if you don't have an MBA at the head of your resume's "education" section. Almost all of those companies absolutely refuse to consider you for any kind of supervisory position unless you have evidence of your ability to fail IQ tests and put up with extreme absurdity evidenced by an MBA degree. Note that the low-tech schools that used to argue for the importance of a Liberal Arts education, because of the minimal investment required in equipment and talent to offer those degrees, now specialize in "Business."

Imagine, if you will, how this trickles down into the companies for which we work.

For example, college profs are infamous for assigning grad students with sections, or entire presentations, of, research they intend to present as their sole effort. It's easy to see where that carries over into business. For one, the infamous "Six Stages of A Project" rule ("wild enthusiasm, disillusionment, total confusion, search for the guilty, punishment of the innocent, and promotion of the non-participants"). By their very lack of useful background, many of the degreed types are always non-participants, which guarantees success in the typical dysfunctional corporation or education system. This is a good thing for the credential collector and a very bad thing for the business. Eventually, all of the "guilty" (those who do work) will be purged from the system, leaving nothing but those who are innocent" and incapable. The hot business trend of the moment is the guilty are starting home businesses and abandoning cubicles in droves. Soon, all functional employees will be "contract labor" and all full time employees will be wandering, hopelessly, through the dead halls of the Fortune 500. Not a bad future, if it holds up.

Another of the many forms of academic corruption is unbelievable laziness, especially in state funded schools or federal funded programs. It's never hard to find a prof who hasn't stood in front of a class in decades. Even Paul Harvey can recognize "research" that is pointless, expensive, and has been done so many times by other academic deadbeats that copy machines have worn out the template. This routine is rearing its ugly corporate heads in gutless, me-too products. Look at the various versions of the Ford Taurus produced by every car company from GM to BMW and back to Ford. Look-alike consumer electronic products are churned out each year with no improvement more substantial than color and model number changes to distinguish the new stuff from the previous year's models.

The best of all academic aberrations is the totally useless and obscure specialty. Degrees are handed out for any damn thing, these days. You can practically study yourself and get a Ph.D. It used to be that FizEd majors took all the basket weaving classes. Now, the pushup-majors are taking College Algebra while the Fill-in-Your-Nationality-or-Sex Studies, Communications (learn to talk in your native language) hog all of the underachiever classes. There are even simplified Engineering programs that make Liberal Arts requirements look technical. In fact, some of the low-science program core classes make basket weaving seem scientific. Once you move this habit into business, it's almost impossible to figure out what department does what. Engineering departments masquerade as "Research and Development," because that gets a better tax break and inflates job titles. No one knows who Marketing serves, especially Sales. The rush to eliminate middle management has become an avalanche of middle-non-management positions with vast numbers of workers unsure to who they report. It appears that most companies have done what the federal government did in 1996. They identified "non-essential employees" and promoted them.

The fecal icing on this steaming mound of BS is that we are packing our companies with people who have been "educated" by those who can't do, teach, or administrate. If you're looking for the fatal flaw in our booming "Alice in Wonderland" economy, this is it. If you're worried about Y2K, your problem may be that you spent too much time in 400-and-up classes. If you want something to worry about, worry about companies that form the foundation of our economy and who insist that their most critical employees be college graduates. That's like insisting that a surgeon be blind and nervous. Or that your dentist only use tools made by Black & Decker. In Hitchhikers' Guide to the Universe, Douglas Adams wrote about a world where MBAs and Marketing types spend their days arguing about what color the wheel should be and burning down forests so that their leaf-based monetary system doesn't collapse in devaluation.

There is a glass ceiling in American business. But it's not just gender based. It's also a sort of academic aristocracy. Aristocrats are the ruling class version of hillbillies. Branch-less family trees and all. When a college degree is what we use to determine competency, we're screwed. Every honest fast-tracker can tell tales of being tutored, on the way up, by superior quality people who were stuck where they are because they weren't rich enough to loiter in a college for four years. It doesn't take any effort to find examples of incredibly successful, degree-less, self-employed multi-millionaires (or billionaires, in Mr. Gates' case). Seems like this ought to make someone think twice about where a degree's importance fits into a prospective employee's decision. Doesn't it?

August 1999

#25 Building Teamwork (1999)

All Rights Reserved © 1999 Thomas W. Day

Lots of companies like to debate (and re-debate) "who works for who" arguments.  Marketing works for Sales.  Engineering works for Marketing.  Everybody works for the CEO.  And on and on.  This stuff never gets settled because these mismanagers haven't established or committed to the most basic corporate "quality" or "customer awareness" concepts.  It's not a guy-fear-of-commitment thing, either.  Once men or women grab hold of a little power, neither sex seems to be able to let go of it for the good of the organization.

There is a short, euphoric period that companies go through when they first become aware of how many problems vanish with a corporate customer orientation attitude.  That euphoria turns to a puff of dust when mismanagement people realize how much work and responsibility is required from them to make these things happen.  In the time it takes to find someone to blame, most companies drift back to their natural attitudes and disorganization.

Personally, I think developing a company "service" attitude and structure is the only way the big and chronic company issues can be resolved efficiently and completely.  Companies and their departments need to determine who their "customers" are and who their "vendors" are and then expect and deliver service on those standards. 

In a manufacturing company, Marketing is a service to Engineering, Engineering is a service to Manufacturing, Manufacturing is a service to Sales, and Sales is a service to end users. 

In a small Ma and Pa store the customer is easy to identify and vendors are pretty obvious.  In a multi-employee/department company the lines of service and supply become blurred by everything from ignorance to empire building.  It is critical that management establish and enforce customer identification because the company can't operate as a team until everyone knows what the objectives and responsibilities are. 

What kind of football team would argue about whose job it is to protect the kicker?  "I can't do that, I'm a running back . . . I've got a science degree, you want me to hurt my brain? . . . that fool wouldn't know a decent block if you could throw a party on it. . . he's a high school dropout, what does he know about management?"  Imagine a team that has to debate who the stars are going to be and what the "real' objective is; now imagine a sport that group will succeed in. 

It is popular for hip, yuppie-types to put sports and its participants down; and the sport analogies go down with the athletes.  I don't know where a person can get better situation training and practice; except, maybe, in war.  If you think that managing a group of oversized, spectacularly talented, high paid, self-motivated athletes is simple, what would you qualify as a difficult management task?

Here's a more yuppie, scientific analogy for you.  A collection of cells group together, programmed by DNA (a type of management), into a coherent organism.  The organism is more complex and more functional than the sum of the individual cells.  It can control its environment by moving to food, trapping or out running its food, choosing its breeding mate, and planning its future. 

The organism can be contaminated by a virus or a cancer and the function of the organism can be completely destroyed by the disorganized and random actions of the intruder; unless the intruder is destroyed or managed.

I have some experience working in a "team" and too much experience watching teams dissolve; that is a process a lot like having your family come apart.  A team is still-born or murdered if just one self-serving member sours the powerful, single-minded creative process that a real team effort is.  One childish, selfish "upwardly mobile", or gamesmanship type can wipe out the gestalt by making the other members of the team re-evaluate how much they are sacrificing so that this Bozo can step up the corporate ladder. 

Teams are delicate, rare, valuable, and the output is always greater than the sum of the participants.  When a team is split, the fabric that kept the members working together is difficult to repair.  I suspect the most effective cure is to remove the divisive component and the team members should have the major voice in selecting the replacement.  If corrective action isn't immediate the independently competent ex-members of the team start looking for a more productive situation and the dependent members, who depended on the team to draw out their best, sink back into obscurity.  The company is left with the back-stabbers, the selfish, and the uninspired.

August 1999

#24 Watching the Doc Stocks (1999)

All Rights Reserved © 1999 Thomas W. Day

Medicine and it's associated hardware are the aerospace industry of the 90's. Don't believe me? Just look at the relationship. The government is the primary customer (52% of all "insurance" coverage issued as of the 1997 census), through Medicare and Medicaid, military, and government benefits. The national health costs are expected projected to total $1.3 trillion and reach 14.3 percent of Gross Domestic Product (GDP) by Y2k. $594 billion of this cost will be paid directly by public financing. $723 billion will be paid for by private sources, but a substantial percentage of the "private" funds are actually purchased with public funding, via military and government employee insurance coverage.

The only portion of the country's medical costs that is absolutely privately financed is $222 billion of out-of-pocket payments. The government never pays for anything out-of-pocket. Since cosmetic surgery gets wrapped into "medical" cost statistics, it's probably not hard to figure out where most of that $222 billion gets spent.

So, it's a fairly safe bet that either the government is paying the bill or it's plastic surgery for rich geeks. Sounds like the military-industrial complex, doesn't it? Either the government is buying their products or it's gangbangers, terrorists, or drug cartels. I wonder how many of the second group needs cosmetic surgery?

Whatever. The real deal is, the medical industry has its hands into the same ultimate deep pockets as their aerospace predecessors. Boeing, Harris, McDonald-Douglas, Fairchild, GE, General Dynamics, and the rest of those now-burnt-toast companies gorged on public funding until they popped. Popped they did, though. When that brand of corporate welfare ran out, so did the gangsters who profited from it. It would be interesting to see how many of the escapees, who didn't take the bank with them, ended up in medical device and drug companies.

As investors, this is the reason we all have to closely monitor these investments. If you think have found a medical device company that is running efficiently and producing products that sell for something resembling a real-world price, you need to look again. From the incredibly fat cats at the top to the field personnel, these companies don't spend a penny where a dollar will do. This is the home of limos for every excuse, thousand dollar lunch meetings, expensive booze on every occasion, expensive cars, multi-million dollar stock options and golden parachutes for the totally incompetent, and money spent like Y2k (or the next three-day weekend) is the end of time.

Just like the bomb manufacturers, the differential between the haves and the have-nothings, power-wise, is as wide as the spectrum of what Danny Quayle doesn't know. The execs are packing their pockets and golden-parachuting their way into mansions on the cliffs of Mendocino and the beaches of Hawaii. All the while, folks on the assembly lines might as well be knitting labels on sweatshirts or picking cotton, since corporate affluence only trickles down when it slips through the executives' fingers. This is always a sign that no one's building a business that's expected to last long enough for the cement to dry.

A short attention span is the shape of the industry. These aren't companies that spend time worrying about the distant (more than six months') future. The "big picture" is being painted today and tomorrow may require digging a whole new gold mine. The little companies are hoping to slither through their clinical trials and get bought up by a big company. The gangsters who run the big companies hope to get through the next couple of quarters with their stock options and bonuses intact. Once they bank their payoff, who cares if the business swirls down the drain? If the check didn't bounce, the millions the executives rake off of the top will set them up for a lifetime of luxury. Did you expect them to go job hunting afterwards?

On the fringes of corporate maneuvering, the FDA looms over everyone and those dreams of massive independent wealth. One significant product recall and the whole show goes down the tubes. Stock analysts are totally incapable of knowing anything about this aspect of a stock's value. In fact, the most important criteria for a medical product company CEO is how well he can lie about rumors of product problems. The second most important ability is hiring an idiot who will take the fall if the inspectors with the handcuffs show up looking for someone to blame for the latest homicidal product screw-up. The only way to get advance notice of this sort of impending disaster is to work in the bowels of the company's Reliability Assurance Department. Is your financial security worth that kind of sacrifice? Even the FDA's inspectors rarely go into those dark and depressing places.

Even if the company isn't run by a pack of Mike Milkin and Charley Keating clones, the future is beating hard on the door of this industry. Someday, a manipulated strand of DNA will put all kinds of implantable devices out of business. Pacemakers, ICDs, stents, catheters, and all of the cardiac paraphernalia could become ancient history with one good breakthrough. The same goes for dialysis equipment, transplant technology, cochlear implants, and, even, drugs. What's gold today could be dust tomorrow. And tomorrow could, literally, be tomorrow.

These are the reasons that knowledgeable analysts (if they still exist) consider medical device companies "high risk." The bubble could break, for a half dozen very good reasons, on any company at any point in the near and far future. This may be the ultimate in "buyer beware" in the stock market.

August 1999

#23 How the Poor get Poorer (1999)

All Rights Reserved © 1999 Thomas W. Day

Because I wasn't smart enough to apply for financial assistance when I was young, poor, and scratching out a living, my kids didn't get much of a role model when it came their time to look for handouts. Just like me, they are working their way through times of no money without asking for much help from anyone. So, I'm getting a second hand view of what it's like to be poor in America in the 1990's. My oldest daughter's taking the most risk, as a single mother and a freelance writer, so she's getting the most experience at living on the edge.

Her recent run-in with the systems that keep the rich, rich, and the poor, poor, has taught me a lot about what puts and keeps people in poverty. The number of "systems" aligned against poor people is astounding. The protection offered to the powerless, from the abuse of the powerful, is non-existent. As I see the trials she suffers, I'm constantly hearing the theme song from "Falcon and the Snowman." ("This is not America, oh no!") It is truly a wonder that anyone ever survives poverty, let alone escapes it. There must be a lot of profit in keeping fellow citizens underfoot and downtrodden.

Recently, she was robbed by two different rental property owners. One, illegally, took a large deposit on an apartment as security, rented the apartment to someone else, and kept the deposit. The other inspected the apartment she was leaving, signed off on the inspection, only asking for $20 in damages, and, a month later, sent her a bill for $200 additional repairs while keeping her original $700 deposit. No surprise here.

Landlords are often evil bastards. Everyone who's rented a place for less than $2,000 a month has a tale of the hell that living in a rental can be. The surprise came when she exercised her legal options to get the money back. Small claims court, where lawyers who can't comprehend the law pretend to be judges, is where citizens are supposed to go for protection when they can't afford civil court. For all I know, there isn't even a GED requirement for the clowns who masquerade as small claims court judges, let alone a law degree. Based on my daughter's experience, I'm not sure a small claims judge even has to be able to read.

On the same day, the two sets of scumlords slithered into the court house on, essentially, the same issue; is it legal to steal from a renter?

My daughter was well prepared with receipts, dates, names, and an honest description of the transactions' events. The first scumlord didn't bring anything but his lying butt into court. After an unconvincing tale of blundering and illegal activities, he was told to return the money in 30 days. No punishment for attempted theft, no punishment if he decided to ignore the court's order. He wasn't even reminded that taking a full deposit as security is illegal in this state.

The second set of trust fund-baby-scumlords was even more blatant. They, also, brought nothing but their bloodshot eyes for evidence. However, they were a lot more creative. Before their case was presented, in the hall outside the court, they tried to bully my daughter into dropping the suit. The courts are so busy protecting themselves from the civilians they abuse, they don't have the resources to protect victims from the criminals that might have been brought to court. Under slightly worse conditions, my daughter might have been intimidated into abandoning this suit in fear for her and her three year old son's safety. Luckily, my wife and a bailiff managed to move these clowns into the court and the court system barely avoided total injustice. The judges probably like to deal that out themselves.

In the courtroom, the scumlords invented their testimony as it occurred to them. While every piece of documentation refuted their fable, somehow, the judge decided to reward them with $200 of my daughter's $700 deposit. They, also, had 30 days to decide if it was convenient to obey the court order to return approximately $500. So, for the price of an hour's time and a trip to downtown Minneapolis, these rich boys made $200 for violating the terms of their own agreement and telling a few tall tales. Clearly, the moral here is "lie, cheat, and steal, and you will be rewarded." A message that this country's ruling class has always held near to its cold and shriveled heart.

While this was going on, my daughter was out somewhere around $1200 for three months. That is about 15% of her gross income from the year, so it mattered. A lot. Between the crooks and slow paying magazine accounting departments, she bounced some checks. One of those checks was the deposit on her new apartment.

She is not alone or friendless and the banks were paid back, quickly. Still, as far as banks are concerned, a couple of bounced checks and you are history. USBank closed her account and she was left with no economical way to cash the many out-of-state checks she receives from her customers. No way to pay many of the bills that required non-cash payment. Without her family and friends, she would have been in a very difficult financial and physical position.

Because bad isn't bad enough, she discovered that she couldn't open an account with any other bank. Her driver's license and social security number were illegally used to do a credit check, without requesting her permission, and other banks wouldn't even allow her to open a savings account.

With all of the publicly provided protection and financial liberties banks are given, you'd think that some public service would be required of them. You'd be wrong. Apparently, we cover their brainless investments, criminal accounting activities, and basic incompetence with taxpayer subsidized insurance so that they can offer low interest rates on deposits and high rates on loans. No wonder shutting down welfare for the poor was so important, the rich and powerful need that money so they can keep being rich and powerful.

I know this doesn't even illustrate the tip of the iceberg that sinks poor people into chronic poverty. This is the kind of stuff that happens to you when you can afford to get into an apartment, in the first place. When you have a good enough education to know how to deal with small claims courts. When you have enough freedom to be able to waste a day with the over-paid, under-motivated public servants who administer the injustice. When you have enough money to be able to want to put some of it into a bank. And on and on.

This system isn't a conspiracy against the poor. It isn't smart enough to be a conspiracy. It's a collection of mindless rules and regulations designed to protect those in power from having to earn and deserve that power. There has got to be a way to write a piece of software to replace these drones. It couldn't take more than a couple dozen lines of well-written code.

July 1999