The Incredible Power of Luck and Finding Suckers

I recently read two automotive industry books, first was Ludicrous: The Unvarnished Story of Tesla Motors, and the second was Driving Honda, Inside the World’s Most Innovative Car Company. Those two companies could not be more unlike wile still being in the same industry. One company (Tesla, if you’re clueless)  is driven by a narcistic megalomaniac and the other is driven by a company philosophy. The cars produced by the two companies are equally different: Teslas are all about status and “belonging” to a cult and Hondas are primarily reliable, flexible transportation. One company exists to promote the fame and fortune of its owner, man-boy Elon Musk, and Honda exists “to provide products and services that expand people's dreams and potential.” The difference is apparent, even obvious, in the products, the employees, and the customers.

I committed a fair portion of my working career to manufacturing and, even, a substantial portion of my early audio engineering experience to producing products of my own design . In fact, from my perspective it was hard to beat the best moments I experienced in manufacturing products I cared about. Likewise, I would have rather died in a motorcycle crash at 30 than having gone through my worst half-dozen moments in manufacturing (which all occurred during my 10 years in medical devices). Manufacturing anything is a team effort and that includes designing the equipment necessary for manufacturing. Anyone who claims to have designed a product that was mass produced is a lying sack of crap. From the original concept to the finished product, there are dozens if not hundreds of hands and minds that shape and finish a product into something that is useful, safe, and cost-effective.

Weirdly, there has never been a shortage of people who are willing to do the hard work that is necessary to make and improve a product or service. Usually, those people go unnoticed not just by the public but by the people who have the most to gain from their hard work. Every rich asshole from Henry Ford to Elon Musk has lucked into a few hundred dedicated, talented, hard-working people who foolishly bought into the rich guys’ bullshit and made the lucky idiot rich in spite of himself. I’ve had a ringside seat for a half-dozen of those rags-to-riches lucky business histories. In only one of the lot was the “founder” a critical (or even useful) component in the companies’ success. In most, the founder/founders was/were an impediment that employees had to work around to keep the business alive. In none of the second group of mismanagers were the people who had the most to gain even mildly aware of their good fortune. In that one instance where the founder was a critical component, he was also very aware of his own shortcomings and consistently grateful for the contributions of the people who carried his ass from rags to riches (although he started out pretty rich).

Luck usually has more to do with success than does brilliance, talent, strategy, or even hard work. But yiou’d never get that story from the lucky few who are successful, or at least rarely is that kind of self-critical honesty present. Most “founders” do everything they can to purge their institutions of evidence of their mindless luck as quickly as possible. Some do it ruthlessly and fairly successfully, like Musk and Tesla or Jobs and Apple, and many more do it ham-handedly often killing the golden goose before it is fully hatched. But they all depend nearly totally on being lucky enough to con the right people into committing to what is presented as a “mission” early in the business’ history and doing all of the hard, boring, detail work that is necessary to actual success. Some, like Trump, not only misunderstand how little he contributed to the success of his one-and-only public corporate meltdown but blame the people who did the work for dying on him. Most are like Henry Ford who carefully scraped away all of the evidence of his own good fortune so ruthlessly that he “destroyed” his only son, Edsel, to keep his own competence myth alive. Without the fatal consequences, the same went for Musk and Jobs.

The next time you hear some half-wit babble about his self-made zillionaire status, try to imagine what it would be like to have built something spectacular,—believing your hard work and contributions would result in some kind of recognition and reward—having to listen to a non-contributor brag who ended up on top of the corporate turd-pile purely out of luck and conniving viciousness. It happens more often than not, but the public perception is one more example that “history is written (and advertised) by the winners.”

An Age of Dying Expertise

Recently, a friend described an incredibly expensive series of visits to his Volvo dealership in which he had to explain the problem (surging at low speeds), leave his vehicle at the dealership for a day or two, pay around $1,000 per visit, take the car home and discover the same problem still existed. And he had to do this a half-dozen times before he finally “resolved” the problem by disabling the car’s oxygen sensors. He’d had several such problems with his two early 2000’s Volvos and at least one of those malfunctions was solved by a Boomer parts manager who had been a mechanic before being promoted to management who knew something about the history of Volvo’s many fuel system problems. Without that insight, his car might be in a salvage yard today.

I’ve had a couple similar experiences. In 2011, on a motorcycle trip with my grandson through the Rockies, my Suzuki blew a fork seal about 50 miles north of Laramie, WY. First, I assumed that there wouldn’t be a Suzuki dealer in that backwater and I was wrong. Frontier Cycles not only serviced and sold Suzuki bikes, but I lucked into a 60-something parts guy who knew that Suzuki only use 3 sizes of seals, regardless of their hundreds of part numbers for fork seals. Thanks to his long-term knowledge of Suzuki motorcycles, I was back on the road a day later. Left up to the young mechanic who did the work in a perfectly competent manner, I’d have been stuck in a motel for a week waiting for a part from Denver. I’ve documented my Volkswagen experience here long and loud, but along with discovering that two Albuquerque VW dealers and one VW specialty independent service station were totally incapable of doing anything their highly flawed computer analysis equipment didn’t describe for them, I lucked into one very clever and curious 50-60-something technician at German Motorwerke who discovered the Eurovan’s Transmission Control Unit (TCU) couldn’t make up its mind as to the source of the problem. Where the VW dealer “mechanics” read “replace the transmission,” Motorwerke’s tech tracked the faults though the analysis down to the point that every time he ran the analysis, the computer pointed to a different component of the transmission. That convinced him that the TCU was the problem, not the transmission that obviously managed to get the camper from eastern New Mexico to Albuquerque without frying itself, although a good bit of that trip was done in “limp home mode.” Later, I found another mechanic, Victor Cano-Linson at Big Victor’s Automotive in Elephant Butte, NM who patiently hacked his way through the mostly-erroneous mess of “service information” VW supplies for $400/month to independent shops and got us back on the road. Victor has a couple of grown kids, regardless of the fact that he looks about 30 max, so he’s going to be heading into retirement soon, too.

Currently, significantly more than 50% of America’s skilled-trade workers are retiring in the next 10 years, almost a third in the next five. That skilled labor shortage includes automotive and heavy equipment mechanics, plumbers, electricians, electronic technicians  construction workers, water system treatment technicians, building maintenance technicians, HVAC technicians, welders, masons, and heavy equipment operators. The same is true for high-skill, jobs like electrical and electronic engineers, mechanical engineers, doctors, and other hyper-skilled, education dependent jobs. There was a brief window when the important details of many of those skills would have been passed on, but that opportunity was missed during the multiple recessions, down-sizing, huge and incompetent conglomerate monopolies sucking up businesses and trashing them, and the massive transfer of wealth from the 99% to the 1% the country suffered between 1970 and 2020. While the owners of those skills are leaving the workforce, their replacements are having to fend for themselves in an unstable labor market with a shaky national  economic future. We often hear the shrill cry of “why don’t people want to work anymore,” but those asking don’t want to hear the complicated answer.

In a country that has fallen hook-line-and-sinker for the repeatedly-failed economic fallacy that dribble-down will save the economy and culture if we just cut taxes on the rich, working hard to earn a middle class living has lost its appeal. White people especially have been convinced if they just bow and scrape low enough they will be rewarded with the luxurious life they are entitled to be living. Mostly that proves that you can fool enough of the people all of the time.

From my own experience, a big reason the traditional generational skill-transfer didn’t and isn’t happening is that since the 70’s few of us had even considered staying with an employer long enough to be part of that. Most of us didn’t have the opportunity due to downsizing layoffs, recessionary layoffs, and local economic factors that put many of us in the technical migrant category. During the 70s through most of my career, the average engineer stayed at one company for an average of 3 years. Supposedly, that is up to 5.1 years today, but only one or two people (or at least a dozen) I know who are working in engineering would reflect that stat. Still, after 5.1 years an engineer has barely mastered the basics of a typical job in manufacturing, design, or customer support. Through most of the past 40 years, companies have devalued technical experience by laying off higher paid, experienced employees first often followed by employing those ex-employees at a much higher rate as contractors. There is literally no reason why a contractor would make the slightest effort to pass on valuable information to a company employee.

My last medical devices employer only hired degreed (mostly MS and PhD) engineers from well-regarded schools like MIT and CalTech. They were usually wonderful manipulators of computer-assisted software (CAD/CAM) and could wring solutions from auto-routing PCB layout software that totally baffled me. Their understanding of semiconductor electronics and reliability engineering was embarrassing at best and too often tragic for the end users. And every year there were fewer experienced engineers at that company to act as guardrails against the kind of mistakes young engineers make without knowing any history of the product, customers, or applications. Many of those experienced engineers were paid early-out bonuses to leave, because the company mismanagement had no idea how complicated the products had become.

Years ago, a young man who was trying to get started in the field I had introduced him to through the school where I worked and he had attended complained that “It’s not what you know but who you know in this business.” He was mostly complaining about the fact that service information on the products he most often was asked to repair was only available from other technicians. The companies who made the equipment were mostly dead-and-gone, but their equipment lived on and stayed in demand for at least another decade. The “who” he was complaining about were experienced technicians who had collected service manuals, schematics, and troubleshooting techniques over the previous 20-30 years. I offered to level the playing field for him by ignoring his calls when he needed help and he declined; understanding that it might take a while to become well-regarded enough to collect more useful resources.

Company and industry history are poorly-regarded today. “Experienced workers” are considered to be expensive workers and the first to go when mismanagement wants to give itself a giant pay increase or a huge golden parachute. Because they have no financial motivation to do anything to improve the life of the companies they mismanage, they see no downside in killing off company history resources. Like their heroes—Jack Welch, Steve Jobs, Elon Musk, and the rest of that ilk—they imagine that their media-manipulations are the important stuff in a company’s activities and the wreckage they leave behind will be for future generations to clean up . . . or not.

“You can fix it.”

This morning in a conversation with an old friend, he brought up a question, “How many people do you think affected through your life?” L.A. “Arnold” Stevenson¹ was my first real employer and, probably, a mentor of sorts. He would have hated that label and I’m not particularly fond of it. Before Arnold, I had held several jobs from age 13 to 23, but my employers and bosses made no more of a mark on me than would have assorted drunks I might have met in a bar. Most of the people I worked for, before Arnold, knew no more about the organizations (loosely using that word) they led (laughably using that word) than anyone on the street at any given moment. Not only would I have not considered them mentors, they were mostly just obstacles to be gotten around in the process of doing my various jobs.

After about 5 months in a mediocre Dodge City Community College technology program, I realized that the instructor was out of things to teach me and, supposedly, there were 1 1/2 more years of classes that I needed to take for my associates degree. About the time I came to that realization, my wife announced that she was unexpectedly (to me) pregnant. She’d been listening to an unholy collection of Kansas idiot-relatives, both on her side and mine, and decided that having a baby would solve the problem of having to make adult decisions about what to do with her life. Of course, since someone had to take up that slack my own adult decision process went into overdrive.

I’d been working as a part-time electronics technician for a small manufacturing company in Dodge while I went to school and as soon as that employer discovered that I was sending resumes to competitors they offered me a slight salary bump and a large increase in responsibility and increase in hours. While I’d only been at that job for a few months, I was already the department’s “expert,” which was scary on multiple levels. The first level would be that I didn’t know squat about much of anything. I ignored that offer as long as possible and, eventually, my resume landed on the desk of the manager at Oswalt Industries in Hereford, Texas. He passed it on to Arnold, who was running the division’s electronic scales department and who was looking for a technician to handle the office and shop duties while he performed the field service responsibilities. After a brief interview, I was hired and we spent a day locating a place to live and went back home to gather our meager belongings, quit my job, say “goodbye” to our relatives and friends, rent a small U-Haul van, and move ourselves to Texas. I was barely 23 years old and had been on my own for 8 years and the sole support of our family-of-two for 4 years. And life was about to become incredibly complicated.

For starters, while my new employer had made a big deal out of their benefits, including health insurance, they didn’t bother to point out the fact that my wife’s pregnancy was “a pre-existing condition” that wouldn’t be covered. That would be a several-thousand dollar debt which I’d be paying off with my $2.35/hour salary; which meant a short work-week would be at least 60 hours and more often 80 to 90. Secondly, while I was a “star” with my previous employer I was a rank beginner with Arnold. About a week into my new job, he told me, “If I’d have known how little you knew when I hired you, I’d have never hired you.” I really didn’t know much, either. My previous employer had no service information for the products I’d been repairing and installing. I’d made one attempt to convince our prime supplier that I needed schematics and calibration information which had gotten me a reprimand from both my employer and the supplier’s CEOs. Arnold, on the other hand, had everything I’d asked for and a lot more for every electronic device we serviced. I’d hand-traced schematics for most of the circuit boards and while my drawings were better than nothing, they weren’t absolutely correct and some of my troubleshooting assumptions were wrong as a result. After a rough start, during which I expected to be fired practically every time Arnold came near me, I began to be useful and even got a small raise.

Once he decided that I wouldn’t be a waste of his time, Arnold became a constant education. His mantra was something like “Anything any engineer can design, I can improve on.” `That applied to everything from the components we used in circuit repair work to the processes we used in rebuilding electro-mechanical devices to the cable and wire routing on the equipment we installed and repaired. Arnold got his electronics training in the 1950s Air Force, where state-of-the-art electronics met mission-critical applications and at least one technician, Arnold, who never wanted a pilot to die because of something Arnold could have prevented. My on-the-job training with Arnold ended after about a year, because our idiot division manager had made Arnold’s life miserable by scheduling him in several places at the same time, often hundreds of miles apart, and by cluelessly undermining his decisions and authority. Arnold quit and started his own business and after a short pause, hired me to do his in-house repairs in my spare time. Almost immediately, my “spare time” began to produce a lot more income than my day-job. I started to avoid the telephone on weekends, so I could concentrate on the work Arnold gave me instead of the low paid work from my “real job.”

On occasion, I’d even do a field job with Arnold, even taking fake “sick days” to free up the time. One of those occasions was when he got a call from one of his customers to look at a newly installed “automated elevator system.” The system came from one of our worst vendors, C-G Systems (Colton, CA), who had installed a complicated half-analog/half-digital system that was intended to monitor, weigh, and deliver premixed cattle feed to feed trucks. Literally, none of the system worked when the C-G engineers packed up and left in the night, abandoning the feedlot owner with a million dollar non-functional system. Arnold brought me along for a walk-through of the new, deader-than-a-doornail facility and he immediately started identifying sections that he thought could be brought to life fairly quickly. This was 1972, when the most advanced digital “technology” available was TTL in 14 and 16-pin DIP packages and A-to-D circuits came from a very few, very expensive manufacturers. Neither Arnold or I had ever worked on digital logic to that moment. So, we took a bunch of notes and went home to do research. We both bought Don Lancaster’s TTL Cookbook, The RTL Cookbook, and Walt Jung’s National Semiconductor Applications books. And we spent a couple of weeks reading and experimenting with these circuits. Then, we went back and, section-by-section, we brought most of that system to life. There were areas that wouldn’t be practical or possible for at least another decade, but the grain mill could at least move grain, measure it, and deliver it by conveyor to the trucks.

Hereford, Texas was a tornado magnet and when the city got clobbered by tornado just past midnight on April 19, 1971, Arnold decided his family needed a tornado shelter. (The edge of the tornado passed by the house I was renting by less than 150’ and we slept through it.) So, Arnold grabbed a shovel and dug the outline of the foundation and walls a couple of days later. He and I dug holes for the walls and he lined those holes with plywood frame work and poured the concrete himself. Then, he rented a backhoe and dug out the basement, poured the floor, reused the wall plywood as a frame for the ceiling which he braced massively, and poured the ceiling and buried the structure. Over the rest of the spring, he finished that new basement/storm shelter into a terrific family entertainment room with food and water storage. Throughout the construction, the city inspectors harassed him for not using “approved” contractors. Every time they tried to ding him for a code violation, he demonstrated that he’d exceeded code by a wife margin and they backed off, pouting all the way.

Texas was never going to be a place where I’d be happy and even less so for my wife. Before our 2nd daughter was born, I’d started looking for a way out of that armpit, only a few miles from Dalhart, Texas where the “Willie and Joe” cartoonist Bill Mauldin once told a Rolling Stone reporter “If they ever give the world an enema — Dalhart is where they’ll put the tube.” Bill was wrong, Dalhart was much nicer than Hereford and Dalhart had a tiny fraction of the multiple sorts of pollution that Hereford generated. Arnold went above and beyond to help me relocate. First, he strongly recommended that I start my own business, like his, in Guymon, OK. We wanted to go further from Texas than that, so he put in several good words for me with a large equipment dealer in Central City, NE and that was the job I took. As part of that research we did for the grain mill, I had started working on a small mobile electronic scale of my own design and Arnold connected me to a friend of his in Garden City, KS who was running a larger scales servicing business and a small manufacturing operation. It took me a few more years to finish the design and when I did I handed it off to Arnold’s connection who produced it for a few years. A few years later, that resulted in a life-saving large royalty check at a critical time in my unemployed life and career.

I learned countless things from working with Arnold Stevenson. I owe him my career and, likely, the best parts of my life. From early on in my experience with Arnold, I started looking at every piece of electronic equipment as something that was probably designed by half-hearted, mediocre engineers and that could be improved along with being repaired. I learned that doing a job as well as possible was its own reward. I learned that just having a job isn’t enough; financially, personally, and security-wise. I learned that as soon as I got a job, I should be looking for the next one and getting myself ready to be able to do that next job. I learned that management is more often than not, useless and incompetent. I learned to depend on myself for education, training, security, and to always be looking to be ready for what comes next. I learned to collect educational resources from any place I find them and to assume that any education I get that is worthwhile is going to come from my own effort; often without any school’s assistances and totally from my own research and study.

Arnold died in 2006, back in Hereford after some time in his hometown of Garden City. When I passed through Hereford on my way to California, Arnold was in Garden City and I missed seeing him. The next time I was in Hereford was 2014 and too late. It is possible that I had talked to Arnold once or twice since we left Hereford. I know I certainly thought of him thousands of times between 1973 and . . . now and beyond. Anyone who has gone through a massive change in perspective, ability, experience, and insight has to owe several people for all of that. In many important ways, I think Arnold had more effect on my life than did my father. As a result of working with Arnold, I rewrote practically every life-lesson I’d absorbed between birth and age 26 when I left Texas. I had a lot more lessons to learn, but all of them were built on the 3 years I worked with L.A. Stevenson.

¹ L.A. "Arnold' Stevenson Garden City Telegram, The (KS) January 20, 2006

Who Gets Replaced by A Robot

In manufacturing [Remember when we used to do that?] there is an old rule that says, “We automate the jobs that are mostly occupied by the biggest pain-in-the-ass employees.” In several of the companies where I worked in the 70s through the late 90s, the first people to be replaced by a computer or robot were technicians. For a time, moderately trained technicians were the “special children” on the manufacturing floor. They weren’t skilled enough to be engineers or even middle-management, but they were too skilled to easily be replaced by other company employees or easily recruited from the recently tech school-educated employment pool.

So, as soon as possible manufacturing engineers started searching for ways to put some kind of computer test equipment into the assembly processes to reduce the number of technicians needed. Contrary to popular belief, this was not a management decision. Few improvements in any process are driven by upper management; they are too busy stuffing their pockets with the company profits to bother with doing actual work. Actual decisions always get made by the people stuck being responsible for the work and that is almost always engineers and manufacturing technicians.

Thinking about that kind of problems in society, it is easy who and what engineers would automate in the rest of the country: police, prison guards, politicians and many bureaucrats, firefighters, tax collection, the justice system, bus and truck drivers, and restaurant workers. And, pretty much, in that order.

Police, obviously, are a societal pain-in-the-ass, a huge civic liability, more often than not more corrupt than the “criminals” they supposedly protect us from, and massively expensive. Police department costs range from as much as 64% of a city’s budget (Billings, MT, $247 per resident) to as “little” as 8% (New York, City, $624 per resident). Ridding taxpayers of out-of-control police department spending and erratic and violent policing would go a long ways toward making cities more livable, safer, less racist, less expensive, and sustainable. From a manufacturing engineering standpoint, a huge portion of what police do on a daily basis would clearly be easy and cheap to automate. At least 90% of what a traffic cop does could be done better with strategically placed sensors (cameras and microphones). Most traffic violations could be recorded, vehicles identified, and citations sent through computerized systems: no cop necessary unless an arrest for non-compliance is required. One of the most common vehicle violations that goes un-cited today is noise violations and practically every state’s current vehicle noise violations could be monitored and cited automatically with “fix-it tickets” and the revenue from those violations, alone, might pay for the system. For more aggressive traffic violations, the combination of those cameras and microphones and driver alerts could utilize the remaining human police and computerized dispatch systems to be used more effectively. The relatively few complicated police activities, typically assigned to “detectives,” would likely remain human-powered for a long time, but as the number of crimes solved by those humans continues to decline there will be plenty of incentive's for automated solutions to those underperforming employees.

Likewise, it’s pretty obvious that automation and robots could do at least as good a job as prison guards and their mismanagement for a tiny fraction of the cost. For example, California’s prison guard union is so grossly over-powerful that the annual cost of keeping a typical prisoner “guarded” is well over $100,000 per year. Even as the state’s prison population declines, the costs are rising rapidly as are the salaries and benefits of their underworked, unskilled union members. Since the guard’s union has a stranglehold on the state politicians (Democrat and Republican) the solution is clearly one place where California’s referendum system should be able to sold a problem that the politicians won’t dare touch.

The rest of my list (see above) will be more and less complicated to automate with some of the easiest going earlier simply because there will be fewer political obstacles to overcome (like truck and bus drivers who most everyone will be happy to see gone from the highways). So, now my “predictions” are in print and probably a while after I’m dead someone might find them and have a great time ridiculing how wrong I was. Have fun, whoever you are.

When Does Marketing Trump Products?

As usual, I stepped into a discussion about the “importance” of marketing when I should have just ignored it all and let people believe the whackadoodle crap they want to believe, uninterrupted by reality. As usual, the marketing dweebs out-jabbered me and I’m happy to let them wander off into the woods as they usually do. At this point in my life, it no longer matters to me what happens to anyone’s business and I’m less inclined to be interested in anyone’s mission than at any other time in my life.

However, I get to have the last word (if I want to) on my own blog and here it comes.

The question from marketing is always, “How do people hear about the product you are selling if not marketing?" The answer is simple and complicated. The simple part is that word-of-mouth spreads far faster and more effectively than any advertising campaign. The complicated part is that word-of-mouth spreads bad news far faster and more effectively than any advertising campaign can ever hope to repair. From my years in quality management training, I remember a restaurant rule that went something like “It will take $50 in advertising to convince a customer to try your business, 5 seconds of lousy service to drive that customer out the door, and $5,000 in more advertising to get them to try you again.” Something like that.

My favorite example of how effectively word-of-mouth works is In-N-Out Burger vs. McDonalds and Burger King.  When my family lived in California in the 80’s, there were probably a dozen fairly substantial fast food chains. Fast food was nothing more than a commodity to 90% of those businesses. None of them did anything particularly well, so the best marketing program probably “won.” Creative accounting probably helped those chains help convince suckers to both invest in their franchise and to buy their engineered addictive “fat, salt, and sugar” concoctions. You couldn’t drive a block on any busy street without seeing an ad for McDonalds, Burger King, Burger Chef, Wendy’s, Hardies, Carl’s Jr., and/or any of those commodity food producers.

The burger joint of choice for Californians remained In-N-Out Burger and before the internet the best way to find one was to ask for directions from someone wearing one of their t-shirts. There were two In-N-Out Burger stands in Huntington Beach and Costa Mesa and neither of them bothered to do much more than keep their signs lit, marketing-wise, and their lines flowing through their drive-thrus were always long. Like Aldi’s, those lines moved fast, so it was always worth the wait to get a hamburger made from actual beef, fresh tomatoes, onions, and lettuce and fries made from actual potatoes. When an In-N-Out Burger appeared near my daughter’s home in Plano, Texas, her junk-food addicted husband immediately changed his food allegiance to actual food. No advertising required.

Likewise, the pro audio company I worked for in California couldn’t afford an actual marketing department for the first 6 years I worked for the company. When the company started out, in 1973, the founder spent all of his inheritance and some of his siblings and parents’ money promoting a company that had yet to figure out product development and manufacturing. After a brief flash-in-the-pan period of media presence, the company downsized to a half-dozen employees in a cheap business district in Costa Mesa. For the next ten years, the founder worked at learning his engineering craft, the original employees learned how to manage money, purchase parts, and develop a sales rep network. By the time I started work there, “marketing” consisted of very information-strong ads in industry magazines and a couple of sales meetings each year.

That same year, the company released its first professional quality power amplifiers and by the end of 1983 our problems became “how can we make more of these products, service our customers, and maintain our product quality?” For the next six years, we doubled our gross sales every year, maintained a 24-26% profit margin, and led our industry in customer service and product quality.

The company’s CEO idolized Hartley Peavey and Steve Jobs and had a minor hard-on for Donald Trump. He saw himself as a similar marketing “genius” and desperately wanted to reform the company as an “ideas business” instead of a manufacturing and engineering company. In the next few years, manufacturing moved to China, product development became diffused and only somewhat focused on customer needs, marketing became a more powerful force and a larger empire in the company, and it took another decade for the gross sales to double between 1992 and 2002. It’s a privately-held company, so it’s hard to guess what the profit margins are now, but based on the gross sales, the size of the administrative staff (especially in marketing and sales), and the luxury of the new facilities and number of executive officers, I’d guess 5-8% max.

There was an upside for me. Having spent 8 years in an executive position near someone who saw himself as a marketing genius, I developed pretty thick charisma armor. When Donald Trump went public for his one-and-only time with the Trump Hotels and Casino Resorts (DJT) IPO, I remembered the giant space between reality and our CEO’s self-image and, for the first and only time in my investment career, I shorted about 1,000 shares of DJT. I know, not an impressive bet in the scale of things, but it was a big deal for me at the time. My incredibly clever and sophisticated investment philosophy was “anything that the CEO I knew so well believes is a ‘good idea’ is going to be a guaranteed disaster.” I missed the IPO peak by a few weeks, but I still got in when the stock was valued at about $29. I sold off half of my shorted option in 1998 and the rest in 2001 when DJT was pretty much a penny stock.

I have never had that much confidence in a stock’s value collapsing since. I was close with Apple in 1997, but Bill Gates stepped in to save Apple with a $150M investment and a dumbed-down version of Office for dumbed-down Mac users. Peavey is still a privately held company, so there has never been an “investment opportunity” for me to bet against that company. I would if I could, though.

My takeaway from all of this is that marketing is what you do when you can’t do anything useful, original, necessary, and/or well. When what you have to sell is fluff or a me-too commodity or crap, you probably need marketing to convince customers to part with their money and waste their time. There is a price to be paid for shifting resources from manufacturing, design, research, and customer service, too. Regardless of the delusions and propaganda saying otherwise, everything is a zero-sum game: you can’t spend money in one area without taking those resources from other areas. Moving resources to an unexamined, usually poorly-managed area like marketing (especially if the marketing is an external “organization”) too often means that manufacturing (the hardest job in any product-based company) gets shipped off-shore and important, mission-critical skills are lost forever. (And the off-shore vendor gets to refine those skills on someone else’s money, eventually becoming a competitor.)

From the inside, I have since witnessed the farce of marketing-driven mismanagement several times and every one of those attempts at an illusionary business model resulted in spectacular crashes; just like DJT. I don’t really know if marketing actually ever works, but I do know that if you think your business desperately needs marketing assistance you have a lot to worry about.

One Feature too Few

I spent a small part of CyberMonday on the edge of spending $1700 on an electric bicycle. There were lots of good reasons to like the bicycle I was looking at, but one really big reason I ended up passing on the sale: no service information. None. Zero information on how to repair or maintain this relatively expensive (by my standards) vehicle.

The kiddies who buy, modify, and farkel-up this particular brand of eBike are convinced “the future is internet based” and YouTube is the “wave of the future.” Obviously, YouTube is today and will most likely not even exist in the near future. Everything gets replaced by the next thing and YouTube is barely this century technology. We’ve gone through at least a dozen iterations of the “next new thing” that will replace decent service manuals and we keep coming back to the one way humans have learned to transfer complicated information: writing and technical illustrations.

In the 1940’s, television was the great educational hope. Television’s promoters spent a small fortune convincing the government that television would be the educational wave of the future. It wasn’t. However, the con job worked and television’s promoters got some powerful monopoly protection in the form of FCC regulation under the guise that something about television would be “public service.” For almost 40 years, the only public service provided by television (and radio) was forced by the Fairness Doctrine, but Reagan eliminated that in 1987. For-profit “education” companies are really spending big bucks trying revive television and on-line media as educational tools because it is incredibly cheap to provide. Cheap and good are not often comfortable bedfellows.

Of course those early video training films weren’t cheap, because film and unions were involved, but they also weren’t effective. I remember watching a Burroughs Corporation film training program on cassette tape head alignment in 1975. The presenter had to stop the projector multiple times to explain what we’d just seen because the complicated task of getting azimuth and zenith exactly right was barely mentioned in the video and, with the heads used and the tape speed, that was critical for both data acquisition and storage and head and tape life. Some Burroughs word processing machines couldn’t make it through a day without wreaking a tape or two and losing a day’s work when the tape broke during backup. The video, typically, dwelled on easy shit like installing a tape drive or cassette, magnetic tape theory, and Burroughs’ corporate history and blew past the actual information like it was some sort of contagious virus. A month later, Burroughs flew me from Omaha to Hauppauge, New York to teach a class on cassette head alignment to their in-house techs. A year or so later and Burroughs was out of the mini-computer and dedicated office machine business.

Over the next 40 years, I have had several equally disappointing (if you take training seriously) or hilarious (if you don’t take humans seriously) video training experiences. For the last 25 years of my career, I taught industrial technology in medical devices and, later, music technology at a music college. In that time, I experienced a whole “video revolution” in training; from VHS (far cheaper than film) to digital video and non-linear editing to PowerPoint with a little of everything included. I used both video and PowerPoint in my own presentations, but I never relied on either for conveying complicated information. For that, I had reading assignments, homework, and labwork. After I retired, I took a couple of on-line courses through my local community college; because they were cheap and I was curious. Both classes were, by design and out of necessity, remedial. The instructors were remote and barely technically qualified to instruct in their subjects and the video material used was . . . freakin’ terrible. Obviously, I am infected with confirmation bias, but I doubt that you could present evidence that would make me doubt my opinion even slightly.

So, when I criticized the short-term and lazy thinking of an eBike manufacturer’s simplistic and mostly-useless video “manuals,” I got this response, “Funny you think you are correct because you are in the older generation and your years of experience tell you this FACT. Realistically the future will all be YouTube. The headlight LED kits I buy are all online links to installation (for my truck). My generation prefers online links to learn from watching vs reading. Its all opinion and your views vs others. The difference is your generation thinks your way is better when mine thinks our way is different and works for us. Get off your high horse. The future is internet based.” We’ll see, kiddy. I have been there and done that and while you live in luxury in your mommy’s basement watching YouTube and convincing yourself you’re learning something, I doubt that you’ll have a 55 year career doing anything that requires skill or knowledge.

In the end, I let the lack of product support make the decision for me. I let the sale price pass and decided to stick with repairing (on my own) the used bike in my basement. Nearly $2k for an unsupported product (last year’s model) with an undetermined life-expectancy and no useful repair information is beyond my personal and economic means.

They Took Ur Jobs!

Trump promised to bring the jobs he shopped out to China back to the USA. What do you think the chances are that Trump’s hats, shirts, ties, and other cheap shit will come back to US clothing manufacturers? How about zero, unless he can get US wages down to China’s.

The Trumpets wailed about how badly they were being treated, most of whom are living on Social Security and Unemployment and Welfare. These are the same people who elected Reagan and started the transfer of wealth from the US to Indochina and from the working class to the 1%. But they don’t get that, because they are the “uneducated” that Trump loves so much. When Reagan took his dribble-down axe to the federal tax code and made “unearned income” (interest and investment income, rent, income received from the ownership of natural resources, inheritance: aka “passive income”) more profitable than active income, any chance of US jobs expanding died and has almost no chance of ever returning. Trump is a prime beneficiary of this tax/social engineering plan and if you think Donald Trump has ever done one thing that didn’t benefit himself over every other person on the planet, you are one of his beloved “uneducated.”

For example, the unemployed (probably for decades) steel workers who campaigned and voted for Trump are great examples of uneducated voters without a clue. What could Trump do to bring steel production back to the US? He doesn’t even us US steel in his own casinos. The problem is on multiple levels: 1) the US tax system does not reward capital investment, 2) even if someone were insane enough take on creating a modern steel production facility, it wouldn’t employ uneducated, unskilled labor and would be highly automated, and 3) the US hasn’t invested in manufacturing and engineering education for so long that the country doesn’t have the talent to build a competitive steel production facility. Financial services has siphoned off at least two generations of the nation’s most talented people to the point that 45% of US STEM undergrads are foreign students who intend to return home with their US-subsidized education and skills. Our manufacturing economy is so weak that 74% of US STEM grads work in non-STEM related jobs. And why not? Engineering is complicated, competitive, and constantly demanding new skills. Finance is barely any different today than it was in the early 1980’s, when the Reagan Administration decided to blow-off enforcing Glass-Steagall. To become a finance millionaire, all you need is ruthlessness, a total lack of morality, and a little luck. You actually have to have talent, education, and perseverance to be Elon Musk.

The media has decided to blame Trump on liberals who, supposedly, ignored the “plight” of the poor white man. The reality is that the poor white man has always had the tools he needed to crawl out of poverty and step into the middle class: public education and white entitlement. The problem is these are the same poor white men who were easily distracted by the 1% aiming them at poor blacks, Hispanics, and every other ethic immigrant with a work ethic. The one skill poor whites will always have is an innate capacity for hate and violence. Otherwise, their claim of “white supremacy” is disproven by their existence.

There is, as best I can see, no fix for massive unemployment in the unskilled labor demographic. The best this lot can hope for is decent healthcare, available education for the small percentage with the values to work for it, tolerable housing, and the usual distractions of sports, religion, and guns. Preying on this crowd with easy credit and heartless bankruptcy laws is the Republican tactic and, so far, telling these nitwits that Democrats and liberals and immigrants are to blame has worked. It doesn’t make their lives any better, but it does keep their capacity for hate and violence in play.

Getting Answers Without Making Enemies

Back in my management salad days, we had a manufacturing engineering rule that stated, “Any new paperwork/procedure has to directly benefit the person who does the work.” This put some pressure on management when we began to add quality control processes to assembly line jobs. Anytime we wanted to add an inspection, a check box on an inspection form, or a self-monitoring quality control chart to an assembler or technician’s job, we had to find a way to prove to that person that we were making their job easier, giving them more control of their work, and/or upping their value to the company (making it possible for them to make more money).

I get reminded of this requirement every time someone sends me a SurveyMonkey link. Most recently, Google sent me a link to a 3-question about the effectiveness of AdSense, Google’s blog page revenue generator. That pretty much fits my rule. I make a few dollars every month from my blogs and optimizing that revenue would be important to me if that revenue were a critical part of my family income. It took a few seconds to complete the form and, hopefully, we both got something out of the exercise.

On the other hand, an organization that my wife and I occasionally participate in sent us a survey about a change in the organization’s leadership. While there was no indication of how many questions I’d be asked, after a page of questions I realized I wasn’t committed enough to having my voice heard to waste any more time with the survey. I made it far enough to get to the second page, looked at the repetitiveness and irrelevancy of the questions and bailed out. Back in my academic days, I created a collection of surveys for the faculty senate and administration and I made an effort to be concise and user-friendly. I am perfectly happy to be out of that business, though. Doing that kind of work in a poorly managed environment is a wrestling match between the control freaks and the information collectors. I’m only interested in the information and did everything possible to ignore the control freak requests.

Some questions are more complicated and absolutely require more questions: the Myers-Briggs Personality test or the Political Compass analysis, for example. Otherwise, if you can’t get the answers you need in ten or fewer questions, you need to think harder about what you really need.

#105 Losing the Passion (2004)

All Rights Reserved © 2004 Thomas W. Day

In his book, Made in Japan, one of Sony's two founders, Akio Morita, talked about the differences between major American and Japanese companies.  He discounted a lot of the "cultural differences" that were used as excuses for American mismanagement failures.  But he put most of the credit for Japan's success upon the fact that, at that time, most of Japan's great companies were still managed by their founders.  The founders provided the passion, direction, and focus that drives those successful companies.  America's similar example was our semiconductor and software powerhouses.  Folks like Bill Gates, Andy Grove, and, even, Steve Jobs are examples of founders who still provide those valuable assets to their companies.  Morita's suspicion was that, once Japan's companies were handed over to a second generation, they would be no more creative than American corporate disasters.  They'd still be large, powerful, and more-or-less productive, but they wouldn't be dynamic.

One of the great faults in American culture, however, is that many of our company founders turn into second generation impotents before they pass on their inheritance.  Far too many American company execs begin to put themselves in ivory towers before they get out of their garage space.  As soon as the company produces the smallest level of profitability American mismanagers begin to act like they are heads of state. 

That "image is everything" philosophy is partly to blame.  Banks, investors, and even customers expect to see illustrations of power from the folks with whom they do business.  Too often execs fail to realize that pretending to be powerful to impress these fools is not the same thing as actually being powerful.   Posing and pretending gets to be a habit and, pretty soon, that's the only activity the exec is engaged in.  Not long after, the reason the exec exists is erased and the company is drifting without a rudder.  If the company has developed a critical amount of momentum, useless execs may not be a fatal flaw. 

Small business needs active, participatory management.  Hell, all businesses need that kind of management.  Managers provide services to the people they manage so those people can get work done.  When managers are serving themselves, they are pointless resource-wasting energy drains without a reason to exist. 

#101 Focus is Everything (2004)

All Rights Reserved © 2004 Thomas W. Day

Most small businesses die from lack of focus.  One of the keys to business success is finding what you do well and doing it well.  Lots of small companies fail because they don't have a specialty, a skill that the company performs exceptionally.  Lots more fail because they forgot what it was that they knew how to do in a misdirected search for something different to be doing. 

For example, a company that builds a great kitchen widget decides that kitchen widgets are never going to be big dollar items, so the management wanders off in search of another widget market that provides more net profit.  The folks back in manufacturing are still cranking out kitchen widgets, but nobody's running the show.  Asking employees to care more about the company's direction than the owner's are willing to demonstrate is a logical fallacy and, pretty soon, the company's kitchen widget market starts to deteriorate.  If the execs continue to search for a brighter, shinier place to play, the employees who can find a better managed place to work will head for higher ground.  After all the talent has left, the product starts showing the effects and established customers look for a better supplier. 

Often, this collapse of corporate momentum causes the execs to start wandering around with more urgency.  They may try moving manufacturing overseas, which usually results in more competition when the overseas manufacturing company discovers they can build and market the product they were expected to produce. 

IBM tossed computer manufacturing to the Far East with this clever management technique.  Once, the only company (other than Compaq) able to build a quality personal computer, IBM decided to safe a little manufacturing money by moving all assembly to Japan.  A few years later, Sony, Toshiba, NEC, and a host of Japanese manufactures were building and selling their own computers.  IBM, however, was forced out of the market because they didn't have the manufacturing or design skills necessary to build personal computers.  They had trained their competition and, then, got their butts kicked.  Meanwhile, IBM's foolish, misdirected management was still looking for a market where their limited skills could produce a higher profit margin. 

A couple of decades back, I worked for a mid-sized company that built a particular pro-audio product.  In the company's past, every time the company started to do well the CEO would want to "branch out" into another area of the industry.  Nobody in the company had any experience with actually using pro audio products, so the "branching" usually required a lot of consulting with potential customers and acquiring of engineers with expertise in the anticipated new market and products.  Lots of resources would be wasted with a predictable result; a mediocre product and the distraction from the one product we knew how to design and build.  The company ran through this cycle three times in the ten years I worked there.  Each time, the distraction drained the company's productivity and set profitability back dramatically.  Twice, the new market products were sold off to either a customer or one of the engineers who were brought in to develop the product.  Both times, the buyer built a solid position in the new market and a new business was launched at the expense of an established business. 

For the first few years in the company's growth period, these distractions did minimal harm to the overall business.  We had momentum, our competition was mostly brain-dead and dying, and the core products were very good so we didn't lose much of our base market with these distractions.  In the last decade, lots of new competition has appeared (lots of it from Asia) and the company's growth has stagnated in the last five years.  The reaction, predictably, has been to flail about looking for a richer market and a new product line.  They have a wide collection of new products that are falling flat in the market and the core products are losing ground.  It's a new world of competition, too, and the momentum appears to be shifting away from their base.  It will be interesting to see what happens in the next few years. 

Lots of strong American companies have shot themselves in the foot when they lost focus.   There isn't much an employee can do about fixing executive focus.  The best we can do for ourselves is to watch what they do, if they're looking away from the action, it's time to polish up the resume. 

Communicating with the Factory

12/14/2013
A good bit of my career was spent in Customer/Technical Service. For all of that, I always tried to imagine myself on the other side of the phone, even when the other side of the phone was attached to an asshole (follow this link for the theme song). Now that I AM on the other side of the phone, it is a lot easier to understand why customers begin conversations as if they are speaking with the devil. What follows is my discussion with the regional VW “Customer CARE Advocate” about the screwing I got and the 40’ shaft I would have taken if I’d have believed their techs are competent. I particularly love his closing “if there is anything else I can do for you, please feel free to email us again” comment. Please explain to me what he “did” for me. VW is one clearly clueless company. How the mighty have fallen.

VW
Dear Mr. Day,
We partner with our dealerships to provide you with trained technicians and quality parts when your Volkswagen is in need of repair. I am troubled to hear you feel you received poor service from one of our dealerships.
Complaints about service at a dealership are taken very seriously. At your earliest convenience, please reply with more detail about your experience, like which dealership you went to, and what the independent has determined the concern to be.
I want to make sure we have enough information to properly address this. I look forward to your reply and if you have any other questions, please feel free to include them in your response.
Sincerely,
Sam M.
Customer CARE Advocate

Me
On Friday, November 29, I had my 2000 Winnebago Rialta (Volkswagen Eurovan) motorhome transported to University Volkswagen and Mazda because the transmission had switched to “limp home” mode several times between Roswell and Belen, New Mexico during the previous two days. Preceding the transmission problems, the Scangauge II diagnostic device installed in my motorhome began to have difficulty communicating with the Volkswagen engine and transmission electronics. I made all of this clear to the service technician I talked to over the phone, twice, but the technician apparently decided I was a clueless moron and he chose to ignore that information. I am a recently retired electronics and manufacturing engineer and while I might not be much of a Volkswagen mechanic, I can also read test gear and the Scangauge made it clear that some system communications problems existed.

Monday, December 2, I received a call from University Volkswagen with a $7,500 estimate for a “rebuilt transmission.” Since I had been able to get the vehicle to work flawlessly (except for the inability to communicate with the Scangauge II) three times in the 230 miles between Roswell and Belen, I suspected this was a computer-driven “analysis” with as little insight or common sense from the “mechanic” as possible. As I’m sure you know, Volkswagen dealers are not known for supporting competent service departments. Since the Eurovan is not something commonly seen and the Rialta is even more rare, incidents of dealer incompetence are familiar and Rialta owner’s groups (Rialta Tech – Yahoo! Groups and Rialta Tech BigTent.com, for example) warn new owners away from dealership service. Again, I requested that the tech look at the transmission multi-function switch connection and the Engine Control Unit’s connections, since those connections and electronics are commonly known sources of “limp home mode” operation. I was told that analysis would be useless, but the tech would look there anyway.

Because I had no faith in the analysis received and the service estimate was so extravagant, I decided to obtain another opinion. An Albuquerque native and Rialta owner, Paul Joseph, offered to help me look at the multi-function switch, just in case that turned out to be an easy fix. We drove the vehicle two blocks to a nearby bank parking lot and pulled the engine pan. When I removed the transmission multifunction connector, water dripped from the connector. Obviously, the “tech” did not look at that connector. Because it was dark and neither of us had a clue where the ECU is located, I restarted the vehicle and drove it to Los Lunas to have Hans Foreign and Domestic Car repair look at it. Surprisingly, they gave me the same analysis with a slightly lower repair cost, but they were unable to fit the Rialta in their bay and I decided to get a third opinion, from German Motowerkes, in Albuquerque.

These two trips required me to drive the vehicle in disabled mode and, now, I know that probably did some damage to the transmission. However, after tracking down the various error codes, three days later German Motowerkes called to say they had found a corroded connection on the ECU and after cleaning it three times, the vehicle appeared to work properly. I picked it up on Tuesday, December 10, and drove it to Santa Fe to visit friends and back to Belen where we had been staying. The Scangauge read a high transmission temperature of 195F on the steepest point of the trip and typically read 130F (I had installed a transmission cooler before we started this trip.). Apparently, outside of damage incurred while the ECU fault disabled the transmission, my vehicle is back in service and my total cost was less than $300.

Before delivering the vehicle to University Volkswagen, I knew about Volkswagen’s service reputation but I hoped my experience might be different because I know that most independent service centers are unfamiliar with and uncomfortable with modern Volkswagen products and I was 1800 miles from home and didn’t know anything about the Albuquerque area.

To top off the insult, when I delivered the vehicle to Hans Foreign and Domestic Car Repair we discovered the battery cover was missing. I’ve since discovered that Volkswagen has obsoleted this part so I can’t even buy a replacement from a dealer.

VW
Dear Mr. Day,
Thank you for taking the time to provide me with all the details of your situation. I regret the service department at University Volkswagen was not able to meet your expectations for this repair.
I can appreciate your frustration. Being told a repair will cost you $7500, only to find out it is really a $300 fix, would not leave me feeling very confident in the abilities of the technician either. I am however, very glad to hear you were able to get the real cause for your concern diagnosed and repaired.
I have documented every detail you have provided me so we can review this situation internally. The feedback we receive about our dealerships is used to influence our future decisions about our dealership network. I greatly appreciate you sharing your experience.
To make sure the dealership is aware of your feedback, I have forwarded your comments on to their management staff. They are in the best position to make any adjustments to their practices, and offer training when necessary.
You are a valued member of our Volkswagen family, and this is not the experience we would hope you would have at one of our dealerships. I thank you again for taking the time to share the details of your situation.
If you have any other questions or comments, or if there is anything else I can do for you, please feel free to email us again.
Sincerely,
Sam M.
Customer CARE Advocate

Me
It was too late to do me any good, but after I posted my experience with University VW and Mazda on the Rialta groups, I got about a half-dozen emails from other Rialta and VW owners blistering that dealership for their lousy, overpriced, less-than-competent service. 30 years ago, I was a dedicated VW owner, but I did all of my own work on those simple air-cooled motors; including overhauls.
I'm a life-long motorcyclist and as I approach the age where two wheels could become impractical, my "reward" for being smart enough to get off of the bike was going to be a new VW Beetle convertible. I'm sure you can understand why that option is now off of the table. Maybe I'll look for a '67, like the one I owned back in '67, though. I just won’t be able to drive it for 6 months out of the year because, as every old VW owner knows, VW’s dissolve like sugar in the snow and old German vehicles do not have heaters.

University VW & Mazda
Mr. Day,
Thank you for taking the time to complete our survey. Although our goal and track record is to provide a higher standard of service, we fell short of your expectations. We are Rialta certified and one of the few locations that can work on these vehicles. I disagree with the Volkswagen shops terrible reputation, but certainly understand your frustration. I understand the vehicle diagnosed by Hans Foreign Shop in Los Lunas had also contacted us regarding prices on a TCM and Transmission. We had advised them that the TCM would not be available and suggested they locate one from a used or recycle parts center. We also stated this may not be a permanent fix from past experience and a transmission may be required. Regardless, we failed to meet your expectations and I apologize. If I can be of further assistance, please do not hesitate to contact me.
Kind regards,
JC Ogborn
Fixed Operations Director
University Volkswagen Mazda
5150 Ellison Ave NE | Albuquerque, NM 87109
505-761-1900 | 505-761-1906 fax
jc@abqvwmazda.com

ME

Mr. Ogborn,

You’re disagreeing with the majority of VW owners, including the ones who rated Volkswagen in the bottom 5 for 15 out of the last 15 years, including a half-dozen bottom place finishes. If you were actually aware of the actions of your shop in regards to my vehicle, you would be embarrassed instead of arrogant about your shop’s performance. I was, in fact, told that your mechanic had checked the connectors on the transmission multifunction switch, the ECU, and TCM. When a friend and I removed the multifunction switch a few blocks from your shop, that connector was found to be soaked. Later, German Motowerkes discovered the same fault in the ECU and 150 miles and a week later, in Elephant Butte, a technician with more skills than your entire business possesses found the Transmission Control Unit connector was also full of water and highly corroded. VW’s incompetent installation of the windshield gasket allowed water to pour onto the connector causing all of the problems I have experienced. If your pitiful excuse for a technician had replaced my transmission, I would be in exactly the same place I am now, except $8,000 poorer. You may think that is simply a failure “to meet your expectations,” but I consider it to be incredible incompetence.
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