For the past 25 years, the trend in the world's economy has been to financilization of everything. It doesn't matter what business you have been in, some form of securitization, new financial products, hedging, derivatives, financing, or other financial intermediation has been part of your world. Those of us who actually like to create stuff have been playing second-fiddle to those whose game has been moving the financial blocks around, slicing and dicing them beyond recognition, repackaging them into incomprehensible forms, and then trying to sell them back to us.

A Financialization Orgy

That world hit incredible heights. General Motors (NYSE:GM) and Ford (NYSE:F) have become shells of their former selves, making most of their money from financing. Automobile manufacturing has become practically a sideline, something they needed to do in order to have something to finance. Even General Electric (NYSE:GE) has become much the same kind of company, slowly shedding low-profitablilty manufacturing divisions, while securing the rights to provide financing to purchasers of the products that are manufactured by others yet still bear their name. Jack Welch's success wasn't so much in making GE's manufacturing divisions better as it was in making them less relevant to GE's financial results, depending more and more on easily game-able financial business results. (Jack Welch's greatest genius may have been realizing when it was time to get out with his money intact. His jumping off the financialization train was -- in retrospect -- an early signal that it was about to run off a cliff.)

Even small companies with little financial sophistication were caught up in this. As Kevin Depew pointed out in December, little CKE Restaurants (NYSE:CKR) got caught flat-footed in a bad interest rate swap deal. Why an interest rate swap made any sense for a company in the business of operating fast-food restaurants is not clear to this relatively sophisticated investor. Hedging food costs? Maybe. But interest rate swaps? Most likely it made no sense to anybody other than the bankers who sold the deal and the auditors who were paid to tell management that it was a valid use of shareholder money. (Hint to all managers of small companies: Remember the poker axiom that if you can't see the sucker at the table, it's probably you. If you're sitting at the table with a bunch of investment bankers whose job is to create financial products, each of whom makes more in a year than the top ten earners in your company, then odds are you are the sucker.)

Most of us have been suckers. It's just taken a couple of decades for the final cards to be dealt and the reality of things to kick in.

I’m currently sitting in a meeting for the local chapter of a sizable professional organization. The fact that I’m writing this probably suggests to you that I’m not all that excited about what’s going on. The reason is that despite being a supposed professional organization that as part of it’s “agenda” promotes good management, communications, and other process, nobody in this group has ever put together a good quality meeting in their lives.

Look at the agenda:

• 8:30 – 8:45: “Warm up”
• 8:45 – 8:50: Opening, welcome and introductions
• 8:50 – 9:00: Meeting agenda and organization
• 9:00 – 9:55: Department introductions, 6-8 minutes each
• 9:55 – 10:00: Team formation
• 10:00 – 10:10: Break
• 10:10 – 11:00: Breakout Sessions
• 11:00 – 11:10: Closing

What do you think is wrong?

Well, let’s start with the obvious. What is the purpose of this meeting? Can you even divine this from the agenda?

OK, I’ll clue you in. The purpose was to get volunteers involved in the organization and assigned to specific responsibilities.

Can you see on the agenda where this would come across?

Can you see how this agenda drives towards that ultimate purpose?

Neither can I.

And not surprisingly, the meeting is wasting a lot of time and heading towards being a complete failure.

Here’s my agenda, should anybody ever ask me for one:

Purpose: To introduce volunteers to the organization and allow them to select an appropriate volunteer opportunity.

Homework: Review the attached powerpoint describing each of the departments, it’s functions and its volunteer needs. Please complete this before the meeting as we will not have time for review.

Schedule:

• 8:30 – 9:00: Bagels and coffee.
• 9:00 – 9:05: Welcome and quick agenda overview
• 9:05 – 9:20: Quick intro of each department's needs by the director, 1-2 minutes each. (Reminder, we expect you to have reviewed the background information provided in advance for details.)
• 9:20 – 9:30: Break
• 9:30 - -10:10: Department roundtable #1, select one of the departments you may be interested in volunteering for and speak with the director about opportunities in a small group setting. Identify opportunities and fit.
• 10:10 - 10:15: Quick break and reorganize
• 10:15 – 10:55: Department roundtable #2, same as the first roundtable, in a second department.
• 10:55 – 11:00: Closure and review next steps/action items

Action Items::

• Directors to follow up with volunteers to confirm choices and assignments.
• Additional action items to be agreed to between directors and volunteers.
• Other items resulting from meeting

Next steps: Be prepared to present final teams, assignments and expectations at next board meeting on [date]...

[Off topic. I am now listening to one regularly self-interested participant who has hijacked the meeting to discuss his pet topics. Nobody is telling him: “not on the agenda, we need to table this, shut up.” But running meetings is a topic for another day.]

Why is my agenda better?

For the past year or so, I've found that the number of companies looking for contract employees and consulting services has dropped off significantly compared to the number that wanted to hire me to full time project management positions.

Recently, I've noticed this has reversed.

Typically, this is a sign of reduced willingness to commit to hiring, and perhaps a weaker employment market.

Obviously, I'm just a very small sliver of overall employment, and a fairly high-end one as well. I'll be following up with a few recruiters I know to try to get a better understanding of what's going on a bit further beneath the surface.

-btc

Just put in a wire request at Charles Schwab (NasdaqGS:SCHW), where I've had the bulk of my money. The request was to transfer out about half my cash, or a third of the account value. It's going to my E*Trade (NasdaqGS:ETFC)account, which has always been smaller and a place where I've tended to keep long-term investments that I don't look at much.

As a project manager, I tolerate a lot. Fuck ups are part of the territory.

But I don't tolerate incompetence, especially not in mission critical stuff.

So when Charles Schwab exhibited extreme incompetence this morning, it was the last straw. I've been increasingly uneasy for the past several weeks and with even money funds turning out to own all sorts of mortgage junk, I've felt like maybe splitting my money between institutions was a good idea. And Schwab's trading interface has gotten increasingly clunky compared to newer competition.

No, I'm not talking about the financial markets. I'm talking about the toy market. The cat food market. And overall the market for offshore outsourcing.

And more than anything else, what I'm seeing is a lack of proper management of risk and quality in these big offshore deals.

Historically, outsourcing has been pretty easy. You made a deal with a contract manufacturer and the contract manufacturer, among other things, made sure that the product met all applicable standards: your own and the legal ones for the market you're selling into. You thus have been able to outsource not only the manufacturing, but also much of the quality control. Whether the manufacturer was in the US, Mexico or anyplace else, you had real leverage to insist on those standards being met. If they weren't, the contract manufacturer ate the costs.

I've been a Delta frequent flyer for several years because their route map suits me, but I've just dropped them, perhaps with the exception of my occasional trips to Utah. The primary reason is their antiquated and disastrous Terminal 2/3 complex at JFK, which has devolved into something reminiscent of a third world travel experience. It was inadequate 20 years ago, has gotten worse since 9/11, and now has gotten even crazier with many domestic departures going out of terminal 2, but all check-in at terminal 3 (the old Pan Am terminal) which has completely inadequate space, and forces you into going all the way around the perimeter of the place just to get over to the walkway to the terminal you're actually departing from!

Unortunately, the City of New York, in it's great wisdom, has decided that certain airline terminals deserve to be considered historic landmarks. The old TWA terminal, designed by Eero Saarinen is one of these buildings. It's completely useless for any kind of modern aviation, but there it sits, unused. It has been surrounded on one side by the new concrete superstructure of the AirTrain. On the other side, it has been cut off from the tarmac, it's satellite gate areas knocked down, and the long spindly corridors that used to connect to them now suspended in mid-air, terminating at the edge of a new roadway which will access a replacement terminal.

Up in Utah where I spend as much of my winters as I can, I'm friendly with a dog named Midas. Midas is the senior avalanche dog on the Snowbird Ski Patrol, and also one of the most experienced dog/volunteers of Wasatch Backcountry Rescue. I've done some avalanche training at Snowbird and seen Midas in action. In his career he's been responsible for at least a couple of successful rescues that I know about. During the 2005-2006 ski season, which was the most deadly on record for the Utah backcountry, Midas was responsible for recovering many of the victims.

I was thinking about Midas last night as I watched MythBusters clumsily go about "busting" all sorts of myths about avalanches. I have been a fan of MythBusters since it started airing several years ago and have generally found it to be pretty well put together, if not always completely thorough.

Until last night, that is.

Last night's episode was so badly done that it makes me doubt I can ever take them seriously again. For me, it was one of those "jump the shark" moments, in which a show goes from being good, to being one that is coasting on its past glory, trying desperately to be as cool as it once was but unable to because it has exhausted all real possibilities.

There were so many things wrong with the experiment it's not even funny.

I've been cleaning out the garage this weekend. In the past few months I've replaced a car, purchased a new mountain bike, moved all my old wine (some of which is sadly over the hill) out of storage and back home where it can be drunk, and worked on a number of small projects that have caused me to accumulate a lot of junk. Since my garage and my office are really one space with a half-wall and some bookcases between them, this has gotten quite annoying.

As with any major cleanup effort, it started with total destruction. Move everything off the shelves, move everything out of the closet space under the stairs, move everything that isn't delicate or a book off the bookcases, and leave a pile on the floor.

Then what do you do?

With many business problems, it's tough to figure out where to start. Prioritizing the tasks, the items, and the junk seems almost impossible. Some of the stuff is important, some isn't, some takes consideration, and some will need to be put away in a location to be determined. If you try to think about it too much, you end up like my "buddy" Casey Serin: overwhelmed with the choices and unable to get anything going.

Readers of this blog know that I have some training in wilderness emergency medicine, search and rescue and general emergency response. All of these have a simple approach to dealing with an overwhelming situation that is equally useful when cleaning a garage or deciding what to do next in a highly-stressful business situaiton.

Start where you stand.

There's really no better solution. If you're dealing with 100 wounded people all around you, you have no way to know who needs the most critical care without looking at every one of them. There's no way to guess, no way to know until you check each one. If you start anywhere other than just where you are, you'll just waste time and won't (on average) do any better at getting to the most critical folks first. So you start where you stand. Assess the situation, give everybody a quick once-over (triage) and then, as needed, go back.

That's how I approach business situations. Focus on the next thing in front of you. Get it done or at least take a good enough look to assess how critical it is. Then on to the next item. Do it carefully, systematically, and ensure that you do go back to the things you decided could be skipped right away. It doesn't matter if I'm figuring out a project plan, considering my next trade, or assessing any other problem, you've got to start somewhere and there's usually very little point in debating the starting point.

That's how I started the garage. With one screwdriver on the floor next to me. I put it into a drawer in the tool chest. Yes, I may need to reorganize the tool chest later, but that could wait. Then some antenna wire on the floor. Put it into a garbage pile. Next item, and next.

Right now, I have much of the big work done, a large garbage pile and a couple of smaller piles to be sorted through with greater attention and consideration. Those will be done by the end of today. I'll still have to re-organize some of the shelves as well as the afformentioned tool chest, but those are seperate smaller projects. Everything that needs to be on the shelves is, and all the tools are nicely put away.

And all because I decided to start, not debate. And for lack of any better idea, I started where I stood.

-btc

In recent years I've focused my project management practice on so-called "adaptive" styles. These styles, which include techniques known as "agile" and "extreme" as well as many others, are different from tradition PM methods in that they set out from the premise that the future is to a large degree unknowable and unpredictable, and thus the old practice of creating large master plans that try to anticipate conditions years (or in some industries, merely months) in the future is a futile effort.

Instead, these adaptive methods presume from the start that you have to think small, focus on the things you know, work on increasing your knowledge as you work, and be equipped to deal with significant change as it comes along. These methods are based on the notion that the world will control you, not the opposite and that "controlling change," as traditional project managers expect to is a pipe dream.

LAX, and Los Angeles in general need to get with the reality, as this piece suggests. Planning beyond the limits of what's known is a waste. Holding the most important business asset in the region hostage to our inability to perfectly predict the future business, economic and political climate for years to come is only ensuring that we stand still while somehow hoping and waiting for the perfect plan.

There isn't a perfect plan. There's only what you know today, and it's plenty for the airport to work on even in the absence of a grandiose masterplan. Get started.

Bob Nardelli's gone, out and finished as the CEO of Home Depot.

Good Riddance.

In the wake of this, lots of people including the Wall Street Journal are decrying his reign as a failure of Six-Sigma quality improvement methods.

In truth, by any financial and operational metric, HD was doing OK, as my friend Vitaliy Katsenelson has pointed out. Six Sigma has probably played some part in this improvement.

Where Nardelli and many of the process junkies out there have failed is in their inability to recognize that in some areas of human endeavor, process improvement just isn't enough. There is noplace where this is truer than in retail sales.

Six-Sigma, like any process methodology, is focused on making a process more and more efficient. It does this by following a process of Defining metrics, Measuring them, Analysing the results, making Improvements, and then Controlling things (DMAIC). Alternately, when new processes are required, it calls for Design, Measure, Analyze, Design, and Verify (DMADV). Either way, it's designed for predictable processes to which there are clearly defined metrics and little variation.

It works great if you're GE manufacturing a million light bulbs.

It works great if you're GE shipping a million light bulbs to a Home Depot.

It works great if you're Home Depot stocking a million light bulbs in warehouses, distributing them to stores, and keeping track of the light bulb inventory.

It is of limited use when selling light bulbs one at a time to a million customers, who have widely different needs, levels of light-bulb expertise and service expectations. You can't approach an improvement in your in-store conduct in the same way as you can measure all those other operational aspects of running it. Businesses and the metrics they use are relatively consistent and predictable. Some companies have even had success using Six Sigma to measure and improve commercial sales because commercial customers are at some level consistent and predictable. But it doesn't work with retail customers. They expect to be treated like individuals, which means that every single customer contact is going to be a new process.

Try to force customers into a process that's convenient to you, and you risk them going elsewhere.

That's what was happenning at Home Depot, as virtually all the personalized aspects of service for which they used to be famous disappeared.

And that's what happened on the board of Home Depot, where Nardelli pretty much told the world "my company, my process, you can leave if you don't like it."

Eventually, they told him to leave.

People like being treated as individuals. A retail business strategy which does not recognize that fact is doomed to failure, and sadly has maligned a methodology which -- when applied judiciously rather than dogmatically -- makes lots of sense even for many retailers.

I'm a certified project manager, and project management is how I make most of my money.

In recent years I've become fairly disillusioned with the profession, particularly as it's been promoted by the Project Management Institute. In fact, I've slowly been reducing my ties to that organization because of the monolithic approach they take towards everything. Their philosophy is completely antithetical to the world I see developing, yet it is at the core of what new project managers are taught is the "right way" to do things.

At its core, PMI is about doing things in the way that was mastered during WWII: Plan carefully, budget, assign resources, measure progress against the desired tasks, make adjustments if anything deviates from the plan, and meet the goals for delivery. Like most organizations, PMI tends to promote what it knows. When reality conflicts, it tries to identify reasons that the reality should change.