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- USA Household Debt Jumps to Record $13.15 Trillion
The Federal Reserve Bank of New York’s Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit, which reported that total household debt increased by $193 billion (1.5%) to $13.15 trillion in the fourth quarter of 2017. This report marks the fifth consecutive year of positive annual household debt growth. There were increases in mortgage, student, auto, and credit card debt (increasing by 1.6%, 1.5%, 0.7% and 3.2% respectively) and another modest decline in home equity line of credit (HELOC) balances (decreasing by 0.9%).
Outstanding consumer debt balances by type: $8.88 trillion (mortgage), $1.38 trillion (student loans), $1.22 trillion (auto), $834 billion (credit card), $444 (HELOC).
continue reading: USA Household Debt Jumps to Record $13.15 Trillion
- Avoiding Difficult Problems
Coping with this issue (of avoiding unpleasant, systemic and long term rather than acute problems) is one of the things that separates great corporate culture from decent or bad corporate culture.
If there are fairly obvious or fairly easy improvements those would likely be acted on. There are, rarely, but still sometimes, instances where those vocal or politically powerful individuals who would lose out in a fairly obvious improvement will prevent action.
I am not convinced there are not ways to improve the situation. And I am pretty confident it is important enough to try. And I believe (though I might be wrong) with a concerted effort of knowledgable people improvements that would make a big difference in the quality of life could be achieved. I am not so certain those people involved in leading the effort would be seen in great lights though even if they "succeed." People are much more likely to remember negative consequences to them personally, even if they gain much more than they lost overall.
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- The New Age of Robots and What it Means for Jobs
Industrial robots are the most advanced application of robots in business today but they are still far from plug and play solutions. They require skilled experts to have them work effectively; but the capabilities and usability have greatly increased over the last 20 years. Respect for people (and all that entails about the management system) is an important part of creating a management system to have the most success integrating robots.
The ability of us to create technological solutions to accomplish tasks that required people has exploded in the last 20 years and will continue to. Lawyers are finding much of what they do can be done by a computer. Much, doesn’t mean all, obviously. Search and rescue in disaster areas is another task that robots are playing an increasing role in; and the use of robots will likely continue to grow quickly. Technology is taking over many aspects of medical care that were not long ago seen as requiring highly trained and experience medical professionals (reading scans, diagnosing illness…).
I think many of these advances are moving so quickly that we are not properly thinking about the long term future of our organizations. The disruption these changes will take will be difficult to predict and plan for.
continue reading: The New Age of Robots and What it Means for Jobs
- “Explaining” Random Variation
When I was a reporter covering Cisco Systems Inc. in the late 1990s, it was my job to talk to several analysts a day to find out the latest bit of news that might move the networking company’s share price.
If the stock moved more than 2% on any uptick in volume, I had to write a story explaining why. After dealing with that every day for about three years, I realized the overwhelming majority of analysts had no better clue than I did about what was moving Cisco’s stock.
The “explanations” you hear from media often are just as useless as horoscopes. A bunch of meaningless words presented in the hopes you don’t realize they are empty words.
The talking heads (and writers) need to say something. It would be much more useful if they took the time to do some research and put in some thought but they seem to be driven by the need to fill space instead of the need to inform.
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- Applying Deming’s Management Ideas at the Great Plains Coca Cola Bottling Company
The difficulty in changing is often mostly about our psychology (not the technical difficulty of operating under changed systems and processes after making adjustments to adapt to take advantage of new opportunities).
Results matter but within a context of the process. If I double profits by wagering all the cash we can borrow on the roulette wheel that result isn’t a sign that we are doing much better. Using data wisely requires understanding what the data tells you and what it does not tell you.
continue reading: Applying Deming’s Management Ideas at the Great Plains Coca Cola Bottling Company
- ACA Healthcare Subsidy – Why Earning $100 More Could Cost You $5,000 or More
One of the benefits of the USA Affordable Healthcare Act (ACA) is that health insurance costs are subsidized for those earning less than 400% of poverty level income. The way that this has been designed you could get $5,000 (or more, or less) in subsidies if you earn just below the 400% level and $0 if you earn just above.
60 year old in Virginia - earning $48,200 would receive $7,073 in subsidies (60% of the cost*). Earning $48,300 would mean receiving $0 in subsidies (for this and also examples, the examples shown are for a single individual, you can use the tool to try different scenarios).
The subsidy levels for those with very high health insurance costs (especially those over 50 years old, or with a family) are very large. If you are close to the subsidy cutoff level the costs of going over can be huge, costing you $5,000 or even over $10,000 just by making an extra $100.
continue reading: ACA Healthcare Subsidy – Why Earning $100 More Could Cost You $5,000 or More
- Understanding and Misunderstanding Variation
... one of the central aspects of Deming’s ideas on management: that we need to view the organization as a system. It is not as simple as adopting a couple practices and getting the same results another organization gets from those same practices. The interactions between the existing organization and the new practices will be different. This makes management challenging but it also makes our jobs of improving management continually interesting and full of opportunities to learn.
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- Advice for Managers Who are Just Starting Out
- Applying Quality as a Business Strategy at Hallmark Building Supplies
Hallmark Building Supplies has profit sharing for all and doesn’t do annual performance appraisal. They attempt to let the market dictate pay and take pay out of the performance discussions. To manage performance they seek to “coach while the game is going on” (and mentioned the importance of people being receptive to coaching). Cooperation between sales people has increased since they eliminated commissions.
Everyone is trained on the purpose statement, it is not just something that hangs on the wall. We use it to make decisions on a regular basis.
continue reading: Applying Quality as a Business Strategy at Hallmark Building Supplies
- Toyota’s Newest Humanoid Partner Robot
T-HR3 reflects Toyota’s broad-based exploration of how advanced technologies can help to meet people’s unique mobility needs. T-HR3 represents an evolution from previous generation instrument-playing humanoid robots, which were created to test the precise positioning of joints and pre-programmed movements, to a platform with capabilities that can safely assist humans in a variety of settings, such as the home, medical facilities, construction sites, disaster-stricken areas and even outer space.
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- Standardization With a Systems View Allows Creativity to Flourish
We all benefit from standardization every day. We can plug our devices into a wall outlet and power them. We can get a replacement battery and have it work as expected. We can type on the keyboard without thinking because the keys are the same on each keyboard. We can connect to a new wifi network with our phone or laptop. We can buy a replacement pipe for our sink and install it.
One of the objections I hear to adopting standardization is that doing so takes away our ability to be creative. This is not the case. Dr. Deming’s quote does a good job of explaining this. Standardization allows us to create systems that are reliable and effective. Within that system there should be a great deal of flexibility to apply creative ideas.
It is true organizations often impose rigid rules that restrict creativity. If standardization is responsible for part of this result then the process by which standards are created and continually improved needs to be examined. A management system needs to continually improve and part of that is continually evaluating how management concepts (such as standardization) are being applied.
continue reading: Standardization With a Systems View Allows Creativity to Flourish
- Using Annuities as Part of a Retirement Plan
Annuities have a bad reputation, with a history that makes that bad reputation sensible. The main problem is the high costs (and often hidden costs) of many annuity products. Combine with large sales incentives this has led to annuities being abused by sales people and financial companies while providing poor returns to investors.
However the attributes of annuities fit a specific part of a retirement plan very well.
The best roll for an annuity in retirement planning in my opinion is to serve as a protection against longevity. The longer you live the more risk you have of outliving your investment savings. Life annuities have the benefit of continuing for as long as you live.
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- RSS feed for Management Improvement Blog Posts
I have created a RSS feed for select blog posts from the start of the Curious Cat Management Improvement blog in 2004 (as well as other posts I have made on management improvement on other blogs). Subscribe to the John Hunter management improvement RSS feed. Doing so will add a post each day to your RSS feed reader from my past blog posts. Of course, the normal RSS feed for this blog will continue to provide access to the new blog posts that I publish.
I also have a RSS feed on my posts on all topics (management improvement and also investing, travel, software development, engineering…) for those of you who are interested.
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- Stock Market Capitalization by Country from 2000 to 2016
One way to view the dominance of mega-companies is that the market cap for the top 4 stocks exceeds the market cap of all of Canada’s stocks (Apple $807 billion + Alphabet $687 billion + Microsoft $588 billion + Facebook $507 billion = $2.589 trillion). The next, Amazon $477 billion, bring the total for the top 5 to over $3 trillion (and surpasses the UK market cap, leaving only USA, China and Japan as larger markets).
The USA market capitalization was at 46.9% of the global market cap in 2000 and fell to 31.6% in 2000 before rising to 42% in 2016. China grew from 1.8% of world stock market capitalization in 2000 to 6.9% in 2012 and 11.2% in 2016. Adding Hong Kong to China’s totals shows 3.7% in 2000 with growth to to 12.2% in 2012 and 16.2% in 2016.
You may be surprised to learn that 26% of USA equities are owned by investors outside the USA.
continue reading: Stock Market Capitalization by Country from 2000 to 2016
- People and Robots Together
For several decades it was pretty easy to predict wholesale adoption of the robots will save us mantra would be followed by failure. I still strongly believe Toyota's method (thoughtful use of robotics to enhance people is the best strategy). But the ease of using robots to succeed in the long term is much enhanced these days.
Robot first strategies are going to be succeeding quite a bit going forward. Yes those efforts might not be good enough when competing only with companies using the best strategy well (but that will be rare).
continue reading: People and Robots Together