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  • How Not to Convert Equity

     In no way does increasing their leverage convert equity that might melt away. Any amount of “melting away” will still happen after this increase in leverage – no conversion has happened. They still have a full ownership interest in the real estate. If the value of their house fell $300,000 before or after this supposed “conversion” they would “lose” (on paper) the same amount: $300,000.


    The way to convert some of your asset to something else is to sell that asset (or a portion of it or hedge it in some way though for a house this is not easy or maybe even really possible). 

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  • Customer Service is Important

    My experience did not give me the impression they were focused much on what was important to me as a customers. The service I received seemed to be what I would expect from a company very focused on the idea that the objective of the company is to increase profits at the expense of everyone else. Two models of organization provide a very different customer experience.  One that sees customers as fools to be fleeced seems common among USA arilines, health care providers, cable companies, large banks, car dealers and phone companies.  The idea that organizations exists to provide customers value and the company takes a profit for providing that value sadly seem rare in the USA (though some organizations behave this way: Trader Joe's, many credit unions, many small restaurants and Apple (though some may disagree with me placing them here).

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  • Agility vs. Six Sigma

    Some people dislike the idea of managing processes. In my experience they then invent the idea that slow, boring process improvement is an alternative to innovation. That is just wrong. Process improvement should be part of a well run system, as should innovation. Deming, who many believe focused only process improvement, knew the importance of both. See several of Deming’s ideas on innovation.

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  • Public Sector Management Using Deming's Ideas

    Madison’s quality improvement efforts began after then-Mayor James F. Sensenbrenner and his staff were exposed to the teaching of W. Edwards Deming in 1983. A pilot project at the motor equipment division made substantial improvements in prioritizing repairs, improving communications with customers, reducing steps in the inventory purchasing process and, ultimately, reducing vehicle down time, all of which saved money and improved service at the same time. Based on the success of the pilot, it was decided to expand the philosophy throughout city government.

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  • Suggestions to Improve Google (2006)

    I have suggested all of these for years and I still want them:

    1) Let me chose the type of files searched (exclude pdfs, word, power point..). Then if I can’t find what I want I can expand to include them. At the very least give me some way of making the type much more visible (I realize it is there now but I often click before my mind notices…).

    2) Let me remove web sites from my default searches. I would imagine this could even be used to help Google’s normal search results by getting a sense of sites huge numbers of people “block” The same spam sites show up for searches and I would rather block them if Google can’t figure out how to do so.

    3) Let me create site search lists, where I create lists of sties I want searched – then I can target my searches how I want. Actually now that rollyo does this...

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  • Goofy but Widespread Thinking

    I can’t really understand why people seem unwilling to do the simple known things to improve performance. But there does seem to be the attitude that we need to find secret or fantastic new ideas in order to improve.

    People seem to think: “I can't just read some idea in a book published 30 years ago and improve. If it were that easy everyone would be doing it.” Well it isn’t quite that easy but it is close.

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  • Glacier National Park photos

    I have posted photos from one of my most enjoyable days from last year: photos from hikes in Glacier Waterton International Peace Park

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  • Quality, SPC and Your Career

    Success is not as easy as we might hope. Just discovering the ideas of Deming or Toyota or Ackoff is not enough. The great ideas don’t, by themselves, convince managers to try a new way of managing. There is a great deal of education needed for most organizations to get to the point where they realize they could improve by applying “old” ideas such as: control charts, lean thinking, spc, not tampering

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  • Should GM be Removed from the DJIA? (2005)

    I agree removing GM makes sense, though I see no reason to wait. Whether to replace it with Toyota (market cap: $167 billion), DaimlerChrysler or something else is an interesting question. Of course the whole idea of the Dow Jones Industrial Average pretty much outlived its usefulness decades ago. The S&P 500 has long been far better measure of the stock market...

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  • Toyota's Planet Kaizen

    It requires flash to view Planet Kaizen. I think it has amazingly bad visual controls (as do many flash applications). I can’t figure out why it would be done in flash – other than some marketing person, or IT person, thought it would be cool. I certainly don’t see how kaizen practices could have produced such an application. It seems to me one of the examples of how far Toyota still has to go.

    Of course, as an automobile manufacturer failing to develop web applications well, is better than failing at manufacturing cars well.

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  • Process Improvement of the Order Fulfillment Process

    Shipping an international order now takes about 35 seconds, down from 3 minutes, and can be done by anyone, whether or not they have SQL and Mail Merge skills. Domestic orders are even faster since they don’t need customs forms. Most of all, it’s all really fun.

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  • Poka-Yoke Assembly

    Poka-Yoke (mistake-proofing) is one of my favorite ideas. I just love the idea of not only making something that works well but making something that is difficult to use misuse or use in a way that leads to problems, waste and disappointment.

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  • The 70 Percent Solution

    Google CEO Eric Schmidt:

    We spend 70 percent of our time on core search and ads. We spend 20 percent on adjacent businesses, ones related to the core businesses in some interesting way. Examples of that would be Google News, Google Earth, and Google Local. And then 10 percent of our time should be on things that are truly new. An example there would be the Wi-Fi initiative.

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  • Peter Drucker Opinion Essays from the Wall Street Journal

    Is Executive Pay Excessive? In 1977, Peter Drucker's answer was, no. As pay did become excessive, Drucker became a prominent voice against the unjust pay of CEO’s.

    Economically, [the] few very large executive salaries are quite unimportant. Socially, they do enormous damage. They are highly visible and highly publicized. And they are therefore taken as typical, rather than as the extreme exceptions they are.

    In 1977, he was mainly worried about “the public” rising against excessive executive pay when there was no systemic problem. He didn’t seem to foresee the problem of other CEO’s believing they were entitled to such unjust pay and creating the crisis of leadership this caused later in his career. Of course the entitlement culture was not a widely held view at that point.

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  • Innovate or "Play it Safe: to Avoid Risk

    There are many reasons why avoiding risks is smart and should be encouraged. But when avoiding risks stifles innovation the risks to the organization are huge.

    Playing it safe isn't always safe. In rapidly changing markets (which are quite common lately) "playing it safe" is often riskier than "taking chances" on new ideas.

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