Sunday, June 20, 2010

Killed by Ignition

We are living with legacy transportation systems, while alternatives are available. We are demanding inefficiency while smarter choices exist. These choices will hopefully create a dent in the demand-side of the hydrocarbon value chain and help create an economy that will focus more on fuel that will not end this civilization soon. Driving an SUV in this time and age is like using a mainframe to update my blog. Its like spending $20 per minute calling India from the US while there are alternatives that cost a cent. But when it comes to cars, somehow we are blind to these alternatives. We refuse to believe that smarter choices are available and if we know that smarter choices are available, we refute to promote them.

We need to divorce the internal combustion engine from hydrocarbon energy and we need to do this on a war-footing. An obsolete technology, this engine wastes about 90 cents on a dollar. This is due to the fact that only about 10% of a gallon is used to propel the vehicle/driver forward, while the rest of it is wasted in various operational aspects of the engine ending up as heat and exhaust.

The most simple thing to do is to demand more fuel-efficient vehicles. But we are all caught in the web of form not function, style not substance. Hence, a lot of people think its cool to buy SUV's and sports cars which suck gas like a starving vampire would suck blood. The car companies (especially the big three in the US) are culpable for promoting a lifestyle that derives self-identity from the car a person drives. They stick up some "green" labels on the new vehicles which cunningly display some "sustainable" feature or the other, usually hogwash. Looked beneath the surface, most of these vehicles are made the same. Until the gas prices truly reflect their social cost, consumers will not change their habits. When gas prices fall, the SUV's will come out and when gas prices go up, the demand of hybrids will increase. But we do not understand that these price mechanisms follow the evil calculus of OPEC. These countries manipulate their supply to promote demand. The economics of oil dictate the lives of businessmen and politicians alike. Here is a facet of the oil economics (I found this breakup at http://jb-williams.com/).

Based upon a $3.00 gallon of gasoline, the average break-down is as follows.

Gasoline Retailer $.01 cents per gallon
Oil Company $.08 cents per gallon
Refining $.29 cents per gallon
Marketing/Distribution $.32 cents per gallon
Taxes $.59 cents per gallon
Cost of crude $1.71 per gallon (delivered)

As you can see, the retailer makes nothing, the oil company itself makes wafer-thin margins while the refiners and marketing make close to 20% of the margin. Government gets about the same (20%). Since most of the oil companies are vertically integrated, we can safely assume that about >21% of the cut goes to them while about an equal amount going to the Government. This is the reason why usually Governments do not care too much about reducing oil dependency. Tax money is easy money, it goes into running bloated and inefficient governments. This is why they refuse to make sincere efforts to promote hybrid and electric vehicles. Besides, the car companies have massive lobby operations which help reduce investments into public transport. So the more oil is sold at the retail outlets, the more tax money the Government gets and the more the profits of the oil company and the more dependency on cheap energy (since social cost is not taken into account). This web of dependencies can easily be classified as a socially acceptable drug addiction.

Since we, the people, are alone in this war against oil, there are a few things we can do. First, demand more fuel-efficient and smart cars with engines that do not waste too much fuel. We can promote and invest in companies that are innovating towards this end. Tesla, an electric car company, has been investing bucket loads of money to make a good looking electric car but they are too expensive at the current rates to cater to the mass market. Toyota Prius, Honda and Ford hybrids, while being more affordable are not well liked by consumers for the lack of sex appeal. Again, this is because we put more focus on style than substance. I guess, its up to the car companies to restyle these hybrids and electrics into more likable designs but at the same time, we can make a few style sacrifices as well.

There are a couple of others ways to increase the fuel efficiency of vehicles. The first is by using lighter materials for manufacturing, and this is the department of material science engineers. If spiders can make webs that are stronger than kevlar, I wonder why we cant make a material that is light enough to be fuel-efficient but strong enough to be safe. The second method is by using aerodynamic drag reducers. These drag reducers are perfectly suitable to trucks doing long-hauls and they help improve fuel-efficiency by about 10-15% depending on different studies. Using lighter and stronger materials could be cost-prohibitive which makes drag reducers a more cost-effective and scalable solution. The drag is created because of design issues. Almost all trucks that you see on highways are shaped like big boxes. Not a lot of thought is put into their design. Its easy to see that they are not efficiently designed since more energy is required to move a rectangle or square compared to sleeker shapes. A square has to displace a lot of air and this creates a drag which in turn demands more energy from the engine. There are already companies out there that place smartly designed drag reducers that help reduce this drag. We should have to start using them.

Drag-reducers for trucks and semis and hybrids and electrics are the way to go in the future. These technologies are not rocket science. In fact, these days even rocket science is not rocket science. If we can improve various aspects of our lives by focusing on efficiency, I wonder why we neglect something that is so basic. Transportation is an integral part of modern life. But the methods used for transportation are archaic and even anachronistic. To tolerate an internal combustion engine that wastes 90% of the non-renewable resource put into it is essentially living in apathy. To destroy ecosystems that took thousands of years to come to life because of this apathy, is to kill life by ignition, the ignition of our internal combustion engines.

Friday, June 11, 2010

A Travesty of Education

From my experience of working in the education industry, living in three different countries and meeting students from a cross-section of universities across the world, I can safely observe that the current state of education is in a deep state of disarray. I believe that richer countries like America and Australia can somehow live with this trend because they have built a certain level of efficiency and productivity into their societies and systems but countries in Asia (I will not comment on Africa as I have never been there) will pay a big price if the policy makers there keep playing deaf to the call of the day. Even in countries like the US and UK, which are so advanced in terms of human development compared to the rest of the world, it is deeply troubling to see many schools survive and prosper with sub-standard curriculum's and callous faculties. Whether private or public, these schools have survived mostly because the world economy has been growing post-WW II. Except a few hiccups in the 70s and 90s, mostly the world growth has been positive, till now. Post 2000, the world has been growing exponentially, thanks to China entering WTO in 2001 and India bidding adieu to Hindu rate of growth. This has prompted corporations (mostly based out of US/Europe) to expand and get a large share of their revenues from the growing Asian and Latin American populations, which compensated for the slow growth in their home countries. This has further led to the demand of managerial talent and hence management education. Which has in turn led to the growth of business schools across the world. Entrepreneurs in the private sector and public schools under the aegis of incompetent Government bodies, took advantage of this demand. While some of these schools, a minuscule, are truly thought-leaders, most others are just shops. Public business schools are under-funded and hence under-staffed. They make do with a nonchalance attitude to education. Living life on a quarterly basis with no focus on the longer term aspects of what they are imparting, these schools seldom try sincerely to hear what the travails of students are. Private schools are better equipped to deal with these issues because they are financially independent. But they often care only about the "success" of their alumni and how large the checks these alumni would cut in the future.

Modern education is evolving into a beast. The objective of real education is not to confer degrees with fancy titles. Education, in any discipline should be about kindling the fires of the mind and not filling it with nonsense. Curriculum's should lead students into a direction that allows them to explore the world and see things that are above and beyond the grasp of text books and case studies. It must be about teaching humility and honesty and live a life with fulfillment and contentment. It must fire the imagination and awaken the creativity that has led to so many great innovations in the past few decades. Is it pure chance that most of such innovation came from the streets and not the schools? Is it just a constant coincidence that creativity comes from areas one least expect?

But modern education instead instills either pride or self-doubts in the minds of the student. Pride comes from association and exclusivity. Self-doubts are born out of delinquent pedagogy. From the course structure, to the assessments and the mode of teaching in between, everything has gone wayward and misdirected. Business education is in a bigger state of disgrace as compared to other non-mainstream disciplines. Media is busy with ranking schools based usually on the cliched metrics of salary levels achieved and placements generated while accreditation companies are filled with people who seem disconnected from reality. It does not matter if the top management of the the Enron's, Global Crossings, Lehman Brothers and Satyams of the world were educated at the best schools in the world. Were these people not imparted with values that should have stopped them from doing what they did? Accreditation companies fail miserably in gauging the efficacy of their accreditation just like ratings companies fail to properly predict the bankruptcy of a AAA rated company. Life looks good when these people look down from their high-rise glass buildings but the reality in the schools/companies they rank, rate and accredit is different. Back in the olden days in India, apparently good kings roamed the streets at night, in disguise, so as to see how their citizens are living and what their problems are. Maybe accreditation companies and journalists should enroll as students to see what a travesty modern education has become.

In India, the emphasis in most schools is on rote learning rather than building analytical skills. It is surprising to find that a similar model is followed in most schools in the UK and the US as well. Scranton tests are the enemy of creativity while being a matter of convenience for the faculty. Such tests destroy the soul of education. One can get A's in these tests and fail in the real world. This model of education is akin to missing the forest for the trees. The point of good education is help a person do their job with diligence and propriety while staying within a framework of ethical and moral respectability. This requires analytical skills and a sense of what is right and wrong. Multiple-choice tests cant teach this, only interaction can. It is the duty of the teacher and his/her discretion to think through these issues. Its the job of the teacher to develop values and real knowledge (lets forget wisdom, it cant be learned in a school) in a student. Teachers are responsible for inspiring or destroying the students. Why don't teachers take this to heart? Why do elite schools fail to instill values in their students? Why don't lesser than elite schools focus differentiating themselves by creating such niche?

The problem is not in the schools but in the way society has come to evolve. Focus, from childhood, is put on being "successful" in life, which usually means making money. Big businessmen and successful actors are the role models these days instead of people of character, integrity and selfless leaders. Greed has come to replace altruism, which fell out of fashion decades ago. Media reflects (through movies and fiction) these trends by portraying success as the be all and end all of human life. Every person I talk to, these days reflects a sense of dissatisfaction with his/her current situation regardless of the fact that they have a job, a car and a house. They all want to be somewhere else, do something else and look like someone else. And yes, these are also men and women who come out of good schools and even elite schools. Why does this happen? While elite schools instill "bragging rights" in their students, lesser ones often are left feeling inadequate. Regardless of professional choices, both seem unhappy about their lives in general because they are not "successful" enough. Somebody else has more than you, always. This stress and the ensuing pressure cracks families, neighborhoods and finally nations. Everything begins at the schools. If teachers did their jobs well in the first place, there would have been more secure people in the society. Kids growing up in single parent homes have lesser opportunities to be nurtured compared to kids who grow up with both the parents. But fathers and mothers these days are busy earning bread and promotions so where do they have time to talk to kids? That leaves the teachers to do this job. But sadly, teaching, just like all the other professions, has become a wage job so nobody takes it passionately. If this is the bottom-up analysis for the breakdown of modern education, the top-down looks even more disturbing.

The deans and heads of private and public schools treat their schools and universities as a business. They act and behave like modern day CEOs. You could ask me what the trouble with this attitude is. Here is what is wrong. Education is NOT business, and it should never be. They are two totally separate fields. While business schools impart students with a set of heuristics on how businesses are run, education is actually about uplifting the soul and ennobling. Its another question whether business education can ever be uplifting, but it surely can be ennobling. There are capitalist philosophers and men/women of vision who made this world a better place through merchandise. Whether public or private, elite or street, its about showing such light in the darkness of daily din. If universities are run like businesses, their focus is on profits, growth and power. To obtain these ends, universities will make any compromises. Such compromises could be in quality or in morals. Complete this quarter, update the roaster and file away a few more students, irrespective of how we taught what we taught or why we taught what we taught. So from the teacher to the university, there is nobody who truly cares for the student, which they can do by taking some time out to understand what this individual actually wants. Humans are treated like sheep with no respect paid to their independence and personality.

A large part of my essay is trying to expose the current problems, hence you could ask me what the suggestions are. I do propose a few. More specifically, business schools should revamp their curriculum's to include brave courses on sociological issues and philosophical subjects, not just the usual accounting and marketing rigmarole. There has to be a cross-pollination of ideas in curriculum's. Business schools should include a few art classes to encourage the students to think out of the box for solving business problems. Inter-disciplinary studies are important for enhancing a person's critical thinking. Furthermore, universities should ONLY and STRICTLY be run on a non-profit model and any profit made should be sunk back into building libraries and sports facilities. Teachers should be regularly evaluated irrespective of whether they are tenured or not. Likewise, feedback should be 360 degrees and not just students ranking teachers. Finally, for the younger section and maybe not at the graduate level, home schooling could be an alternative and this is already becoming popular in the Western world. Children could be exposed to classical education and this will enhance their worldview in a way, current curriculum's cannot. While its true that experience is the best form of all educations, its equally important to have a basic training in the functioning of the world. "Ipsa scientia potestas est" or knowledge itself is the real power. All forms of power corrupts, but real knowledge liberates.

Friday, June 4, 2010

The Recall Fiasco

Over the past one year, there have been so many product recalls, spanning various facets of our consumer life, its intimidating to think about the safety of anything we use in our modern lives. In the last one hundred or so years, a multitude of products have entered our daily lives to make us lead a product-centric and contemporocentric lives. But in the past two decades, the escalation has been incredible. People across the World are now regularly bombarded with products and advertisements hundreds of times, everyday. Our lives get shorter as the margins of companies get longer. And as the cycle of innovation reduces, more and more products hit the street. Subliminal and explicit messages pollute our sub-conscious minds making us gullible customers controlled by a puppet master. Someone is selling something constantly, creating an endless feed of commerce interspersed within the already chaotic daily schedules of men, women and children. Here is a fact of modern life, we live in a society which cares more about the shelf life of a product, than the shelf life of a person. Product > Person.

McDonald's, about whom investors have been salivating in the last few years, recalled glasses it started selling in conjunction with Dream Works' franchise flick, Shrek IV. While the ogre is pretty damn popular with kids, his green color has come to signify the greed of cross-product placements and movie-product tie-ins. I know how crazy kids can get about these tie-ins, as in their gullible age they associate everything sold out there with the chirpy, fun-loving nature of the ogre. My nephew used to pester me to get these toys in our visits to the not-so-friendly neighborhood McDonald's. I was amazed at how cunning these companies are in their reach-out efforts to the younger sections. Even kids are neatly market segmented and psycho-graphically profiled. The McDonald's glasses apparently (recalled in the millions, as there are 12 million glasses in the market now), have a lethal chemical cadmium (a carcinogen no less) inside them. Kids drink the already nasty colas (Coke and Pepsi found traces of pesticides in their formulas recently in India) in place of water in a glass made with cadmium and down a hamburger made from a cow that was fed some more lethal hormones. Looks like the entire value chain of our lives is polluted. Will our next generation of men and women turn to aliens in their lifetime, being fed such trash? No wonder the folks of our parent generation have more energy and mental stamina than the kids these days. Fortunately, U.S. Consumer Product Safety Commission found the McDonald's cadmium-tainted glasses in time to even launch a recall. What if it wast found? What about all those other products floating in the market now with some lethal ingredients in their DNA? Where are the testing standards to stop corporations putting carcinogens into our daily lives? How come investors don't cry for safety in products instead of ever-increasing returns? In their eagerness and hastiness to to get tainted products to market in time when their movies hit the screens, the DreamWorks', McDonalds' and Coke's of the world will do anything. They will even allow their manufacturing (usually China, cause its cheap, never mind the quality) facilities to get tainted with carcinogens. Just like all those crackers and peanut butters etc recalled last year as someone found salmonella in some of these products. Essentially, one of us should put ourselves in peril or even die so others will know how bad these products are. Unfortunately, modern industrial production systems are so integrated and so large scale, its impossible to test every product in time to check if everything is safe or not. Please remember the toys from China that were filled with toxic substances. These profit-seeking corporations will not stop at anything for a little extra growth and a nicer quarterly number. Not even the toys of our kids. We were not safe by what we drank or ate and now our kids are not safe by what they play with and the glasses from which they drink their colas.

Update on June 25th. Kellogg recalled some 28 million boxes of its breakfast cereal, Apple Jacks, Corn Pops, Froot Loops and Honey Smacks cereals, due to a "bad smell" coming from the package. Interestingly, the news item only reveals so much about the recall but adds "shares of Kellogg unchanged at end of trading". Look at the apathy of this situation. While we are worrying about the life/death of human beings here, the conclusion of news items talks about the frigging stock price of the company? Is that the only raison d'etre of modern existence?

Toyota, whose production systems and kanban/kaizan processes cause many managements gurus to jizz in their pants, recalled millions of its cars recently. Why? Because the floor mats were disabling drivers to hit brakes or accelerate the cars automatically. There are problems with gas pedals. Imagine sitting in a car that you cant control. Imagine trying to stop the car when you see pedestrians, but instead the car starts racing. All these decades, Toyota, an otherwise smart company because of its focus on innovation and hybrid technologies, was praised high for its ability to advance production processes through just in time (JIT) manufacturing and constant improvement yada yada yada. JIT practice is not a panacea, while it can save inventory costs, it puts a strain on human beings to do things in the last minute, it clogs traffic and finally it responds weakly to variance in demand. I see a link between these methods like JIT and other fancy Japanese words to the recent recalls. Management consultants would like you to believe otherwise, because they sell crappy ideas with fancy words and make fancy bucks doing so. In its quest to increase market share, Toyota might have sent an unfinished product to the market without proper testing. Is this the constant improvement they were doing for last two decades? Most of the major Toyota brands like Prius and others were recalled. Even Lexus, which prides itself in its quality has recalls. Please remember the ads of Lexus extolling its virtues and how cool you are as a person just because you drive a Lexus. Well, if you stay alive driving one that is. And this week Chrysler announced that it is recalling nearly 600,000 Jeep Wranglers and Chrysler/Dodge because of a possible brake fluid leak from front inner fender liners causing friction and a possible loss of brakes not to mention the fire hazard the wiring can cause. We were not safe crossing the road but now we are not safe inside the cars.

Johnson & Johnson, loved by many B school professors who constantly give the cliched example of Tylenol recall in the 70s, recalled Children's Tylenol and Other Children's Medicines in the last few weeks. batches of regular and extra-strength Tylenol, children's Tylenol, eight-hour Tylenol, Tylenol arthritis, Tylenol PM, children's Motrin, Motrin IB, Benadryl Rolaids, Simply Sleep, and St. Joseph's aspirin have been recalled. If you ate them, J&J is sorry about it. Sorry, we had some bacteria in our manufacturing plants and this bacteria (which is resistant to anti-biotic by the way) seeped into the tablets your kids take. I ask, why is there not a revolution already in the streets demanding the heads of people responsible for these things? Is it just enough to start a boycott J&J or Toyota page on FaceBook? Does J&J know about something called testing? According to FDA, problems with these drugs surfaced as early as 2008, but no one bothered to follow up. What kind of manufacturing standards do these companies use? Is it just enough to put anything out, as soon as can? It does not even matter if the consumer dies using the product? Companies don't care about this, because Wall St., does not care. All investors care is about the return on their investment, it does not matter if their kids are taking contaminated medicines of a company in which their parents are investors. Who cares if a few children get sick or even die when the company has been consistently giving returns and meeting quarterly expectations? We were not safe using these drugs in the first place, because they cure the symptoms not the disease. Now, we have to think ten times before we load our kids with Motrin and Tylenol and who knows, maybe J&J will come up with another medicine to cure those who are affected by the contaminated Tylenol. Now, that would be a great business idea, which would make those investors drop their pants and dance.

HP, another paragon of virtues as extolled by gurus, recalled thousands of laptop batteries last week cause they were a fire hazard. Simply put, you or I could be blown to bits by just using a laptop. Why do we need weapons of mass destruction, if we have batteries like that? Why not install them batteries into laptops and gift them to our enemies? Now, since I bought a HP laptop in 2007 (recall period, August of 2007 and July of 2008), my heart skipped a beat and I hastily checked my battery serial number. No, its not in the recall. But yes, the battery overheats like crazy causing either my clunky Windows OS to shutdown, or drive the fan nuts or barbecue my thighs or all. CPSC, the primary safety watchdog for technology in the United States, can be contacted if consumers have problems but what about those laptops that were sent to places like India where finding someone who cares is as hard as finding a snowball in hell? It does not matter right, because HP already booked those laptops into their sales figures, which is reflected in its share price and investors already made their returns. Why care if a few people's lives are jeopardized because their laptops have suddenly turned to landmines. We are not safe by using our "productivity" enhancing gadgets.

We might have to strip ourselves naked and go live in the jungle. Might could be right there but at least there is honesty in such a killing. The above named corporations should be ashamed of themselves for the fact that they will go to any length in their naked pursuit of profit. Investors could care less if these companies make lethal products that masquerade as kids toys or cars or laptops. I don't believe that only a few people who are exposed to these products and endanger their lives will pay the price along with their families and friends. I believe that we are all doomed as long as we think and act like sheep (read consumers). Nobody will question these companies because they are too big. A few heads could fall, business will be back to normal but processes will not change. Investors will only clamor for quarterly performance. Soul searching will not happen and our cars, glasses, laptops, burgers, medicines, and lives will keep getting contaminated until the last day. We will all eventually meet our maker, and hey, I have my defects but I don't want to be recalled just yet. But I'm sick and tired about these companies and their cadmium-tainted souls.