They're here, again.
Layoffs. Our local Calgary Herald is reporting layoffs at drilling contractors due to rig activity at 36% of capacity.
Technorati Tags: People's Management Failure Capabilities
OUR PRELIMINARY SPECIFICATION MAKES SHALE COMMERCIAL. THROUGH AN INNOVATIVE BUSINESS MODEL SUPPORTING THE JOINT OPERATING COMMITTEE, WE PROVIDE OIL AND GAS ASSETS WITH THE MOST PROFITABLE MEANS OF OIL AND GAS OPERATIONS, EVERYWHERE AND ALWAYS. ENABLING THEM TO ACHIEVE ACCOUNTABLE AND PROFITABLE NORTH AMERICAN ENERGY INDEPENDENCE. OIL AND GAS’ VALUE PROPOSITION IS AT A MINIMUM, LEVERAGED TO THE POINT OF 10,000 MAN HOURS PER BOE. WE KNOW WE CAN, AND WE KNOW HOW TO MAKE MONEY IN THIS BUSINESS.
Layoffs. Our local Calgary Herald is reporting layoffs at drilling contractors due to rig activity at 36% of capacity.
Posted by Paul Cox at 12:04 AM 0 comments
Labels: Capabilities, failure, Management
In Canada we have the pioneering spirt of Daryl (Doc) Seaman and his two brothers BJ (Byron James) and Don who established the independent oil producers in Canada. Without these individuals, the energy industry would not have had the entrepreneurial spirit that guided it through the very difficult times of the 1980's. All Canadian's have been benefactors of these men's vision, courage and dedication to the ideals of the independent pioneer.
It is with sadness that we learn the passing of Doc Seaman this evening. His legend will live for many years, and he will be missed.
Posted by Paul Cox at 10:52 PM 0 comments
Over at BusinessWeek they have an interesting blog on innovation and design . The post for this week is topical for the work that is being done on this website. Entitled the "Transition conversation: Is 'Transformation' a better concept than 'Innovation' to guide us forward?' The opening sentence brings the subject in focus
We are having a great conversation on one of the most important subjects in our lives—how we can change our broken institutions and out-dated culture to survive and thrive within 21st century forces.That is what this blog, innovation in oil and gas is about, and what the software system we are building, People, Ideas & Objects, is about. How we can change the failed bureaucracy in the oil and gas industry. We need to approach the ways and means that we organize ourselves for the 21st century challenges in the oil and gas industry. By using the Joint Operating Committee (JOC) we are able to align the compliance and governance that is the sole concern of the hierarchy with the legal, financial, operational decision making, communication and cultural frameworks that are the domain of the JOC. This alignment puts the business of the oil and gas business back into the proper context. And therefore is able to support innovation and speed / performance of the producer.
Our institutions aren’t working. They are broken. Corporations, investment banks, health care, schools, universities, Congress, transportation. The current crisis is accelerating the breakdown in the major institutions of our lives that began in the 90s.Today software is the key to organizational performance. I coined the phrase "SAP is the bureaucracy" to reflect the impact that software has on defining and supporting the type of organization they are. Software is a deliberate and necessary part of any future organizational change. It is not the technology that is driving this initiative, its aligning the business of the oil and gas business to support and encourage innovation, speed and capacity to change as critical business attributes.
Digital technology is disintermediating every organization, eroding the role of all middle men and women, from ad agencies to college professors, from newspaper editors to hospital administrators, from political parties to savings banks. The shape of all our institutions is radically changing.People, Ideas & Objects software developments are driven by the users, the multiple of professions that are part of the oil and gas industry, who are the people and their ideas that make the energy industry. This is a user based initiative that drives the software development. The software simply automating many of the new and innovative ideas users want and need to increase their organizations performance.
The power to create and participate is moving to the masses. Digital technology is giving everyone the tools to tinker again, to design and shape their learning, their working, their play. Craft is back in newly significant ways that we are just beginning to understand.The energy industry is desperately in need of an innovative organizational basis. We are headed in a downward projection in terms of reserves and production. A situation that presents these organizations with its demise, yet, the management are unconcerned outside of the impact that this will have on their salary, pension and most precious of all stock options.
“Innovation” is inadequate as a concept to deal with these changes. You have “game-changing” innovation, which is big but rare and incremental innovation which is small but common. “Innovation” implies changing what is. “Transformation” implies creating what’s new. That’s what we need today, a huge amount of totally “new.”Nussbaum is suggesting that the innovative mindset is not enough any more. The world is quickly moving on to new initiatives. "Transformations" being the result of the innovative methods of an industry. Transformation are driving this new level of change. The fact that oil and gas firms are unwilling to participate in these ways, after all it means a lot more effort on managements behalf, is one thing. However, I have been pushing these ideas to be adopted in the industry since September 2003. The tally for the amount of financial resources that have been committed to these ideas is $0.00. (And I am forced to work outside of the oil and gas industry because I have accused the bureaucracy of failing.) As far as I am concerned, that is disgusting. This fact alone reflects that management have their collective heads in the sand. And I am not suggesting that this software development and using the JOC is the key to attaining the innovation necessary, I have done the research and it works on paper. It's just that it is the only idea that suggests the status quo is the not accessible. And if there was a better idea presented, I would certainly get behind it and start pushing that. The important point is that the bureaucracy is failing. It is time to do something about it.
Design is the answer. I use the term “transformation” to capture the immensity of the task ahead of us and to guide us in the magnitude of that task, but the actual tools, methodologies and, yes, philosophy of that mission is found within the space of design and design thinking. This is what many of those in this thread of a conversation are saying and I agree. It is the design schools that are creating the tools of transformation and graduating the people to implement them, not the business schools (one exception—The Rotman School of Management). It is the Institute of Design in Chicago, The D-School in Stanford, DAAP at The University of Cincinnati, the Parsons School of Design in New York City, The Art Center College in Pasadena and RISD in Providence where “Transformation” is being developed.I have codified the ideas that I have researched and presented them in a coherent vision of how I see the industry moving to a more innovative footing. This vision is reflected in the Draft Specification and I encourage you to join me here in this very important work.
Posted by Paul Cox at 12:04 AM 0 comments
Labels: failure, Innovation, Management
Posted by Paul Cox at 12:08 AM 0 comments
The Oil & Gas Journal is reporting the rating agency Moody's is downgrading the Exploration & Production sector to negative. Click on the title of this entry for the Oil & Gas Journal article.
LOS ANGELES, Jan. 6 -- Moody's Investors Service has changed its outlook of the independent exploration and production industry to negative, citing the "precipitous decline" in oil and natural gas prices to levels that are likely to result in abnormally low cash margins and fundamental credit deterioration.
Posted by Paul Cox at 12:01 AM 0 comments
Labels: failure, Management, Pig
Canada's National Post (Click on the title of this entry for the article) has an article about Canadian Natural Resource Ltd (CNRL), our favorite piggy, has lost the interest of Fidelity Investments Maggelan stock fund. I can't imagine why. I mean is it the questionable accounting, the massive debt load, the massive working capital deficiency or just the probability that the Horizon heavy oil project will ever get started or the ability to ever make a profit from that white elephant? Maybe its just the steep declines in production? Probably the fact that the 44 individuals with Chief or President in their title, and lets not forget the three people who rank as Chairman, couldn't provide a reason for Fidelity to keep their shares. After all CNRL was not the only stock Fidelity were selling, they were also dumping a number of American banks.
Posted by Paul Cox at 12:09 AM 0 comments
Labels: failure, Funding, Management, Pig
Jeffrey Immelt, CEO of General Electric is quoted in a speech this last November.
The economic crisis doesn't represent a cycle; it represents a 'reset'. ... People who understand that will prosper. Those who don't will be left behind." MSNBC Meet the Press December 28, 2008.We are quickly approaching the point in time in which we are changing the ways and means of economic organization and development. People will soon realize, on scale, that the economic problems are associated with the inefficiencies that our organizations conduct their operations. The continuation of business as usual has and will fail completely. The opportunity to address these problems and re-start from a clean slate is both the opportunity and necessity. 2009 is the point in time in which this software development becomes critical to the future of the energy industry. Pompous words, but the fact is that software defines and supports the organizations we depend upon today. If we want to make the necessary changes and design more efficient economic organizations, the software must be built first. We are well beyond the point where "spontaneous order" will provide the solutions that are necessary. We must actively define our future organizations through the development of People, Ideas & Objects software for the future of the oil and gas industry. If we do not address these points, then we will be relegated to the status quo, at best, or barbarianism from manual systems.
Posted by Paul Cox at 12:01 AM 0 comments
Labels: Call to action, Change, Economics
The Christmas tradition of this blog is to post a pertinent writing of my favorite author Ralph Waldo Emerson. This years contribution is entitled Man the Reformer and was a lecture to the Mechanics Apprentices Library Association in Boston on January 25, 1841. This will be the last post of 2008 and I will return to writing on January 5, 2009. Merry Christmas to all and a happy New Year.
Mr. President, and Gentlemen,
I wish to offer to your consideration some thoughts on the particular and general relations of man as a reformer. I shall assume that the aim of each young man in this association is the very highest that belongs to a rational mind. Let it be granted, that our life, as we lead it, is common and mean; that some of those offices and functions for which we were mainly created are grown so rare in society, that the memory of them is only kept alive in old books and in dim traditions; that prophets and poets, that beautiful and perfect men, we are not now, no, nor have even seen such; that some sources of human instruction are almost unnamed and unknown among us; that the community in which we live will hardly bear to be told that every man should be open to ecstasy or a divine illumination, and his daily walk elevated by intercourse with the spiritual world. Grant all this, as we must, yet I suppose none of my auditors will deny that we ought to seek to establish ourselves in such disciplines and courses as will deserve that guidance and clearer communication with the spiritual nature. And further, I will not dissemble my hope, that each person whom I address has felt his own call to cast aside all evil customs, timidities, and limitations, and to be in his place a free and helpful man, a reformer, a benefactor, not content to slip along through the world like a footman or a spy, escaping by his nimbleness and apologies as many knocks as he can, but a brave and upright man, who must find or cut a straight road to everything excellent in the earth, and not only go honorably himself, but make it easier for all who follow him, to go in honor and with benefit.
In the history of the world the doctrine of Reform had never such scope as at the present hour. Lutherans, Hernhutters, Jesuits, Monks, Quakers, Knox, Wesley, Swedenborg, Bentham, in their accusations of society, all respected something, -- church or state, literature or history, domestic usages, the market town, the dinner table, coined money. But now all these and all things else hear the trumpet, and must rush to judgment, -- Christianity, the laws, commerce, schools, the farm, the laboratory; and not a kingdom, town, statute, rite, calling, man, or woman, but is threatened by the new spirit.
What if some of the objections whereby our institutions are assailed are extreme and speculative, and the reformers tend to idealism; that only shows the extravagance of the abuses which have driven the mind into the opposite extreme. It is when your facts and persons grow unreal and fantastic by too much falsehood, that the scholar flies for refuge to the world of ideas, and aims to recruit and replenish nature from that source. Let ideas establish their legitimate sway again in society, let life be fair and poetic, and the scholars will gladly be lovers, citizens, and philanthropists.
It will afford no security from the new ideas, that the old nations, the laws of centuries, the property and institutions of a hundred cities, are built on other foundations. The demon of reform has a secret door into the heart of every lawmaker, of every inhabitant of every city. The fact, that a new thought and hope have dawned in your breast, should apprize you that in the same hour a new light broke in upon a thousand private hearts. That secret which you would fain keep, -- as soon as you go abroad, lo! there is one standing on the doorstep, to tell you the same. There is not the most bronzed and sharpened money-catcher, who does not, to your consternation, almost, quail and shake the moment he hears a question prompted by the new ideas. We thought he had some semblance of ground to stand upon, that such as he at least would die hard; but he trembles and flees. Then the scholar says, `Cities and coaches shall never impose on me again; for, behold every solitary dream of mine is rushing to fulfilment. That fancy I had, and hesitated to utter because you would laugh, -- the broker, the attorney, the market-man are saying the same thing. Had I waited a day longer to speak, I had been too late. Behold, State Street thinks, and Wall Street doubts, and begins to prophesy!'
It cannot be wondered at, that this general inquest into abuses should arise in the bosom of society, when one considers the practical impediments that stand in the way of virtuous young men. The young man, on entering life, finds the way to lucrative employments blocked with abuses. The ways of trade are grown selfish to the borders of theft, and supple to the borders (if not beyond the borders) of fraud. The employments of commerce are not intrinsically unfit for a man, or less genial to his faculties, but these are now in their general course so vitiated by derelictions and abuses at which all connive, that it requires more vigor and resources than can be expected of every young man, to right himself in them; he is lost in them; he cannot move hand or foot in them. Has he genius and virtue? the less does he find them fit for him to grow in, and if he would thrive in them, he must sacrifice all the brilliant dreams of boyhood and youth as dreams; he must forget the prayers of his childhood; and must take on him the harness of routine and obsequiousness. If not so minded, nothing is left him but to begin the world anew, as he does who puts the spade into the ground for food. We are all implicated, of course, in this charge; it is only necessary to ask a few questions as to the progress of the articles of commerce from the fields where they grew, to our houses, to become aware that we eat and drink and wear perjury and fraud in a hundred commodities. How many articles of daily consumption are furnished us from the West Indies; yet it is said, that, in the Spanish islands, the venality of the officers of the government has passed into usage, and that no article passes into our ships which has not been fraudulently cheapened. In the Spanish islands, every agent or factor of the Americans, unless he be a consul, has taken oath that he is a Catholic, or has caused a priest to make that declaration for him. The abolitionist has shown us our dreadful debt to the southern negro. In the island of Cuba, in addition to the ordinary abominations of slavery, it appears, only men are bought for the plantations, and one dies in ten every year, of these miserable bachelors, to yield us sugar. I leave for those who have the knowledge the part of sifting the oaths of our custom-houses; I will not inquire into the oppression of the sailors; I will not pry into the usages of our retail trade. I content myself with the fact, that the general system of our trade, (apart from the blacker traits, which, I hope, are exceptions denounced and unshared by all reputable men,) is a system of selfishness; is not dictated by the high sentiments of human nature; is not measured by the exact law of reciprocity; much less by the sentiments of love and heroism, but is a system of distrust, of concealment, of superior keenness, not of giving but of taking advantage. It is not that which a man delights to unlock to a noble friend; which he meditates on with joy and self-approval in his hour of love and aspiration; but rather what he then puts out of sight, only showing the brilliant result, and atoning for the manner of acquiring, by the manner of expending it. I do not charge the merchant or the manufacturer. The sins of our trade belong to no class, to no individual. One plucks, one distributes, one eats. Every body partakes, every body confesses, --with cap and knee volunteers his confession, yet none feels himself accountable. He did not create the abuse; he cannot alter it. What is he? an obscure private person who must get his bread. That is the vice, -- that no one feels himself called to act for man, but only as a fraction of man. It happens therefore that all such ingenuous souls as feel within themselves the irrepressible strivings of a noble aim, who by the law of their nature must act simply, find these ways of trade unfit for them, and they come forth from it. Such cases are becoming more numerous every year.
But by coming out of trade you have not cleared yourself. The trail of the serpent reaches into all the lucrative professions and practices of man. Each has its own wrongs. Each finds a tender and very intelligent conscience a disqualification for success. Each requires of the practitioner a certain shutting of the eyes, a certain dapperness and compliance, an acceptance of customs, a sequestration from the sentiments of generosity and love, a compromise of private opinion and lofty integrity. Nay, the evil custom reaches into the whole institution of property, until our laws which establish and protect it, seem not to be the issue of love and reason, but of selfishness. Suppose a man is so unhappy as to be born a saint, with keen perceptions, but with the conscience and love of an angel, and he is to get his living in the world; he finds himself excluded from all lucrative works; he has no farm, and he cannot get one; for, to earn money enough to buy one, requires a sort of concentration toward money, which is the selling himself for a number of years, and to him the present hour is as sacred and inviolable as any future hour. Of course, whilst another man has no land, my title to mine, your title to yours, is at once vitiated. Inextricable seem to be the twinings and tendrils of this evil, and we all involve ourselves in it the deeper by forming connections, by wives and children, by benefits and debts.
Considerations of this kind have turned the attention of many philanthropic and intelligent persons to the claims of manual labor, as a part of the education of every young man. If the accumulated wealth of the past generations is thus tainted, -- no matter how much of it is offered to us, -- we must begin to consider if it were not the nobler part to renounce it, and to put ourselves into primary relations with the soil and nature, and abstaining from whatever is dishonest and unclean, to take each of us bravely his part, with his own hands, in the manual labor of the world.
But it is said, `What! will you give up the immense advantages reaped from the division of labor, and set every man to make his own shoes, bureau, knife, wagon, sails, and needle? This would be to put men back into barbarism by their own act.' I see no instant prospect of a virtuous revolution; yet I confess, I should not be pained at a change which threatened a loss of some of the luxuries or conveniences of society, if it proceeded from a preference of the agricultural life out of the belief, that our primary duties as men could be better discharged in that calling. Who could regret to see a high conscience and a purer taste exercising a sensible effect on young men in their choice of occupation, and thinning the ranks of competition in the labors of commerce, of law, and of state? It is easy to see that the inconvenience would last but a short time. This would be great action, which always opens the eyes of men. When many persons shall have done this, when the majority shall admit the necessity of reform in all these institutions, their abuses will be redressed, and the way will be open again to the advantages which arise from the division of labor, and a man may select the fittest employment for his peculiar talent again, without compromise.
But quite apart from the emphasis which the times give to the doctrine, that the manual labor of society ought to be shared among all the members, there are reasons proper to every individual, why he should not be deprived of it. The use of manual labor is one which never grows obsolete, and which is inapplicable to no person. A man should have a farm or a mechanical craft for his culture. We must have a basis for our higher accomplishments, our delicate entertainments of poetry and philosophy, in the work of our hands. We must have an antagonism in the tough world for all the variety of our spiritual faculties, or they will not be born. Manual labor is the study of the external world. The advantage of riches remains with him who procured them, not with the heir. When I go into my garden with a spade, and dig a bed, I feel such an exhilaration and health, that I discover that I have been defrauding myself all this time in letting others do for me what I should have done with my own hands. But not only health, but education is in the work. Is it possible that I who get indefinite quantities of sugar, hominy, cotton, buckets, crockery ware, and letter paper, by simply signing my name once in three months to a cheque in favor of John Smith and Co. traders, get the fair share of exercise to my faculties by that act, which nature intended for me in making all these far-fetched matters important to my comfort? It is Smith himself, and his carriers, and dealers, and manufacturers, it is the sailor, the hidedrogher, the butcher, the negro, the hunter, and the planter, who have intercepted the sugar of the sugar, and the cotton of the cotton. They have got the education, I only the commodity. This were all very well if I were necessarily absent, being detained by work of my own, like theirs, work of the same faculties; then should I be sure of my hands and feet, but now I feel some shame before my wood-chopper, my ploughman, and my cook, for they have some sort of self-sufficiency, they can contrive without my aid to bring the day and year round, but I depend on them, and have not earned by use a right to my arms and feet.
Consider further the difference between the first and second owner of property. Every species of property is preyed on by its own enemies, as iron by rust; timber by rot; cloth by moths; provisions by mould, putridity, or vermin; money by thieves; an orchard by insects; a planted field by weeds and the inroad of cattle; a stock of cattle by hunger; a road by rain and frost; a bridge by freshets. And whoever takes any of these things into his possession, takes the charge of defending them from this troop of enemies, or of keeping them in repair. A man who supplies his own want, who builds a raft or a boat to go a fishing, finds it easy to caulk it, or put in a thole-pin, or mend the rudder. What he gets only as fast as he wants for his own ends, does not embarrass him, or take away his sleep with looking after. But when he comes to give all the goods he has year after year collected, in one estate to his son, house, orchard, ploughed land, cattle, bridges, hardware, wooden-ware, carpets, cloths, provisions, books, money, and cannot give him the skill and experience which made or collected these, and the method and place they have in his own life, the son finds his hands full, -- not to use these things, -- but to look after them and defend them from their natural enemies. To him they are not means, but masters. Their enemies will not remit; rust, mould, vermin, rain, sun, freshet, fire, all seize their own, fill him with vexation, and he is converted from the owner into a watchman or a watch-dog to this magazine of old and new chattels. What a change! Instead of the masterly good humor, and sense of power, and fertility of resource in himself; instead of those strong and learned hands, those piercing and learned eyes, that supple body, and that mighty and prevailing heart, which the father had, whom nature loved and feared, whom snow and rain, water and land, beast and fish seemed all to know and to serve, we have now a puny, protected person, guarded by walls and curtains, stoves and down beds, coaches, and men-servants and women-servants from the earth and the sky, and who, bred to depend on all these, is made anxious by all that endangers those possessions, and is forced to spend so much time in guarding them, that he has quite lost sight of their original use, namely, to help him to his ends, -- to the prosecution of his love; to the helping of his friend, to the worship of his God, to the enlargement of his knowledge, to the serving of his country, to the indulgence of his sentiment, and he is now what is called a rich man, -- the menial and runner of his riches.
Hence it happens that the whole interest of history lies in the fortunes of the poor. Knowledge, Virtue, Power are the victories of man over his necessities, his march to the dominion of the world. Every man ought to have this opportunity to conquer the world for himself. Only such persons interest us, Spartans, Romans, Saracens, English, Americans, who have stood in the jaws of need, and have by their own wit and might extricated themselves, and made man victorious.
I do not wish to overstate this doctrine of labor, or insist that every man should be a farmer, any more than that every man should be a lexicographer. In general, one may say, that the husbandman's is the oldest, and most universal profession, and that where a man does not yet discover in himself any fitness for one work more than another, this may be preferred. But the doctrine of the Farm is merely this, that every man ought to stand in primary relations with the work of the world, ought to do it himself, and not to suffer the accident of his having a purse in his pocket, or his having been bred to some dishonorable and injurious craft, to sever him from those duties; and for this reason, that labor is God's education; that he only is a sincere learner, he only can become a master, who learns the secrets of labor, and who by real cunning extorts from nature its sceptre.
Neither would I shut my ears to the plea of the learned professions, of the poet, the priest, the lawgiver, and men of study generally; namely, that in the experience of all men of that class, the amount of manual labor which is necessary to the maintenance of a family, indisposes and disqualifies for intellectual exertion. I know, it often, perhaps usually, happens, that where there is a fine organization apt for poetry and philosophy, that individual finds himself compelled to wait on his thoughts, to waste several days that he may enhance and glorify one; and is better taught by a moderate and dainty exercise, such as rambling in the fields, rowing, skating, hunting, than by the downright drudgery of the farmer and the smith. I would not quite forget the venerable counsel of the Egyptian mysteries, which declared that "there were two pairs of eyes in man, and it is requisite that the pair which are beneath should be closed, when the pair that are above them perceive, and that when the pair above are closed, those which are beneath should be opened." Yet I will suggest that no separation from labor can be without some loss of power and of truth to the seer himself; that, I doubt not, the faults and vices of our literature and philosophy, their too great fineness, effeminacy, and melancholy, are attributable to the enervated and sickly habits of the literary class. Better that the book should not be quite so good, and the bookmaker abler and better, and not himself often a ludicrous contrast to all that he has written.
But granting that for ends so sacred and dear, some relaxation must be had, I think, that if a man find in himself any strong bias to poetry, to art, to the contemplative life, drawing him to these things with a devotion incompatible with good husbandry, that man ought to reckon early with himself, and, respecting the compensations of the Universe, ought to ransom himself from the duties of economy, by a certain rigor and privation in his habits. For privileges so rare and grand, let him not stint to pay a great tax. Let him be a caenobite, a pauper, and if need be, celibate also. Let him learn to eat his meals standing, and to relish the taste of fair water and black bread. He may leave to others the costly conveniences of housekeeping, and large hospitality, and the possession of works of art. Let him feel that genius is a hospitality, and that he who can create works of art needs not collect them. He must live in a chamber, and postpone his self-indulgence, forewarned and forearmed against that frequent misfortune of men of genius, -- the taste for luxury. This is the tragedy of genius, -- attempting to drive along the ecliptic with one horse of the heavens and one horse of the earth, there is only discord and ruin and downfall to chariot and charioteer.
The duty that every man should assume his own vows, should call the institutions of society to account, and examine their fitness to him, gains in emphasis, if we look at our modes of living. Is our housekeeping sacred and honorable? Does it raise and inspire us, or does it cripple us instead? I ought to be armed by every part and function of my household, by all my social function, by my economy, by my feasting, by my voting, by my traffic. Yet I am almost no party to any of these things. Custom does it for me, gives me no power therefrom, and runs me in debt to boot. We spend our incomes for paint and paper, for a hundred trifles, I know not what, and not for the things of a man. Our expense is almost all for conformity. It is for cake that we run in debt; 't is not the intellect, not the heart, not beauty, not worship, that costs so much. Why needs any man be rich? Why must he have horses, fine garments, handsome apartments, access to public houses, and places of amusement? Only for want of thought. Give his mind a new image, and he flees into a solitary garden or garret to enjoy it, and is richer with that dream, than the fee of a county could make him. But we are first thoughtless, and then find that we are moneyless. We are first sensual, and then must be rich. We dare not trust our wit for making our house pleasant to our friend, and so we buy ice-creams. He is accustomed to carpets, and we have not sufficient character to put floor-cloths out of his mind whilst he stays in the house, and so we pile the floor with carpets. Let the house rather be a temple of the Furies of Lacedaemon, formidable and holy to all, which none but a Spartan may enter or so much as behold. As soon as there is faith, as soon as there is society, comfits and cushions will be left to slaves. Expense will be inventive and heroic. We shall eat hard and lie hard, we shall dwell like the ancient Romans in narrow tenements, whilst our public edifices, like theirs, will be worthy for their proportion of the landscape in which we set them, for conversation, for art, for music, for worship. We shall be rich to great purposes; poor only for selfish ones.
Now what help for these evils? How can the man who has learned but one art, procure all the conveniences of life honestly? Shall we say all we think? -- Perhaps with his own hands. Suppose he collects or makes them ill; -- yet he has learned their lesson. If he cannot do that. -- Then perhaps he can go without. Immense wisdom and riches are in that. It is better to go without, than to have them at too great a cost. Let us learn the meaning of economy. Economy is a high, humane office, a sacrament, when its aim is grand; when it is the prudence of simple tastes, when it is practised for freedom, or love, or devotion. Much of the economy which we see in houses, is of a base origin, and is best kept out of sight. Parched corn eaten to-day that I may have roast fowl to my dinner on Sunday, is a baseness; but parched corn and a house with one apartment, that I may be free of all perturbations, that I may be serene and docile to what the mind shall speak, and girt and road-ready for the lowest mission of knowledge or goodwill, is frugality for gods and heroes.
Can we not learn the lesson of self-help? Society is full of infirm people, who incessantly summon others to serve them. They contrive everywhere to exhaust for their single comfort the entire means and appliances of that luxury to which our invention has yet attained. Sofas, ottomans, stoves, wine, game-fowl, spices, perfumes, rides, the theatre, entertainments, -- all these they want, they need, and whatever can be suggested more than these, they crave also, as if it was the bread which should keep them from starving; and if they miss any one, they represent themselves as the most wronged and most wretched persons on earth. One must have been born and bred with them to know how to prepare a meal for their learned stomach. Meantime, they never bestir themselves to serve another person; not they! they have a great deal more to do for themselves than they can possibly perform, nor do they once perceive the cruel joke of their lives, but the more odious they grow, the sharper is the tone of their complaining and craving. Can anything be so elegant as to have few wants and to serve them one's self, so as to have somewhat left to give, instead of being always prompt to grab? It is more elegant to answer one's own needs, than to be richly served; inelegant perhaps it may look to-day, and to a few, but it is an elegance forever and to all.
I do not wish to be absurd and pedantic in reform. I do not wish to push my criticism on the state of things around me to that extravagant mark, that shall compel me to suicide, or to an absolute isolation from the advantages of civil society. If we suddenly plant our foot, and say, -- I will neither eat nor drink nor wear nor touch any food or fabric which I do not know to be innocent, or deal with any person whose whole manner of life is not clear and rational, we shall stand still. Whose is so? Not mine; not thine; not his. But I think we must clear ourselves each one by the interrogation, whether we have earned our bread to-day by the hearty contribution of our energies to the common benefit? and we must not cease to _tend_ to the correction of these flagrant wrongs, by laying one stone aright every day.
But the idea which now begins to agitate society has a wider scope than our daily employments, our households, and the institutions of property. We are to revise the whole of our social structure, the state, the school, religion, marriage, trade, science, and explore their foundations in our own nature; we are to see that the world not only fitted the former men, but fits us, and to clear ourselves of every usage which has not its roots in our own mind. What is a man born for but to be a Reformer, a Remaker of what man has made; a renouncer of lies; a restorer of truth and good, imitating that great Nature which embosoms us all, and which sleeps no moment on an old past, but every hour repairs herself, yielding us every morning a new day, and with every pulsation a new life? Let him renounce everything which is not true to him, and put all his practices back on their first thoughts, and do nothing for which he has not the whole world for his reason. If there are inconveniences, and what is called ruin in the way, because we have so enervated and maimed ourselves, yet it would be like dying of perfumes to sink in the effort to reattach the deeds of every day to the holy and mysterious recesses of life.
The power, which is at once spring and regulator in all efforts of reform, is the conviction that there is an infinite worthiness in man which will appear at the call of worth, and that all particular reforms are the removing of some impediment. Is it not the highest duty that man should be honored in us? I ought not to allow any man, because he has broad lands, to feel that he is rich in my presence. I ought to make him feel that I can do without his riches, that I cannot be bought, -- neither by comfort, neither by pride, -- and though I be utterly penniless, and receiving bread from him, that he is the poor man beside me. And if, at the same time, a woman or a child discovers a sentiment of piety, or a juster way of thinking than mine, I ought to confess it by my respect and obedience, though it go to alter my whole way of life.
The Americans have many virtues, but they have not Faith and Hope. I know no two words whose meaning is more lost sight of. We use these words as if they were as obsolete as Selah and Amen. And yet they have the broadest meaning, and the most cogent application to Boston in 1841. The Americans have no faith. They rely on the power of a dollar; they are deaf to a sentiment. They think you may talk the north wind down as easily as raise society; and no class more faithless than the scholars or intellectual men. Now if I talk with a sincere wise man, and my friend, with a poet, with a conscientious youth who is still under the dominion of his own wild thoughts, and not yet harnessed in the team of society to drag with us all in the ruts of custom, I see at once how paltry is all this generation of unbelievers, and what a house of cards their institutions are, and I see what one brave man, what one great thought executed might effect. I see that the reason of the distrust of the practical man in all theory, is his inability to perceive the means whereby we work. Look, he says, at the tools with which this world of yours is to be built. As we cannot make a planet, with atmosphere, rivers, and forests, by means of the best carpenters' or engineers' tools, with chemist's laboratory and smith's forge to boot, -- so neither can we ever construct that heavenly society you prate of, out of foolish, sick, selfish men and women, such as we know them to be. But the believer not only beholds his heaven to be possible, but already to begin to exist, -- not by the men or materials the statesman uses, but by men transfigured and raised above themselves by the power of principles. To principles something else is possible that transcends all the power of expedients.
Every great and commanding moment in the annals of the world is the triumph of some enthusiasm. The victories of the Arabs after Mahomet, who, in a few years, from a small and mean beginning, established a larger empire than that of Rome, is an example. They did they knew not what. The naked Derar, horsed on an idea, was found an overmatch for a troop of Roman cavalry. The women fought like men, and conquered the Roman men. They were miserably equipped, miserably fed. They were Temperance troops. There was neither brandy nor flesh needed to feed them. They conquered Asia, and Africa, and Spain, on barley. The Caliph Omar's walking stick struck more terror into those who saw it, than another man's sword. His diet was barley bread; his sauce was salt; and oftentimes by way of abstinence he ate his bread without salt. His drink was water. His palace was built of mud; and when he left Medina to go to the conquest of Jerusalem, he rode on a red camel, with a wooden platter hanging at his saddle, with a bottle of water and two sacks, one holding barley, and the other dried fruits.
But there will dawn ere long on our politics, on our modes of living, a nobler morning than that Arabian faith, in the sentiment of love. This is the one remedy for all ills, the panacea of nature. We must be lovers, and at once the impossible becomes possible. Our age and history, for these thousand years, has not been the history of kindness, but of selfishness. Our distrust is very expensive. The money we spend for courts and prisons is very ill laid out. We make, by distrust, the thief, and burglar, and incendiary, and by our court and jail we keep him so. An acceptance of the sentiment of love throughout Christendom for a season, would bring the felon and the outcast to our side in tears, with the devotion of his faculties to our service. See this wide society of laboring men and women. We allow ourselves to be served by them, we live apart from them, and meet them without a salute in the streets. We do not greet their talents, nor rejoice in their good fortune, nor foster their hopes, nor in the assembly of the people vote for what is dear to them. Thus we enact the part of the selfish noble and king from the foundation of the world. See, this tree always bears one fruit. In every household, the peace of a pair is poisoned by the malice, slyness, indolence, and alienation of domestics. Let any two matrons meet, and observe how soon their conversation turns on the troubles from their "_help_," as our phrase is. In every knot of laborers, the rich man does not feel himself among his friends, -- and at the polls he finds them arrayed in a mass in distinct opposition to him. We complain that the politics of masses of the people are controlled by designing men, and led in opposition to manifest justice and the common weal, and to their own interest. But the people do not wish to be represented or ruled by the ignorant and base. They only vote for these, because they were asked with the voice and semblance of kindness. They will not vote for them long. They inevitably prefer wit and probity. To use an Egyptian metaphor, it is not their will for any long time "to raise the nails of wild beasts, and to depress the heads of the sacred birds." Let our affection flow out to our fellows; it would operate in a day the greatest of all revolutions. It is better to work on institutions by the sun than by the wind. The state must consider the poor man, and all voices must speak for him. Every child that is born must have a just chance for his bread. Let the amelioration in our laws of property proceed from the concession of the rich, not from the grasping of the poor. Let us begin by habitual imparting. Let us understand that the equitable rule is, that no one should take more than his share, let him be ever so rich. Let me feel that I am to be a lover. I am to see to it that the world is the better for me, and to find my reward in the act. Love would put a new face on this weary old world in which we dwell as pagans and enemies too long, and it would warm the heart to see how fast the vain diplomacy of statesmen, the impotence of armies, and navies, and lines of defence, would be superseded by this unarmed child. Love will creep where it cannot go, will accomplish that by imperceptible methods, -- being its own lever, fulcrum, and power, -- which force could never achieve. Have you not seen in the woods, in a late autumn morning, a poor fungus or mushroom, -- a plant without any solidity, nay, that seemed nothing but a soft mush or jelly, -- by its constant, total, and inconceivably gentle pushing, manage to break its way up through the frosty ground, and actually to lift a hard crust on its head? It is the symbol of the power of kindness. The virtue of this principle in human society in application to great interests is obsolete and forgotten. Once or twice in history it has been tried in illustrious instances, with signal success. This great, overgrown, dead Christendom of ours still keeps alive at least the name of a lover of mankind. But one day all men will be lovers; and every calamity will be dissolved in the universal sunshine.
Will you suffer me to add one trait more to this portrait of man the reformer? The mediator between the spiritual and the actual world should have a great prospective prudence. An Arabian poet describes his hero by saying,
"Sunshine was he
In the winter day;
And in the midsummer
Coolness and shade."
He who would help himself and others, should not be a subject of irregular and interrupted impulses of virtue, but a continent, persisting, immovable person, -- such as we have seen a few scattered up and down in time for the blessing of the world; men who have in the gravity of their nature a quality which answers to the fly-wheel in a mill, which distributes the motion equably over all the wheels, and hinders it from falling unequally and suddenly in destructive shocks. It is better that joy should be spread over all the day in the form of strength, than that it should be concentrated into ecstasies, full of danger and followed by reactions. There is a sublime prudence, which is the very highest that we know of man, which, believing in a vast future, -- sure of more to come than is yet seen, -- postpones always the present hour to the whole life; postpones talent to genius, and special results to character. As the merchant gladly takes money from his income to add to his capital, so is the great man very willing to lose particular powers and talents, so that he gain in the elevation of his life. The opening of the spiritual senses disposes men ever to greater sacrifices, to leave their signal talents, their best means and skill of procuring a present success, their power and their fame, -- to cast all things behind, in the insatiable thirst for divine communications. A purer fame, a greater power rewards the sacrifice. It is the conversion of our harvest into seed. As the farmer casts into the ground the finest ears of his grain, the time will come when we too shall hold nothing back, but shall eagerly convert more than we now possess into means and powers, when we shall be willing to sow the sun and the moon for seeds.
Technorati Tags: People's Emerson Tradition
Posted by Paul Cox at 12:03 AM 0 comments
Providing an analysis of previous recessions and depressions, McKinsey gives clarity to the economic situation we find ourselves in. The public discussion is beginning to recognize that this is both a financial crisis and a recession. Most would agree that this environment is more toxic then previous events.
From a company standpoint, the critical issue is the impact such shocks and subsequent downturns can have on the availability of credit—and the impact of a credit shortage on the real economy and on consumer and corporate confidence. The downturn after the S&L crisis of the 1980s and ’90s, when bank write-offs equaled some 4 percent of GDP, lasted about two years. GDP ended up about 4 to 5 percent lower than it would have been given the pre-crisis trend line. After the bursting of Japan’s asset bubble, the country’s economy grew by less than half a percent a year in real terms for a decade, and GDP ended up around 18 percent lower than it would have given its pre-crisis trend line. We estimate that the present credit crisis will cut real GDP by around 3 to 7 percent from trend growth. If the US economy were to follow the same path it did in the more severe crises, the total lost GDP could be two to three times greater than that estimate. pp. 1 - 2Up to a 21% decline in U.S. GDP is a serious hit. A hit that would have to be ranked in the depression category. What is unique about a depression is the length of time that the declines occur and the lost opportunities of the economy during these protracted periods. Glossing over the problem, as the U.S. monetary and fiscal policies are attempting, is the wrong way to make the time shorten. Focusing on the strengths, job retraining and letting the social system kick in for those effected is where they should be focusing their efforts in my opinion. You have Toyota, Honda and Ford that are going to make it in the long term, lets leave it to them to work out the problems. A better fiscal stimulus may be tax cuts that provide the consumer with additional cash to use in their own transitions.
But the fallout from the past century’s two worst crises did considerably more damage. In the countries hardest hit by the 1990s’ Asian financial crisis—Indonesia, Malaysia, the Philippines, South Korea, and Thailand—GDP shrank by an average of 8 percent in 1998 in local-currency terms. Since their currencies halved in value, on average, in US dollar terms the damage was catastrophic—bankrupting many companies and causing widespread social unrest. And during the Great Depression, from 1929 to 1933, 28 percent of real GDP was lost. p. 2Organizational changes would reduce the impact of these declines and enable the economies to grow well beyond what the current bureaucracies have established as possible. Acceptance of the scope of the difficulties that we are in seems to be the major impediment to thinking constructively as to our collective future. The pain is here, lets not wallow in it.
Equity markets are the most visible and dramatic indicators as crises unfold. At the end of October 2008, the S&P 500 index had fallen by 46 percent from its peak a year before (October 9, 2007, to October 27, 2008). By late November 2008, the US equity market had given up almost all of its gains since the 2001–02 dot-com bust. Although nobody knows if the market has reached bottom, the fall so far isn’t unusual by historical standards. Japan’s Nikkei 225 fell by 48 percent from peak to trough (December 29, 1989, to October 1, 1990) during the banking crisis, though the market has subsequently fallen still further; at the end of October 2008, it retained less than 20 percent of the peak value reached in 1999. During the Asian financial crisis, the equity markets of Indonesia, South Korea, and Thailand fell by 65, 72, and 85 percent, respectively, in local-currency terms. In the United States, the S&P 500 index fell by 49 percent from March 24, 2000, to October 9, 2002, after the tech bubble burst. pp. 2 - 3The Japanese stock market remains at 20% of what it was in December 29, 1989! Lets not go down that road, where people choose to ignore the problems they are in, the cost is too high. Now with the aging population of Japan becoming a significant issue, their inability to address the scope of their problems in the early 1990's threatens to remove their economy from the global system. All as a result of high real estate valuations.
Since the peak, housing prices have fallen by 18 percent, as measured by the Case–Shiller housing index, whose futures imply a further fall of 19 percent from the peak. Losses in the housing and mortgage markets, when realized, could considerably exceed those in the stock market as of early December 2008. p. 4
We do not yet know how the current crisis will evolve. The confidence of consumers, corporations, and investors—a key factor—cannot be forecast. Nor can government policy. Yet research shows that in past recessions, companies pursuing a purely defensive strategy fared less well than their more active counterparts. As the economy enters what will probably be a difficult downturn, companies should prepare to seize their opportunities. p. 5And for oil and gas, they should turn to this community to begin the process of building the software necessary to define and support the innovative oil and gas producer. A software application that is based on using the Joint Operating Committee as the key organizational construct of the industry. One that aligns the Joint Operating Committees communication, legal, financial, cultural, and operational decision making frameworks with the bureaucracies sole purpose, compliance and governance. A software application that eliminates the bureaucracy and replaces it with the Compliance & Governance Modules Military Command & Control metaphor. With this alignment the conflict and contradictions between the JOC and the bureaucracy cease. The Military Command & Control Metaphor governance methods of the People, Ideas & Objects Draft Specification provides a sound vision of the possibilities of what this community could build and support in terms of a more innovative oil and gas producer.
Posted by Paul Cox at 12:01 AM 0 comments
Labels: Economics, McKinsey, Military Command, Perez
This article was highlighted in McKinsey's Global Institute. Although it is part of McKinsey's "The Crisis: A new era for management" and would be included in our review of those 19 standout papers. This article is co-authored by Diana Farrell, Director of the Global Institute and one of my favorite authors. This document, of all the McKinsey documents, will stand as a critical part of any oil and gas workers toolbox. It is an absolute must read and one that is on target in terms of what we should be doing in these economic times. (Click on the title of this entry.)
These times are different. It is clear that this is different when we can point to the large number of events that have not occurred before. For example, when was the last time Chrysler shut down all of its plants in North America. Although for only 30 days, I would ask how do you restart a car company? Or, the long list of retail operations that soon will be shuttering stores with no 30 day deadline.
I want to simply highlight the following four quotations that relate specifically to this project for oil and gas, and ask you to please join me here to start building the software that is necessary for rebuilding the oil and gas industry.
Most companies acted immediately in the autumn of 2008 when credit markets locked up: they cut discretionary spending, slowed investment, managed cash flows aggressively, laid off employees, shored up financing sources, and built capital by cutting dividends, raising equity, and so forth. While prudent, these actions probably won’t produce the short-term earnings that analysts expect, at least for most companies. In fact, it’s time they abandoned the idea that they can reliably deliver predictable earnings. Quarterly performance is no longer the objective, which must now be to ensure the long-term survival and health of the enterprise.Professor Carlota Perez says the only way that we can move to a higher performing economy is by changing the basis of the economy. We can't do that on a prospective basis, only by keeping the preceding ways, the bureaucracy, until the point to where it collapses upon itself.
McKinsey is the number one consulting firm in the world. It has been for many years and have an established pedigree that others should aspire to. This next quotation should be taken with that in mind and the opportunity you have to join People, Ideas & Objects .More resilient
A crisis is a chance to break ingrained structures and behaviors that sap the productivity and effectiveness of many organizations. Such moves aren’t a short-term crisis response—they often take a year or more to pay dividends—but are valuable in any scenario and could help a company survive if hard times persist. Although employees may dislike this approach, most will understand why management aims to make the organization more effective.
This may, for example, be the time to destroy the vertical organizational structures, retrofitted with ad hoc and matrix overlays, that encumber companies large and small. Such structures can burden professionals with several competing bosses. Internecine battles and unclear decisions are common. Turf wars between product, sales, and geographic managers kill promising projects. Searches for information aren’t productive, and countless hours are wasted on pointless e-mails, telephone calls, and meetings.There is a clear vision of how an oil and gas producer could be more effective using the Joint Operating Committee. That vision is reflected in the Draft Specification.
Experience shows that streamlining an organization to define roles and the way those who hold them collaborate can greatly improve its effectiveness and decision making.