IT’S TIME TO BUILD

Vern Harnish pushed out this motivational article by American tech pioneer and venture capitalist Marc Andreessen over the weekend.  I’ve copied it below because it helped me to crystalize the way I feel about the future.  The COVID-19 pandemic might have sucker-punched us but it’s given us a once-in-a-lifetime opportunity to alter our course towards a better future.  Along with the tragedy it is bringing, the crisis is making it painfully obvious where we have let our guard down.  When we dust ourselves off, we will have to choose how we’re going to act, what we’re going to fix, recognize what we cherish and need to improve. 

Marc argues that for too long we’ve let other people do the hard work for us and that it’s time for us to roll up our sleeves and get busy building the future that we want ourselves. I’m optimistic that we can rally around a shared vision and take the right path.

Take 5 minutes to read Marc’s essay:

 

Every Western institution was unprepared for the coronavirus pandemic, despite many prior warnings. This monumental failure of institutional effectiveness will reverberate for the rest of the decade, but it’s not too early to ask why, and what we need to do about it.

Many of us would like to pin the cause on one political party or another, on one government or another. But the harsh reality is that it all failed — no Western country, or state, or city was prepared — and despite hard work and often extraordinary sacrifice by many people within these institutions. So the problem runs deeper than your favorite political opponent or your home nation.

Part of the problem is clearly foresight, a failure of imagination. But the other part of the problem is what we didn’t *do* in advance, and what we’re failing to do now. And that is a failure of action, and specifically our widespread inability to *build*.

We see this today with the things we urgently need but don’t have. We don’t have enough coronavirus tests, or test materials — including, amazingly, cotton swabs and common reagents. We don’t have enough ventilators, negative pressure rooms, and ICU beds. And we don’t have enough surgical masks, eye shields, and medical gowns — as I write this, New York City has put out a desperate call for rain ponchos to be used as medical gowns. Rain ponchos! In 2020! In America!

We also don’t have therapies or a vaccine — despite, again, years of advance warning about bat-borne coronaviruses. Our scientists will hopefully invent therapies and a vaccine, but then we may not have the manufacturing factories required to scale their production. And even then, we’ll see if we can deploy therapies or a vaccine fast enough to matter — it took scientists 5 years to get regulatory testing approval for the new Ebola vaccine after that scourge’s 2014 outbreak, at the cost of many lives.

In the U.S., we don’t even have the ability to get federal bailout money to the people and businesses that need it. Tens of millions of laid-off workers and their families, and many millions of small businesses, are in serious trouble *right now*, and we have no direct method to transfer them money without potentially disastrous delays. A government that collects money from all its citizens and businesses each year has never built a system to distribute money to us when it’s needed most.

Why do we not have these things? Medical equipment and financial conduits involve no rocket science whatsoever. At least therapies and vaccines are hard! Making masks and transferring money are not hard. We could have these things but we chose not to — specifically, we chose not to have the mechanisms, the factories, the systems to make these things. We chose not to *build*.

You don’t just see this smug complacency, this satisfaction with the status quo and the unwillingness to build, in the pandemic, or in healthcare generally. You see it throughout Western life, and specifically throughout American life.

You see it in housing and the physical footprint of our cities. We can’t build nearly enough housing in our cities with surging economic potential — which results in crazily skyrocketing housing prices in places like San Francisco, making it nearly impossible for regular people to move in and take the jobs of the future. We also can’t build the cities themselves anymore. When the producers of HBO’s “Westworld” wanted to portray the American city of the future, they didn’t film in Seattle or Los Angeles or Austin — they went to Singapore. We should have gleaming skyscrapers and spectacular living environments in all our best cities at levels way beyond what we have now; where are they?

You see it in education. We have top-end universities, yes, but with the capacity to teach only a microscopic percentage of the 4 million new 18-year-olds in the U.S. each year, or the 120 million new 18-year-olds in the world each year. Why not educate every 18-year-old? Isn’t that the most important thing we can possibly do? Why not build a far larger number of universities, or scale the ones we have way up? The last major innovation in K-12 education was Montessori, which traces back to the 1960s; we’ve been doing education research that’s never reached practical deployment for 50 years since; why not build a lot more great K-12 schools using everything we now know? We know one-to-one tutoring can reliably increase education outcomes by two standard deviations (the Bloom two-sigma effect); we have the internet; why haven’t we built systems to match every young learner with an older tutor to dramatically improve student success?

You see it in manufacturing. Contrary to conventional wisdom, American manufacturing output is higher than ever, but why has so much manufacturing been offshored to places with cheaper manual labor? We know how to build highly automated factories. We know the enormous number of higher paying jobs we would create to design and build and operate those factories. We know — and we’re experiencing right now! — the strategic problem of relying on offshore manufacturing of key goods. Why aren’t we building Elon Musk’s “alien dreadnoughts” — giant, gleaming, state of the art factories producing every conceivable kind of product, at the highest possible quality and lowest possible cost — all throughout our country?

You see it in transportation. Where are the supersonic aircraft? Where are the millions of delivery drones? Where are the high speed trains, the soaring monorails, the hyperloops, and yes, the flying cars?

Is the problem money? That seems hard to believe when we have the money to wage endless wars in the Middle East and repeatedly bail out incumbent banks, airlines, and carmakers. The federal government just passed a $2 trillion coronavirus rescue package in two weeks! Is the problem capitalism? I’m with Nicholas Stern when he says that capitalism is how we take care of people we don’t know — all of these fields are highly lucrative already and should be prime stomping grounds for capitalist investment, good both for the investor and the customers who are served. Is the problem technical competence? Clearly not, or we wouldn’t have the homes and skyscrapers, schools and hospitals, cars and trains, computers and smartphones, that we already have.

The problem is desire. We need to *want* these things. The problem is inertia. We need to want these things more than we want to prevent these things. The problem is regulatory capture. We need to want new companies to build these things, even if incumbents don’t like it, even if only to force the incumbents to build these things. And the problem is will. We need to build these things.

And we need to separate the imperative to build these things from ideology and politics. Both sides need to contribute to building.

The right starts out in a more natural, albeit compromised, place. The right is generally pro production, but is too often corrupted by forces that hold back market-based competition and the building of things. The right must fight hard against crony capitalism, regulatory capture, ossified oligopolies, risk-inducing offshoring, and investor-friendly buybacks in lieu of customer-friendly (and, over a longer period of time, even more investor-friendly) innovation.

It’s time for full-throated, unapologetic, uncompromised political support from the right for aggressive investment in new products, in new industries, in new factories, in new science, in big leaps forward.

The left starts out with a stronger bias toward the public sector in many of these areas. To which I say, prove the superior model! Demonstrate that the public sector can build better hospitals, better schools, better transportation, better cities, better housing. Stop trying to protect the old, the entrenched, the irrelevant; commit the public sector fully to the future. Milton Friedman once said the great public sector mistake is to judge policies and programs by their intentions rather than their results. Instead of taking that as an insult, take it as a challenge — build new things and show the results!

Show that new models of public sector healthcare can be inexpensive and effective — how about starting with the VA? When the next coronavirus comes along, blow us away! Even private universities like Harvard are lavished with public funding; why can’t 100,000 or 1 million students a year attend Harvard? Why shouldn’t regulators and taxpayers demand that Harvard build? Solve the climate crisis by building — energy experts say that all carbon-based electrical power generation on the planet could be replaced by a few thousand new zero-emission nuclear reactors, so let’s build those. Maybe we can start with 10 new reactors? Then 100? Then the rest?

In fact, I think building is how we reboot the American dream. The things we build in huge quantities, like computers and TVs, drop rapidly in price. The things we don’t, like housing, schools, and hospitals, skyrocket in price. What’s the American dream? The opportunity to have a home of your own, and a family you can provide for. We need to break the rapidly escalating price curves for housing, education, and healthcare, to make sure that every American can realize the dream, and the only way to do that is to build.

Building isn’t easy, or we’d already be doing all this. We need to demand more of our political leaders, of our CEOs, our entrepreneurs, our investors. We need to demand more of our culture, of our society. And we need to demand more from one another. We’re all necessary, and we can all contribute, to building.

Every step of the way, to everyone around us, we should be asking the question, what are you building? What are you building directly, or helping other people to build, or teaching other people to build, or taking care of people who are building? If the work you’re doing isn’t either leading to something being built or taking care of people directly, we’ve failed you, and we need to get you into a position, an occupation, a career where you can contribute to building. There are always outstanding people in even the most broken systems — we need to get all the talent we can on the biggest problems we have, and on building the answers to those problems.

I expect this essay to be the target of criticism. Here’s a modest proposal to my critics. Instead of attacking my ideas of what to build, conceive your own! What do you think we should build? There’s an excellent chance I’ll agree with you.

Our nation and our civilization were built on production, on building. Our forefathers and foremothers built roads and trains, farms and factories, then the computer, the microchip, the smartphone, and uncounted thousands of other things that we now take for granted, that are all around us, that define our lives and provide for our well-being. There is only one way to honor their legacy and to create the future we want for our own children and grandchildren, and that’s to build.

Marc Andreessen

Leading in Tough Times: Wisdom from CEO’s

After I saw the ravaged store shelves this weekend, I thought it would be a good time to get some perspective on piloting through choppy waters from local CEO members of The Entrepreneurs Organization.

Many of them started tiny businesses that grew into much more serious enterprises and unknowingly committed themselves to quarterback a lot of folks. One recurring theme they brought up is the realization that there is no escaping the obligation to lead, especially when an emergency like the current COVID-19 pandemic is raging.

Here is a summary of the sage advice I gathered speaking to some of the city’s top business brains today on how they approach a crisis:

-Stay positive. No matter how crazy things are you are still in control of a lot of moving pieces. Fight the urge to be overwhelmed and focus on the positive things you are able to achieve.

-You set the tone. The leader’s positive energy will give more comfort and strength to your team than you know. In a crisis, the leader’s every action is noticed and scrutinized. You can make the most of this.

-Get the facts. Good decisions come from good data. Take time away to read, listen, talk to colleagues so that your decisions are well informed.

-Use your powers of vision. Not everyone is born with the ability to see the future. Many entrepreneurs, however, have this gift. Use it to prepare people for what lies ahead and to set their expectations as to how you will deal with the challenges to come.

-Comfort. Listen to everyone’s concerns and validate them, even if you disagree. This lowers anxiety and lets people focus rationally on the tasks at hand, of which there will be many.

-Keep some perspective. This is not the first or the last health crisis we’ll have. It will require decisive action over a prolonged period. However, sure as the sun will rise, we will get through it intact.

Wisdom’s retirement party

I like politics, so I stayed up late to watch our youthful federal leaders deliver their post-election speeches.  There was a strange chaotic moment when, the Liberals, Conservatives, and NDP all tried to take their respective stages at exactly the same time – perhaps each hoping to drown out the others – forcing the poor CBC anchor to jump feverishly between them.  But it was the contents of their speeches that really dismayed me.

The NDP crowd burst into an animated chant of TAX THE RICH, TAX THE RICH that the leader encouraged along for two full uncomfortable minutes.  Andrew Sheer for his part went on about how his loss was really a win and he was going to beat the encroaching forces of socialism next time.  Our prime minister dished his regular pablum and seemed to think that liberal values had triumphed and been embraced by all, when in fact only 32% of our country supported him.

What was missing for me, was any recognition that the election is over and it is time to bury the partisanship for a bit and get united on governing the country.  We have ample big problems:  resource development and Alberta’s place in a new economy, housing the next generation, Indigenous reconciliation, how to pay for our cherished education and healthcare systems, getting citizens to take responsibility for the hot mess we’re making of our planet…to name a few.  But our leaders were not talking about solutions for Canada’s problems.  They were each preaching to their bases and bashing the other two thirds.

The only redeeming moments of the night were the gracious speeches from Conservative Lisa Raitt and Liberal Ralph Goodale – two seasoned and respected parliamentarians who each went down to defeat.  They both seemed to come from a more civilized planet than their respective leaders.  Godspeed.

It made me think about the changes in the construction industry that EllisDon’s Jeff Smith observed in an article recently:  our industry is becoming nastier.  I agree with Jeff.  Over the last couple of years, my company’s jobs have become more about emailing than millwork, more about building arguments than structures, more about protecting interests than getting the work done.  Of course, we all have to look out for ourselves in business, but it can’t be the only thing we do.

I fear that the old guard that has been retiring over the last few years were the holders of a more balanced common sense.   They were leaders who could leverage relationships to get work done without a single trip to their inbox.  Their underlying ethic was win-win in spite of whatever crusty exterior they might have presented.

It’s funny because when I started in the construction industry I thought this group of gruff, old-school men where the problem (yes, they were all men).  In retrospect, in almost every case these gentlemen had an uncanny sense of the best way to get a project to the finish line with all of the players intact.

My friends, reflect on this.  Is it possible that our industry has become too political, too partisan?  Is it possible that our younger generation of project managers is more concerned with winning than with satisfied customers and successful projects?  As this industry’s leaders, what can we do to improve this?  I’m going to suggest we need to act less like our current political leaders and look to the values of the old guard who are now retiring.  Let’s make sure we extract and hang onto their ethic as they take their retirement.  We’ll be a poorer industry without their wisdom.

Our MVP Plan

I learned why Alan Mulally is such a unique CEO when I heard him speak last October.  He changed the way I run my business and inspired me to create our MVP Plan.

What makes him unique

First off, Mulally is responsible for saving the Ford Motor Company. When Ford was at its lowest point (losing 17 Billion in 2006) hled the company back to profitability.  This included weathering the 2008 financial meltdown, that bankrupted GM and Chrysler, without taking any government assistance. 

Another is his unique style.  Mulally describes his leadership as service and combines this with infectious optimism and gracious humility – traits that let him unify a fractious company around a shared mission.  He says his leadership values are based on snippets of wisdom his mother ingrained in him such as  “It is nice to be important, but more important to be nice.” And “The purpose of life is to love and be loved.”  This is not typical thinking from a corporate titan.  However, it struck me that his message of collaborative teamwork is the way forward not only for manufacturing but also for our construction industry.

The most powerful lesson for me was Mulally’s integrated operational plan that he summed up on a single slide titled:  ‘One Ford: one team, one plan, one goal’.  It laid out the way Mulally united a complex global corporate culture around a single compelling vision and tied that directly to an operational plan that was tracked with detailed metrics.  

Mulally famously carried this out at a weekly Business Plan Review meeting (BPR), which he established to track the progress of the One Ford plan with his 16 senior managers.  At the Thursday meetings, each director was responsible for reporting on a host of green/amber/red colour coded metrics that tracked their department’s progress against the plan.   The focus and accountability that the BPR ultimately created are credited with Ford’s turn around.

How he changed my company

Understanding this simple, powerful system connected deeply with me.  We started building and tweaking our own Business Plan and identifying the right metrics to drive the results we’re looking for.  I call the result ourMost Valued Partner Plan’ because our Mission is to be just that for our clients – their most valued partner. 

Internally we now track 37 metrics under the four categories that are critical to our customers’ success: 

  • Competent People
  • Obvious Value
  • Flawless Execution
  • Excellent Quality

I’m already noticing that seeing the data weekly is causing us to uncover longstanding problems and motivating the team to cooperate on eliminating them.  

Starting next week, we’ll be surveying our customers and our staff and integrating their ratings of our performance into our dashboard.  This data will further confirm that we’re ‘on plan’ and show us where to focus our efforts.

These are exciting times and I’m grateful to Mr Mulally for showing me the path. 

Learn more about Mulally’s turnaround in this book by Bryce Hoffman .

Victoria BC

Resolution Free Zone

I’m always searching for better. Better business systems, better health, better time at home… Plus, there is something about this time of year. Maybe it’s watching ‘It’s a Wonderful Life’ yet again, or seeing your in-laws, but I always end up reflecting on the state of the world I’ve built around myself and think about how it could be better. Don’t get me wrong. I’m routinely accused of being a ‘glass overflowing’ kind of guy, but this is the time of year when I look to see if my destination is getting any closer and if it’s time for any course corrections. And so, we come to the inevitable topic of resolutions. I got some great advice from James Clear, author of Atomic Habits. He is an advocate of tiny habits resulting in big goals. James talks about optimizing for the starting line instead of the finish line. For example, instead of aiming to lose 20 pounds, make your goal to just show up at the gym, even if you don’t get out of your car, just make a habit of getting to the gym. Once that becomes a habit, the larger goal will follow. Read the book or watch one of his youtube videos.

This is the same message our friend Paul Akers preaches: tiny improvements gradually transform our company and our lives. Like Clear, he’s talking about forming habits. The habit of making daily improvements. So here’s wishing you an Atomic 2019. May your habits make you happy. If you like some inspiration for your lean goals check out this video made at Yellowtools in Germany https://youtu.be/O6R2CmyaMlY.