Performance Governing

Performance Governing; Getting Lucky and Staying Lucky

Our infrastructure caused Peak Oil and Global Warming, both civilization killers. We built it. We can build better. What can replace it? I believe we can discover that what if we shift to Performance Governing; unleashing ingenuity in a process of relentlessly improving what we know and do.

Conclusion

• Performance Governing sets standards to be achieved, allowing anyone who can meet or beat that standard to implement.


• How Governing, government's current dictation of how infrastructure should be built is unsustainable. Power generation is 69% inefficient. Urban transport is more than 96% inefficient. Governments are simply not great inventors. Govenment control over infrastructure has created brittle and fragile structures completely addicted to finite and depleting oil.

Example of How verses What:

• Biofuels, How verses What:




• How: The President and Congress directed and subsidize ethanol production:




• Corn prices jumped from $2/bushel in 2005 to $7/bushel in Jun 2008.


• US Secretary of Agriculture expects 43% increase in food prices in 2008.


• Growing food riots in the world.


• Likely, first SUV famine in 2008-2009 as burning food in cars at less than 4% efficiency causes the first biofuel famine.




• What: Define sustainable efficiency standard, such as 100 miles per gallon.



• Efficiency, How verses What::




• How: Congress passes a 50% increase in CAFÉ standards (gas mileage). For simplicity consider they are 20 miles per gallon. Government directing this efficiency improvement will:




• Start in 2012.


• Require about 20 years to rotate out the current car fleet.


• Require everyone to borrow money to buy a car.




• What: Set a standard and allow anyone beating that standard to implement. For example, inventors at JPods, SkyTran, SkyWeb, ULTra, MISTER and others easily beat 100 miles per gallon. A summary of their capabilities are:




• Provide urban transport as a service (no loans required)


• Achieve efficiencies from 100-400 miles per gallon. See CSX commercial for 423 miles per gallon.


• Operate at 1/14th the cost of oil-based transport.


• Move people and cargo 24 x 7.


• Zero-emissions, some are solar powered.


• Convenience of a chauffeured car at the cost to operate an elevator.


• Based on riders per day, the elevator is the most successful form of public transportation. Yet these inventors of a physical-Internet, of horizontal-elevators are not allowed access to rights of way. What is possible is disallowed by the current How. There is no conspiracy. Far worse, there are well-meaning rules and regulations based on unsustainable assumptions.








• Oil, How verses What:




• How: Presidents and Congress directed and subsidize oil production. Subsidies distorted free market innovation.




• Econonic Growth equals Energy Growth times Efficiency Growth
  
  Subsidies and government refusal to respond to Peak Oil (watch comments from EIA Administrator Caruso) distored the end of Energy Growth in May 2005.
  
  
  
  


• Borrow $700 billion a year to consume oil.


• We are 3 decades late in responding. We were warned of the geology in 1956. It was confirmed in US Peak Oil in 1970.



• Foreclosures are an example of the consequences.
  Here is a graph updated from EIA. They stopped updating it in 2004.
  
  
  


• CO2 from automobiles contributes to Global Warming.

  Global Warming is the destruction of human and biosphere habitat. Yet governments are building more highways. Arctic ice loss in 2007 was horrific. Much worse than models predicted. Arctic ice flow in the winter of 2007-2008 indictate risk. Pentagon Study on Abrupt Climate Change. Cracks in oil ices indicate more risks.





• What: Tax oil for its true cost to secure and cleanup after use. This would have made alternatives finacially attractive since the 1973 Oil Embargo. We would have had 38 years from the 1973 Oil Embargo to have iterated alternatives.

Ingenuity

There is no mystery to breakthrough insight or ingenuity. Ingenuity is a personality trait:

• Edison, find 4,000 ways not to make a lightbulb.


• Goodyear, after decades of work, dropped a latex blob on a sooty stove and instantly recognized what had been missing to vulcanize rubber.


• Einstein, spend a decade unemployed and as a patent clerk refining ideas.


• Wright Brothers, relentless study matched by insightful testing.


• Pasteur, “chance favors the prepared mind”.

The process is relatively simple. Invest and mortgage everything you have for very long periods of time without reward. If you are lucky you will clarify a breakthrough concept. Then find someway to navigate the commercial requirements to churn that clarity of thought into commercial acceptance. Vast numbers of truly brilliant ideas are weeded out. The process is simple and ruthless. It is an effort driven by passion, not a government job.

Government control over infrastructure adds three barriers, each nearly 100% efficient at stopping ingenuity:

• Innovators must convince government people averse to risk, for whom there is no reward in taking risk, to take professional risk.


• Churning a concept into insight and breakthrough have many failures and occasional success. Embracing failure is harder for bureaucrats and policy makers than taking risk.


• Iterative process, churning ideas into commerce requiring years to decades. It requires passion that is rare in individuals and extremely rare in organizations larger than a couple of people. This is beyond the event horizon of governments.




• The short event horizon of government and iterative nature of infrastructure deployment is indicated by the automobile replacing the horse over a period of 70 years


• Quote from West Point's Decision Making in Systems Engineering and Management
  
  by, Gregory S. Parnell, Ph.D., Editor
  
  by, Patrick J. Driscoll, Ph.D., Editor
  
  by, Dale L. Henderson, Ph.D., Design Editor
  
  

  In fact, one of the most significant failings of the current U.S. transportation system is that the automobile was never thought of as being part of a system until recently. It was developed and introduced during a period that saw the automobile as a standalone technology largely replacing the horse and carriage. So long as it outperformed the previous equine technology, it was considered a success. This success is not nearly so apparent if the automobile is examined from a systems thinking perspective. In that guise, it has managed to fail miserably across a host of dimensions. Many of these can be observed in any major US city today: oversized cars and trucks negotiating tight roads and streets, bridges and tunnels incapable of handling daily traffic density, insufficient parking, poor air quality induced in areas where regional air circulation geography restricts free flow of wind, a distribution of the working population to suburban locations necessitating automobile transportation, and so on. Had the automobile been developed as a multilateral system interconnected with urban (and rural) transportation networks and environmental systems, U.S. cities would be in a much different situation than they find themselves in today.

  
  

  What is important here is not that the automobile could have been developed differently, but that in choosing to design, develop and deploy the automobile as a stand alone technology, a host of complementary transportation solutions to replace the horse and buggy were not considered.

Organizational Methods for Encouraging Ingenious Personalities

Two books outline some key concepts and mechanics of greatness and uncertainty:

• Good to Great defines the process of forging excellence from mediocrity, of transforming a good organization into a great one. We have good infrastructure and good government based on unsustainable assumptions of cheap oil. Building a great sustainable culture requires leveraging the Stockdale Paradox and exuding greatness from our commercial entities, our governments and our lives.


• The Black Swan is about rare events and getting lucky. This book is about how not to be a “sucker” in the face of uncertainty. We face the uncertainty of civilization killers.

Government Actions, Changing What

Leadership must define what we need and inspire everyone to do what they can. As a starting point, here are three simple actions leaders can take to nurture ingenuity, self-reliance, getting lucky and staying lucky.

Self-reliance: Disciplined people, Discipline Thought, Disciplined Action.

Start simple. Self-reliance starts with things as simple as planting a garden then disciplining ourselves to grow 1/3rd of our own food. Small steps, relentlessly taken will create durable people and communities, economic lifeboats. There may not be time to save everyone, but there is time for everyone to save themself.

Excite that we can and will prevail. We need only exercise our liberty and responsibility.

Getting Lucky, Finding Rare Events and Odd People

Ingenuity is a personality trait. Forging ingenuity into insight and breakthrough require great personal investment with improbable chance of success. For governments and businesses to exploit such rare and extreme behavior requires organizations adapt their rules to be susceptible to such individuals.

For every breakthrough, there is vast “silent evidence,” failures that we do not pay attention to. Without failures we cannot find breakthrough. These failures cannot be avoided but they can be contained in scope by requiring attempts to be privately funded. People risking their own money are much more sober about the managing risks than governments. Biofuels verses JPods in the examples above.

• Performance Governing. Establish standards for infrastructure. Define what is needed and allow anyone willing to risk their capital to beat that standard a franchise to profit from performance forged from their ingenuity.




• Government grants should be very limited, or better, not used at all. There are several problems with grants and government funding for research:
  
  
  
  • Breakthrough concepts are abnormal and are not likely to be funded. Example, Einstein could not get a teaching job until 5 years after publishing the Special Theory of Relativity, Quantum Mechanics via the photoelectric effect, and the other breakthrough clarities of 1905. Establishments like iterations of how not changes in what.
  
  
  • Refining a breakthrough concept to clarity costs about as much as chasing a government grant. The passion for creating should focus on creating not chasing permission to create.
  
  
  • Innovators of breakthroughs are not personally wired to wait for government handouts. Example: Steve Jobs and Bill Gates are both college dropouts. Their breakthrough ideas on personal computers did not wait for the government or academia,
  
  
  • Dependence on government money conditions capital markets to wait for such money. Venture capitalists are almost as risk averse as bureaucrats and policy makers. It also conditions innovators, always desperate for cash, to chase permission not insight.
  
  
  
  


• Government backed loans can be effective if:




• Private risk builds infrastructure. This keeps focus on what is practical.


• Infrastructure achieves public policy objectives.


• Infrastructure provides profitable service and can repay loans. Then low cost government back loans can refinance the infrastructure. These loans can be paid back from profitable operation of the infrastructure. The loans free the private capital to build more infrastructure.


• Care and transparency are required to get the benefits but not the corruption of a Transcontinental Railroad model.

Staying Lucky, Honestly Accruing All Costs

There are no lasting victories. Winning today yields the opportunity to compete again tomorrow. Embracing responsibility will enable us to compete again tomorrow:

• Accept that excellence is the process of relentlessly improving,


• Open our institutions to the odd personalities that find breakthrough.


• Assure all costs are accounted for and resources accrued to compensate.

Performance governing requires honestly accounting for all costs. That is not easy. We have a tendency to shove long-term costs off on the future. The failure to prepare is illustrated by: The collapse of the I-35W Bridge. The American Society of Civil Engineers grades US infrastructure as a D. The collapsing, 100-year oil sewers in Atlanta. The average age of electrical transformers is at the end of their design life. Long-term maintenance was sacrificed for short-term rate reductions. The average age of farmers is 54. Soon we face a loss of farming art. Long-term skill building was sacrificed for short-term gains. Borrow $700 billion a year to consume oil.

Preparation and self-reliance are simple and tough standards. We need only return resources use in a condition we are proud to hand to our grandchildren’s child. She has no voice; defenseless she depends on our reasonable care. If unsure our actions cause harm, we must assume harm and collect estimated costs to compensate as honestly as possible. If industries do not reserve these costs, then to protect the general welfare and common defense, it is the duty of government to assess, collect and exercise such funds to provide a sustainable habitat.

As a conservative, I am amazed that conservative political leaders seem the least interested in the conservative principle that all costs should be accounted for. Had we been accounting for pollution, security and maintenance we would not be facing energy crisis today. Had governments declared what is needed instead of how to build only what they can imagine, we would not be facing infrastructure crisis today. The civilization killers of Peak Oil and Global Warming would have been preempted.

Peak Oil, being thrown on our own resources, may help us change the lifeblood of our economy from oil to ingenuity. Defeating civilization killers requires open minds, performance governing, de-monopolizing government planning of how, will allow a new what.

Benjamin Franklin:

“To be thrown upon one's own resources, is to be cast into the very lap of fortune; for our faculties then undergo a development and display an energy of which they were previously unsusceptible.”