Friday, June 11, 2010

Efficiency as the Enemy of Opportunity

Planned obsolescence, increased bureaucracy, and half truths/half lies seem to be the hallmark of modern governments and global corporations. Just look at the current catastrophic disaster of BP oil in the Gulf of Mexico as a latest example of high level finger-pointing, empty apologies and lack of initiative or concrete results.

In my years of observing or participating in large corporate initiatives as well as some governmental biggest struggle has always been understanding why "more always seems to be better". If we just had more people on a project or problem, we would be able to accomplish our task better. If we just had more money we would be faster and happier about our results. Even more destructive has been the tendency to stay with the "status quo" because we had such a successful year or quarter last. We humans seem to always forget that "change is the only constant thing in life" and if we don't keep up with "change", it will eventually roll over us.

I was discussing with a colleague this morning the knowledge we share about inefficiencies in government IT systems here in Panama. For such a small country and government, they sure have a high level of government employees and disparate systems that those employees work with on a daily basis from many separate agencies and "fiefdoms" within that government. My friend summed it up best when he said "for them, efficiency is the enemy of opportunity".

In organizations such as these, you tend to have a large number of under-educated, under achievers whose job security is dependent on keeping everyone underneath them in the organization as a "subservient", obedient staff member. Most organizations these days, whether governmental or corporate, seem to emphasize being a "team player" and "all for one, one for all". While some aspects of that mentality can be helpful to the strength of an organization, if there is no level of competition or individual creativity allowed within such organizations...that organization will always be stuck at a very mediocre level of excellence and growth. The typical mode of large organizations is everyone covering their own a-- instead of truly identifying limitations or weaknesses "within the team" or admitting they themselves are in over their heads.

It has been my observation that most managers or leaders in such organizations hire people underneath them who are weaker or less knowledgeable than themselves. In most cases, when they ask "are you a team player", they mean "are you willing to follow orders and keep your own ideas to yourself?". Patronage in these organizations is much more important than productivity or ingenuity. The "squeaky wheel" might sometimes get the "grease", but more often than not it "gets the axe". That is the message workers get in large systematic organizations. People who get too creative, or too "smart", or get too much attention...well, humankind just loves to bring people down to a "common" level. How else can you explain the headlines everyday of Tiger's marital woes, Linday Lohans alcoholic ankle brace mandated by the courts, or Paris Hilton's sex tapes? We are much more interested in the misfortunes or weaknesses of others than we are the positive talents or traits that these same people have in balance to their weaknesses.

Basically, the system is the system because a majority of people support it. They support it because most of them "live off of it". The sheep don't want to become the focus of the "big bad wolf", so they just try and blend in and not get noticed while they collect a paycheck. Meanwhile, the wolves survive nicely off the fear and trepidations they have instilled on the sheep. They definitely do not want to share their power and money with those coming up who might challenge them, or want a piece of "what is theirs". They see no "opportunity" in allowing more efficient people, ideas or products rise to the top of their particular service or profession. This creates a nice mediocre world...and supposedly takes risk out of the equation for a majority of the sheep. Nothing is to their credit, but also nothing is their FAULT. Responsibility and decisions are always pushed up or down the chain, depending on which excuse is most applicable at the moment.

Here are a few modern day examples in my mind on this phenomenon:

There have been engines engineered decades ago for cars that could get 100 miles per gallon of gas or more. Profitable oil companies and combustible engine manufacturers have often been able to either buy out the new technology or influence government bureaucrats to limit the licensing or production of such technologies. Efficiency affects THEIR profits.

Flat taxes - a majority of people in the world probably support simplified and flat taxation within their various systems, yet no one really runs for office or speaks out against high and laborious governmental tax polities. To take out certain tax entitlements or even simplify tax code would cost thousands of jobs in government and the accounting industry...let alone lawyers. Is it any wonder all the attorneys we elect to public office have no interest in simplification of tax codes? THEIR opportunities for income due to complications would be too limited.

Employment laws - While a majority of us would support fair employment laws and practices and see from time to time a need for labor movements of unification against unfair practices...this mentality throughout much of the world has swung way over to the side of hyper activism and mass manipulation. It seems to now be labor's primary goal to take "competition" out of the marketplace and replace it with unrealistic job guarantees and pay guarantees...regardless of what is REALLY happening in the economy or a company's bottom line. While there was a day when unionists were on the right side of is my observation that most of them now solely exist to #1, collect dues from the masses, and #2, always strive to get more for less. The antiquated employment laws here in Panama and throughout much of Latin America truly holds back progress in education, service and productivity and keeps the region's workers well behind the curve of production, efficiency and economic growth. It is programmed mediocrity and disincentivization of excellence. I see this as one of the most pandemic cultural diseases of the past 50 years throughout much of the third world.

Technology platforms - I see many technology platforms (such as Microsoft) that by their pure size and market penetration have little pressure to maintain "efficiencies". Historically Microsoft and a few other commonly known technologies have had the most issues with security breeches, clunky buggy applications and unreasonably expensive updates or license renewals. Much like the automotive industry example, when you hold 80% of the personal computers hostage with your can afford to snuff out innovative competition or the "better widgit".

Pooling tips - Another example I see in Panama every day is the culture of "pooling tips" in the service industry. Someone told me there is or was a law stipulating this by necessity. This means that when you tip a waiter or other service person for good service, they have to share that in the common pool of the business and everyone shares equally...sometimes all the way up to the business OWNER! If everyone was at the same level of efficiency and training...that might not seem a bad idea among staff. In reality, this culture breeds lethargic and unmotivated attitudes and mentalities. I am sorry to have to be so brutally honest, but Panamanian service is in most cases an "oxymoron". I am quite convinced it is for the lack of motivation and personalized reward for excellence on a cultural level.

Privatization of social security and pension funds - Over 30 years ago I studies the rudiments of the USA social security and pension fund laws and guidelines. Since then there have been periodic movements to privatize those funds and allow the citizens to direct or manage their own contributions. Of course, the reality is that this would totally eliminate entire sub industries to the huge bureaucracy that has become the "Social Security Administration". According to wikipedia,

"The agency includes 10 regional offices, 8 processing centers, approximately 1300 field offices, and 37 Teleservice Centers. As of 2007, about 62,000 people were employed by the SSA. Social security is currently the largest social welfare program in the U.S., constituting 37% of government expenditure and 7% of GDP".

If you privatized such a program...what would become of most of those 62,000 securely paid employees and bureaucrats? And if the Federal government could not raid those resources as they OFTEN have in the past 60 years...what would the Federal deficit REALLY be? If you want to understand the truth regarding the "Security" of this system, there is lots to read and validated links at wikipedia related to the "Social Security Trust Fund". One short quote for illustration...

Some in our country think that Social Security is a trust fund -- in other words, there's a pile of money being accumulated. That's just simply not true. The money -- payroll taxes going into the Social Security are spent. They're spent on benefits and they're spent on government programs. There is no trust.

The bottom line here is that this system has been one of the biggest, most inefficient programs of national interest in the history of the modern world. It has given government leaders the "opportunity" to cover up their multitudes of budgetary sins and voodoo economics for decades. Yet, as we now enter the "boomer" age with more and more people living off these funds that aren't there in addition to a reducing number of high income jobs from younger people paying in...there WILL be a day of reckoning. The math is the math...and eventually the "Wizard of Oz" gets discovered.

If we don't get some of these opportunistic governments and industries out of the public coffers will be way too late for "efficiency". Other people's "opportunity" has been we the peoples "loss". I'm not counting on that check when I reach that qualifying age.

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