Jumping the Shark

April 28th

So I was talking to a postal aficionado friend about the issues that the USPS is facing.  We were having one of those conversations that would have been intelligible to a about 50 people involving the timing of regulators, the implications for policy proposals, the effect on rates, the result for markets, the unintended consequences…then we would change an assumption and cycle through the variables again.   Scenario planning for wonks.

This particular colleague and I have been having these conversations for 10 years.   The problems of the posts are only getting worse.  Much worse.

I always listen to him carefully.  I had asked him the most baffling question of all about 5 years ago.  “Don’t the customers understand what they are going to do to the postal service, the drive train of their livelihood, if they keep going with these retirement payments?”  I had asked.

He said “well you saw it in the reaction to your talk”

[This was a then recent speech about putting the phrase “the regulator shall” into a law.  I was arguing that the customers should be careful about what they wished for.  If you start a regulator down the path of killing an agency, as the British and others have found, you eventually succeed.  And then what?]

He said.   “Maybe they don’t care,” to which I replied, “no one is that mad.”

“Maybe you are thinking about this wrong,” my friend suggested.  “Maybe they know what’s going to happen and they don’t want to be the last man holding the bag.  Maybe risking killing off the institution on which they depend is less of a problem than having it die slowly with enormous debts that they will have to pay off.”

I remember stopping in my tracks with one of those “of course…” thoughts.

So I always listen.

I was explaining that the Senate Governmental Affairs Committee had asked the Postmaster General what he would do with the $75 billion dollars and he answered that if they got the money “they would be OK for a long time.”

I explained in defense of his answer that various Senators had asked him a lot of the same questions and it was late in the afternoon.   I knew he had a better answer and he was being more polite than I would have been able to be.

“Do you think that Snailmail has just jumped the shark? “ he asked and I knew that I was at one of those moments of recognition again, but not for the reason that he might have had in mind.

Jumping the shark refers to the exact moment when you know that something (your television show or anything else) has gone past the peak and its all downhill from here.

“Fonzie”

From Happy Days

Paramount Pictures

In a 1977 episode that began the fifth season, Henry Winkler (“Fonzie”) water-skis in Santa Monica and encounters a shark.  The critics and the fans found this moment to be such a lame effort to save the franchise that they have agreed for years that this was the moment when they knew it was all over.

There is an argument to be made that when an industry can no longer envision how it would spend a windfall, (even if it deserves the windfall) it may well have jumped the shark.

For the record, it’s useful to note that it wasn’t over for Happy Days by a longshot. The studio owned Happy Days and once it ended its prime time run it made the real money in syndication.

Congress and the FCC had sought to protect “local access” by allowing local stations to have prime television time (technically the time just before prime time under what were called the “Broadcast Rules.”)  Local affiliates of the Nntworks discovered that they could buy rights to show favorite television shows like Happy Days as “counter programming” to the network television news and make a fortune in advertising sales.  The studios may have preferred to have a show end once they had enough episodes of a popular franchise to make serious money in syndication.

The result of this regulatory scheme (the Financial Interest and Syndication Rule’s multibillion dollar syndication market) was no doubt not exactly the consequence that had been intended.  But it was in it’s own way a market solution to the question of what should local television affiliate do for the citizen/viewers?

Is the lesson that there is life after jumping the shark and perhaps it’s time to get on with finding out what it is?  We can see that the current business model is not likely to be sustainable.  The postal service is already going through rapid, even radical change.  But so far, all with an effort to preserve the way things have “always been.”  Whether they have always been the same is beside the point.

Perhaps its time to anticipate what kind of a national institution we want to see, what services we want it to provide for our democracy and how we will pay for them; especially now that we have seen the shark.

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Climate Change: Looking Back, Looking Forward

April 24th

So what were the results produced by the climate change talks in Copenhagen?

When we last left off our story, the 71 nations who made pledges in Copenhagen were committed to try and limit the increases in temperature to 2 degrees.

The various controversies of the meeting have made it clear that the global meetings (Rio, Kyoto, Copenhagen) are not likely to be the basis for actions that will equal the scope of the problem.  But there was still hope that the voluntary actions by well meaning, committed nations could offer some hope.  Now it turns out, maybe not so much.

Researchers from the Potsdam institute for Climate Impact Research writing in Nature however have now reviewed the results and they write that “its amazing how unambitious these pledges are”.  The researchers estimate that the increases in temperature will most likely exceed 3 degrees.

We are now beginning ot see the implications of past deals.  It turns out that when the agreements were being made that some of the limits applied to selected countries were lax.  So some were able to do better than their easy targets.  And you could bank these extra achievements.  So the banked extra savings have to be deducted from the promises.  This, the Potsdam researcher explain, is one of the most important reasons that there is a growing gap between rhetoric and reality.

But analysis and explanations aside, 3 degrees rather than 2 degrees is a big deal and leaves us no closer to global solutions.  As the 5 day celebration of Earth Day concludes and the Senate of the U.S. begins the next round of discussion of Cap and Trade legislation we have reached the place where it is time for someone to become ambitious.

The analysis is a collaboration of researchers at PIK, Ecofys (www.ecofys.com) and Climate Analytics (www.climateanalytics.org).

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72.2% Market Share

April 23rd

John Paczkowski writes in All Things Digital of a new survey from MM Research in Japan that has found that the iPhone has captured 72.2 % of the market. I am not sure what I am supposed to learn from this but there is something going on, clearly.

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Design Thinking and 21st Century Leadership Skills

April 16th

Garth Saloner, the Dean of Stanford Business School was interviewed by Lenny Mendonca in the McKinsey Quarterly and explained that at Stanford Business School, as they think about educating the next generation of business leaders, that their focus in a world without borders has moved from the hard skills of accounting, finance and supply chain management to the softer skills related to leadership.

In a world without borders, where the management of global enterprise or even global projects is taken as a given, there is a growing need to train managers who are skilled in encouraging collaboration.

The harder skills are a given. Saloner refers to them as a type of “hygiene.” His focus has turned to leading groups in collaboration where analytic thinking is critical, to communications (especially writing) and to education in the global marketplace. Stanford requires students to work abroad in countries where they have no prior experience.

Innovation is especially prized in a world that is inventing new ways to do things.

The thing that is starting to blossom as an approach and as an idea in universities with business schools as a partner is a whole area of what folks call design thinking. And that’s really the creative process of identifying a need but then working with the customers, through a process of rapid prototyping, to figure out how to develop a product or to solve their needs.

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Problems in Middle Earth

March 27th

There is a great deal of talk these days of branding – no less in New Zealand, the home of the Hobbit.

New Zealand has promoted itself as 100% pure.  Unfortunately, the Guardian’s environmental blog Greenwash reports,  it has been increasing its greenhouse gas emissions. Reports are that they have increased 22% since 1990. The Economist (“It’s Not Easy Seeming Green” a backlash to New Zealand’s vow of purity, March 23, 2010, the Economist online) notes the response:

To this, Prime Minister John Key responded, “bollocks”.

Apparently New Zealand has been planting trees to absorb the results of high car ownership per capita and a certain unmentionable problem with methane production.

But of course it’s more complicated.   One of the most difficult problems of the modern world involves the shipping of food around the world.   Food represents 40% of New Zealand’s exports. “In many ways, the dilemma New Zealand faces is no different to that of other rich countries – how to balance economic growth with the need to address environmental degradation,” comments the Economist.  That and the need to connect the brand with reality.

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Double Counting in the Carbon Markets

March 26th

As the US gets closer to considering Cap and Trade legislation once again, in the Senate this time, a troublesome story appears in the Economist that would make even the strongest supporters of doing the right thing on Global Warming a little queasy. (“The Wrong Sort of Recycling” Hungary’s sale of used carbon credits damages investor confidence. March 25, 2010. The Economist)

No doubt the Hungarians would feel that they had been slandered – after all it was out of their hands. And it’s OK to sell credits twice in Japan. So its unfortunate that this sent the market in Paris into turmoil.

But perhaps we get ahead of ourselves…The Hungarian Ministry of Environment and Water issued 800,000 certified emission-reduction credits (CERs). As the Economist explains “CERs are generated by the Kyoto protocol’s “Clean Development Mechanism, whereby reductions in greenhouse gases in developing countries can produce a carbon credit for use in industrialised markets.”

What happened with this sale of CERs was that Hungarian firms had already put the CERs to good use offsetting their own emissions. The Economist explains that Hungarian officials reported that the credits were ultimately destined for a buyer in Japan and in Japan you can use credits twice, something that you cannot do in Europe.

The point of having a carbon market is to be able to price the right to emit carbon dioxide efficiently. The Economist quotes Yuichi Takayama of Tokio Marine Asset Managementas explaining, “In Japan’s view, so long as some environmental benefit has occurred, then the CERs have a value”.

Not so much in the view of the European carbon markets. The CERs were not simply sent from Hungary to Japan but instead found their way onto BlueNext that is an exchange based in Paris. “By the time that the European Commission realized what had happened, all hell broke lose. BlueNext temporarily suspended trading.” The price fell and investor confidence appeared to be shaken. Since this trade was not in a government’s hands no one broke the rules.

In Europe you are not supposed trade the same credit twice. There has been support for making different kinds of credits fungible. The market will be bigger if new entrants aren’t discouraged from coming in. But if the new players bring credits that are sold in Hungary and again in Japan and then on the European exchange there’s going to be resistance from investors and then there won’t be a market at all.

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Gates on Sustainability

February 26th

This is a haunting talk at TED earlier this month by Bill Gates on Sustainability. In the best tradition of a talk by someone who wanted to share something that they had been thinking about, except that this is Bill Gates – not just your average speaker.

I watched this and was astonished that I/we could be slowed even a step by the resurgent denial school who want to push aside the thought that we are building a debt related to CO2 that we must address.

Then Gates on nuclear power brought back thoughts of Marble Hill Indiana when I took a swing at nuclear power and learned how to spell passionate political opposition.

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Innovation and the Regulator

February 18th

What will be important to the future viability of the Postal Service in America will be to create a regulatory process that is agile, flexible and fair.  The goal should be to create a system where postal employees who may be carrying mail to households will bring their best, most innovative ideas forward, where entrepreneurs know that they can say “I have an App for that” and find a partner in the government’s monopoly postal system.

On February 17th 2010 the Postal Regulatory Commission held a hearing to receive comments on the Postal Service’s Annual Compliance Plan.  I participated in the forum and introduced Comments.

In my comments I noted that the Commission had been clear that it wanted to be judicious in “calling balls and strikes” but in a time of economic crisis where the future viability of the Postal Service may be in question its important for the Commission not only to do its assigned job, but also to work with the Postal Service, the White House and the Congress to widen the strike zone.

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Green Touch

January 11th

News of a new association that sought to promote the efficiency of telecommunications network might have seemed interesting.  Reading that there goal was to  improve efficiency by 1,000 percent by 2015 made the story somewhat more interesting.  But reading of the members of the new Green Touch

Bell Labs, AT&T, and China Mobile from industry; MIT and Stanford University from the academic world; and The French National Institute for Research in Computer Science and Control

made the story interesting indeed. In fact, seeing the members made the story about 1,000% improvement and 10,000% gains in efficiency seem somewhat more plausible.

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Heavy Lies the Head that Wears the Crown

December 16th

Tonight as Barack Obama prepares to leave for Copenhagen, the drama could not be more intense and this is happening on multiple fronts.

In Copenhagen the talks have broken down as the world awaits the arrival of more than 100 heads of state. As compared with the refinement and protocol of the Nobel Peace Prize Award in Oslo last week, Copenhagen with its police cordons and demonstrations seems to be near chaos.

The Wall Street Journal reported (Peter Walsten)

The United Nations summit that was supposed to galvanize global cooperation against climate change is on the brink of failure, and how it ends will depend on whether President Barack Obama and other world leaders about to descend on the Danish capital can bridge deep disagreements over trillion-dollar decisions.

The controversy does not appear to be solvable. China has remained close to the poor nations, the G-77. As of today China is resisting the notion that there could be any outside inspection of its voluntary agreements.

In the meantime, President Obama’s popularity continues to fall. Less than 50% of the public approves of the way that he is handling his job. This discontent appears to have come from concern with the health care bill that continues to head toward the 11th hour showdown in the Senate. And many American’s, especially some his strongest supporters, disapprove of his war policies.

In a Wall Street Journal NBC poll, a majority of Americans believe that America will be surpassed by China in 20 years. Obama’s popularity has fallen in his first year more than his predecessors. These are all measures that are not lost on the Democrats who must be concerned that as they run for office next year, their own popularity continues to erode.

Global warming could not be a more difficult challenge and the President will have to play his role with resources that are increasingly constrained.

This is a good time to revisit all of the major climate change issues because no matter what happens in Copenhagen, EPA has already announced that it is compelled to act under the Clean Air Act to address the concern with the “endangerment” caused by Greenhouse Gases. The issue of whether action will be taken here is beyond popularity. What is at issue is how limits will be set and what will happen to everyone else as policy plays itself out. Henry the IV would have understood what the President faces tonight.

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