National Petroleum Lab

How did Oklahoma, both Bartlesville and Tulsa, lose their parts in a national lab?   This lab had industry researchers working to improve oil recovery and reservoir characterization.

I wasn't in oil and gas at the time, but I'm surprised I didn't hear about this lab.  How did we lose part to Chicago in '83 and then more to Sugarland in '09?

From Wikipedia: "In 1910, the U.S. Department of Interior’s (DOI) Bureau of Mines established the Pittsburgh Experiment Station in Bruceton, Pennsylvania, to train coal miners and conduct research on coal-mining-related safety equipment and practices. ... Just eight years later in Bartlesville, Oklahoma, the Bureau of Mines opened the Petroleum Experiment Station to pursue systematic application of engineering and scientific methods to oil drilling, helping the oil industry create operating and safety standards. 

...

In 1983, however, operation of the Bartlesville Energy Technology Center transferred to IIT Research Institute, based in Chicago, and the Bartlesville Project Office was established to oversee petroleum research activities. Then, in 1996, the Morgantown and Pittsburgh Energy Technology Centers, a mere 65 miles (105 km) apart, were consolidated under the same administration to form the Federal Energy Technology Center (FETC). The National Petroleum Technology Office (NPTO) in Tulsa, Oklahoma, was established in 1998, and the Bartlesville Project Office was closed.

^...

The Tulsa, Oklahoma, office moved to Sugar Land, Texas, in 2009."

Crude prices - going up or down?

Crude Prices

Are crude prices going up or down in 2018?

Well, a year is a long time, and pundits line up on both sides.  If peace breaks out in the MidEast, VZ gets its act together, and/or OPEC pulls out the stops, then prices could clearly drop.

If things get dicey in the MidEast, if VZ tanks further, or if pipelines break (like Forties did last month), then prices could clearly rise.

But most likely some or all of those will happen during the year, and there will be various bumps up and down.  If we low-pass filter such events and just look at fundamentals, then I'd say that prices are going up slowly, unless and until there is a significant economic contraction somewhere in the world...when it happens, it'll probably be in the US.

Here's why we're heading up:  Oil in storage in the US is going from setting massive new highs to a slow but continuing draw-down.  Even with growing production the consumption and export of oil products exceeds production and imports.

For the world overall, supply and demand have been fairly closely balanced, too.  This could change, but currently all major economies are doing OK, and it's projected to stay this way all year.

Not only is storage in the US dropping, but floating storage overseas has been drawn down as well.  The glut just isn't as bad as it has been for the past couple of years.

So, as long as economies stay strong, prices are likely to tend upwards.  If supply gets too tight, this will be a self-correcting problem as we're at the end of the expansion phase and high energy prices could prick the bubbles like they did in 2008.  Hopefully US and OPEC production will keep prices moderated, at a level where US producers remain profitable but cost-focused and the WTI discount to Brent remains wide enough to keep US refineries working hard.

Yes, I realize this is a personally self-serving perspective on energy prices, and others may have differing perspectives.  Wind and Solar people should want oil at $80/bbl and gas at $6/MMBtu so they are somewhat competitive without subsidies.  Consumers should want prices to get back down to last year's levels.  No price will please everybody, so I'm going to go with what pleases me!

Employment - Inflection Point?

Jobs are in a pretty good spot - it's hard to create a lot more when unemployment is already low, and labor participation is positive. It's also not great when unemployment is high even if a lot of jobs are created -- though of course it helps. 

Unemployment Chart

Let's not neglect the zero-order employment levels by focusing only on growth or loss. To me, the worrisome aspect is that slowing growth indicates an inflection point may be here, and that could mean a recession is near. Employment cycles are not clearly correlated to election cycles, so politicians may be victims of the trends as much as the rest of us.


I do wonder if a few hundred $B here and there being repatriated by major corporations will help keep things going up for a little while longer. The Fed rolling back QE might offset that, though. The real question is what sectors will get hit hard and which will be mostly OK in the next downturn. Will cash get clobbered? Bonds? Stocks? Real estate? Crypto currencies? Gold? Commodities?

Lead, It's What Kids Crave!

I happened upon a correlation study and article quite a few years ago that hypothesized that lead levels were the cause of the mid-century crime waves.  I seems the idea is gaining credibility, and additional studies are proving this out.

https://www.brookings.edu/blog/up-front/2017/06/01/new-evidence-that-lead-exposure-increases-crime/

The really sad part of this is that lead additives were known to be hazardous since the early days, and some areas even had laws against lead before the US gov't approvals caused them to change their minds.  This, like smoking, is an area where we were sold down the river by our own gov't and by corporations.
https://www.wired.com/2013/01/looney-gas-and-lead-poisoning-a-short-sad-history/


That was then, but what are we doing now?  Do you know how much lead your kids have, or your neighborhood, your drinking water, or your city?  Why do we struggle to simply test and treat kids with this issue?  Would we really rather have them commit crimes and be incarcerated later?

Are chemical companies being more thorough in their testing, humane in their assessment, and upfront in their self-reporting?  Are our gov't regulators on the job, empowered, and capable of catching such hazards today?

More Gedanken Inventions

In his newly found spare time, Joe goes back to the basement, and devises several new inventions:
- A machine to make copies of typed documents (much of Suzy's time is spend sending out product use instructions, recall notices, safety warnings, and return authorization forms, as Acme's products are famously powerful but unreliable, and for some reason tend to be used by individuals with sub-par intellect but superior creativity and motivation).
- A word-processing machine, making document creation, editing, and mail-merging require far less effort.
- A spreadsheet and reporting tool, making entry of numerical data faster and more accurate, and calculation of sums and averages trivial.

Soon Suzy and Tom note they too can do their jobs in a fraction of the time, and the inventions spread through their departments too.  Suzy and another soon-to-be-mom make a deal to interleave maternity time, each taking a year off entirely while the other works 3-4 hours per day covering both jobs, before falling into a 2-hour-per-day routine for the long term.  Suzy's management is happy, as the accuracy and thoroughness of the work has improved, and Tom's boss is happy that fewer errors appear on tax reports.

As the years roll on, the robots spread, as workers buy Joe's inventions to ease their own workloads, and across the nation workers find themselves with more free time and more money than they'd dared to believe.  Happily, costs of cars and Acme products fall as well, as quality improves, rework drops, and production efficiently rises as the workers improve their robots.


Clearly the Gedankens live in an alternative reality, and a simplistic one at that.  Still, why must savings from automation and labor-saving tools accrue to the capital side of the equation instead of to the labor side?

What would the Gedanken's lives have been like in our world?

Joe, Suzy, and Tom Gedanken

Suspend your disbelief for a minute, and consider the tale of Joe, Suzy, and Tom Gedanken, a family of 1950's employees who are inventors on the side, doing experiments in their basement.

Joe is a factory worker, building Fords.  Suzy, Joe's wife, is in the typing pool of Acme Corporation, spending her time supporting the customer service team.  Tom , Joe's brother, is an accountant for the county tax agency.

Joe is an inventive guy, and he believes he has a number of ideas that would help Suzy be more productive at work, which they both would appreciate since they're saving money to start a family, but both work long hours to do so, and they worry they won't have time for their kids.  Of course this means Joe doesn't have much time to invent labor-saving tools for Suzy either.  Tom is similarly busy, and remarks on how much time he spends making bookkeeping entries and then double-checking to find errors.

Joe takes a couple of weeks of vacation and hides in the basement, inventing away.  Instead of solving Suzy's problem though, he first solves his own: he builds a basic robot from spare parts out of the Acme product returns dumpster.  The robot can automatically line up a couple of component parts and do a basic weld, and as long as the welding consumables and supply of parts are maintained, he estimates that the machine can weld parts four times as fast as he himself can.  Joe thinks about going to management with his invention, but instead takes another path.  He takes his one machine into work, and he and the other 3 people in his work cell hatch a scheme:  each will come in 2 hours per day to feed the machine, and spend the rest of the time doing whatever they like outside work. 

They're kind-hearted folk, so in their newly free time Joe and his team make derivatives of the robot to do other tasks, and before long the entire shop floor is filled with machines and two-hour-per-day workers.  Management notices, but the cars are getting built with better quality than before, and a lot faster since extending shifts doesn't seem to be very hard -- the robots are willing to work around the clock and the team agrees to keep them running for some extra pay.  Before long Joe and team figure out how to reduce the support needs, so they split all three shifts, and negotiate 2x pay for 3x production.  Soon, Joe and his peers not only envision raising kids, but buying bigger houses, and nicer cars.  Already they are active in the local Elks Lodge and the community-- they have money AND spare time, and local shopkeepers are happy with the extra spending.  Management is happy too -- they are producing more cars than other plants, at lower costs, and they get bonuses and raises as well.


But what about Suzy and Tom?

Purpose of business: Drucker vs Friedman

Peter Drucker - "Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs."

Friedman - "There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."


Clearly, capitalism does a great job of efficiently allocation resources to optimal uses.  Before Friedman, though, businesses and corporations had much more flexible definitions of their mission and management focus.  Friedman told a compelling tale that investors liked to hear, and over the decades now management is necessarily on board as well.  Unfortunately, we now see the best use of corporate profits seems to be to fund stock buy-backs, which benefits only the investors and management.  

We also see lower investment in long-term areas like R&D, which directly impacts the competitiveness of the US overall, especially over the long term, and in recent decades there has been a dropping fraction of corporate income going to employees.

While investors include 401Ks and pension funds for the little guy, a disproportionate fraction of cash is going to the top few percent, and a decreasing fraction is going to labor and to customers in the form of lower costs.  


Drucker had a different view of business (focus on the customer), as does Buffett (look to the long term).  There are already corporations who track and report on the value they create overall (for customers and society) as well as the value they capture (as revenue and profit).   Some like Google clearly add a LOT of value to users of various types as positive externalities, while some other companies clearly don't, as they have negative externalities such as pollution.

I think it's high time that we re-balance the allocation of profit from businesses toward employees and the public at large over the long term.  We might even modify corporate tax rates to reflect the value split, and favor those that better spread the wealth by offering greater deductions for wages and employee bonuses, at least for those not "highly compensated".  Taxes are simply a means of modifying behavior, so we should be purposeful and tax what we want to see less of, and not tax what we want to see increased.   

Gas: Supply and Demand

Supply and demand is a wonderful thing.  The only way for prices to get this high is to have both critical demand and issues with supply.  In an area just a few hundred miles from the most prolific gas fields of the US means there is an issue with pipelines and/or local storage.  NYC needs better grids, better gas supply, better insulation, or better something!


http://www.naturalgasintel.com/articles/112957-natgas-spot-hits-record-175mmbtu-at-transco-z6-ny-amid-noreaster-midday-alert

What to Focus Upon?

Over the last months of 2017, I discussed quite a number of topics that I personally found interesting, with varying responses from others.  Clearly, to move from talking to doing some focus is necessary, and honestly I’d love to find something sufficiently compelling to get some friends interested and involved as well. 

What sounds interesting?  Should we strive to influence city hall or the chamber to refocus local business incentives?  Should we strive to turn the tide on fringe neighborhoods to expand the vibrant footprint of downtown?  Do we go straight to the business base with ideas for improving global competitiveness?

Should we find somebody with money and try to open some funded venture, or just market ourselves based on good looks and clever repartee?  Are we progressive Makers, savvy Techies, economic consultants, business strategists, or what?

In last year’s thread, the expanded FabLab + junk pile notion seemed to get a lot of resonance, and some pointed feedback, and it supports STEM education which is a plus from my perspective.  Do we invest in the vigor of our youth, or accept that we may struggle to stay ahead of them and remain relevant?

Or do we push further up toward IoT and Big Data, fostering experimentation for cloud data and analytics, as either student/startup projects, or as a leg-up for existing businesses?  Do we embrace AI, deep learning, and build the workforce skills need to remain competitive in an increasingly automated and intelligent machine-managed world?

Here are some characteristics I think any good project should have:

-          Small core group – 2 pizza team.  If it’s gets much larger, it’s time to divide and conquer, targeting separate (but possibly related) targets with their own core groups.

-          Transparent and data driven.  “If you have data, let’s go with data.  If all we have is opinions, let’s go with mine.”  My opinions are very good, so data would be recommended!

-          Clear goals, measurable outcomes, and meaningful metrics. We gotta know how we’re doing so we can persevere or pivot as appropriate.

-          Follows the lead of the Lean Startup, Agile, Lean, and so forth – quick wins, valuable initial MVP, engaged customers, etc.  We should view our community effort as a startup, with highly constrained resources…so we’ll need to be diligent about what NOT to do.

-          Addresses the needs of average Tulsans, at least in whatever area of impact we select.  The goal should be populist but at a local level; the public should be the center of focus.

-          Big tent participation.  The effort should be feasible with just a few people, but nobody should be turned away.  As long as a person is willing and able to work as part of a team and not be destructive or too flaky, there should be work for them to do, of some sort.  Top-down pushes, back-room deals, and political maneuvering should be avoided.

-          Must be fun.  Meetings should often include food and sometimes beer.  Communications should be electronic in general, but face to face gatherings improves team relationships.  As a society we’ve moved away from most sorts of public interaction, whether professional organizations, civic groups, or softball leagues. 

-          High standards, reasonable expectations.  Who knows what can be achieved?  Hopefully something better than nothing.  But whatever we do, should be done well, and be intellectually rigorous. 

-          Team must be psychologically safe and embrace productive conflict.  Project Aristotle rules.

What have I missed?  What other ideas might we consider?

5DoaT

Lissa Millspaugh, I finished 5 Dysfunctions of a Team, and then for good measure consumed The Ideal Team Player as well. Thanks for the recommendation!

I'm really surprised I'd not read anything from Lencioni before, and I'll put him on my fictional dinner party invite list for people I think it would be fun to talk with.

5DoaT does indeed reinforce the Google Project Aristotle findings on psychological/emotional safety as the key to effective teams, but adds the very valuable point that the purpose of such safety is to enable vigorous disagreement, thereby leading ultimately to better decisions with buy-in.

Lencioni certainly doesn't go as far with this as Ray Dalio in his Principles, but 5DoaT makes a strong case for what a functional team should be like, or rather not be like.

The nice thing about Google's study is that they had fairly quantitative results that match Lencioni's qualitative view from a decade before.

As a summary, 5DoaT listed these dysfunctions:
- Absence of Trust
- Fear of Conflict
- Lack of Commitment
- Fear of Accountability
- Inattention to Results

Project Aristotle listed these positive characteristics:
- Psychological Safety
- Dependability
- Structure and Clarity
- Meaning of Work
- Impact of Work

These look more different at a glance than they really are, since the structure and clarity for Google come from the open discussions and willingness to have productive conflict from Lencioni. Impact of Work and Accountability and Results are pretty close, too. Commitment and Dependability rhyme as well, from a team perspective.

There are a few other items not on these lists that I think really help create a good team, though. One is a sense of urgency, like a crisis or high-profile goal. Another is having vision that represents a stretch goal, something worthwhile yet not clearly attainable. The best teams in my experience aren't positive they'll succeed, but they're all-in to get it done. And, it's worth noting, that's not the same as a "we'll do our best team", which usually indicates a team that won't actually try that hard. After all, it's not better vs best, but getting it good enough for the situation at hand.

Small Parts, Loosely Connected

Another aspect of teams, networks, organization, or other associations of people is how the always-necessary subcomponents interact.  Clearly, the “clinking and drinking” example shows why we can’t have huge teams just working things out as a group.  The early discussion about Dunbar’s Number indicates this isn’t even workable for humans sociologically, though I wonder if ever-connected millennials may argue this point, or at least expand the upper range of Dunbar associations that they can effectively manager.

The trick for any larger organization is to be purposeful about how the component sub-groups work with one another, and I think the tech world has something to offer the low-tech world of politicians, educators, and business people as well:  2-pizza teams and modular approaches that favor small parts that are loosely coupled.

Jeff Bezos at Amazon made the 2-pizza Team term ubiquitous in the tech world, but it makes sense in any company, and any organization, where change is underway.  A team of 5-8 people is big enough to have broad skills, some diversity of opinion, and enough manpower to make an impact, but is small enough to self-organize work and get things done expeditiously.   Such teams have been proven to be able to tackle a range of problems successfully, and often can outperform larger teams and pull off feats that seem remarkable.  Of course some jobs are too big even for a well-oiled and capable team, and so it takes multiple teams, and that’s where the other aspect of a modular system comes in – loosely connected.

One of the truisms of systems theory is that you can’t purposefully create highly functional complex systems (note that complex systems are not the same as complicated systems, as complex systems have time-varying interactions that are chaotic in nature and impossible to predict accurately over the long term).   Good complex systems are almost always the result of starting with a good simple system and then letting it grow, often by informal trial and error.  This phenomenon is quite evident in software systems, where you see software platforms like Google, Amazon, and Facebook that are massive and successful but that started very simply, yet big systems like the US healthcare.gov and updated air traffic systems were massive failures.  Healthcare.gov only started working well when it was split into parts, with development of much simpler subsystems by – you guessed it – small teams of highly skilled people. 

Unfortunately, most human systems are complex systems, and so we know that to expect to design a large system at once is not a recipe for success.  If we’re going to do something well, it needs to start small, and grow incrementally.

The key point about growing incrementally is to revisit the overall structure as you go, and ensure that it becomes modular, with clear bounds between the parts.  This is critically important for software systems, where technologies and needs change and evolve fluidly, so you need to be able to upgrade some parts while adding other pieces new, and dropping obsolete functions entirely.  Defined interfaces between the parts – protocols and application programming interfaces (APIs) – are the way you do this with software, and there are similar approaches that have been used successfully for many other systems.  Your car, with various interfaces between chassis, driveline, dashboard, etc. with standards for things like radio sizes and tire specifications, is a good example as well.

Amazon, as one of its core practices, requires that each team create a public API for the other software systems and associated people to interface to it, and that API also provides a set of performance expectations (service level agreements, or SLAs).  This means that for any new capability invented or innovated inside Amazon, there is a clearly defined way for others to leverage it for their own purposes, and a clear statement of the performance they should expect.  Often, a team comes up a solution for an existing need, then other internal customers leverage the solution for new uses, and then Amazon makes it available as a new service. 

This notion of simple, public APIs and two-pizza teams is exactly how Amazon promotes the idea of “small parts, loosely connected”, and makes it a tenet of their culture.

I think we need to consider the design of human systems for our city innovation project in a similar vein; each part needs to be clearly delineated, with a specific function and a small dedicated team supporting it.  Each team should offer an API – the way you do business with it – with a service level agreement to manage expectations.   Really, this is something we should expect for ALL city/governmental services, and it’s such a direction that Code for America intended to promote, and probably the local Code for Tulsa and Civic Ninjas would likely support the notion as well.    Empirically, when you make the public interface and its responsiveness/performance the focus of attention, you tend over time to get better interfaces and better performance.

Crowdsourced Selection

One of the hardest aspects of supporting entrepreneurs is vetting their ideas and selecting the most promising, but we could decide to let the open market help with that.  For example, we could offer some public/private venture money as matching funds for those who get their ideas funded by Kickstarter or such.  Tulsa philanthropists or state funds could, perhaps, fund incubator space or some partial salary-matching for anybody with a Kickstarter in a loosely defined area that matches our innovation criteria. 

We could cast a broader net, and provide Raspberry Pi computers, IoT toolkits, and/or free Amazon AWS access for high-school students who successfully complete Internet of Things (IoT) bootcamps, to instill interest and grow skills in such technologies. 


Recently, Coding Dojo opened in Tulsa, with the goal of teaching interested students to be reasonably proficient coders in 18 months or so.  It’s like having a tech school for software….and interesting notion.  Honestly, I’m not completely convinced that such bootcamps will provide the depth and breadth of skills that a college degree would, but there are a lot of implement tasks that fairly green but technically competent coders could handle.

Local groups, like TulsaWebDevs and Techlahoma, already have quite capable tech programs in place, and are growing in scope and influence.  Perhaps such groups could help provide networking connections between local traditional educational institutions, graduates of Coding Dojo, entrepreneur incubators, investors and would-be inventors, and local companies.  The “gig economy” is popular with Millennial techies, and facilitating such engagements could be a win for individuals and companies alike.

Speaking of networking, high-speed Internet is table-stakes for a high-tech community, and improving network performance for all of Tulsa, or at least targeted enterprise zones, should be part of the goal.  I think this is one of those areas where we as a community should simply state our expectations and demand that our local provides like Cox or BTC rise to the occasion to yield to Google for their high-speed fiber or wireless.  Sure, it’ll be expensive, but it’s shared infrastructure that will pay back both in improved productivity and improved attractiveness for well-connected techies. 

Better still, free downtown networking for individuals and IoT devices would help the whole area become a spring-board for connected devices.  Free access doesn’t have to be fast for “things”; it just needs to be ubiquitous in order for IoT device innovation to occur.  It should be pretty fast for individuals, though – for techies a good Internet connection is a highly desirable asset, and not just a luxury but a valuable tool.

Removing Impediments

I believe I’m at the end of theoretical and big-picture strategy points that I wanted to make, and anything after here will be more tactical in nature, and just working opinions of mine on ways we could proceed.   I’ll ramble on for a few days on loosely related topics, and then share a few specific innovation ideas I have and stumble through some analysis of those to see if we can poke holes in them, or maybe some will actually float.

There are a few societal aspects we could address to make entrepreneurship easier to undertake, either by removing impediments or creating supports.  Let’s start with removing impediments.

Today, many start-ups are staffed by young people, those with access to private funding, or those retiring.  Why?  Young people with few obligations can take the chance to make it big without losing too much.  Those with access to money can of course do the same at any age, though often that means much of any upside goes to the investor, and my hope is we devise a more egalitarian approach than today’s VC climate.   Retirees have a source of income to survive on, and importantly, also have medical insurance, so turning 65 is actually a common start-up entry point. 

Let’s hit this point squarely:  medical insurance is a problem.  It’s a problem for the nation, for our state, for individuals, and certainly for the self-employed and small-business owner, which are exactly the sorts of people we want to have more of.  Medical care is too expensive for everybody, and many young people take a chance and simply don’t have any; while we want to sift for risk-takers, this isn’t the rational sort of risk-savvy behavior we want to encourage.  For individuals starting their own business, options are more expensive still.  I think for this idealistic tech-topia, one of the small-bets experiments we need is for medical, perhaps something like:

-          A group plan for catastrophic-only coverage, which should be reasonably affordable, especially for young people, which will be the bulk of our entrepreneurs.  Tie to memberships in a local incubator or part of a city-associated start-up program, and have the city negotiate the terms and manage the risk-pool.

-          A local physician, or perhaps a minor care facility, onsite for the co-working premises.  Members go for free, and for “outsiders” it’s just a normal visit.  Maybe one of our larger, more visionary philanthropists could fund the facility construction and first-year costs?

As for funding, perhaps as a state we could help organize and facilitate entrepreneurial survival.  As a society, it would be good if we made it easier for people to start small businesses – it’s part of our self-image of the American Dream (isn’t all of this?), yet the path isn’t clear or easy, and to some extent needlessly so.  It’s hard to envision income support at the city level, but we already do this at the state level, so it would seem logical to start there.

One of the authors I read, perhaps Ries, suggested that rather than only paying unemployment to the recently unintentionally unemployed, we could also choose to pay entrepreneurs similarly, at least for a period of time; after all, if we consider it reasonable to help support some workers, why not include start-up workers?   Maybe this is something OCAST could help with?

Tulsa already has co-working/incubator programs, and with any success these would need to grow.  Beside the space, data networking, basic office supports, an important function of such facilities is access to people, and a place for entrepreneurial thinkers and supports to interact.  Even if you have drive, ambition, and a great idea, you will need practical advice from lawyers, accountants, IT experts, and probably a host of other specialists that larger companies have in-house but individuals and small-business have to find outside.  A new enterprise may have only a few individuals who simply have never had to find such services, and one of the “networks of people” we talked about earlier should be a local ecosystem of support services.  Of course these could be start-ups and entrepreneurs too, part of the same overall programs.

Clinking and Drinking

Many of you are no doubt familiar with Malcolm Gladwell, and sometime earlier in this thread we briefly talked about the roles of Connector, Maven, and Salesperson.  We also talked a lot about the inherent importance of networks of people inside businesses, government organization, and educational institutions to the overall economy of an area.  And we talked about Dunbar’s Number and the notion of limits to personal interactions.

Of course most of us aren’t 100% examples of any of Gladwell’s categories, notwithstanding that there are probably more minor roles and subtypes.  Still, I think there is some additional insight we can suss out of Gladwell’s personalities as they apply to networks of people.

Let’s say we want to drive change in our metropolis, in some meaningful way.  We know it will take action and commitment be various people, most of whom we don’t yet know.  We know it will take lots of discussions, including marketing the approach.  I’m pretty sure it’ll take some sharp people and application of technology as well, and some coordination of all the above.

We all also know why this will be hard to accomplish, as various layers of misunderstanding, cross-purposes, politics, inertia, and competing priorities will contribute viscosity to the process.  Undoubtedly each of us has examples from our work lives of committees and groups that struggled to attain success even in a more focused environment.  So why is this?

Part of the reason any such project goes slowly is that for each added stakeholder there is an intellectual on-boarding phase before they can contribute their skills, and with each added stakeholder there are more interconnections to manage as well.  One way to think about such a problem is the “clinking and drinking” aspect of a happy hour.

Let’s say we’re having a reception, and each person who comes in has to pour a drink, introduce themselves to each of the previous participants, and clink glasses before they can settle down to chat and drink.  If you start with four people at a table, it goes quickly as all can say their names in quick succession, do a 4-way “cheers” clink, and get down to drinking.  For our example, this is pretty much what Mavens want to do – skip much of the people problems and get down to business.

As more people come in, though, the pattern changes.  When the 21^st guest arrives, they have to shake hands with 20 people, clink 20 drinks, and then find a spot at a table.  Plus, by now each of our professional drinkers who just wants to imbibe will have been interrupted for an introduction 20 times as well.  By the time the 90-100^th participants arrive, everybody will be spending more time clinking than drinking. 

Of course in real-world situations the team-building and on-boarding phase (“clinking”) of a project and the development or operations part of doing the work (“drinking”) overlap, and for some people their whole job is really more about people and they are professional “clinkers”. 

For any major effort, building the team is part of the struggle, and getting the structure of the organization right is a component of that effort.  It doesn’t matter if the broader team is built of volunteers, politicians, teachers, entrepreneurs, or technologists; the team will still need some sort of structure.  A good team structure promotes clarity of goals, coherent and concerted action, reasonably good efficiency, and good feedback loops (accurate and low delay).    This is not at all easy for most people, including most executives (or even most militaries), to accomplish, and many of us know what poor teams are like, with uncertain and contrary goals, inconsistent and cross-purpose actions, poor visibility, and a general feeling of slogging through mud.  This latter case is what we want to avoid, and yet it’s an ever-present risk for a broad initiative that involves multiple bureaucracies.

Cluster Mapping Tulsa

First, a hat tip to Fred Emmer for his excellent pointer to the data available on the Cluster Mapping Project, for Tulsa and many other regions and municipalities.

It is well worth taking a few minutes to browse all the Tulsa information, as some of the data was (at least to me) unexpected. Here's a link:
http://www.clustermapping.us/…/…/tulsa_ok/cluster-portfolio…

With a little more work to compare data from Cluster Mapping to the Economic Complexity data, it should be fairly easy to see where Tulsa can build on existing strengths to gain greater success.

A few points I noted:
- Tulsa is low-cost for most of the areas that it's good at. There should be room to market this to gain share against higher-cost areas, and it should be possible to raise wages over time as well.
- Tulsa is near the top of oil and gas technologies, wage-wise. We're leaders in this area (no big surprise), but it is unlikely to be an area of massive growth in wages. We're going to ride the tide of oil and gas production, and should continue to surf the leading edge, but really our goal should be to get this good at other areas.
- Overall, we don't spend enough on R&D. We're a manufacturing shop, not a design shop, relatively speaking. Look at the rankings (bottom quintile) for federal R&D dollars, R&D spending in general, and venture capital spending. Yet we're second quintile for high-school grads, BS degrees, and patent filings. We're bottom quintile for doctorates, and for international trade.
- Things we're good at, and getting better at, tend to be production related - O&G production, heavy equipment production, trailer production. A bright spot is aerospace vehicles.
- Things we're not great at, and struggling with, despite still having good wages and reasonable employment, include financial services, information technology, and general business services. These are areas we could probably still leverage.

To me, the strategy is obvious: for business areas where we have success already on the production side, we should climb up the ladder to capture design expertise, and the higher-precision aspects of production (such as tooling). We should target those areas where there is wage arbitrage to leverage, where global economic complexity indicates there is value to be had, and where we have the ability to grow the skill base. Most importantly, we must strive to create an agile workforce that is well-adapted to the evolving technologies and shifting needs of the next decade.

We also need to get a better share of the Federal R&D dollars. This is probably an area that our state and local business dev'p people could help facilitate on both the small-scale startup side and the large-scale defense contractor side. We probably have some of the contacts from doing aerospace production; we need to start doing some of the related design projects.

The "product" side of things doesn't seem too hard. Maybe the trickier issues will be "people" -- building the resource base, and "processes" -- the sort of organization and structure to foster innovation.

Strategy and Luddites

It's been a while since I posted on the thread of technology strategy for Tulsa....I've been otherwise occupied, and somewhat lazy, with the holidays.

So, let's recap a bit. As the basis for our strategy, we need to decent vision and a good understanding of our current situation. Some will say I'm fond of pointing out the obvious (and I am), but when it comes to comprehending current reality it is actually not as straightforward as it may seem. Not only are facts and accurate quantitative information hard to come by, but we each view things through our own filters and beliefs.

Think back to the days before smartphones, cellphones, and the Internet -- it's harder than you think to recall how you'd go about arranging a trip out of state, to find a reputable dealer of some unusual item, or to check up on kinfolk. Once, not so long ago, all of these items were novel and exciting inventions that stretched our minds and challenged our habits, but now that we've adapted it's not easy to think the way we once did.

This is exactly the point I made early on about a shared lexicon -- the terms, concepts, and though patterns -- upon which to consider innovations. With too much common experience we could fall into group-think and a like-minded echo chamber. With too little, we will struggle to communicate accurately and efficiently. More importantly, though, without a common mindset or technology worldview we won't look at our situation from a similar perspective, and it will be very difficult to articulate and believe in a strategy that builds upon our current state to get to where we want to go.

For those who are already a ways along a technology path, say as an early-adopter, it is hard to embrace the concerns and misgivings of those lagging behind, and for the uninitiated it's hard to envision the same future as the visionaries.

Which brings us to the Luddites (no discussion of tech revolutions can be complete without bringing up Luddites!), and their approach to avoiding a technological future that didn't seem palatable. It's popular of late, with our techie advances of the 20th and 21st centuries, to dismiss the Luddite concerns, but in actuality they were valid -- technology disruption in the long term does not impair employment, but it DOES destroy professions.

And that points out a need for our strategy: not only must we plot a course for skills, technology, and employment that focuses on increasingly-competitive-value products, but we must foresee and avoid areas that will become fading backwater eddies as technology marches on. It's not that the Luddites were wrong in their assessment of their situation, but their approach to the future was wrong; they should have focused on retraining and innovating to exploit the evolving technology.

That's what we need to do, too. We need to focus on embracing the future and re-training and re-skilling to not only meet it head-on, but to facilitate its evolution and bend it to our liking. More on that next time.

FabLabs - Great but Not Everything

FabLabs – fabrication laboratories – including ours, are great, but they also aren’t everything.  Many FabLabs, perhaps most, are associated with institutions of higher learning, often tech colleges or junior colleges.  Ours is more free-standing, and from what I understand it is more centered on youth education than most.  All in all, this is probably a fine role as the earlier you can get kids to take chances on technology and on making things with their hands, the better.  This is doubly true for girls.

However, FabLabs for older teens and adults have a place as well, and ours probably doesn’t do quite as well as some that are aligned more with tech schools that can teach and reinforce the more advanced skills.  Still, I think all the FabLabs are missing a component that I and my friends always had while we were growing up at our houses:  junk.  Junk is a critical component as it provides material for experimentation, learning, and invention.  Unfortunately it’s also an eyesore and will run afoul of just about any HOA.  I think for teens, and probably for adults, a strong FabLab experience would include:

-          Free access to tools, with training on-site for those that require skill, and some supervision to keep things organized and in good repair.

-          Junk and raw materials, available for free or at least cheaply.   The wider the variety, the better.  A local junk pile, access to a junk yard, a supply of stock goods, and access to a hardware store would all be helpful.

-          Free or cheap consumables:  wire, solder, welding gas, rods, glues, tape, paint, etc.

-          Not much oversight or rules, with just enough rigor to keep things safe.

None of this needs to be very expensive, but it will take some monetary support.  I wonder if a cluster of related labs, say one for woodworking, another for metalworking, another for electronics, another for 3D printing and cutting, etc., each associated with a TTC or TCC lab, and with some oversight by a teacher or knowledgeable retiree, would work.  Again this would cost some money, but around here teachers are used to not being paid very much, and some sponsorship is reasonable.  After all, many companies are willing to pay recruiting fees and relocation costs for solid tech employees, and for the cost of couple such hirings a lab manager could be funded for a year, helping to grow a local supply and to point our those students with the best aptitudes for a given company’s needs.

The next step up from that is shop businesses, for outsourcing fab services for customers who need it.  I think this is much the thinking behind the Rawspace concept, fostering such businesses as startups themselves, with support from local customers.

And this now brings us around to the topic of Makers.  The term is popular, and vague, but really Makers are just people who build stuff, as professional craftsmen, skilled trades, hobbyists, and home crafters have for a long time.  The new take on such activities is that in an increasingly commoditized world of cheap mass-market goods built by automated machines and robots, there is a shrinking need for blue-collar workers.

Despite rhetoric to the contrary, the problem isn’t that jobs all went to China (though some did), but that so many jobs can be done better and more cheaply by robots.  Today, the US produces more than ever before, yet the blue-collar workforce is a fraction of what it once was.  The potential counter to such trends is bespoke, custom manufacturing, the one-size-fits-one paradigm, where those with sufficient means will pay extra to get higher-quality, personalized products of all sorts.  Plus, large-scale manufacturing struggles to address small product niches, and the low-cost-leader tends to push towards lower quality as well as lower costs.  Small scale Makers, either individually or in small-business shops, could address such niches at various price/quality points, and innovate to create new offerings and better variety.

Besides the points above about quality of a local FabLab and networking with local institutions and organizations, a FabLab network would be beneficial as well.  The equipment for a FabLab is expensive, and there is no reason each needs to replicate the same equipment beyond the common tools for skills training and basic fabrication.  For example, there is a FabLab in Independence KS, another in Wichita, and other nearby in Fayetteville, Muskogee, and OKC, all within range of day-trips or easy shipping.  If the one in KS gets a 3D metal printer for aircraft parts, the one in Tulsa has good 4D or 5D mills, and the one in OKC has a welding robot for tubing frames, then the collective value will be greater than if all chase the single latest and greatest tech widget. 

Today, there is an association of FabLabs, so some of this thinking is probably underway.  I’m not involved enough to know if they have gone so far as to create and share a regional vision and have active reciprocity and joint projects to spur personal networking.  This brings up an important point:  visions should be fractal and overlapping, not contrary, if the regional entities are going to be able to get support from state organization, who will in turn have an easy time finding support for local projects.  We all need to be heading the same way if we’re going to build virtuous cycles with speed (I guess this would then be angular momentum?).

Climbing the Ladder

It would be great if we had the depth of information about the product exports of Tulsa that we have, say, for Italy.  If we did, we could build a map like this:

http://atlas.media.mit.edu/5v607m

And, for each product on that diagram we could readily double-click to see what countries imported them (the customer base), and who else exported them (the competition).  Of course, we’d also want to know for each product what the relative economic complexity would be; that is, which products bring high-value to exporter, relatively speaking.  All of this information is available for countries, and that’s a good think IF you have a government who pays attention to such things and creates meaningful policies and incentives based on intentional goals.

Unfortunately, as far as I know there is no such dataset available at the state or city level, and honestly I don’t see much in the way of analysis and intentional goals at the national level.  So, we could wring our hands and lament our situation, or we could convince Hidalgo and his crew to convince states and cities to collect info and undertake a study for us, or we could take action locally and do something different, but along the same lines of thinking.  To me, this last notion seems more likely to bear fruit.

Perhaps a distributed, crowd-sourcing approach would work well enough?  If a city team wanted to devise a strategy for the metropolis overall, then getting input on all produced products (those consumed internally as well as exported), a marketing campaign to get feedback from the community – all those employees, customers, vendors of the firms in the city – could probably provide enough data to be useful.  For all I know, there could be such a database already, as a census of the economic makeup of the city. 

But even if there isn’t I think an even more distributed model could still work.  If each firm or individual just looked at his environment and purposefully decided to climb the ladder in their industry, progress would ensue.  For example, we could make a few simple rules or guidelines:

-          If we consume a product but don’t build the product, look into building it.

-          If we build a product but don’t design the product, consider designing it.

-          If we build a product and envision growth, see if we could train for it.

-          If we design a product but don’t teach the design skills, consider educating for it.

-          If we do something open loop, consider instrumenting the process.

-          If there is data in the process and it isn’t collected, collect it.

-          If there is collected data that isn’t much analyzed, see what can be learned from it.

-          If there are processes that require manual human work, see if it can be automated.

-          If there are devices that are smart, but mute, add communications.

I’m sure there are similar thought patterns that could apply to software-centric, biological, chemical, and other areas.  In fact, I’d say it’s a truism for technology today that ANY climb up the ladder will require savvy software programming, and probably have an opportunity for AI or other analytics as well.  It is a safe bet that we’ll need more training and specialization in cloud storage, Hadoop-scale databases, fog computing, Watson-style analytics, Google TensorFlow-style AI, and web-based user interfaces for all of it.

Resources to Leverage

You may recall that Hidalgo, as part of his country analysis, profiled various countries as to their GDP and economic complexity, and predicted which had immediate upside potential.  Based on historical analysis, China, Korea, and Singapore started with fairly high complexity and low GDP, and these countries were expected to grow in GDP and indeed they did.  In fact, they were part of the “Asian Tigers” growth phase, both before and after Hidalgo’s first study.  Interestingly, though, several other countries – Brazil, Indonesia, and Turkey – also grew, despite starting from a much lower complexity and GDP point. 

Interestingly, China only started growing after it’s reforms began, illustrating the importance of “good enough” government structures.  Turkey enjoys a strong relationship with the EU, and Brazil and Indonesia have energy resources, but all did a good job of leveraging their opportunities.

The original study also points out some novel relationships between products, including some clustering of related products.  In the early years, 50 years ago, electronics was a niche cluster of products, somewhat isolated from the rest; today, electronics is a large cluster intertwined with many other products.  This of course makes sense,  as electronics was a technology that started on the fringe but was one of those high-order innovation remixes across other areas. 

On the flip side, oil started as a local cluster, even though 50 years ago oil was already a mature industry; today, it’s still a separate cluster.  Oil does not seem to be the sort of technology that readily mixes into other product sectors.  Combining this with the historical “curse of oil” perspectives, I think this provides a cautionary note for Oklahoma and Tulsa, in that we would do well to look at oil as a fortunate windfall but also a one-trick pony, and perhaps we should strive to diversify our technology base.  I’d assumed that Texas had already done that, but their top-5 isn’t much more impressive than Oklahoma’s, though banking is a notable asset.  Again, we’d need to dig much deeper to get a full picture of their economy, though.

Anyway, let’s get back to Tulsa.  We already have some pretty good resources that could be readily aligned to push in worthwhile directions; in fact, probably a decent pitch would probably be enough to tilt their support significantly, we’d just need to be convincing.  Such resources include:

-          36 Degrees North – a cool co-working and start-up support space downtown, 36 Degrees is mostly a software-centric organization supported by a range of philanthropists.  It’s perhaps the best techie space in Tulsa.

-          FabLab – a tech shop just east of downtown, FabLab provides members with access to a number of high-tech tools for creative use, like 3D printers, wood mills, vinyl cutters, and basic electronics equipment.  Today it mostly support youth outreach and teaching, but that’s got to be part of a long-term vision for anything STEM related.

-          I2E – A state supported group, I2E provides space and funding for startups with a pretty solid business pitch.  They work with local investors, but last I worked with them they had yet to find their perfect niche.

-          OCAST – the state group that funds I2E, they also provide funding for interns and other science ventures across the state. 

I’m sure there are others I don’t know about, and still more that sound promising but have yet to get off the ground (like Scott Phillip’s Rawspace). 

So, what’s the point, you might ask?  To have success we’re going to need to turn up the annealing temperature, and get people jumping a little further in their thinking than has been the historical norm.  We need to get a lot of ideas funded, and then let the market weed them out.  We can’t be paranoid about wasting money, as it’s going to be a statistical thing, and just like VCs in Silicon Valley we need to trust that the few big wins will more than cover the many little losses.  In short, I believe we should combine four key ideas:

-          Increase the annealing temperature of our innovation, pushing entrepreneurs to take a bit more risk than they normally would, and making more technology and market ideas available through networks between our local institutions and neighboring high-value cities.

-          Leverage the Lean Startup ideals of small bets, with intentional market experiments and value accounting that emphasizes customer value growth rates and other second-order metrics more than income.

-          Bias for success by seeking adjacencies to high-value products that Tulsa already produces, including both physical products and virtual products like software and algorithms in the mix.  Detailing these will be a good bit of work.

-          Specifically seek success for several distinct areas of the economy:

o   The hands-on build/craft/trade side that includes traditional blue-collar attributes and middle-class hobby-craft as a base (bespoke one-offs, custom items, Maker sorts of creations, etc.)

o   High-value professional jobs making high-tech products, artificial intelligence, Watson analytics, cloud data hosting, Internet of Things widgets, and so forth.

o   Bulk mid-level techie jobs centered on software, user interface/web development, and basic networking and troubleshooting skills.

In the next day or two I’ll finish up with a few thoughts on how we might go about the detailing and planning process, some areas I think we need to work on to make turning the crank of innovation easier for entrepreneurs and existing companies, and a few other loosely related notions that I believe in but for which I have yet to rigorously develop support.