Thoughts on Climate Change

There has been an interesting debate running within the Australian Institute of Company Directors ‘closed’ Linked-In group. This post is an abstract of some of the more salient points that I feel should be in the wider community. A lot of the material may be common sense, but common sense is ‘that which is commonly considered right and proper when observed’, not ‘that which anyone and everyone has already thought of’.

My view expressed in the discussion is that the managers and directors of organisations destined to fail in the next 5 to 10 years will continue to pretend the climate is not changing (the cause of the change is irrelevant). This phenomenon of refusing to accept what is gradually becoming the ‘blindingly obvious’ is not uncommon among boards – there are still people who don’t accept smoking causes disease because only 50% of long term smokers are killed by the habit and they know someone who has smoked for 40 years and is still healthy… And whilst acceptance of the lethal effects of asbestos fibres are now more widely acknowledged, the mounting evidence of the danger was ignored by boards, architects and engineers for decades preferring short-term expediency over long term risk management.

Anyone with a basic grasp of science knows it is impossible to ‘prove’ climate change in advance; predictions are always based in probability. The simple facts of science are:

Fact 1 – there is no proof of any theorem in physics – all the scientists can state is that based on observation and experiment they have not been able to disprove the concept to date. The transition from Newton’s ‘gravity’ to Einstein’s ‘relativity’ to the 98% certainty Higgs Boson has been discovered is a case in point. Climate science is no different.

Fact 2 – there is overwhelming evidence the climate is changing significantly – the immediate consequences are more severe weather events (hot and cold; eg, tornados in the Murray Valley) and sea level rises caused by the sea waters expanding as they get warmer.

Fact 3 – these changes will have inevitable consequences on every business and every organisation.

The precautionary principle suggests prudent organisations make reasonable allowances for these observed effects. Optimist may hope they are temporary and will go away in a year or two, but how many boards really what to bet their future on an optimistic hope?

WHY the climate is changing is largely irrelevant (although green house gasses seem to be a major contributor). The issue for boards is recognising the reality that exists now and dealing with the real problems this is causing today, starting with insurance cover/premiums closely followed by increasing the resilience and diversity of supply lines.

Alun Stevens suggested the science is quite settled. He posted: I grant you there is a lot of noise, but the science is settled and quite unequivocal. To put it succinctly:

1. Radiation absorption by CO2 warms the atmosphere. This has been known since the mid 1800s and is identical in process to microwaves warming meat. If your microwave works, CO2 warms the atmosphere. if CO2 does not warm the atmosphere we are all deluded about our microwaves.
2. Other gases including water vapour also warm the atmosphere in the same way, but more effectively.
3. The higher the concentration of these gases, the greater the absorption of radiation and the greater the warming.
4. The CO2 concentration is rising. Every monitoring station across the globe has shown a rise including those in Antarctica and Tasmania where there is no local production of CO2.
5. The increase in CO2 is due to human activity. I can never understand why this is disputed because it is quite easy to prove. The world has an extremely accurate estimate of the amount of CO2 produced each year because of very good records of production and consumption of fossil fuels. Some may have been missed, but this just means that the answer is a Lowest estimate. The amount of CO2 in the atmosphere is a bit more difficult to measure, but is still accurately known because of the spread of measuring stations and satellites. The increase in CO2 content of the atmosphere is less than the amount produced by humans. The rest of nature is therefore a net absorber of CO2 and ALL of the increase is due to humans.
6. Methane concentrations have also increased. Some from increased animal production – ie human induced. Some from land clearing and related activities – human induced. Some due to thawing of the deep frozen stores in places like Siberia. Physics interlude – ice can only melt if heat is added to it. If the methane stores are melting, their heat content is necessarily rising. The methane rise is either human produced or secondary to rising temperatures.
7. Water vapour content is rising. Another physics interlude – the capacity of gases to hold water vapour is dependent on their temperature. If the water vapour content has risen it is necessarily true that the temperature of the atmosphere has also risen. Water vapour rise is a secondary effect to rising atmospheric temperatures.
8. There is an energy imbalance between the energy received from the sun and the energy being radiated back into space. There is some argument about this, but only about the size of the imbalance not about its existence or that it is increasing.
9. The amount of energy coming in from the sun has not changed materially. There are solar maxima and minima, but the differences in energy output between them are not big and are much too small to account for the increase in the energy imbalance. The earth has also been on a very consistent orbit over the last 150+ years or so and the Milankovitch cycle effect has in fact been very slightly negative – ie reducing the amount of incoming energy. There has been no increase in earthbound events (e.g. volcanoes) that could explain the increased imbalance. The increase is due to retaining more heat which can only be due to the ‘greenhouse’ gases.
10. The energy content of the globe is increasing. Less than 2.5% of this in the atmosphere. Over 90% is in the oceans with the rest in the continents (warmer rocks) and melting ice. There has been a significant reduction in ice volume. The only scientific argument is whether it is a lot or a lot more or even still more. Sea levels have risen. Some is due to the melting of continental ice (melting sea ice doesn’t change sea levels) and the bulk from expansion due to rising sea temperatures.

He continued: Although I am now an actuary, I started out as a physicist and have been interested in climate science for 40 years. Back then the question was whether rising aerosols in the atmosphere would cause global cooling or rising CO2 would cause global warming. The world responded strongly to the rising aerosols – sulphur, ash etc – so that concern disappeared. It did not respond to CO2 and we are now where we are.

The science was actually settled 20 years ago. All that has happened in the last 20 years is to settle it more and more accurately and to falsify all competing hypotheses. (As Pat rightly points out, that is what scientists do – falsify claims. Those that remain unfalsified, no matter how unpalatable, are the best estimate of the truth available.)

The outworking of all this is that the science is clear that:

1. The earth is warming.
2. The warming is accelerating.
3. The warming and its acceleration is caused by CO2 and its increase.
4. Human activity is the source of the increasing CO2.

Having got that off my chest, we now get back to what are actually the real issues, namely what does this mean and what should we do? Here there is some room for debate and argument. What is the likely extent of the warming? How quickly will it happen? What will be the impacts on the climate and weather at different temperature levels? What will be the impact on sea levels? What impact will weather and temperature changes and sea level changes have on human and other life and their activities?

The answers to these questions go to answering the sorts of questions that directors need to be asking. What should we do? How quickly must we do it? How much should we spend? Can we afford to do nothing?

This gets down to one of my current areas of interest – risk management. Boards have a responsibility to manage risks. It is one of their primary functions. Climate risks, like all other risks require a proper approach:

1. What is the risk?
2. What will be the impact of the risk?
3. How likely is it to happen – in this case the question is more one of when rather than if?
4. Can we absorb the outcomes?
5. If not, how do we mitigate the risk, insure the risk or avoid the risk?
6. How do we implement our decisions?

This all requires proper forward estimations which brings me to my final question (at last). How will you make quality estimations and therefore decisions? Will you just rely on the gut feel experiential approach of, ‘don’t worry, my experience shows that nothing has happened in my lifetime or that of my father and grandfather; things are always up and down; so nothing will change’? Or will you take into account the best scientific knowledge and properly model the potential outcomes?

To answer one of my questions – we cannot afford to do nothing. We have to manage the risk.

Alun concluded: I am a great believer that change is ALWAYS an opportunity to be exploited. This is a big change and it will be worth a very serious amount of money. There are opportunities in changing what we do now to prevent or reduce the impact of climate change. And, because of the tardiness out there, there are opportunities in doing new things to cope with and exploit the changes that will happen.

Interestingly this is not a global left/right political argument. Whilst the approach adopted by Tony Abbot in his announcements this week (Australian Liberal) and the US Republican party favour the easy option – shoot the messenger, treat each occurrence of an unusual weather event as a 1 off anomaly and pretend nothing serious is happening this is not a consistent ‘right wing’ position.

The UK Conservative party has a 100% commitment to reducing greenhouse gasses enshrined in law – the Prime Minister who set this objective in motion was Margaret Thatcher, hardly a ‘left leaning green’, but she was a trained scientist.

Conversely, many labour organisations oppose change to mitigate greenhouse gas omissions because of their short-term effect on their member’s employment. And the thing I find strangest is the farming community (at least in Australia) that has to adapt fastest and will suffer the most from extreme weather events, seems to be represented by bodies that want to deny the existence of a problem.

Somewhere there is a serious communication breakdown. Our innate biases tend to mitigate against dealing with the issue; some of the more potent include:

A reluctance to do things now for an uncertain future benefit,

A preference for what we know though direct experience compared to things we cannot see or touch, and

A tendency to ignore things we don’t like or that don’t fit comfortably with our current views (see more on ‘bias’).

Education in the broadest sense is the antidote to bias and this requires meaningful communication – something that has been seriously lacking.

The BANANAs slip up

A UK Government Minster recently commented that the world was shifting from a bunch of NIMBYs to BANANAs!

NIMBY = Not In My Back Yard (potentially selfish but understandable)

BANANA = Build Absolute Nothing Anywhere Now and Always

In the UK the journey from London to the Midlands is fraught – traffic is overcrowded for most of the 24 hours – one accident can cause hours of traffic chaos, conventional rail is overloaded and the distance is too short for effective air travel. The solution to this problem has been rolled out throughout the rest of Europe for several decades – high speed rail. Using the existing high speed rail you can get to Paris or Brussels easier than Birmingham or Leeds from the centre of London.

To fix the problem, the UK is planning its second high speed rail link from London to Birmingham and then on to Leeds and Manchester, called HS2. Since its announcement the BANANAs have been out in force – apparently it is better from the BANANA viewpoint to have highly inefficient, high pollution traffic jambs and build nothing rather than a clean and efficient alternative. The fact that the North of England is significantly disadvantaged compared to the better connected South is irrelevant. The emotional arguments about ‘damage’ caused by the development are immediate and compelling, the benefits arising from the operation of HS2 are in the future and so BANANAs can ignore them.

Fortunately the UK High Court operates in a more pragmatic space. In its judgement earlier this month, the government won nine out of 10 points being challenged, which effectively gave the “green light” to the high-speed rail project. The judge agreed it was lawful for the Government to choose to rule out upgrading the existing network as a credible alternative to HS2. He noted that a patch and mend approach failed to meet the Government’s objectives of providing a long term boost to capacity and economic growth. He also found that the Government’s approach to consultation on the HS2 Phase One route, environmental assessment and consideration of the impact on habitats and protected species, had all been carried out fairly and lawfully.

The one point the judge upheld was a challenge concerning the way the property compensation consultation had been carried out. The Government has decided that instead of appealing this decision it will re-run this consultation in line with the judge’s finding to fairly compensate the public who are impacted by the scheme.

Contrast the problems in the UK and the Republican Party blocking a similar initiative in the overcrowded NE of the USA with China where current plans are for 16,000km of high speed rail to be operating by 2020, including the 9676km already built, in a determined effort to overcome congestion and pollution.

To quote the Boston Consulting Group: ‘China’s big infrastructure networks are platforms upon which new industries are layered greatly multiplying the economic value of the projects themselves’.

Australia has its fare share of BANANAs – there are 100s of tones of radioactive medical waste stored in expensive hospital buildings as well as radioactive industrial waste scattered throughout metropolitan areas because no government has had the courage to develop a safe storage facility. Every time one is proposed the BANANAs start screaming, but they also do not want to let cancer patients die or fly in unchecked aircraft (radio isotopes are used in the non-destructive testing of welds).

What the BANANAs forget is living is a compromise – every decision not to do something has a consequence and every decision to do something has a consequence. Careful consideration of the options and a balanced decision is needed based on the overall good for the environment and society (with proper compensation to those disadvantaged).

Doing nothing simply condemns everyone to progressively lower standards of living that will eventually lead to mass degradation of the environment because there is no money to look after it!

The advent of BANANAs supported by social media opens up a whole new set of stakeholder management challenges. NIMBYs were identifiable and had reasonable ground to expect consultation. BANANAs are far more widespread and work on emotions rather than common sense – for more on the tools for stakeholder management see: http://www.stakeholdermapping.com/

Fairfax Media problems, are they rooted in customer service?

Fairfax Media Limited’s dismal share price seems to be matched by its dismal customer service! Media outlets live on subscriptions; regular subscribers are the bedrock of circulation numbers that in turn feed into advertising rates and revenues.

Last night Melbourne suffered major storms and there were production delays in completing the Saturday 1st December edition of The Age newspaper – with late delivery to the local agents and supposedly late delivery to customers.

You cannot help bad weather, however, this is no excuse for dismal customer service. The failure of Fairfax Media’s to offer effective customer service runs at several levels:

1. They could not be bothered to put an easily accesses notice on there web page – the only way to find out what’s gone wrong is through time consuming telephone calls. Presumable Fairfax Media puts trying to keep their production problems a secret ahead of customer service – a failure on 2 counts!
2. The local newsagent Dundas Place Newsagency Pty Ltd simply refused to answer its telephone for the whole for Saturday morning!
3. After a 15 minute wait to speak to the Age subscriber call centre at 9:00 I was advised about the late delivery to the newsagent and that the papers were in the process of being delivered now. Possibly true of some locations – not to us.
4. After a 5 minute wait at 11:30 speak to the Age subscriber call centre again (the local news agency was still refusing to answer its ‘phone). I was told it was too late to organise a re-delivery; this had to be notified to the agency by 7:30am.
5. All that was offered in compensation was a credit for the discounted delivery of the Age – if we wanted to see today’s paper we have to walk to another (much closer) news agency and pay the full price. This is despite the fact we have a long-term contract with Fairfax Media for daily deliveries of the paper.
6. From previous failings of the delivery system we have learned the only way to get a credit for Fairfax Media failing to honour its contractual obligations is to spend valuable time on the telephone and request the credit – even where there has been no delivery to anyone or the news agent is aware of their failure to deliver.

Production problems are occasionally unavoidable in any industry, particularly time pressured processes such as newspaper production. What has prompted this post is the chronic failure of Fairfax Media both at the contractual level and at the customer service level.

• Good customer service requires an organisation to go out of its way to minimise inconvenience to its clients caused by its failure and to volunteer compensation – done properly it builds customer loyalty. When done as badly as the Age simply it simply drives customers away; they have demonstrated they have no real interest in their customers so why should I bother to remain a subscriber? Multiply this by several thousand people and the damage to Fairfax Media’s value becomes obvious.
• From a contractual perspective, the law requires a breach to be remedied and the non-default party to be placed in the same position as it would have been if the breach had not occurred. The remedy offered does not recompense the actual costs involved in telephone calls, time wasted or the actual cost of buying the replacement paper at the news stand prices.

I have lodged a formal complaint with the Age call centre which of course cannot be dealt with until ‘management’ wake up on Monday morning, but may not be dealt with for 48 hours……. So we will see what happens. It is a real pity the Age’s excellent journalism is not backed up by effective management and good customer service.

PM World Journal up and running

PM World Journal is a free monthly e-Journal that is progressively filling the void left by the closure of PM World Today in March. You can read the journal and download articles of interest at www.pmworldjournal.net.

The November edition of the PM World Journal was published late last week, and included my article ‘Communicating Upwards for Effect’, introduced by Prof Darren Dalcher.

Other points of interest in the November edition include:

• Gower publishing offering FREE Project Management Books and 40% Discount to Celebrate PMWJ Launch – http://pmworldjournal.net/?article=gower-offers-free-project-management-books-and-40-discount-to-celebrate-pmwj-launch
• A range of Feature papers and series articles
• Commentaries and advisory articles
• Book reviews
• Reports and updates from around the world

PM World Journal fills an important gap between the heavy-weight, peer-reviewed academic journals and the short shelf-life news sites and magazines. If you have something of value to contribute, the call for Papers for December and January editions is open at – http://pmworldjournal.net/?p=3237

Time Management Presentation – WITS University Johannesburg

Yesterday afternoon, I took time out from the work of the ISO TC 258 study group hosted in Pretoria, by the South African Bureau of Standards (SABS). The primary purpose of my trip to SA is to contribute to the work of this group, studying the current state of understanding of the concept of governance of project, program and portfolio management with a view to the possible development of an ISO standard. The ‘time out’ was to present a paper on ‘time management’ at WITS University; but this simple diversion turned into a fascinating day……

Apart from the storms hail and floods, a highlight of the visit to the university was a too quick tour of the recently opened ‘Origins Centre’ http://www.origins.org.za.

The centre showcases recent South African discoveries of two pieces of engraved ochre and, more than 60 marine-shell beads dated at 75 000 years. Theses finds, together with archaeological evidence emerging from other parts of Africa, suggest that symbolic thought and other forms of behaviour regarded as characteristic of modern human beings, began in Africa as far back as 200 000 years ago. This combination of palaeoanthropological and archaeological evidence confirms the hypothesis that fully modern human beings evolved in Africa first, and then left the continent to populate the entire world.

The two overwhelming impressions I took away from the displays were:
• Firstly the intrinsic oneness of mankind – the differences are minute compared to the common bonds and heritage.
• The second was the ever accelerating rate of change in the technologies we use. Every ‘new age’ of development occupied a fraction of the time of its predecessor starting with the ‘old stone age’ which lasted over 2 million years. The ‘middle stone’ age lasted some 250,000 years, followed by the ‘new stone age’ which lasted less than 10,000 years and finished with the start of the modern era some 5000 years ago – the modern era includes the Bronze and Iron ages, leading through to modern times.

After considering the ‘historical aspects of time’ it was onto the ‘management of time’ and planning the future… The presentation is on our website at http://www.mosaicprojects.com.au/Resources_Papers_163.htmlx. The three underlying messages in the presentation are:
• Plan what you know ‘budget the rest’
• Useful schedules are useful because they are used (ie, effective communication media)
• The future is unpredictable so expect change.

The last of these points was brought home immediately after the lecture concluded. My hosts had arranged a dinner at a local restaurant; however, the afternoon storms had flooded the bridge leading to the restaurant and it took a number of attempts to find a way around – the 8:00pm meal started nearer to 9:00pm! Good communication and adaptability led to a great evening but the original plan had to be revised to accommodate reality.

The pride passion and hospitality of South Africans is amazing I certainly hope to be able to return at some time in the not too far distant future.

Qantas: ‘You’re the reason we fly’???

This is a misleading advertisement; ‘You’re the reason we fly, BUT ONLY IF YOU COMPLY WITH EVERY SINGLE ONE OF OUR RULES’ would be more accurate!

If you move away from Qantas’ relatively expensive full fare bookings you can expect to be treated like a number, not a valued customer. If you have not carefully read and fully understood every piece of information and complied with every restriction and limitation don’t expect any common sense of customer service from the Qantas staff.

We booked a discount international business fare without looking too closely at the domestic connections. Big mistake!!! The Qantas system somehow considered it reasonable to book the Melbourne – Sydney connection with a 13 hour overnight stay in Sydney! There are 12 other flights departing after the one the system selected.

Certainly if we had noticed the flight stuff up, we could have done a dozen different things to drive some common sense into the travel arrangements. The simple fact was we did not see the error, our mistake, and Qantas are refusing to provide any sensible assistance. As far as Qantas is concerned, ‘The rules are the rules and we can get stuffed’.

It looks like Qantas will become yet another Australian business heading for the scrap heap driven by the accounting logic of ‘rule based cost cutting’.

Despite over 20 years of flying Qantas (most as a Gold Card holder), this last episode has moved us to the point where customer loyalty will be replaced by our own cost efficiencies – there are plenty of other options out there. Net cost to Qantas from ‘applying the rules’? Probably in excess of $50,000 this financial year as we book alternative flights with other airlines – their service is likely to be bad, but Qantas is demonstrably no better so why pay more??

What ever has happened to the idea of charging a premium (already built into every Qantas fare) in return for sensible customer service and providing a great experience? If Qantas had provided a little bit of help sorting out our mistake, instead of this negative blog, Qantas would be receiving praise and on-going customer loyalty. Fixing the problem sensibly would have cost Qantas virtually nothing. As it is, Qantas ‘applied the rules’, destroyed customer loyalty, damaged its brand and has potentially lost tens of thousands of dollars in future business.

A stupid outcome from a stupid system, driven by a stupid philosophy. When will bean counters learn the key to business success in the 21st century is exemplary customer service? If you don’t have loyal customers you are in a price driven commodity market and there is always someone who can undercut your price.

System Support?

At times I’m pleased we only have to support our Stakeholder Circle software. The following was forwarded by a colleague – the veracity of the conversation cannot be determined!

Support log:
Caller : Hi, our printer is not working..
Customer Service: What is wrong with it?
Caller : Mouse is jammed.
Customer Service: Mouse? … Printers don’t have a mouse!!!
Caller: Mmmmm??.. Oh really? .. I will send a picture.

The 2012 Global Innovation Index

The 2012 Global Innovation Index has been launched by the INSEAD Business School. For the second year running that Switzerland, Sweden and Singapore are in the top three positions. The rest of the top ten this year are: Finland, the United Kingdom, the Netherlands, Denmark, Hong Kong (China), Ireland and the United States. Canada dropped out of the top ten this year, while the U.S. fell to tenth position from number seven last year.

New Zealand comes in at #13, with Australia 10 places behind at #23, a drop of 2 places from last year. The index directly links innovation to the creation of wealth so rankings matter!

To read the report, see: http://www.globalinnovationindex.org/gii/main/fullreport/index.html

A Tale of Two Cities

Or to be more accurate two countries.

I have just finished a 5 day trip to Shanghai and have landed in the UK. First impressions of the UK is the place is slowly decaying into insignificance, visiting Shanghai after a 3 year break and the progress is very noticeable.

Shanghai is a much larger city than greater London – its traffic is bad, but works. The place is clean, very little litter, major attempts to grow greenery and virtually everything looked well maintained. Watching as an outsider, the problems Shanghai faces are created by its success and growth. What was most noticeable was the work to overcome these issues and problems. Problems were defined and resources committed to developing solutions. There was a noticeable pride in the city and in China’s re-emergence as a world power.

Flying from Shanghai, I arrived in the UK on a wet afternoon – the M25 was a dysfunctional parking lot. The BT internet service did not work at the family home - plenty of signal strength but despite having a paid BT account no access for 4 hours despite repeated attempts to connect! My Australian Telstra 4G modem does not work – no signal. The UK is one of the richest and most densely populated countries in Europe and basic services readily available in most developing countries are dysfunctional. More worryingly the press and political system seem to accept second rate as normal.

The genuine patriotic reverence for the Queen’s Jubilee celebrations showcased the ‘best of British’ – however, what commentators eulogising over putting the Great back into ‘Great Britain’ forgot was that when Britain was ‘great’ it had world-leading capabilities and these were founded on world-leading communication infrastructure such as canals and railways.

The key infrastructure of the 21st Century is broadband communication – Australia is building its national broad band network (although some luddites think this is unnecessary), China is investing heavily to keep up with demand (as is Singapore, Malaysia and a host of other countries); so why has the UK become so uninterested in providing an equivalent service that works to help business and grow the economy?

My feeling is UK business seems more interested in cutting costs than making money –corporate anorexia (you need to invest wisely in capability, service delivery and people to make money). The government is frightened to lead and the press seem more interested in any salacious scandal than pushing for effective service.

Great empires take a long time to decay – strong civil systems are remarkably resilient, however, the parallels between the decay of the Roman Empire in the 3rd century and the collective European Empires in the 20th century is interesting to say the least. A loss of technical dominance as countries outside of the ‘empire’ learned to emulate the technology of the Romans, major wars between competing factions followed by the emergence of new dominant cultures that eventually destroyed the empire and usurped its power and property. The Roman system was unable to reinvigorate itself to compete effectively in the changed world of the 4th century. Will history repeat itself in the 21st century with commerce replacing legions in the ‘battle’? I hope not but the signs are worrying.

How long is a piece of string?

Apparently anything up to 35,786Km (22,236 miles) long!

NASA have offered a $2 million award to the team that can create a cable strong enough to support a space elevator rising from the equator to a ‘counter weight’ tethered in orbit more than 35,000 Km above the ground, using inertia to keep the cable taut.

So far no one has claimed the prize – The NASA team working on this idea believe carbon nanotubes may provide the answer but the technical problems are immense. To read more see: http://science.nasa.gov/science-news/science-at-nasa/2000/ast07sep_1/

So the next time someone on your team asks ‘How long is a piece of string?’ you have a plausible maximum value – the current safe answer is probably less than 35,000Km (but only until some genius rises to the challenge set by NASA).