Trump needs engineers who understand value

Americans have voted, and most of us were surprised.

I just watched a CNN interview with a former factory worker who voted for Trump. “We need lots of small factories with 200-300 people making things, employing Americans.”

Trump can’t deliver that.

Only engineers can make that happen, engineers who know how to create sufficient value to attract investors.

Bill Williams and I have recently discovered that many engineers know little if anything about creating value for investors.  Supported by students, we interviewed practicing engineers and found that, for example, most associate the word “value” with a number in a spreadsheet.

We also discovered little in the business and engineering research literature that can help.

A small number of “expert engineers” have worked it out for themselves, without necessarily being able to explain it in simple terms.  They are well rewarded by their clients and employers because they create so much value for their enterprises.

We have recently written a detailed explanation which, we think, explains how these experts create value, and we hope this makes sense for many more engineers who could just make enough difference, everywhere.  Not only to help frustrated Americans.  Engineers who know how to create value effectively could transform our world and eliminate poverty.

Since the industrial revolution, we have all come a long way, but most of us know we cannot sustain our civilization into the future without making some big changes.  We engineers have to lead these changes, but we need huge resources from everyone else to make it happen.  And that requires insights into value creation that elude the vast majority of engineers right now.

In coming posts I will do my best to explain the fundamental ideas that have emerged from our research and what we mean by value creation.

Why failing drinking water supplies are a catastrophe for us all

When I started writing about drinking water supply in low income countries (like India and Pakistan) I saw it primarily as an economic issue.  It was only when I read recent papers on stunting that I realized the catastrophic health and economic impacts of stunting caused by faecal contamination of drinking water supplies, now common in many parts of the world.

Stunting occurs when infants drink contaminated water causing repeated diarrhoea attacks which result in permanent damage to the intestines, restricting nutrient intake so affected children suffer from malnutrition even if they eat enough. Nearly half of all children in South Asia and other parts of the world are now affected.  So many piped water schemes provide contaminated water at the point of consumption.  The water pumped into the system may be safe to drink, but what goes into the mouth is not.

The only way to start fixing this problem is safe drinking water distribution. Obtaining and treating bulk supplies of safe drinking water is relatively inexpensive: even desalination costs only $0.50 per ton. While there are many water-scarce regions, in most there is still plenty to drink once treated.  The scarcity affects agriculture more than drinking.

Piped water supply utilities are failing in most low-income countries and few if any provide a 24/7 supply of safe water. For example, “good” utilities in South Asia provide intermittent water for 1-2 hours every 2nd day: sewerage seeps in through leaks during the “off” time contaminating the network. Many leaks result from crude attempts by engineers to enforce revenue collection by temporarily disconnecting adjacent water and sewerage pipes to recalcitrant customers. Air trapped in pipes destroys meters. A downward spiral in service quality and revenue collection forces people to stand in line to bribe tanker drivers to refill contaminated domestic tanks. Water has to be filtered and sterilized to make it safe, or supplied in 20 liter bottles at $100-150/ton.

Low trust between consumers, utilities and government undermines attempts to improve service quality. Conventional water supply technologies require trust and collaboration between diverse social actors which is much more difficult than in high income countries so the problem persists.

And for the majority of people who have no piped water, the situation is even worse. When women carry and purify water their labour is unpaid but comes at a cost: more than $30/ton across South Asia using standard value of time models.

The consequences of drinking water safety failures affect everyone: the real cost of getting just enough can exceed 10% of family income. It helps to explain stubbornly persistent poverty, stunting and malnutrition from environmental enteropathy caused by fecal contamination. The economic and health catastrophe in low-income countries affects us all.

In the next post, I will describe why so many previous attempts to solve this problem have failed and how I came to see some elegant solutions.

An update on Close Comfort

About 10 months ago I was sitting in the lounge room of our family home in Islamabad, Pakistan with my wonderful wife Samina Yasmeen.  She is a professor of Political Science at the University of Western Australia and directs the Centre for Muslim States and Societies there.  We had just inspected a huge pile of boxes containing hundreds of Close Comfort air conditioners in Lahore which we were planning to sell in Pakistan in the summer.

“Well Professor, what do we do now?”

Never having even sat by the road side to sell lemonade, as two professors, we wondered just where to begin.

Close Comfort emerged from my addiction to Pakistan mangoes developed in the 1990s and aversion to summer load shedding introduced by President Musharraf in response to Pakistan’s inability to pay for electricity.  It was a love-hate relationship because the best mangoes come in the hottest months of May and June when the indoor temperature without air conditioning is around 40C day and night.  The electricity supply to each part of each town and city is disconnected in a mostly predictable rotating sequence.  It was new to Pakistan in the early 2000s, and now common in many countries.

I decided not to give up my love for mangoes.  Instead I decided to try and develop a battery powered personal air conditioner to deal with my hate for load shedding.  I lay in bed during the power blackouts, sweat running down my skin, listening to the inevitable mosquitos ready to pounce.  The air conditioner had to be just powerful enough to keep the two of us comfortable at night, with mosquito protection, and it had to run on a domestic UPS (uninterruptible battery backup power supply).

A good ten years passed before we had the boxes in Lahore.  It was only after I tried a wooden prototype in Islamabad in June 2013 with amazing success that we decided to finance some prototypes and we had now reached our first commercial launch.

It has been a whirlwind 10 months.  Our prayers were answered and the right people stepped into our lives and the right moments.  Samina’s charm attracted so many.  Amazingly we sold hundreds of ACs with our special tents that intensify the cooling, essential in the height of summer in Pakistan.

Now several hundred people in Pakistan have slept soundly in summer, free from interrupted sleep, without worrying about power bills and mosquitoes maybe for the first time.  We would like to take this technology to more people in future.   It could be one way to avoid huge increases in electricity demand that could lead to unacceptable CO2 emissions.

Running a technology start-up is not for the faint-hearted.  As a late-comer to entrepreneurship, I am now almost accustomed to the ups and downs and dramatic changes from one day to the next, but not quite.

We are a long way from profitability, but at least after 9 years of company operations we have some positive cash flows.

I will bring more stories from this adventure from time to time.  For now, read the post “Lost in Urdu Translation” to give you some insight into the difficulties we have had to overcome.  Browse our Pakistan Facebook pages for some of the reactions to the product.  Try our interactive experience to educate prospective customers about a radically new approach to air conditioning.

And, at the Close Comfort web site you can also browse the new challenge that presented itself: developing an application has pre-occupied me for the last 8 weeks or so.

A big change and a new project

It has been a while since I posted last, and the gap is due to a big and change in my life.  After 41 years of teaching at the University of Western Australia, I decided to draw my formal teaching career to a close.

The reorganisation currently under way at UWA presented me with an opportunity to make the change earlier than I originally planned, under much more favourable terms.

The main reason for the change is to spend more time on our growing investment in Close Comfort (www.closecomfort.com) and to pursue another intriguing challenge.  Last December, my wife Samina and I gazed at the huge pile of 800 air conditioners stacked in our family home in Lahore and asked each other “Well, Professor, what do we do now?”

We prayed and the right people came into our life, and we sold hundreds of air conditioners with a marketing campaign that we devised as we went along.  For more, see our Pakistan Facebook page.

I will shortly describe the new challenge that life has presented….

 

Another reason for engineering project failures

This series of posts all has to do with the ways that engineering is critical for our economy, no matter whether you are in an advanced industrial country like Australia, or a developing and low-income country like Bangladesh.  Unfortunately, that link is hardly ever mentioned in engineering schools, let alone understood.

Also in earlier posts I mentioned our appalling and worsening record in completing major engineering projects, and how that is affecting the world’s economy right now, discouraging investors.  Why would anyone want to invest their money with engineers when there’s a good chance of losing all of it, and not much chance of making money?

In this post, I am going to advance another possible reason large projects can fail.  This time the root cause stems from engineering education.

In your first year of engineering, you probably learned about stress and strain. Even if you became an electrical engineer.  Maybe if you’re software engineer you missed out on the fun of playing with elastic beams and springs, noticing how they stretch in proportion to the applied load.

It’s fundamental knowledge for mechanical and civil engineers, and valuable for others.  In most engineering schools, you won’t graduate without having passed an exam on it.

Now, what would be the result if engineers had to pick up that knowledge on the job? Continue reading

Why an engineering project can fail (1)

In this series of posts, I am going to show how engineering underpins the world economy more than we think, and how we can improve our engineering performances by changing the way we think about engineering.  The last post was bad news for us engineers.  The good news is that we can all gain by improving our engineering performances.  However, to turn our performance around, we first need to understand what’s not working.

Companies like IPA Global have answers based on statistical analysis, and have provided these answers for several years.  They will tell you which factors are statistically correlated with successful projects, as Ed Merrow has written in his book.  However, even the projects they interact with are getting worse, and there are many more projects that they don’t assess, such as government engineering projects.  Political constraints with these projects usually rule out closing down a failing project: unemployment is often a bigger issue than a failed project for government sponsors.

Clearly there are other factors at work here.  The fundamental difficulty with statistical correlations is that they cannot provide causes.  Try this example.  My hair grows every day and Halley’s comet is moving further from the sun every day.  But that does not mean that my hair will get shorter when Halley’s comet comes back towards the sun.  Statistical correlations can tell you which factors are correlated with project outcomes, but these associations cannot tell us much about the causes of project failures or how to make improvements.

We have to turn to different kinds of research to find the underlying causes for engineering project failures.  The qualitative ethnographic research we do with engineers can help identify potential causes that statistical correlations miss.

Continue reading

Why Are Investors Not Listening to Engineers?

Mineral processing refinery - summary of Ravensthorpe Nickel Refinery: Conceived 2004 for AUD 1.4 billion, Cost till 2008 Au $2.6 billion, Sold to First Quantum for AUD $250 million, AUD 2.4 billion in value destroyed

Photo: Mineral processing plant  (This is not a photograph of the Ravensthorpe Plant – image by Shutterstock)

In the first post in this series I explained just how significant engineering is in today’s sluggish world economy, both in the developed world and developing world.  In this post I will explain why investors are so reluctant to back engineering ventures.

Engineering performances are slipping, engineers are frustrated, business owners are even more frustrated and billions of people languish in misery because of engineering performance failures.  These are not spectacular failures like Fukushima or Deepwater Horizon.  Instead they are silent failures that have remained mostly out of sight, in many cases deliberately hidden by their owners.

Continue reading

It’s The Engineering…..

Its-The-Engineering“It’s the economy, stupid!” was the line that secured Bill Clinton’s election campaign in 1992 against sitting president George W Bush.  Now, with economies struggling to grow it’s time to recognise that it’s engineering that drives the world economy, and we engineers have to recognise how we can play our part and get paid better at the same some.  Our performance can, indeed has to improve. Continue reading

Sales pass 1500 copies

I recently received first sales report from Taylor and Francis for the book.  Over 1500 copies sold.  Thank you so much all those of you who bought copies.  I hope you have enjoyed reading the book and found it useful.  Lots of people have given me verbal feedback, all of it extremely complimentary.  Some have sent nice written reviews that you can read here.

Time to Share the Load and that Empty Car Seat

An edited version of this piece appeared in The West Australian, Opinion Section, Thursday May 26, 2016.  It has been written for a Perth audience.

Once again, politicians are seducing us with money to fix transport in Perth, and it’s our money of course.  Yet both main parties are still offering solutions from the last century: more roads and railways.

Self-driving cars will soon be here. They will bring disruptive changes in urban transport, possibly within a decade, sooner than a Metronet or Freight Link could be completed.

Public transport is expensive and infrequent in Perth and needs large government subsidies because we have such a low population density.  According to a 2011 report, 30% of people in Sydney live in densities of 44 persons/ha or more – compared 12% in Melbourne, 5% in Brisbane, and less than 2% in Perth.

That’s we use cars.  As a consequence, Perth freeways and main roads are clogged every day with hundreds of thousands of slow-moving empty seats.  What a waste of expensive roads and cars and valuable time!

Continue reading