The Rapid Response Institute

Tag: Creative Destruction

  • Process Audit-Musk Style: A Systems Analysis Solution

    Process Audit-Musk Style: A Systems Analysis Solution

    “Auditing is defined as the on-site verification activity, such as inspection or examination, of a process or quality system, to ensure compliance to requirements.”  Elon Musk has just changed the Auditing Game!

    Most readers are aware that Elon Musk is leading a small task force of developers to assess the processes and spend of various federal government agencies, i.e., USAID.  This pundit has been of the belief that this group is using Artificial Intelligence (AI) to address this, as he did when assessing the proposed budget in December 2024.

    Observers were astonished with the speed and accuracy of this AI driven assessment.  Gone are the days of thousands of pages of unreadable bills where congressional leaders demand instantaneous passage in the ‘wee hours’ of night.  No more, “We have to pass the bill so that you can find out what is in it.”

    Too Big to Fail, No More!

    The long-standing mantra for major, critical sectors such as Money Center Banks is that they are too big and too important to be allowed to fail.  By this logic, US federal government agencies are at the top of that very short list.

    Assuming the following post on 𝕏 is factual, Musk and company have the developed the basis of a new company.  One that will restructure the way auditing is conducted for large complex organizations.

    The EKO article is a quick and compelling read, and we will not repost here.  Key take aways, this pundit took include that crawling through decades of data:

    • Three subsystems were mapped quickly as were payment flows across agencies.  Patterns were revealed that even career individuals did not know existed
    •  $17 billion in redundant programs were detected and are growing
    • “The beautiful thing about payment systems,” noted a transition official watching their screens, “is that they don’t lie. You can spin policy all day long, but money leaves a trail.”
    • “That trail led to staggering discoveries. Programs marked as independent revealed coordinated funding streams. Grants labeled as humanitarian aid showed curious detours through complex networks. Black budgets once shrouded in secrecy began to unravel under algorithmic scrutiny.”
    • “By 6 AM, Treasury’s career officials began arriving for work. They found systems they thought impenetrable already mapped. Networks they believed hidden already exposed. Power structures built over decades revealed in hours.”
    • “Their traditional defenses—slow-walking decisions, leaking damaging stories, stonewalling requests—proved useless against an opponent moving faster than their systems could react.  By the time they drafted their first memo objecting to this breach, three more systems had already been mapped.”

    The list goes on, but readers get the point and can do their own detailed review.  Also, one expects that much more will be made public in the near future.

    Graphic is taken from the linked 𝕏 article.

    2025-02-10_13h13_41

    Value Proposition to ‘We the People’

    Bureaucrats are hired hands.  The citizens of the United States of America are the client.  Some argue that government is different than a profit or non-profit organization.  But is it?  Isn’t government responsible for delivering goods and services in accordance with its customers wishes?  If not, what is the role of Washington, DC and every state capital?

    This pundit has focused on Operational Excellence (OE). We have developed economic models that document (with support) measurable as well as soft value that can be attained and sustained from OE initiatives.  We believe this approach is applicable to governmental agencies as well.

    Nature of Auditing

    According to the American Society for Quality (ASQ), Auditing has three components:

    • Process Audit–Verification that processes are working within established limits
    • Product Audit–Assess whether or not products and services conform to accepted standards and requirements
    • System Audit–Assessment of management systems, i.e., Operations Management Systems (OMS)

    The principal objective of the systems analysis phase is the specification of what the system needs to do to meet the requirements of end users.  Isn’t what Musk has done the holistic integration of data acquisition and initial assessment of the three components of an Audit?

    There are no longer three components (four if one included financial reporting) but ONE.  Not just Game Changing but the Creative Destruction of the esteemed auditing profession.

    Future Role of Professional Services

    This writer’s career spans the gulf of large software development teams to the configuration using tools by as few as one individual.  This is a pattern many processes deal with, for example fast food, discrete manufacturing, energy exploration, medical and others.

    Jobs are retooled and affected individuals find careers elsewhere and by the way, you’re never too old.  Millions of individuals in the private sector have met this challenge and some more than once.

    Apparently, Musk only had four (4) IT types working on this DOGE project.  Certainly, others had to assess his findings and make decision, but the data acquisition was inexpensive and fast.

    This suggests massive and wrenching changes to the professional services status quo.  Smaller, focused with fewer billable hours compensated teams.  The upside, this may lead to a Value Pricing Model.

    Musk Auditing LLC?

    Has Elon launched another company with the high visibility first customer?  This pundit thinks so.  And what a demo!

     “The US Auditing Services Market size is estimated at USD 51.88 billion in 2025, and is expected to reach USD 60.94 billion by 2030, at a CAGR of 3.27% during the forecast period (2025-2030).”  I rest my case.  Then there is the Rest of the World!

    One lesson for all of us; any profession can be instantly made irrelevant with emerging technologies and the will power of new entrants.  At all costs, stay ahead of the curve.

     

    How will your organization deal with this game changer?

    Pre order our new book

    Navigating the Data Minefields:

    Management’s Guide to Better Decision-Making

    We are living in an era of data and software exponential growth.  A substantive flood hitting us every day.  Geek heaven!  But what if information technology is not your cup of tea and you may even have your kids help with your smart devices?  This may not be a problem at home; however, what if you job depends on Big Data and Artificial Intelligence (AI)?

    Available April 2025

    Ordering Information

    For More Information

    Please note, RRI does not endorse or advocate the links to any third-party materials herein.  They are provided for education and entertainment only.

    See our Economic Value Proposition Matrix® (EVPM) for additional information and a free version to build your own EVPM.

    The author’s credentials in this field are available on his LinkedIn page.  Moreover, Dr. Shemwell is the coauthor of the 2023 book, “Smart Manufacturing: Integrating Transformational Technologies for Competitiveness and Sustainability.”  His focus is on Operational Technologies.

    We are also pleased to announce our forthcoming book to be released by CRC Press in April 2025, Navigating the Data Minefields: Management’s Guide to Better Decision-Making.  This is a book for the non-IT executive who is faced with making major technology decisions as firms acquire advanced technologies such as Artificial Intelligence (AI).

    “People fail to get along because they fear each other; they fear each other because they don’t know each other; they don’t know each other because they have not communicated with each other.” (Martin Luther King speech at Cornell College, 1962).  For more information on Cross Cultural Engagement, check out our Cross-Cultural Serious Game.  You can contact this author as well.

    For more details regarding climate change models, check out Bjorn Lomborg and his book, False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet.

    Regarding the economics of Climate Change, check out our blog, Crippling Green.

    For those start-up firms addressing energy (including renewables) challenges, the author can put you in touch with Global Energy Mentors which provide no-cost mentoring services from energy experts.  If interested, check it out and give me a shout.

  • DOGE’d

    DOGE’d

    The Day the Congress Stood Still

    On December 18, 2024, Elon Musk delivered on the social media site, 𝕏  the death knell of a 1500+ page so called Continuing Resolution that was to stave off a Federal Government shutdown.  Later it was replaced with a much shorter (100+ page) bill that passed largely intact.

    This Out-of-the-Gate action by the Non-Government Organization (NGO), DOGE (Department of Government Efficiency) may foretell the next 18+ months of DOGE’s self-imposed life ending July 4, 2026.  This first Musk assessment revealed extensive and massive political pork earmarked spending.

    The Congress and all manner of hired bureaucrats may face increased public scrutiny, posted for all to see.  Who knows, the idea may expand to all levels of government and their hired hands.

    Creative Destruction

    Previously, we discussed this economic substitution model.  “The economist Joseph Schumpeter was the first to coin the term creative destruction–the destruction of old markets and those active in them through innovation, & inventing of new markets, this can be new technologies, methods, business models, services, or products.”  One can argue that the creative destruction cycle time is very short today.

    And perhaps getting even shorter!

    Gort or Grok?

    In the original (1951) movie, The Day the Earth Stood Still, the robot Gort has the ability to destroy the world.  It is prevented from doing so by the utterance (by a human) of the key words, “Klaatu barada nikto.”

    According to 𝕏, the Artificial Intelligence (AI) robot of today, Grok (formally defined as “to understand something”) “leverages the 𝕏 platform to understand what’s happening in the world in real time. We recently launched two additional features to enhance this experience even further: web search and citations.  Now Grok draws upon posts from 𝕏 and webpages from the broader internet to provide timely and accurate answers to your queries.  We also added citations, so you can easily dive deeper into a source to learn more or verify the information provided by Grok.”

    Fortunately, three simple words neutralized Gort, and the earth was saved.  Grok will not so easily be rendered impotent, unless the First Amendment is repealed.

    The government world has been (figurately) creatively destroyed and changed forever.  Moreover, in their world of consistent suboptimal performance, most have no idea what has already happened to their cherished long-standing bureaucratic processes.

    The Regulatory Public Comment period will never be the same.

    After DOGE

    It appears that Musk has put in place an AI solution that will live on after the formal closure of DOGE in 2026.  Grok and other emerging AI tools can continue to review and assess each and every piece of proposed legislation and other government edicts regardless of length and/or complexity.

    Like Hacking, those opposed to honesty will seek ways to thwart AI.  Those providing transparency solutions will need to stay one step ahead, just like law enforcement agencies that are required to enforce and uphold the law.  If accepted social behaviors norms are to prevail, transparency is demanded.

    Finally, we can “read the bill to find out what is in it.”  Prior to voting!

    This Accountability Sucks!

    Well, get over it!  One suspects entrenched vested interests will try to find ways around this revolution, but likely to no avail.  There is not only a new sheriff in town, even after he leaves, the new accountability will remain.

    And so much for the current media business model whereby either a single individual or small group amalgamates society’s daily activities and present the proletariat with their (often agenda driven/opinionated/biased) version of THE NEWS.

    How will you take advantage of the AI delivery of information?

    Pre order our new book

    Navigating the Data Minefields:

    Management’s Guide to Better Decision-Making

    We are living in an era of data and software exponential growth.  A substantive flood hitting us every day.  Geek heaven!  But what if information technology is not your cup of tea and you may even have your kids help with your smart devices?  This may not be a problem at home; however, what if you job depends on Big Data and Artificial Intelligence (AI)?

    Available April 2025

    Ordering Information

    For More Information

    Please note, RRI does not endorse or advocate the links to any third-party materials herein.  They are provided for education and entertainment only.

    See our Economic Value Proposition Matrix® (EVPM) for additional information and a free version to build your own EVPM.

    The author’s credentials in this field are available on his LinkedIn page.  Moreover, Dr. Shemwell is a coauthor of the recently published book, “Smart Manufacturing: Integrating Transformational Technologies for Competitiveness and Sustainability.”  His focus is on Operational Technologies.

    We are also pleased to announce our forthcoming book to be published by CRC Press in 2025, Navigating the Data Minefields: Management’s Guide to Better Decision-Making.  This is a book for the non-IT executive who is faced with making major technology decisions as firms acquire advanced technologies such as Artificial Intelligence (AI).

    “People fail to get along because they fear each other; they fear each other because they don’t know each other; they don’t know each other because they have not communicated with each other.” (Martin Luther King speech at Cornell College, 1962).  For more information on Cross Cultural Engagement, check out our Cross-Cultural Serious Game.  You can contact this author as well.

    For more details regarding climate change models, check out Bjorn Lomborg and his book, False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet.

    Regarding the economics of Climate Change, check out our blog, Crippling Green.

    For those start-up firms addressing energy (including renewables) challenges, the author can put you in touch with Global Energy Mentors which provide no-cost mentoring services from energy experts.  If interested, check it out and give me a shout.

  • The Times They Are a Changin!

    The Times They Are a Changin!

    Creative destruction is the dismantling of long-standing practices in order to make way for innovation and is seen as a driving force of capitalism.

    We live in an era of hyper-change.  Technology to be sure, but all social constructs are under duress.  The question is, how will all of us at an individual level deal with these enormous pressures?

    The statement, “The only constant is change” remains a basic truism.  From the time of our birth until our death we  undergo physical and psychological transformation.  At this writer’s age, I have been through more than seven decades of evolvement.  With hopefully a few more cycles in the future.

    Joseph Schumpeter (1883–1950) coined the seemingly paradoxical term “creative destruction,” and generations of economists have adopted it as a shorthand description of the free market’s messy way of delivering progress.

    The question is, would we have it any other way?  Some central government (most likely unelected) bureaucrat dictating how we should respond to social/economic forces is not only anti-American it is Fascist if not Communist policy.

    If Lenin and the Bolsheviks prevail in the upcoming US presential election, get ready for the disruption of life as we know it.  Welcome to East Berlin, circa 1960s.

    How will you preserver Capitalism, the best, worse, social construct?

    For More Information

    Please note, RRI does not endorse or advocate the links to any third-party materials herein.  They are provided for education and entertainment only.

    See our Economic Value Proposition Matrix® (EVPM) for additional information and a free version to build your own EVPM.

    The author’s credentials in this field are available on his LinkedIn page.  Moreover, Dr. Shemwell is a coauthor of the just published book, “Smart Manufacturing: Integrating Transformational Technologies for Competitiveness and Sustainability.”  His focus is on Operational Technologies.

    “People fail to get along because they fear each other; they fear each other because they don’t know each other; they don’t know each other because they have not communicated with each other.” (Martin Luther King speech at Cornell College, 1962).  For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game.  You can contact this author as well.

    For more details regarding climate change models, check out Bjorn Lomborg ands his latest book, False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet.

    Regarding the economics of Climate Change, check out our blog, Crippling Green.

    For those start-up firms addressing energy (including renewables) challenges, the author can put you in touch with Global Energy Mentors which provide no-cost mentoring services from energy experts.  If interested, check it out and give me a shout.

  • And Just Like That!

    And Just Like That!

    Often attributed to the movie character, Forest Gump the title phrase can be interpreted as an abrupt change in one’s life.

    The past few years have brought significant changes to many of us.  Illness, job change, moving to a new location, kids out of school and so it goes.  Disruption can be intimidating, yet it need not be so.

    Life is all about change.  We move from infancy to youth, adulthood and so on.  In each phase our interests and environment are different.  Moreover, we often seek change.  The celebration upon one’s 16th birthday and getting a driver’s license.  In my case turning 25 when my car insurance cost was lowered.

    Society is moving into an era whereby an individual can expand his or her horizon.  No longer is a college degree seen as the price of entry.  Non graduates now have access to IT positions as well as management and other high paying skills.  The focus is moving from having mountains of college debt to having the desire to achieve.  Additionally, the Great Resignation movement is taking root too.

    So What Happens Now?

    In our 2oo9 White Paper, Rapid Response Management: Thriving in the New World Order we coined the term, Velocity of Information which we defined as, “Similar to the economic theory, Velocity of Money, it is the frequency at which information is exchanged.”  Who would have dreamed today’s volumes would be so massive.  Now we are awash in information and disinformation.  Decisions that depend on valid and reliable data are more difficult, not less.

    However, life’s disruptive moments can force us to move forward in another direction.  The recession in 1974 required that this then young individual to more to Louisiana and enter the oil and gas sector.  This was not on my radar at all as late as two months earlier when a recruiter called.

    This life changing moment was not based on valid and reliable data as ‘I did not have clue’ what I was getting into.  Rather the decision was made with almost no knowledge of the subject.  Fifty years later, the rest as they say is history.

    When one door closes, another opens.

    New Relationships

    We have previously discussed the RBC Framework; Relationships, Behaviors, Conditions (aka the situation).  This straightforward model was developed in 1993 to study International Negotiations and we have found it convenient for all manner of human interaction assessments.

    The military refers to the (true)knowledge of one’s environment as Situational Awareness.  In other words if one has a good understanding of what is happening around them, their behaviors should reflect that knowledge.  Subsequently, relationships may change including making new one or leaving old ones.  In my case, the move to Louisiana and entering a new sector is a good example.

    Going Forward

    Forest Gump embraced change and excelled at a number of things despite his handicap.  Disruption was not a threat but an opportunity.  Like Louis Pasteur, one can prepare for change even if the next step is not immediately clear.

    Finally, “The economist Joseph Schumpeter was the first to coin the term “creative destruction.”  Creative destruction is the destruction of old markets and those active in them through innovation, & inventing of new markets, this can be new technologies, methods, business models, services, or products.”  One can argue that the creative destruction cycle time is very short today.

    What are you doing to prepare for your next step?

    For More Information

    Please note, RRI does not endorse or advocate the links to any third-party materials herein.  They are provided for education and entertainment only.

    The author’s credentials in this field are available on his LinkedIn page.  Moreover, Dr. Shemwell is a coauthor for an in press book (to be released in Spring 2023) titled, “Smart Manufacturing: Integrating Transformational Technologies for Competitiveness and Sustainability.”  His focus is on Operational Technologies.

    “People fail to get along because they fear each other; they fear each other because they don’t know each other; they don’t know each other because they have not communicated with each other.” (Martin Luther King speech at Cornell College, 1962).  For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game.  You can contact this author as well.

    For those start-up firms addressing energy (including renewables) challenges, the author is a member of Global Energy Mentors which provide no-cost mentoring services from energy experts.  If interested, check it out and give us a shout.

  • Crippling Green

    Crippling Green

    “Yes, hope is a strange thing.  Peace at last.  But at what price?”
    — Khaled Hosseini

    Great Societies have been lost in the past–a number of times.  There is no reason to believe our current crop is immune!

    Ariel Durant, the co-author of the 11 volume tome, The Story of Civilization is credited with, “A great civilization is not conquered from without until it has destroyed itself from within.”

    The United States is currently engaged in a great climate civil war.  One one side there are those who advocate for expensive and expansive economic and social investment in so-called Climate Change.  Climate Change Skeptics, often derided by the aforementioned group as Climate Deniers are those who question the Scientific Consensus and the cost and return on the investment to become Net Carbon Zero.  By the way, science is never settled.

    From the observer’s perspective, there is a long term effort to shut down debate, as is typical in today’s society largely by name calling, shaming and even threats.  Dissenters seemingly risked their professional reputation, loss of grants, even safety, and more.

    And Now Questions

    Funny thing happened on the road to Net Zero.  Questions began to be raised about the efficacy of renewables, and their Total Lifecycle Cost.  Moreover, the heavy metal cost of ecological damages of mining were raised and are now under scrutiny.

    The Let Them Eat Cake Strategy

    Transitions, especially Transformations are painful.  Based on Joseph Schumpeter’s Creative Destruction, “The incessant product and process innovation mechanism by which new production units replace outdated ones,” transformation is a linchpin of Capitalism.  Now, some believe socialism is the future, history does not prove their point.  Are any to turn in the Smart Phones for the old black dial model tethered to a wall?

    However, when this natural process is driven by the ‘heavy hand’ of non-economic actors, perturbations in the process can cause warps in the economic space time continuum.  Some examples of overreach include:

    Agriculture

    Some argue that, “Agriculture accounts for 16 to 27% of human-caused climate-warming emissions.”  Nitrous oxide (N2O) is the named culprit (according to the Intergovernmental Panel on Climate Change this chemical accounts for 6% of greenhouse emissions).

    It is reported that in the Netherlands agricultural sector system manure is high in nitrous oxide.  Emotions are apparently running high between Dutch farmers who see a targeted 30% reduction in livestock heads and the government whose position seems to be this is an “unavoidable transition.”  Jobs are at risk!

    Gasoline

    It seems the President of the United States is celebrating high gasoline prices as part of “an incredible transition” to move away from fossil fuels.  As with the Dutch case, this seems to place the biggest burden on the so-called ‘little guy.”

    Truckers

    We all remember the trucker protests in Canada and the United States in early 2022, mostly regarding Covid-19 restrictions.  Around the world there was a strong level of solidarity.

    This sector is also not immune to Climate Change driven initiatives.  From one source there are two key considerations:

      • The proposed 2027 new emissions regulations for diesel-powered trucks, and
      • The 2030 goals from some states and their aggressive objectives for zero-emissions vehicle sales.

    One might project similar (Covid-19 driven) responses to these new mandates.  This might be another major negative impact to supply chains for all sectors.

    Electric Vehicles

    The US Secretary of Transportation has suggested that everyone would benefit from an EV.  At the time of his statement (October 2021), the average cost of an EV was $55,676 while a compact car was $25,240 and and SUV was $34,122.

    By this pundits calculation (at $4 a gallon), break even for the SUV is 5,389 gallons of gasoline at 20 miles per gallon.  As mathematicians will say, it follows that break even is almost 108,000 miles of driving.  Years of driving for most of us and what shape will the battery be in at that point.  While some argue the maintenance costs are less for EV, most consumers are driven by out-of-pocket buying decisions.  Then there the disposal costs of EVs at end of life (see Other Blogs below for details).

    Fracing

    Perhaps one of the more emotional fossil fuel development process is Fracing (not Fracking by the way).  Some believe the damage to the environment from fracing is the greatest of any human endeavors.

    On the other hand, the value from fracing includes:

      • The shale revolution mad the United States self-sufficient in oil and gas for the first time since 1947
      • In 2022, the US is the largest exporter of LNG (liquified natural gas)

    Given the current geopolitical situation, easy access to low-cost traditional energy sources is at least near time high value.

    There are many other areas of controversy regarding this issue.  More than likely both sides will continue to make their points and emotions will continue to play a major role.  There will be Winners and Losers over the next few years as this debate plays out.  Honest scientific debate can mitigate the emotional and political agenda at play.

    Are Green Initiatives Making the Problem Worse?

    Per the NBC piece aired on September 20, 2022, illegal gold mining in Peru not only releases mercury into the ecosystem but adds to environmental carbon when the soil is disturbed.  This makes this pundit wonder if all the heavy metal strip mining to fuel EVs will do the same in addition to its other environmental problems (see Heavy Metal Rocks below)?

    Moreover, this issue about strip mining and carbon release has been known for a long time.  In 1977 the peer reviewed scholarly article, Soil fungal populations and soil respiration in habitats variously influenced by coal strip-mining addressed this issue.

    Likewise, NBC reported on illegal gold mining in Peru in 2019.   Point being, this information is not new nor is The Science newly discovered.

    Unintended Consequences run amok?  Are lithium batteries destroying the planet?

    And the Winner Is?

    No one!  If we do nothing, we are told the oceans will rise and temperatures will become unbearable causing all manner of weather driven catastrophes as well as increased intensity and frequency of forest fires.  On the other hand, spending the multiple trillions of dollar will enrich the (very) few at the cost of economic collapse for the many.

    Lose–Lose Deal.  Either way our world ends or our economies end.  Is there a difference?

    According to Merriam-Webster, “A pyrrhic victory is a victory that comes at a great cost, perhaps making the ordeal to win not worth it.  It relates to Pyrrhus, a king of Epirus who defeated the Romans in 279 BCE but lost many of his troops.”

    Decisions–Decisions

    So Global Society is faced with two choices.  The earth is in physical peril unless we spend malevolent amounts of money as fast as possible.  Or, as a result of economic destruction on a global scale if this level of spending adds little if any value.  Then we will all live in poverty or worse.  Either way, Human Extinction is one end game proclaimed by many.  The very definition of a Dilemma.

    According to Merriam Webster, one definition of Hobson’s Choice is, “The necessity of accepting one of two or more equally objectionable alternatives.”  Not a great place to find oneself.

    The ancient Romans apparently made poor decisions as a mature and wealthy society.  It cost them dearly.  Are we now?

    How are You and Your Organization Assessing the Risk of Investing in Climate Change (Conventional Wisdom) Scenarios or Alternative Approaches?

    Other Recent Relevant Blogs

    These blogs in this series address this particular issue in greater detailed.  Together, they form a more complete picture of the author’s position on relevant components discussed here as well aligned subjects.  In reverse chronological order:

    For More Information

    Please note, RRI does not endorse or advocate the links to any third-party materials herein.  They are provided for education and entertainment only.

    The author’s credentials in this field are available on his LinkedIn page.

    Disclaimer, the author has no personal or business relationship with Bjorn Lomborg or his publications other than reading and commenting on his latest book, False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet.

    Second Disclaimer, Ali Daneshy was interviewed for the referenced Forbes article on Fracing.  This author knows Mr. Daneshy and worked with him for many years at Halliburton.

    For those start-up firms addressing energy challenges, the author is a member of Global Energy Mentors which provide no-cost mentoring services from energy experts.  If interested, check it out and give us a shout.

    For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game.  You can contact this author as well.