Dominic Cummings says …

“There really are vast improvements possible in Government that could save hundreds of billions and avoid many disasters.

Leaving the EU also requires the destruction of the normal Whitehall/Downing Street system and the development of new methods.

A dysfunctional broken system is hardly likely to achieve the most complex UK government project since beating Nazi Germany…”

It’s hard to disagree with the sentiment, putting to one side the tasteless comparison with WWII and, of course, individual feelings about Brexit.

But subtract Brexit for the changes required to deal with climate, or true artificial intelligence, with increased automation etc and I suspect we all agree more fervently.

What Price Oil?

The news over the weekend about a drone attack on Saudi Arabia’s oil infrastructure may cause a disruption in supplies to the world. Saudi Arabia produces roughly 10% of the world’s daily need, and up to half of that may have been disrupted by this attack; some theorise that redundancy in their infrastructure may mean that normal supplies will be resumed within days, perhaps as soon as Monday.

But what would the oil price need to be to change consumer behaviour? How much would a litre of petrol need to cost before there was a wholesale switch to mass transit, or to EVs?

With roughly 61% (the highest in the EU) of the price of unleaded petrol going to the government in tax (a mix of fuel duty and VAT), increasing prices at the pump directly increase revenues to government, provided consumer behaviour doesn’t change (shorter journeys, lower use of cars etc).

The government will take in £28.4bn this year in fuel duty, not including VAT. As I’ve written before, even a move to 10% EVs makes a significant dent in tax revenue. A bigger move makes a huge hole in spending plans.

Unless, of course, government moves to plug that gap by taxing EV mileage. The sooner such a plan is made clear, the easier it will be to calculate the benefits of an EV versus a petrol car, especially if petrol prices begin to increase in response to both actual and potential threats.

Projects as Films

Today’s Financial Times notes

2% make it to the cinema and perhaps 1/3rd of those are profitable. Those are long odds.

There are likely 3 rules of cinema

1) Make something you, or someone else has already done (hence why we see so many remakes and sequels … Toy Story 4, endless Marvel movies)

2) Produce a film with people you’ve worked with before (which is why proven directors and actors get repeat work)

3) if you’re going to do something completely new, start small and don’t risk a lot (hence low budget independent films)

Projects, which have perhaps the same, or maybe even a worse, success rates, have the same rules

1) Do what someone else has already done and stick as closely to the script as possible (cloud technologies and configurable apps versus custom projects)

2) Keep the same team around you, as long as they have been successful, because you know how they work and they know how you work; trust the team to solve the problems they know how to solve … bring in new people to keep things fresh but don’t go for wholesale swaps

3) If you really want to do something novel and different, start small and don’t spend a lot of money … especially if you’re working with people you’ve never worked with before

Those 3 rules, a version of which I wrote on this blog many years ago, could massively boost your project success rate.

Stairway To Nowhere

By nature I’m an optimist. I expect people to be good and to do the right thing, I expect that tomorrow will be better than today and next year better than this year. I expect that we will make progress. I expect that we will learn from what has gone before and do our best to make fewer of those same mistakes.

That said, as the header of the blog says, I am “largely disappointed by digital transformation” … and pessimistic about how we make real, positive change happen. We seem to be in a loop, doing much of what has been done before, making some localised improvements but nothing on a macro scale.

I’m adding a tag to my blog “stairway to nowhere” to give me a place to look at why this is so and what we might do about it and how we might start.

From Lithium to Hydrogen

A few years ago at a conference on Electric Vehicles I posed the following question

If we believe the following three things

1) EVs are the future and will quickly displace diesel and petrol cars

2) EVs will usher in autonomous cars but we don’t yet know when

3) The arrival of autonomous cars will accelerate an existing trend of lower car ownership and introduce broader car sharing and subscription models

Then

1) how much should we invest in wiring the U.K. to support widespread and local charging of EVs?

2) when should we switch our investment plan to cater for AVs that drive themselves to a charging spot (and so are in in use perhaps 70-80% of the time) and that don’t need to be parked outside a house (unused 90% of the time)

3) what would we do with the space that was freed up, particularly, say in the streets of South London where single lane roads with two lanes of parked cars would suddenly have wide streets, no longer need traffic control measures and would be safe for the young and the old to wander around in?

There is no easy answer to those questions. We are so early in the world of EV take up, not just in the U.K. but elsewhere (though other countries – Norway and China for instance are far ahead). There are plenty of scenarios, of course. My sense is that we are only really dealing with Q1 above as everything else likely falls into the top hard box.

There are lots of challenges with EVs. I’ve written here about some of them over the last 12-18 months.

One of the bigger challenges is around the ethics of the components that are used in EVs, particularly around where many of them come from and how they are mined or produced.

An EV needs nearly double the amount of copper a traditional car uses. Cobalt is physically mined by huge numbers of workers, often involving child labour; death rates are off the scale. Lithium is perhaps a little better, but not much, and if delivered at the volumes needed to put a battery into every car, would be worse. There are plenty of other rare earth materials involved – all of which are also used (in vastly different quantities at an individual level but huge quantities at a macro level) to make jet fighters, mobile phones, submarines and computers.

What then, if we asked a different question and said “what would it take to make hydrogen a viable fuel source?” and when could we, or should we, make the switch to backing that as the best option?

Norway is already trialling this. Japanese car makers have long been sceptical of EVs (notwithstanding the hybrid Prius and the Leaf EV) and have invested heavily.

The big cost is affordable extraction using solely renewable energy sources. The big challenge is likely erasing memories of the Hindenburg from the minds of potential customers.

But what if?

From the Department of Useless Studies

According to Monday’s Times, the clever folks at EY have studied 20 years of company performance history. The detailed studies are available on the EY site.

Apparently a company that issues three or more profit warnings in a year has a 1 in 10 chance of going bust in a year. Or a 90% chance of not going bust – by my maths anyway.

They go on …

A company issuing those same three profit warnings has a 25% chance of losing its CEO and a 20% chance of losing its FD. Or a 75% and 80% chance of not losing them.

18% of companies who warn on profits go on to issue at least two or more warnings within a year. 88% don’t. You get the gist.

This could perhaps be summed up as

Trouble comes in threes. Except when it doesn’t. Which is more often than not.