Tony K's Blog

Project management processes often show the project progression by moving between the project team to do the work and a meeting with management to allow the project to move on to the next step. One expression for this sinuous depiction is "snaking." You can see the resemblance to a snake in the graphic. This type of process management is typical in Waterfall or Phase Gate processes.  Agile processes have become more common in recent years. They describe an iterative process with rapid testing, feedback, and turnaround. It actually looks quite similar, but rather than taking a few months, it takes a few weeks. Rather than going high on the chain of command, it goes up a level or two. Sometimes there are not phase gates at all, just continuous up and down. This up and down feedback, I am calling "MicroSnaking" or "micro-snaking." I'm the first. I stake my claim. The term is free for all to use. Knock yourself out.

I'm hopefully about four years away from retirement. I have a good salary and, looking out to 2023, I think I'm in good shape overall. There will be three main sources of funding for the retirement years. 1. Wife's and my 401ks and IRAs 2. A lump sum retirement contribution from my employer 3. Social Security 1 and 2 are about equal right now, 3 is a fixed future monthly payment. The stock market has been hot since the crash of 2008. The Dow is now around 25,000. How much higher will it go? Is it going to crash? Would it be wise to transfer some funds from stocks into cash or bonds? My first thought was Yes, of course! But, I did a little digging on this and one piece of advice was that people approaching retirement should have a couple years worth of cash in their accounts so they don't have to sell stocks in a down market. That makes a lot of sense, I have seen literature that shows how a stock market decline immediately following retirement can demolish ret...

I will call people who believe in anthropogenic global warming (AGW), warmists, those who are less certain, denialists. I hope it insults both sides equally. My BS degree is in earth science. I work for an oil company. I believe in the scientific method. I believe that government has a legitimate role to play in society. I am not a Neanderthal. I have biases. Some may think that because I work for an oil company, I desperately want to see the warmists fail. Look, I'm too close to retirement for anything that happens now to have an effect on my personal earnings or career, so I don't think that comes into play. And by the way, I live on this planet. If humans are doing something to damage the planet, I want it to stop. I want us to take action to fix and reverse the harm. I may be retiring within fifteen years, but I hope to live a lot longer than that, and I want my kids to inherit a good place. I have read a lot about the science, politics, and economics of the CO2/glob...

Dear Saint Mary's Professional MBA students, I am looking forward to meeting you in class. Here is a brief description of my background. I am Manager of Portfolio and Planning for Chevron Corporate Business Development. I have a BSc in Geophysical Engineering from Colorado School of Mines. I did exploration work for many years, but found myself attracted to the business side. I received an MBA from the University of St. Thomas in 1999, effectively completing a long gradual shift from the technical to the commercial and financial side of the business. In the late 1990s, I built the cash flow model that we used in our new country entry into Brazil. I transferred to San Ramon in 2001, and since then, have been an advocate of portfolio methods and improved planning and decision methods at Chevron. My current position is responsible for ensuring that asset and corporate acquisitions will be a good fit with our corporate strategies. Overview Monte Carlo and Portfolio Management...

This video is stunning. It simply makes my head spin. The changes coming in the next few years are unimaginable.

The expression crack the whip has two meanings. It can be in the sense of a boss (or parent), becoming more strict about work expectations, or it can be referring to the kids game, Crack The Whip. This post is about the latter, but as applied to work. I have been doing headquarters staff work for several years now. One of the issues with it is that you are collecting data and information from people who are not really interested in providing it. Then giving it to people who will not take no for an answer and have high expectations of the quality of the work as well as the data. The game crack the whip is described this way on wikipedia "One player, chosen as the "head" of the whip, runs (or skates) around in random directions, with subsequent players holding on to the hand of the previous player. The entire "tail" of the whip moves in those directions, but with much more force toward the end of the tail. The longer the tail, the more the forces act on the last ...

This entry on the Overcoming Bias blog got me thinking. Bosses just want the number . I see a lot of confusion between planning, estimating, goal-setting, and forecasting. Forecasting Forecasting as often used in business is simply giving someone the number that represents business performance. Forecasting accurately is impossible , except maybe in the very short or very long term. Nonetheless, you still at some point need to come up with a number. Forecasting is best done using probabilistic techniques and reporting events as probabilities. Simply predicting a number, even if you are right is of little value in most circumstances. Can you imagine a weather forecaster simply saying, "Rain"? Without a percentage and a timing, it's simply not a real forecast. Estimates Likewise when you estimate business performance, wouldn't it be better to say, given the manpower and marketing budget, there is a 10% chance that we can sell 10,000 units, and a 90% chance that we can se...

I work with portfolios of real assets. One of the basic concepts of portfolio analysis and management is that you must know what you value. Very seldom does an organization have one single goal that it pursues to the exclusion of all others. It is a useful framework for looking at the mortgage problem that I wrote about earlier. If your single goal in life is to minimize the amount of interest you pay in your life, paying off your mortgage early may be a good strategy. For most people their house loan is the biggest loan they will ever get, typically paying hundreds of thousands of dollars in interest over the life of the loan. These are big numbers, exagerrated by the size of the loan and the time period. However, most people have goals besides minimizing the interest paid. If you take it up to a higher level, most people want to maximize their wealth, which in simple terms is simply money in minus money out. Money in that equation can represent any form of value including house appr...

The pay-off-a-little-more-each-month-on-your-mortgage fallacy has been around for a long time. The deal is that the numbers are big, so they are really impressive. Yes. It builds equity faster. (But it's just converting your cash from a flexible form of equity into a less flexible form.) Yes. You pay less interest over time. (But you lose opportunity to invest). Yes, you pay off your house sooner. (How many of us will live in our house for 20+ years though?) There are several ways to look at this prolem though. First, from a strictly financial perspective, the right way to look at this is to consider the alternative uses of the extra money you would be putting into the equity. For example, a 6% loan has an after tax 4% rate. Instead of putting the money into your house, why not put it into a SP500 index fund? It will get you 8% over time (5.33% after taxes). So by putting $1000 into your house, you lose $13.33 each year. Put it into the IRA that you haven't been funding and it ...

My name is Tony and I'm a planner. There I said it. Six years ago I was describing the work I was doing to someone and he said, "Oh, you're a planner." I was shocked to be called such a name. Today I am out of the closet. I am not a planner though in the mold that most organizations think of planners. In many places, planning is a combination of very mechanical rollups and dysfuctional negotiations; collect sandbagged data, add it all together, twist arms until people go back to what they were willing to live with, repeat yearly. This type of planning adds little if any value, but is very common. In many places, even the adding up of the data is extremely painful. We used to use Excel for adding up all our data. I have no problem with Excel, when used as designed. Once you start to treat it as a database, all kinds of bad things can happen. First, Excel has capacity limitations. The tool I had built in Excel had to contain 500 assets, 20 to 50 years looking forward of...