Kg and I share numerous articles and factoids. We are both avid readers and, fortunately, we access different sources, so there is little repetition.

He sent me this one yesterday.

The total cost of the US military’s F-35 program, $1.45 trillion, could provide free college education to every student in the US for 20 years.

Oh, and by the way…the program has been a total disaster.

Nine years into development, the F-35 fighter jets (the most expensive American weapons ever built) are still not ready for combat, and their software is so flawed that they may never be ready. Great…

The question, of course, is how important is the software?

The answer seems to be subject to circumstances.

2014 “The enterprise now deals with ALIS as if it is a ‘weapons system’ and a critical part of the F-35 program.” — General Bogdan

2015 “The responsiveness, the timeliness of ALIS information for the maintainers and for the war fighter is at the top of our priority list.” –Assistant Secretary of the Navy Sean Stackley

2016 “It is a software-intensive system that connects to almost every piece of the F-35 program.” — General Bogdan

“ALIS has yet to meet its full promise and we’ll need to go the full distance in that regard if we’re going to succeed in meeting our goals for reducing the ownership cost and increasing the operational availability for this complex aircraft.” — Assistant Secretary of the Navy Sean Stackley

But after a negative report from GAO the tune suddenly changed.

And now, in a surprising twist, General Bogdan is saying ALIS is not really critical after all, insisting the F-35 can fly without it for 30 days.

Really? After claiming the ALIS was the heart and soul of the system?

It’s one thing to have buggy apps crash your computer or phone, but quite another to have buggy maintenance software crash your jet.

Obviously, free college would probably offer our country a higher ROI than flawed software in a weapon system going nowhere, although not the bragging rights so dear to the hearts of our military.

Of course, ROI has never carried much weight when it comes to funding pet projects — which holds true for industry, too.

Martin Cooper/Flickr

Did you know ‘communications’ are like the Force, with both a light and dark side?

Communications may be used to engage, enlighten and clarify.

Communications may be used to confuse, coerce and obfuscate.

I usually write about the light side of communications.

Dark-side communications are what brought the economy down and are still popular, most recently at JP Morgan.

Consider the following presentation written by Bruno Iksil, the whale himself, on Jan. 26, 2012, as the losses were growing. He called for executing “the trades that make sense.”
He proposed to “sell the forward spread and buy protection on the tightening move,” “use indices and add to existing position,” “go long risk on some belly tranches especially where defaults may realize” and “buy protection on HY and Xover in rallies and turn the position over to monetize volatility.”

Confusing? Don’t feel alone; that was the finding of the Senate investigation report.

“This proposal encompassed multiple, complex credit trading strategies, using jargon that even the relevant actors and regulators could not understand.”

Companies of all sizes have a responsibility to communicate so their customers understand.

Bosses have a responsibility to communicate in ways their people understand.

Not that you’d know it listening to them or reading the content they produce—it’s full of jargon and jargon is the bane of clarity.

So which side are you on—light or dark?

By the way, that choice carries into your personal life in the way you choose to communicate with your family, friends, pets and all other constant or random interactions with anything that breathes.

Flickr image credit: Marina Avila

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

“The startups that really get hosed are going to be the ones that have easy money built into the structure of their company: the ones that raise a lot on easy terms, and are then led thereby to spend a lot, and to pay little attention to profitability. That kind of startup gets destroyed when markets tighten up. So don’t be that startup. If you’ve raised a lot, don’t spend it; not merely for the obvious reason that you’ll run out faster, but because it will turn you into the wrong sort of company to thrive in bad times.” — Paul Graham, co-founder, Y Combinator

Graham’s comment is from an email he sent to his portfolio companies in response to the Facebook IPO fiasco.

While everything he says is true, the spending standards he recommends were just as important before Facebook’s IPO as they are now.

One of the great attractions of startups has always been the lack of bureaucracy.

However, when founders jettison financial controls in the name of eliminating bureaucracy the only thing they accomplish is to show off their own ignorance.

Would you even consider designing a product from start to finish without detailed specification? Or  design reviews? Or market feedback? Or testing?

No?

Then why would you consider running your company without viable fiscal controls?

Flickr image credit: HikingArtist

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Does one really have to be an accountant, lawyer, minister or whatever expert in order to recognize when something is likely illegal or, at the least, unethical?

“That’s not my area of expertise” is the excuse du jour on most of the financial games being played—especially option backdating.

I find it very amusing when I hear high-powered corporate CEOs explaining that they don’t have the financial or legal savvy to understand that backdating is a no-no.

In one high profile case dating back to 2006 involves Dr. William McGuire, former CEO of UnitedHealth Group, who “…relied on others to assess the legality and appropriateness of backdated stock options granted to top executives and new hires. As such, all allegations against him in a shareholder’s lawsuit should be dropped.”

I love this part, “Dr. McGuire has no formal training or degrees in finance, accounting or law,” the brief states. “His only professional training is as a medical doctor with a specialty in pulmonology.”

Maybe no formal training, but please! There’s no way he was hired to run one of the largest health-care companies in the country without good business knowledge and skills.

No formal training, but didn’t he read or listen to the news? The backdating went on for 12 years and there certainly were news stories of other companies that got in trouble doing it during that time. The cost? $1.56 billion downward restatement of earnings.

But it’s the Cablevision case that really cracks me up.

“Cablevision had awarded 400,000 stock options to a deceased vice chairman, while making it appear as though the options had been granted prior to his 1999 death.”

Cablevision just settled, “…terms of the settlement agreement, certain present and former Cablevision directors and execs will pay Cablevision $24.4 million, while Cablevision’s liability insurer will kick in another $10 million. Cablevision has also agreed to adopt a number of corporate governance changes relating to stock-based compensation awards.”

Who said that greed ends with death?

(To learn why I chose this picture just click it and read.)

Heard any good corporate greed stories lately?