For process engineers and Six Sigma quality improvement nerds, this week must have been a little like when rock ‘n roll fans learned of the death of Jerry Garcia from the Grateful Dead.
A great one has passed.
So, a moment of silence please for Eiji Toyoda, who as a member of Toyota Motor’s founding family had a hand in creating what’s called the Toyota Production System and a body of guiding corporate principles known as the Toyota Way.
Toyoda died this week at the age of 100 in Toyota City, Japan.
As a corporate development executive as far removed from the manufacturing floor as one could get, I was a reluctant participant in a total quality management training program in the late 1990s. Half a day into training my attitude had flipped completely. This training was both fascinating intellectually as well as important in understanding how to run the business well.
The terms may have been different, but most of it had come directly from Toyota.
There were concepts like “kaizen,” a commitment to continuous improvement. There was the critical importance of tireless efforts to eliminate waste, and it wasn’t just waste anyone could see, like scrapped parts in a flawed production process. It was waste everywhere, in any facet of the business.
Watching video tape after video tape, no one in that training could have forgotten this mantra: “Find the waste and get rid of it. And keep it gone. Forever.”
Then there is my personal favorite, the five whys. This technique is a big part of problem-solving training in the Toyota Production System, to discover the root cause of a problem as well as unmask any potential solutions.
It’s easy, too. Simply ask why five times.
Not only can this be very helpful at work, the five whys happens also to be a great way to manage teenagers.
“My homework was late.”
“The printer didn’t work, and it was too late to get a friend to print it.”
“The Epson printer was out of ink.”
“Because you didn’t buy any ink!”
“Because you don’t ever use this printer and didn’t know the ink was low?”
And so you see how this goes. The root cause was identified and everyone could see the right corrective action to take. Let Dad know the ink cartridge was nearly empty.
Eiji Toyoda was one of those at Toyota who changed manufacturing forever and changed the way many of us think at work. Even made some of us better parents.
Governor Mark Dayton has once again objected to the Vikings selling expensive personal seat licenses to fund the team’s portion of the new stadium’s costs, and once again it’s fair to ask whether he just doesn’t get how stadiums are financed or whether the politics of public funding for a stadium requires a more than normal amount of posturing.
To recap, the stadium financing legislation requires the team to come up with $477 million. A personal seat license, also called a stadium builder’s license, is the one-time purchase of the right to buy tickets for given seats. They are expensive, up to $80,000 in recent sales in San Francisco.
A seat license is hardly novel, and the adoption in 2011 by the National Football League of its so-called “G-4” financing program cemented personal seat licenses as a key financing vehicle. It’s clear that seat license proceeds are part of any NFL team’s plans from the beginning of any stadium project.
As reported, the NFL will provide up to $200 million in financing from its G-4 program for the Vikings stadium, but, much like the public’s deal with the team spelled out in the legislation, the NFL’s financing also requires a “private contribution.”
Money through the NFL will come in three pieces, called “tranches” in NFL documents.
Two of the tranches, totaling $150 million, are loans to be guaranteed by the Vikings’ controlling owner but the $100 million piece gets repaid by dedicating game-day proceeds that ordinarily would go to the visiting teams. They are dependent as well on a private contribution.
The last tranche is what’s most interesting. It requires a private contribution of $100 million to the project, and if so the league will advance an amount equal to 50 percent of the private contribution, up to $50 million.
There is no indication in the league’s document that this is a loan at all, which makes it a grant. The thing is, the only money that counts as a private contribution on this tranche are personal seat license proceeds or the issuance of equity. That means the team cannot borrow the money and call that a private contribution.
That makes the optimum amount to raise from seat licenses at least $100 million - which is a lot if, as the governor insists, prices for any PSLs are to be kept to "an absolute minimum."
By putting PSL’s specifically into the document as a qualifying private contribution, the NFL and its teams have all agreed that this is how new stadiums will get financed.
The governor did sign the legislation that created a more-or-less conventional NFL stadium financing framework – including language on seat licenses. Now insisting Minnesota’s stadium has to be financed differently than the rest of the league’s new football palaces is, to be generous, a curious position to take.
What would have been good to hear from Rosengren is why the economy, with the federal government deficit spending and with the Fed buying $85 billion of securities per month, isn’t simply booming. And at that level of monetary accommodation, please explain how inflation could still be running well below 2 percent.
If what happened in 2012 is any indication, the market for start-up equity financing is going to be slowing dramatically now that Minnesota’s angel tax credits have been fully allocated for the year.
The state ran out of its last credits for the program — which provides a 25 percent “refundable” tax credit to investors who put money into qualified startup companies — on May 17.
A Minnesota Senate proposal to increase the 2013 allocation by $5 million, to $17.7 million, did not survive negotiations with the Minnesota House and was not included in final tax legislation approved Monday evening.
Last year the tax credit allocation ran out in July, and entrepreneurs have said that had the effect one would expect, of causing investors to just sit on opportunities until January. The conventional wisdom among economists on angel credits is that they may not influence investor behavior on whether to invest, but their availability sure can on when to invest.
If an entrepreneur is looking for financing between now and first quarter next year, no credit is a problem.
It was a pretty active start to 2013 in the start-up financing market, to according to the closely watched TECHdotMN web site. It reported that at least 24 Minnesota technology-oriented ventures raised in excess of $28 million in the first quarter of 2013. That’s up dramatically from the same period of 2012 when adjusted for one exceptional deal that distorted the 2012 picture.
It will be interesting to see what TECHdotMN reports for subsequent quarters.
The program reopens in January 2014 with $12 million in credits for the year.
The state has hired a consultant to analyze the effectiveness of angel tax credits, as the program is scheduled to sunset in 2014. Hopefully the consultant looks into what happens in the market when credits are all claimed for a given year.
The market is looking for roughly 10 percent of the outstanding shares of Mosaic stock to be repurchased in 2013, Andrews wrote, and “not coincidently, this is roughly the same of stock that unlocks in 2013” from the Cargill-related trusts.