Learning Like Lightning: Lessons From JSF F-35 Sustainment Activities

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Based in Fort Worth, Texas, the JSF F-35 program provides several important lessons about financial management:Projected Costs

  • Begin with the end in mind
  • Measurement inversion happens—manage it
  • Don’t set arbitrary targets and then manage to them
  • Develop adequate information before making decisions
  • Use interval rather than point estimates

The November/December 2015 issue of the Journal of Corporate Accounting & Finance breaks down these lessons and sheds light on the world’s largest project to date, the trillion dollar to develop the F-35 Lightning II family of single-seat, single-engine, multirole fighter aircraft.

Here’s a closer look at the third lesson: Don’t set arbitrary targets and then manage to them

In his 1986 book, “Out of the Crisis”, W. Edwards Deming laid out 14 key principles for managing. Deming’s eleventh point: Eliminate arbitrary numerical targets…Substitute aids and helpful leadership….

Deming based this point on the idea that it is useless to specify a goal without developing a method for achieving it. The U.S. Government Accountability Office has been critical of Department of Defense (DOD) affordability efforts:

When the DOD established affordability targets for the F-35 program in 2012, the methodology…was not informed by actual resource constraints….Specifically, DOD officials stated that targets were determined by arbitrarily lowering…estimated F-35 Cost per Flight Hour by 10 percent….

The JSF F-35 program is massive—unprecedented in size. It has scored many successes.

Along the way, it has offered many lessons for us to consider.  You can read about them in the Journal of Corporate Accounting & Finance, 2015 (November/December) and also here.

Out of Diapers

Thankfully, I can’t remember those “good-old” days when my folks had to change my diapers, feed me at 2 a. m. and do all of those other lovely things that families go through with new babies.

However, I was told that I was born at home on Summer Avenue in Waco, Texas. I have not even a dim memory of the birthing process. Now, you didn’t really expect me to-did you?

Early life included an experience that, I’m convinced, has had a profound effect on all my days. An incident with a tricycle at ridden at high speed around the house and stopped cold by a corner resulted in a split on my head, raised a large knot, and, I believe, contributed to a personality that does not always track straight.

However, being born into a family with a much older sister, who lived just to annoy me, was my fate. As I remember, she was pursuing me with revenge on her mind that day. I wonder what she thought I had done to cause her violent intent. So my personality is largely her fault.

Our next door neighbors were the Harrington’s. He was the rough looking (to me), seasoned chief of the Waco Fire Department. Mrs. Harrington was a dark haired, dark eyed beautiful woman. Even at a very young age I had a taste for beautiful women—and I haven’t gotten over it yet!

The Harrington’s had a pony in an enclosure in the back yard (long,long before large animals were outlawed in neighborhoods). At the front of the enclosure was a gate with a board hung low over the entry to support the gate.

One day my much older sister, Shirley, was riding the pony. The pony was anxious to get back to its feed inside the enclosure. He ran through the gate and, in the process, deposited Shirley on the ground with a lump on her head. Perhaps that was her payback for the tricycle incident.

Lee Harrington (or Lee P, as everyone called him) was the same age as I was and was my first playmate. We had some fun times—sometimes digging around our houses and eating dirt. We refined our menu by taking table spoons from the kitchen and enjoyed our little game until our mothers noticed the black rings around our mouths.

Lee P always wore “long handles” with the trap door in the seat. He was frequently seen running around the neighborhood with the trap door down. Not a pretty sight, but it did teach me, even then, the notion of being embarrassed.

Our escapades inevitably led to quarrels and fights-battling 3 & 4 year olds must have been a great sight. I had been admonished many a time by my parents not to fight—so day after day I was thoroughly thrashed by Lee P. finally, Mother talked to Mrs. Harrington about it and Mrs. Harrington said that I must fight back! Well-mother gave me permission and I promptly went out and cleaned Lee P’s plow. I’m told that victory ended the fights.

Lee and I remained good friends for life- going through school together and even Baylor together. Lee was an outstanding athlete having played center-linebacker for Baylor and catcher on the baseball team.

Lee was very involved with the Baylor athletic association for many years after coaching and being a public school administrator for a career.

Sadly, Lee and his wife were killed instantly when returning from cancer treatment in Houston. Lee simply pulled out in front of an 18 wheeler.

All of Lee’s friends, including me, miss Lee’s big smile and bear hug we always got at Baylor events.

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Tarleton Texans cap stellar year of CPA exam performance

Wednesday, February 12, 2020
STEPHENVILLE, Texas


Tarleton State University’s College of Business Administration celebrated the end of 2019 with three new Certified Public Accountant candidates successfully passing the remainder of their exam requirements.

To become a CPA, graduates must pass four parts of the rigorous Uniform CPA Exam. With 72.22 percent of sections passed, Tarleton has one of the highest percentages in the state of all schools with 10 or more candidates testing, second behind Texas A&M-San Antonio.

“We are thrilled that our graduates marked a 73 percent pass rate in 2019 on the regulation section of the exam. That is well above the 56 percent national average,” said accounting professor Ashley Schieck.

Additionally, Tarleton grads averaged 74 percent on the audit section, 50 percent on managerial accounting and 45 percent on financial accounting and reporting.

Dr. Keldon Bauer, head of the Department of Accounting, Finance and Economics, celebrated this milestone, noting, “Our 100th graduate joined the CPA ranks in 2017. We’re moving quickly now toward our 200th.”

Tarleton’s College of Business Administration comprises outstanding faculty from across the globe, serving a diverse population of over 2,800 students in Stephenville, Fort Worth, Waco, Midlothian and online, with flexible, student-centered learning opportunities.

Tarleton, founding member of The Texas A&M University System, provides a student-focused, value-driven education marked by academic innovation and a dedication to transform today’s scholars into tomorrow’s leaders. It offers degree programs to more than 13,000 students at Stephenville, Fort Worth, Waco, Midlothian, RELLIS Academic Alliance in Bryan, and online, emphasizing real-world learning experiences that address societal needs while maintaining its core values of tradition, integrity, civility, excellence, leadership and service.

Contact: Phil Riddle
817-484-4415
priddle@tarleton.edu

Textbooks for ACCT 4323, Ethics for Accountants

Required

This course requires two textbooks.  McGraw-Hill Connect is required for the Louwers et al. (2018) textbook; it will be used for homework, bonuses, and exams.  Printed copies of these texts are not required.  McGraw-Hill Connect is NOT required for Mintz & Morris (2014).

Mintz, S. & Morris, R. (2014). Ethical obligations and decision making in accounting: text and cases. New York: McGraw Hill.  978-0-07-786221-3, www.mhhe.com/mintz3e

Louwers, T. J., Blay, A. D., Sinason, D. H., Strawser, J. R., & Thibodeau, J. C. (2018). Auditing & assurance services (Seventh edition). New York, NY: McGraw-Hill Education. 9781259573286, https://www.mheducation.com/highered/product/auditing-assurance-services-louwers-blay/M9781259573286.html

Optional Books

This course helps students to develop written and oral communication competencies.  Your grade will reflect your ability to communicate.  An excellent resource for professional accountants is May, C. A., & May, G. S. (2009). Effective Writing: A Handbook for Accountants (8th ed). Pearson Prentice Hall.  This book has been updated several times, and there are thousands of copies in circulation.  You can buy one used for under $10.

One popular method for considering business ethics is “Giving Voice to Values”.  If you are interested in becoming a better accountant who is less susceptible to unethical behavior, you may find the following to be helpful: Gentile, M. C. (2010). Giving Voice to Values: How to speak your mind when you know what’s right. Yale University Press.

‘Why Jesus Called a Man a Fool’–Reverend Dr. Martin Luther King, Jr.

As a kid, I found it puzzling that we were taught the importance of calling no one “a fool”. Sure, we knew that name-calling was wrong. And, we knew “cuss words”.

But, “fool” seemed pretty mild compared to other names we might call someone. So strange that the word, “fool”, had such importance.

As it turns out, Reverend King noted the significance of this term, fool, also.

He also wondered why Jesus called a man a fool–despite instructing otherwise.

August 27, 1967, was a special day for several reasons. Dr. King delivered a powerful lesson at Mount Pisgah Missionary Baptist Church in Chicago, Illinois, answering one of my many questions:

Jesus called this man a fool because he allowed the means by which he lived to outdistance the ends for which he lived.
There are a lot of fools around. Because they fail to realize their dependence on others.

Fortunately, someone saved an audio copy of this powerful sermon: https://youtu.be/xo-6BNtq5RY

New York World-Telegram and the Sun staff photographer: Albertin, Walter, photographer. [Public domain]

Akhalbey, F. (2019, August 27). Read MLK’s Powerful “Why Jesus Called a Man a Fool” Sermon He Delivered on this Day in 1967. Face2Face Africa. https://face2faceafrica.com/article/read-mlks-powerful-why-jesus-called-a-man-a-fool-sermon-he-delivered-on-this-day-in-1967

If You Enjoy Combat in Commerce, You Might Enjoy “An Effective Response”

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Today’s headline from San Francisco Business News heralds the coming of intense airline competition in the western United States:

Flying into unfriendlier skies: United tries to stay aloft as the Bay Area’s dominant air carrier while rivals circle

Things seem to be heating up again.  CJ McNair-Connolly and I provide a look at some of the intense airline competition in the US during the last couple of decades in our latest: “An Effective Response:…” [Cost Management, Nov/Dec 2017] (If you are interested in how managerial accounting can serve to guide organizations through crises, then you may be interested in the subtitle.  Airline aficionados find the swordplay entertaining.)

By January 1995, United was operating flights in 14 markets with Shuttle by United, its self-declared “airline within an airline,” which was designed specifically for the head-to-head competition with Southwest and similar airlines in the western United States.“‘Shuttle by United will be a catalyst for change,’ declared Gerald Greenwald, chairman and CEO of UAL Corporation, parent of United Airlines.”  Herb Kelleher, president and CEO of Southwest Airlines, took an openly aggressive stance, declaring:

They are proposing to take on the airline with the best balance sheet, the best customer service record, and the lowest operating costs in the industry. Now, that’s their business judgment to make, but I would suggest that it’s not necessarily the right one. If anyone thinks our people aren’t lusting and thirsting for war with them, they are making a serious mistake. Our people are ready for it, and they will enjoy it. 

Exhibit 3, Timeline for Case Study Narrative

Annual Net Margins for US Airlines Combined

Your Best Performance Measure Is the One You Don’t Need

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My wise, old friend Tom Pryor provides a steady flow of insight-filled guidance–and has now for many years.

Recently, he and I teamed up to address a couple of key themes in performance measurement and management for the Journal of Corporate Accounting & Finance.  Read about it at “Your Best Performance Measure is the One You Don’t Need”, 2016, 27(6): 11-18 and here.

AboutSevenToTen

Strategic Development of REITs in India

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DAS-Prashant Prashant Das continues to provide important insights into real estate assets and financing with this discussion of how India might implement REIT financing.

“Introduction of the real estate investment trust (REIT) structure in India is an important step towards the building of a mature commercial real estate market. The move is reflective of increasing appetite for structured financing of investments in commercial real estate assets….”

Das-Thomas_2016_StrategicDevelopment-REITs-India_BenchmarkingIndianEconomy_excrpt

While delivering insights into the potential for REITs in India, the article provides a useful description of the current state of the real estate market.

Das-Thomas_2016_StrategicDevelopment-REITs-India_CommercialAssetsHeld_excrptPart1

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Das, Prashant & Thomas, Charles. 2016, “STRATEGIC DEVELOPMENT OF REITS IN INDIA”, Journal of Real Estate Literature, vol. 24, no. 1, pp. 105-131.

Prashant Das serves as Assistant Professor of Real Estate Finance at the prestigious Ecole hôtelière de Lausanne, HES-SO–University of Applied Sciences Western Switzerland.

A Dousing at NWBC

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Our family walked the 1½ blocks to church every time the doors opened-the first pastor I remember was Brother W.D. Boswell and he was succeeded by Kirby McGuire.  I made my profession of faith on a Sunday night in, I think, 1943.  I’ll get this date correct later.  Kirby McGuire baptized me on a Sunday night in the warm artesian waters provided by north waco water supply company, (in that section of Waco users had the choice of using city water or North Waco Water Supply).  mother and daddy both taught Sunday school and there were always plenty of deacons outside the church smoking cigarettes between sunday school & church each Sunday–daddy among them.  bandana-157057_640.png

One of the funniest things I ever saw happened in the baptistry of North Waco Baptist Church* (2001 McKenzie Avenue).  It was customary to have baptisms on Sunday night and have the choir remain in the choir loft immediately below the baptistry, NWBC had a mission church further out north 19th street in a low-income area & when they had a baptism to perform the would use NWBC baptistry and Kirby McGuire would perform it.  One Sunday night I was still in church watching the baptism and daddy had gone outside to smoke and, for some reason, mother went outside as well, the first candidate was a very large woman who came into the baptistry in as ugly a homemade dress as I had ever seen and a bright red bandana around her hair curlers, the preacher said the words and laid this massive figure backwards at which time we all became aware that she was deathly afraid of water, so she struggled and slapped the water straight up with all her might, delivering a pre-shower to everyone within 20 feet, the preacher calmed her and leaned her back again, he discovered that she still wasn’t quite ready when she struck the water with a mightier blow doing more water damage than the first time, by this time the congregation was giggling and I was almost falling out laughing, I was close to the back of the church–so I ran out the back door & told daddy & mother that they just had to see this!  splash-308941_640

When we got back into church the baptism was still going on and not very well, the choir loft was darkened for the service, but you could see various member creeping quietly down while wiping their faces, arms, etc. with whatever they could find to wipe, in once last final, near fatal attempt, the preacher started her down again and this time she scooped the water (as kids douse each others faces in the pool) and the result was masses of water drenching whatever had not been drenched before, the pastor, counting the job well done closed with a prayer and we all went home laughing

It was in this church that I saw the only “excommunication” I ever saw-actually i believe they called it “withdrawing fellowship”.  There was a family named “Deutsch” who had been members for quite a while, they had a daughter named Agatha who was a talented pianist though I’m not sure whether this is part of this story, anyway, all kinds of strife surrounded Mrs. Deutsch, including that she gossiped, I know mother didn’t like her for reasons she never saw fit to disclose I do remember a little about the acrimonious business meeting of the church when fellowship was removed, mother & daddy had little or nothing to do directly with the battle, but it soured their feel for the church, I think.

North Waco Baptist Church, April 29, 1945

North Waco Baptist Church, April 29, 1945

Shirley and my cousin, Gwen, went through various steps in the girl’s auxiliary (g a’s) & every time there was a ceremony they dressed up in these little costumes and I had to attend, I hated it!  Shirley also played the cello during those days and her recitals were more than I could bear so, as I recall mother & daddy mercifully left me at home–sparing me the agony & them the risk of embarrassment that would have resulted from my behavior.

     -Charley Thomas