Making a Difference in Our Short Lives

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As we proceed through life, many of us struggle with endless clashes between the tactical and strategic aspects of human existence.

The tactical problems begin with food, water, shelter and education.

The strategic begin with where one wants to live and what job to take, whom to marry, how many children to have.

Most people rarely distinguish between strategic and tactical perspectives in utilizing their time and focusing their energy. Consequently, the general human life process is to move forward one step at a time, adjusting, if at all, as best one can going along. That is frequently accompanied by the often mistaken instinct to favor the urgent over what may be more important.

What is the measure of a life well spent? How do you know whether you are wasting your life or investing it in the things that really matter?

In America we have several yardsticks by which we measure a life. One is usefulness. We are pragmatists at heart. We feel that if a person does something useful for society, whether it is a profession or a trade, he or she spends his or her life well.

Another yardstick we use is busyness or sheer activity. Our lifestyles reflect our values here—we’re all extremely busy people. Our weekly calendars are full to the brim. We have the notion that if you just sit around, you’re wasting your life.

We also gauge our lives by adventure and excitement. If we can’t get it firsthand, we pick it up vicariously on TV or at sporting events. Our heroes lead exciting lives, either through romance or life-and-death risk taking. We read magazines like People that tell us about the rich and famous, secretly wishing that our lives could be like theirs. We generally think that a person who dies rich and famous has achieved success.

Personally, I believe the more people ultimately know about their options, the more likely they are to choose and make the effort to take advantage of their lives’ vast opportunities.

I wonder how many people ever have a five-year plan, much less a 20-year plan. If they never think about the arc of their lives, they inevitably forego opportunities to bend that arc to seek their dreams.

How many people make pros and cons lists as they encounter crossroads in their lives? When they get to the fork in the road, they simply take it.

Some people spend two weeks researching prices and customer satisfaction and performance data about a possible new car. But rarely, or never, do people spend even a minute thinking about what their neighbors might say about their life when they are gone, because they have been taught to believe it is nobody’s business.

There is indeed a growing base of research out there which shows that choosing to spend time engaging in activities that facilitate a strong sense of purpose; that provide opportunities to contribute to the well-being of future generations (especially outside our own families); and that allow you to feel like you really matter have a profoundly beneficial impact on your mental and physical health….BUT although we tend to be more drawn to jobs, volunteering, or care giving opportunities that benefit future generations as we get older, we can and should consider how we are living our lives NOW, and how we matter to others well before we reach old age or experience a life-threatening condition.

I offer you one – How will you spend your years, however many are left, mattering to others?

I chose the path of empowering millions of people financially through the Financial Policy Council and the dozens of other charities I have embraced throughout my life.

Money and Education for me are not only about “freedom” but are also the “glue” cementing all if used properly.

What have you chosen to do?

Share your thoughts

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Investors Can Boost Their Cybersecurity: Back to the Basics

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Security Essential for Financial Transactions Online

Now that the Cyberworld is upon us, most of us do most, if not all, of our financial transactions online. Long gone is the day when most of us paid our bills by check or delivered a check to our brokers to invest for us. Now we pay our bills online, either on the biller’s Website, or on our bank’s Website. We don’t write checks – we transfer funds. We rely on the security of the Web site with which we are dealing to protect the security of the transaction. Most of us make sure that the “HTTPS” designation is at the beginning of the address for every Website on which we conduct transactions or share sensitive information. We maintain security and privacy settings on Facebook, LinkedIn, Twitter, and other social Websites where we publish. We have firewalls for our computer systems, our personal computers, and our home networks. We have anti-virus software and run it rigorously. We have our Outlook set for appropriate levels of security and use spam settings to segregate anything that looks like spam, knowing that in the spam box we can see the REAL addresses behind the links in emails. We know enough not to click on any link in any email, instead copying and pasting the address into our browsers. We have our browsers set for appropriate levels of security and privacy, and use a secure browser like Firefox or Tor. We have our networks set for security against invaders. We understand that the weakest link is usually the employee sitting at his keyboard, and have established suitable policies, procedures and penalties regarding cybersecurity for our employees. We use, and require our employees to use, “strong passwords” and change them often.

Really? Surveys by security analysts show that most people, even tech-savvy people, use passwords they can remember easily, and seldom, if ever, change them. We are our own weakest link. We rely too heavily on all of these measures, but are lazy in our own computer habits. We open Firefox, but forget to go to “New Private Window” for each jump. We click on links in emails that come from friends and trusted associates. Our own lapses can only be remedied by imposing discipline on ourselves. A new report on ways the government can mitigate persistent cybersecurity challenges contains a crowdsourced list of best practices. According to the report, “Much of what is required, expected, or even possible in cybersecurity management is known to cybersecurity professionals, but not fully or properly implemented across the government.” The same is true of industry, even the financial industry.

Communist countries are famous for establishing “five year plans.” China has a five-year plan for cybersecurity targets. Security vendor CrowdStrike has produced a report on China’s next fire-year plan. “They’re focusing on getting Western technology out – they don’t trust it,” said Adam Meyers, vice president of intelligence at CrowdStrike. “They want to use their own technology.” Chinese hackers appear to be looking for information to use in restructuring China’s healthcare sector. This may have contributed to the spike in healthcare breaches in 2015. “Targeting the western healthcare sector may be as much about logistics and know-how for running national level health insurance schemes as it is about siphoning data,” said the CrowdStrike report. The data they took, however, could also be used to build profiles of federal employees for intelligence purposes and spear-phishing campaigns. China seems focused on collecting intelligence that supports its economic system, and not just on military and defense targets. Therefore, financial firms of all types and sizes are potential targets, as well as high-profile individual investors. Hacking investors’ personal computers could provide access to the financial systems in which they work and invest.

There are other measures that savvy investors can take to protect their financial lives and those of their firms. The purpose of this article is to look at them. After you read this, you might say, “I have heard all of that, already.” Perhaps you have, but have you implemented it all? If not, read it again and again until it becomes second nature.

Security Begins at Home: Ten Commandments

Security begins at home. Financial Executives’ home networks are often insecure and are logical targets for hackers seeking entry into financial system networks. Many executives access their office networks from home. There is nothing wrong with that, per se, but if their home network is not secure, their connection to the office is not secure. So, let’s start with the home network and home computer. Make sure that when you are not at home, no one else can gain access to your home and access your computer.

  1. Use a reasonably new Internet router. If the one you have is over a year old, destroy it and buy a new one. The security of routers is steadily increasing as the technology develops, and an old router will be full of holes hackers can exploit. Set the new router up as a “non-broadcasting network.” That means other computers cannot see it. A computer must send a signal with the appropriate router name in order to be able to see it. You can provide the key to visiting friends or family who need to use your Wi-Fi.
  2. Set the router up as a secure network requiring a complex key to access it.
  3. Consider buying a firewall router to place between the Internet router and the rest of your network.
  4. Encrypt the contents of your computer’s hard drive and any other hard drives connected to the network. Windows 10 has encryption available, but not activated by default. There are also third-party encryption programs available. Here is a site that reviews them and posts ratings for the top ten: http://encryption-software-review.toptenreviews.com/
  5. To access your office network, use a strong password with at least 8 characters that are a random mix of numbers, lower-case and upper-case letters, and symbols. Example: kyG@2bK&. If you can remember it easily, it is no good. Norton has a good password generator online: https://identitysafe.norton.com/password-generator/#. Use it, or any of the other good programs out there.
  6. Because you can’t remember your passwords, use an encrypted password keeper to keep track of them. There are several available. There are a number of methods, including software vaults you can put on your computer, and also separate devices. Some allow access only by fingerprint identification. DO NOT write the passwords down where someone other than you can access them. Here is one of the many good separate devices available: https://keepersecurity.com/
  7. In your security software, turn on the feature that flags dangerous Websites and prevents access to them. Even good websites can get hacked and then infect computers accessing them. Porn sites are notorious for this, especially the free ones that show up in free catalogs of porn sites. Beware of foreign sites, especially in Africa, the Middle East, Russia, and East Asia.
  8. Know the source of software you load, including security software. A consultant with whom I have worked values security, and has on his server an anti-virus package he considers very good and very reliable, and he recommended it to me. I googled it, and found that it came from a Chinese software firm. Given the publicity recently about Chinese hacking attempts, I would beware of using security software from China.
  9. On your computers (all of them) activate the feature that loads the screen saver after a period of inactivity and requires a password to allow access again to the computer. Use a different password for each computer, of course
  10. Do not use outside data CD/DVDs or thumb drives on your computer until they have been separately tested and scanned for spyware and viruses.

Security at the Office: Ten Commandments

  1. Retain an outside cybersecurity expert to advise your IT department. Explain to your IT department that it is not that you don’t trust them, but a second opinion is always better than a first opinion alone. Before hiring the consultant, run a background check. Some real hackers work as cybersecurity experts, and could leave backdoors for themselves.
  2. Make sure your facility is physically secure. Most successful “hacks” consist of a “hacker” walking into someone’s office when he or she is out, sitting down at that person’s desk, and using his or her computer to access the network to extract intelligence, install spy software, or open a back door.
  3. Make sure your IT department has a robust policy for protecting and policing the network.
  4. Retain an outside consultant to attempt penetration of the network. There are “honest hackers” who specialize in this service. Many IT security firms provide that as a service. If you know where the back doors are, you can close them and lock them. If you know where the open windows are, you can do the same with them.
  5. Ask your IT department to set up a computer to test flash/thumb drives and data disks brought in from outside the office before they are inserted into any computer. It should be a stand-alone computer with strong anti-virus software. Do not allow any thumb/flash drives or outside CDs or DVDs to be used on an office computer until they have been scanned.
  6. Make sure your office network is isolated from the Internet with a secure firewall appliance. If you allow employees to bring into the office their own devices capable of connecting to the system, make sure they are screened first by your IT department and equipped with the necessary security software. If they come in and connect, your system firewall has just been bypassed. Establish a robust BYOD (Bring Your Own Device) policy
  7. Make sure every server, file server and computer workstation is protected with robust firewall, anti-virus, anti-spyware and anti-malware software. Windows 10 has a good suite built in. Use it. Make sure that every computer is running Windows 7 or 10, and make sure that any operating system older than Windows 7 is banished from the office. Yes, I really like Windows XP, but it is no longer secure.
  8. If you are an Apple or Linux person, don’t relax. Apple and Linux computers and devices are also subject to viruses, spyware, and other malware, as well as to hack attacks. Make sure your Apple devices are protected by robust firewall, anti-software, anti-spyware and anti-malware software.
  9. Make sure your CIO and IT departments keep up to date with the latest information and technology on cybersecurity. Send them to conferences and continuing education on the subject, and make sure they are on mailing lists for the appropriate newsletters. Equally important, make sure they actually read the material and implement best practices.
  10. UPDATE. Make sure all software on your system and in your computers is updated with regularity. For operating systems and software like Microsoft Office, make sure auto-update is implemented. For an office system, have the IT department download all updates and install them on all computers, if you don’t implement auto-update.

OK, Now What?

Now, go practice safe surfing, but warily and carefully at all times. “Come into my parlor, said the spider to the fly.” Her parlor is the Web. You are the fly. Whether you are online or offline, if your computer does something unexpected and irritating, power it down immediately using the power switch. Start it up using a start-up CD/DVD with an anti-virus program on it, and use it to scan the computer.

An attack will generally come when you are relaxed or sleeping. Many will come online when your computer freezes on a website for no apparent reason. Often, that is because the website has been contaminated. Vigilance is the key to security. BE YOUR OWN BEST WATCHDOG! (Sorry, I didn’t mean to shout).

References:

Php secure login

Sophos is one of the best providers of computer security software for computers and networks. Their blog is worth reading.

Sophos whitepaper

Naked security You can read their newsfeed online, or subscribe to their newsletter.

“Industry Ideas for Boosting Government Cybersecurity: Go Back to the Basics”, www.NextGov.com (01/20/16) Moore, Jack.

“China’s Next Five-Year Plan Offers Preview of Cybersecurity Targets”, CIO, (02/03/16) Korolov, Maria.

NextGov Link

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Key Financial Regulations To Monitor

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Fourth quarter 2015 was a hard precursor to 2016 both in capital markets and financial corporate governance. Highly volatile commodities and equities markets, an overall slowing of economic growth and a cooling of tech business growth have left the investing landscape bearish. In addition, corporate governance of major financial and business institutions showed signs of increased shakiness; in 2015 HSBC took the governance world by storm with tax evasions, Bank of America and Citi continued to fail bank stress tests and capital requirements and JPMorgan’s stock has significantly underperformed analysts’ expectations. We now open the year 2016 with an SEC fraud charge against the entire executive management and Board of Superior Bank for overstating loan performance. In this light, 2016 will be a year of continued US Federal Reserve and Securities and Exchange Commission (SEC) financial regulation.
It is noteworthy to mention that the US Federal Reserve may raise rates for 2016. However, in this outlook we have decided to focus on specific regulatory requirements linked to the Dodd-Frank Act of 2010 and to Securities and Exchange Commission rules that will also shape the regulatory framework of financial institutions and corporations for 2016.Key regulations are as follows:

Capital Requirements and Asset-Liability Management:
The Dodd-Frank Act of 2010 has clearly stipulated capital requirements for financial institutions, of which systematically important financial institutions such as Bank of America and Citibank have failed within the past two years. For assurance that banks are better capitalized, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) plan to enforce further Basel III agreement factors, requiring higher leverage ratios and a larger liquid asset base. The Financial Services Roundtable, a top US Financial Service advocacy group, has cited the Net Stable Funding Ratio as the standout rule which banks will need to apply for asset-liability management to comply with Basel III requirements. The upside to continued monitoring of capital reserve requirements is financial stability. The downside is, of course, further dampening of bank earnings growth.
Single Point of Entry and Source of Strength:
In 2015 regulators called for stronger resolution strategies of 12 major banks operating in the US, to ensure that if these financial institutions needed to be liquidated there would not be significant strain on US financial stability. The Federal Reserve and FDIC have demanded that bank holding companies be able to be resolved within themselves as well as for all subsidiaries. Ten out of the twelve major banks have opted for the Single Point of Entry (SPOE) resolution strategy under Title I of the Dodd-Frank Act of 2010. Under this strategy, banks will rely on the holdings company as the major “source of strength” for all operating subsidiaries, before FDIC intervention. Sharon Haas et al. of Columbia Law School’s Corporate Governance Program explain that SPOE is different to the Bridge Bank resolution strategy, by which the bank automatically goes into receivership under the FDIC. The Financial Services Roundtable has stated that regulators will seek a firm implementation of the source of strength stipulation for banks in 2016.

Stress Testing and Risk Management For Non-Bank Financial Institutions

The non-bank financial industry is of equal importance to major banks as systematically important financial institutions. In 2015, the SEC played a major role in setting risk management parameters for investment funds, mutual funds and ETFs. Under 2015 amendments to the Investment Company Act of 1940, the SEC stipulates more stringent liquidity risk management, requiring set minimum cash and liquid asset quotas based on the fund’s net assets, with a three day time to liquidation. In addition, the Financial Services Roundtable cites more implementation of stress testing, securities disclosure requirements and qualified standard of conduct from investment advisors on all investment company types for 2016 via the US Department of Treasury’s Financial Stability Oversight Council (FSOC) in conjunction with the SEC, under Section 913 of the Dodd-Frank Act.

Executive Compensation And Clawback Policy

In 2015 the SEC majority voted to implement firmer requirements with regards to executive compensation within financial institutions and major corporations, in cases where the financial institution displays significant noncompliance with financial reporting standards. SEC Rule 10D-1, based on Section 954 of the Dodd-Frank Act, requires a corporation that seeks financial recovery due to an accounting restatement for compliance purposes to seek recovery from both current and former executive management who obtained “excess incentive based compensation” over the course of prior three fiscal years. Public companies are thus required to file a detailed clawback recovery policy with each 10-K. In addition to a stronger enforcement of SEC Rule 10D-1 in 2016, the Financial Services Roundtable cites a need to have a stronger enforcement of Dodd-Frank Section 956, which requires regulators set specific standards to “prohibit salary arrangements that encourage “inappropriate risks.”” To date a final draft on executive compensation guidelines for banks has not been produced; however, with the implementation of the claw back policy we expect to see more examination of executive remuneration by regulators in 2016.

Commodities Income and Payments To Governments

This SEC regulation is non-financial institution related. Regulations on tracking the income flow of oil trading are now a highlighted part of the regulatory landscape, given the commodities markets climate as well as the geopolitical nature of commodities trading. The SEC has proposed a rule to enforce Section 1504 of the Dodd-Frank Act, which requires “issuers that extract natural resources” to specifically delineate all payments, transactions and income made to the US government and to foreign governments for any commercial development of commodities. Elizabeth Ising et al. of Gibson Dunn & Crutcher LLP via Harvard Law Corporate Governance explain that all resource extraction issuers are required to publicly file an annual report stating all government payments, with only case-by-case country exemptions. This disclosure would be required of all holding companies and subsidiaries under the issuer. In addition to payment amounts, all fiscal years when payments were made, as well as the actual geographical areas linked to these payments will be mandatory to disclose. In a geopolitical atmosphere of terrorism funding linked to oil and commodity trading, it is most acceptable to see strong SEC commodities income disclosure requirements for 2016.
Sources

Haas, Sharon et al. 2015. “PwC discusses Resolution: Single point of entry strategy ascends.” The Columbia Law School Blue Sky Blog.

Hatch, Robert. 2016. “10 Regulatory Issues the Financial Industry Is Watching in 2016.” Financial Services Roundtable.

Ising, Elizabeth et al. 2015. “One More Time! SEC Seeks to Re-Adopt Resource Extraction Disclosure Rules.” Gibson Dunn & Crutcher LLP. Harvard Law School Forum on Corporate Governance and Financial Regulation.

Ising, Elizabeth et al. 2015. “SEC Propses Rules Regarding Clawbacks.” Gibson Dunn & Crutcher LLP. Harvard Law School Forum on Corporate Governance and Financial Regulation.

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Success and Ego – Two sides of the same coin?

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I believe there is a very thin line between success and ego.  You cross that line and you could be in big trouble. You straddle the two variables carefully and your upside has no limits.
So what have I learned in life to manage both and use them to the best of my capabilities?

Let’s start with the ego part…

Everyone has an ego. It’s rare that people these days are devoid of it.

Ego is nothing but an attachment to a wrong image of yourself.

When you start identifying yourself with your academic achievements/failures, a successful/failed career or even with the image that you are a benevolent/kind person or bad or perverted, that is ego. People generally think that success leads to ego. But on the contrary, ego leads to both superiority and inferiority complex.
It is not the ego which is bad, but the impact which it has on our personality that makes it disastrous. When you start seeing the world through these spectacles, you are full of yourself and this makes you a very proud person or you feel worthless when you are in the company of successful” people.
In my opinion, Ego is the false impression on a person’s mind that forces him/her to believe that he/she is superior to others by pulling curtains over the fact that we all, made up of same matter, will eventually end up in the same earth.  In simple words, ego is not you but what you think yourself to be. It’s an image, not the object (you) and we all know the images are virtual.
So, if we don’t identify ourselves with these labels, then what do we identify ourselves with? What would make us ego-less?
This was the question I pondered upon for while for which I got the answer one day. The answer I got was from a daily spiritual television show.
When we identify ourselves by the roles we play, there is either a high or a low feeling attached to it. Instead if we identify ourselves as beings (which they called the soul, in the T.V. series) playing the roles of a student, a professional, a kind person, then there would be no superiority present in this state and ego would collapse. The same applies when you feel inferior. It is the “being”, playing the role of an inferior person. So ego-less stage is going from being role conscious to soul conscious.
Since this concept has always helped me to be stable and centered in my daily life, I now never jump with euphoria or somersault when I experience high success or I never go suicidal or into extreme depression when things are not in my favor.
I still have a long way to go to become ego-less… At least, I know now that I am on the right track.
Now moving to the success part…
In my dictionary, Success is living a life that gives you satisfaction as well as happiness, irrespective of how much you earn or how popular you are among the folks.
I know that in a world where there is cut throat competition for earning money and fame in order to be recognized as a successful person by the society, my definition may seem somewhat naive. But I have seen rich people craving for little happiness and have heard about the insanely famous celebrities craving for real friendships. Many of them are successful in the eyes of society but they are not happy. If that’s the scenario, what’s the use of such success? No doubt, money is important but earning money and running after it are completely two different things. And I am glad that I now understand the difference.

So what has ego to do with success? How does it creep in? 
When you achieve something and think that it’s you who own the whole credit for your success, you give way to ego. If being grateful is not your nature, success will surely get to your head. Your parents fed you; your teachers taught you; your friends- good ones supported you and false ones taught you lessons. And when you succeed, you forget how they helped you to become who you are, eventually ending up in a false belief that you did it all by yourself.
Ego is the sister of ignorance. You may have a high IQ and may be a gold medalist in academics, but that knowledge has nothing to do with wisdom. You may be an experienced person in your forties, but again the age has nothing to do with maturity and wisdom.
Remember that all the matter in this universe, including you, is made up of atoms. These atoms come together and create a new life. And then one day the whole pattern falls apart (which we call death) to put an end to that life in order to create a different one. We live, we die and born again. This is a cycle of changes. And this life which we are proud of is a journey with only change being the constant. Whether you accept or not, we are always changing, bit by bit. So when you yourself will not stay alive forever, how can you take the guarantee of the success you achieve?
People feel superior to others because they assume that what they have will stay with them till eternity. Almost everybody knows this, but very few accept it. With the acceptance comes the wisdom. And wisdom never lets ego creep in.
What should you know to avoid it?
If you are for example a girl and think that you are so pretty and being friends with an unattractive /rural girl may tarnish your image or better to say lower your standard, remember that life’s so uncertain. Those acid attacks, cases of fire and other mishappenings can knock your door anytime without your permission, thus, stealing from you your priced possession. So be humble.
If you are holding a high status in society and consider that as the reason to feel superior to the rest, I can give you the web links of great celebrities whose stardom ended in a flash. So be humble.
If you escape everything, there will be another devil waiting for you whether you are at the top or at the foot of a mountain. That devil is none other than LOVE. Trust me, it will shatter your nonsensical ego to the pieces and will not free you from its claws till it succeeds in teaching you the lesson of humility.
Just remember that time changes, situation changes and so does the life. Never take anything for granted. Nothing belongs to you because you can’t escape death. Whatever you have will end with you in the grave.  Enjoy what you have. Dream what you want. Work for passions and get that damn thing what you yearn for. But don’t look down upon anyone. The rich and the poor- the ugly and the beautiful- you and me- all are humans. Be humble.
If I have to sum up my answer in a line, I will say : It’s not success, but you- your ignorance- that builds ego. Avoid it.
Share your thoughts…

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When Will We Stop Blindly Pissing Away Money Down the R&D Rat Hole?

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Let me start by saying that I am a physicist and have been involved with many of the leading U.S. research facilities over the years — Los Alamos National Laboratory, Sandia Laboratories, just to name two.  I also directed the Socrates Project under the Reagan administration.  So the quick knee-jerk reaction to the title that “I don’t understand research and development or the value of technology” holds no water at all.  Please don’t even try to argue this point.
Research and development (R&D) does not equate to a competitive advantage in the marketplace or on the military battlefield.  Knowledge for knowledge’s sake is a worthwhile pursuit.  Totally agree.  But it is conceptually flawed and detrimental to the objective — being competitive — when companies and governments use the need to increase economic and military might as justification for higher expenditures on R&D.  But yet this is the rapidly rising battle cry among the leading thinkers in Congress, the Pentagon, academia, think tanks, and the press — “Raise R&D funding levels, and America’s future will be secured.”  How so far from the truth.
One highly critical set of decision makers who suffers from this R&D is the key to competitiveness thinking is the leadership in the office of the Secretary of Defense.  But this was all avoidable.
In the late 1980s, I “assisted” in writing legislation that would force DoD out of this R&D is the key to competitiveness thinking.  As a member of the intelligence community, working directly with the U.S. Congress was considered a hanging offense.  But I was willing to risk it because I foresaw that DoD thinking in this manner would lead to the massive dilemma that DoD is now at a loss to address — the rise of China as a military threat and the almost total erasure of U.S technology leadership on which our military strength is based.

The legislation mandated that the Secretary of Defense develop and present a Department of Defense technology strategy to Congress every year.  It was a process that would force DoD out of its R&D is the key to competitiveness thinking.  The legislation passed, and for all intents and purposes, lies dormant and unexecuted to this day.

But let me go back to the beginning of the story — The Socrates Project.

Throughout the 1980s, I was the Director of the Socrates Project within the U.S. intelligence community.  I also initiated the program.  The Socrates Project had a two-fold mission.

1/ Utilize the full range of intelligence to determine the true underlying cause of America’s declining economic and military competitiveness, and then 2/ use this understanding to develop the required solution.  We were fully successful in both aspects of our mission.

What we determined (and covered in our last blog but is worth restating) was that the cause of the decline was America’s shift from technology-based to finance-based planning that began at the end of World War II.

In finance-based planning all decision-making is based upon manipulating the acquisition and utilization of funds, and the final measure of success is how well we optimized the fund exploitation to achieve the objective — generating a profit.

In technology-based planning, the foundation of all decision-making is the outmaneuvering of the competition in the acquisition and utilization of the technology.

How effectively an organization or a country outmaneuvers the competition in the technology exploitation fully dictates the level of other resources and how they must be utilized to generate a competitive advantage.  The other resources include but are not limited to manpower, natural resources, time and funds.

Where technology-based planning starts with the foundation of maneuvering in technology for a competitive advantage that then dictates the rest of the business plan, finance-based planning leaves technology exploitation, which dictates competitive advantage, to chance.  The manipulation of funds, which is the focus of finance-based planning, often leads counter to generating a true competitive advantage in the marketplace or the military battlefield.  The finance-based planning organizations of the U.S. pride themselves in being highly effective in what equates to rearranging the deck chairs on the Titanic.

What is competitive advantage?

All competitive advantage is a matter of satisfying the customers’ needs better than the competition, where the customer needs are defined from the customers’ perspective and covers the full range of their needs.  This goes for both commercial and military competitive advantage.  If you are not excelling at satisfying one or more customers’ needs, no amount of slick marketing, branding, or financial optimization — Financial shell games — matters.  The organization is going to die.  Or in the case of DoD, be totally ineffective.
Outmaneuvering the competition in the acquisition and utilization of technology is a multi-faceted, fluid, on-going chess game played with the technologies of the world.  Winning at this technology chess game requires a technology strategy.  When I use the term “strategy,” I am not using the simplistic, conceptually flawed term that is traditionally passed off as “strategy” in the business community.  Strategy is not the same as a vision statement, a target list of products or services, a road-map, an exercise in consensus building, or glorified trend analysis that really belongs at the racetrack.
In the case of a technology strategy, the limited resource is technology, where technology is properly defined as any application of science to accomplish a function.
A technology strategy consists of a coherent set of offensive and defensive technology acquisition and utilization maneuvers.
The set of technology acquisition maneuvers consists of the full range of means to acquire the technology that the organization requires, and prevent or hinder the competitor from acquiring the technology that it requires.  At some points in time, the technology strategy may be executing maneuvers to acquire technologies for the organization, while at other times, it will be executing maneuvers to retard the competitors from acquiring technology, and at other times it will be doing both.  Research and Development (R&D) is just one of the mechanisms in the full set of technology acquisition maneuvers.  But when this one mechanism is used, it is both very precisely and accurately targeted and is done in a systematic coherent process interconnected with a full range of precisely planned offensive and defensive acquisition and utilization maneuvers.
Just executing the one mechanism of R&D is extremely costly and highly ineffective for generating and maintaining a competitive advantage.
The U.S. using R&D as the sole means to address technology exploitation for a competitive advantage makes it a one-trick-pony knuckle-dragging Neanderthal event next to a modern agile fighter with a full range of fighting techniques and weapons at his disposal.   The Neanderthal may get in one or two good hits, but the modern fighter will consistently outmaneuver him until he is fully exhausted, and then he is simply and unceremoniously eliminated.
So, from Socrates’ intelligence-based view, who was the modern agile fighter?
It was then and now has developed into the China we know today.  China was executing very aggressive, highly coherent countrywide technology strategies that, if left unchecked, were guaranteed to enable China to evolve to sole super-power status faster than any country in history.
It was seeing the utter futility of the DoD R&D approach to technology exploitation, and China’s aggressive technology strategies that caused me to risk my neck and career to draft the legislation that would transform DoD into the agile, multi-faceted fighter needed to ensure our military super-power status and contain China’s aggressive technology-based strategies for military, economic and political dominance.
The legislation passed but has never been executed. Since then, as we all can see now, China has gone from barely being on the Pentagon’s threat radar and even then only because of its massive manpower and communist government to, by some people’s estimates, being the #1 threat to the U.S. with that threat rapidly growing by the day.
Is R&D important?  You bet it is — We have some of the best researchers and research facilities in the world. But R&D is only effective when it is a coherent element in a complete, holistic technology strategy to achieve and sustain competitive advantage.
We need to stop being the Neanderthal before it’s too late.  We must evolve or expire.

By Michael C. Sekora – Past Director of the Socrates Project, President of Quadrigy, Inc. affiliated with Operation U.S. Forward

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