So how is management engineering? A business, by nature, is a system. The parts are the inputs — employees, inventory, capital — and profit is the (hopefully steady) output. It’s popular for business managers these days to say that “the value of our business is our employees”, and that is certainly true, but the human nature of an employee means that they are inherently unreliable. Plans change, new jobs come along, retirement beckons — all of these things mean that the human element of the system needs to be designed to be fault-tolerant. An engineer understands this concept, and has a natural insight into ways of building efficiency and redundancy into the organization. A more streamlined process that reduces needless overlap while maintaining critical redundancies will maximize profit and ensure business continuity.

The sweet spot in management is a manager who can balance the vital “soft” aspects of motivation with the organizational awareness that an engineering background can provide. Either trait by itself can do an adequate job, but the combination creates a truly capable and effective motivator and manager.

No doubt, this is great. However, with smaller city newspapers failing across the country and even the venerable Times in trouble, the long-term sustainability of content providers is a serious question. Right now, Google News and YouTube news videos are fueled largely by professional journalism companies that make their money selling advertisements in print and video media. However, as Google steps in and uses the content without providing an adequate revenue stream back to the content creators, the prospects for professional journalism look dim.

Clearly journalism as a money-making endeavor will not go away. What will happen, on the other hand, is that news outlets will find ways to capitalize on what is actually an amazing opportunity to reach a huge audience with dramatically lower costs. As an example, I’ve never paid a dime for a newspaper, yet after getting an Amazon Kindle2 about 2 months ago, I now pay for subscriptions to two newspapers. The key for me was convenience and quality — the ability to have a full news source on my Kindle every morning on the train was well worth the $10-$15/month I pay for my subscription. A content delivery device that didn’t exist 2 years ago is what it took to get a 24-year-old guy to start paying for the paper.

What about the web? How can providers continue to afford to let Google assemble their content into dynamic newspapers and give it away free? The solution is micropayments. Want to read an article on Google Reader? Why not charge a nickel (or a penny!), the bulk of which goes directly back to the content provider? Of course, a few cents doesn’t sound like much, but obviously the key is making it on millions of users. Collect a nickel, and watch what happens to the web. The best content providers — professional and amateur — will now have a way to make money off of their work directly. News outlets will still exist, but there will also be plenty of semi-professional, independent authors and creators who will churn out material that will be just as good.

Undoubtedly, there are many stumbling blocks to charging people for what they’ve become accustomed to getting for free. Dan Ariely, the MIT behavioral economist and author of Predictably Irrational has found that the difference between even 1 cent and free is enormous from a psychological perspective. Things that are free just have a certain allure that even the cheapest alternatives do not. The way to overcome this stumbling block is to disassociate people with the money they’re actually spending. We could do this by allowing (but not necessarily requiring) people to prepay their nickels every month with their internet bill — perhaps include $2 worth of content in a “bank account” with the monthly internet. Alternatively, Google could pay these nickels for you — in this case they would simply be a structural mechanism to allow payment to flow back to the originators.

The internet has irreversibly changed traditional content distribution models, but so far, revenue models have largely stayed the same for content providers. The providers that push for and embrace new models will be the ones that generate incredible profits. Micropayments are the solution that will fix the content-revenue link on the web.

The Department of Energy says that HVAC (heating, ventilation and air conditioning) account for 40-60% of the energy use in buildings. Given that it’s expensive, inefficient, environmentally harmful and just plain uncomfortable, why not just turn the thermostat up a few degrees!

Five years ago, a bad experience like this would have meant that the company lost a few customers at most — maybe me and a few of my friends. But in the age of Facebook and Twitter, where people are microblogging about everything, a few bad experiences can quickly find an enormous audience. All it takes is a reader to see one or two tweets relating a hiccup with a company for that reader to avoid the company in the future. The margin of error for bad customer service is getting far smaller, since it takes far fewer missteps to destroy a reputation than it used to.

Customer service has always been important, but now days, its make-or-break for a company. When I Google for ‘flowers’, 11 sponsored links show up. The services themselves all basically do the same thing — the call one of a few local florists and have them deliver an arrangement purchased online. Since I imagine conversion for keyword clicks for ‘flowers’ on Google are pretty high, I bet that they pay $5 or more per click for traffic through search engine ads. Given that the cost of acquiring a customer is very high, a company in this type of business must do everything it can to make sure that it keeps the customers it has, since part of the rationale behind a high initial acquisition cost is that customers on average will do business repeatedly. But if a company doesn’t invest the [comparatively far smaller] money in customer service needed to keep existing customers, they will find that they can no longer afford to pay the huge acquisition costs because they simply aren’t capturing enough profit per customer over the entire lifecycle to justify the expense. Since its much easier to keep customers you already have, the competitors that can retain customers will be the ones that win out, hands down. And as the world gets more connected, these companies will have an even easier time rising to the top.

Update: I’m not all pessimism — I just had a great customer service experience with Fidelity. Read about it.

Cities like New York currently have ineffective systems in place to clean litter, which consists mainly of spent cigarettes. The way it works now is that workers walk along the sidewalks with brooms and dustpans and sweep stray bits of trash into the dustpans. It works to some degree, but there is no incentive for the worker to make sure to get every single item. By instituting the deposit system of cigarettes, cities would reduce the need for these workers, and replace them by an army of “freelancers”. Within a week, the streets and gutters could be free of all remnants of cigarettes.

I can foresee a few criticisms of this plan. It’s unsanitary and could spread disease. While questionably true, I would argue that a homeless person who collects 200 cigarette butts and then buys a sandwich at a deli is going to be far healthier than one who eats a sandwich or other food from the trash. Cigarettes already have enough taxes added on to them. While I am not in favor of taxing, part of the deposit could be offset by the reduced cleaning costs to the city. The other portion could be written into part of an environmental-type budget. It’s difficult to accurately count the cigarette butts. While there is no machine that currently exists to count them, I guarantee that such a system could quickly be built given some economic incentive. I picture basically a two-stage device — the first stage would be a rough filter that would allow items the size of cigarette butts though, and the second stage some sort of device that measures the volume of material.

What are we waiting for? Enacting this simple solution will reduce litter, give basic jobs to hundreds of people, and provide a (admittedly small, but still existent) boost to the economies of cities.