Management is not one of my favourite subjects; I find it rather simple and preachy. But I read it quite a bit in Stanford. Russell Ackoff was one of the most entertaining writers I read there; I covered him in the Business Standard column of 17 July 2000.
RUSSELL'S WISDOM
Russell Ackoff is one of my favourite writers on
management – clear, rigorous, commonsense, and elegant. In his long life he has
collected many lessons, which he illustrated in his Ackoff’s Fables with incidents from his life; some of them are
hilarious. For instance, he describes the arrival of pantsuits in America. When
he was in Washington in the early 1950s, his friend and he went to a restaurant
with their wives; the wives were dressed in pantsuits, the latest fashion. The
maitre told them that the restaurant’s dress code prohibited women wearing
trousers. The problem was quickly solved. The women went to the restrooms and
removed their trousers; their jackets also served as miniskirts.
In Wharton School, where Ackoff taught most of his
life, a graduate student had a Labrador called Jessie, who accompanied him to
all lectures. Jessie also visited everyone in the department every morning and
was suitably rewarded. When he wanted to enter or leave the building, he would
go to the lift, and whoever turned up next would escort him up or down. One day
he got off at the wrong floor. The professor of that department was outraged.
He called up the director of buildings, who posted a notice on every floor
saying, “No pets allowed.” But Jessie could not read. So he continued to visit
the department with the following notice hung around his neck: “To whom it may
or may not concern: Jessie, a black male Labrador retriever who is not my pet
but is my friend, and who has been the mascot of the Social System Sciences
Unit for the last three years, is hereby authorized to enter and work on the
fourth floor of Vance Hall. If anyone has any objections to this authorization,
please contact the undersigned.”
Ackoff’s lessons from management consultancy are
amongst the most instructive. He used to run a social service project in
Mantua, Philadelphia’s black ghetto. In the 1970s, the local school board
decided to build a secondary school at the edge of that area. Some residents
went to Ackoff and asked for his help to stop the school from coming up. When
asked to explain, one of them said that Mantua was divided into seven turfs,
each controlled by a different gang; a boy who walked into a turf not his own
was liable to be beaten up and even killed. When Ackoff asked her what she
proposed, she asked for a Scatter School – a primary school which had
classrooms so located that children had to pass through every turf. That way,
children would have to visit all the turfs before they reached the age when
they had to join a gang; they would develop a sense of neighbourhood which
might overcome their need to join gangs later. A Scatter School was built in
three locations that made the children pass through the maximum number of
turfs, and over the years, the hold of the gangs was destroyed.
And then there was a bus service in a European city
that paid drivers a bonus for keeping to the schedule and conductors for not
missing out on selling tickets to passengers. When the buses were crowded, the
conductors had to make long stops to make sure that no passenger got off
without a ticket; the buses got delayed. So there were quarrels between
conductors and drivers. The management proposed eliminating the incentive
payments, which both the drivers and the conductors opposed. It suggested that
the incentive payments should be equally shared between the drivers and the
conductors; neither would hear of it. Then it was discovered that the number of
buses running at peak time exceeded the number of stops. So conductors were
posted at bus stops instead of in the buses; that way, the delays caused by the
need to issue tickets were eliminated.
When Busch beer was being introduced, Ackoff was
asked to find out how it compared in taste with competing brands. In two
separate tests, the Busch beer and four competing brands were selected, the
labels were replaced by letters A to E, and tastings were held in hotels where
guests were asked to rank them. To Ackoff’s surprise, the rankings from the two
tests were quite different. Then he placed similarly lettered five brands into
cases and gave them to regular beer drinkers to drink over a month and rank.
The rankings were very different from those of the first test, and corresponded
to the market shares of the brands.
In the 1970s, Ackoff got a UN assignment to help the
government of Iran, which found its cigarette monopoly being subverted by
smuggling of American cigarettes from Iraq. He worked out the costs and margins
at each stage of import and distribution both for smuggled and legally marketed
cigarettes, and not unexpectedly found that even though their prices were
lower, smuggling of cigarettes was more profitable. He suggested to the
government that it should use the same chain of import and distribution as the
smugglers; if it did, its profits would be higher than the smugglers’ because
it would not have to bribe policemen and customs officers.
Ackoff describes the corruption in Mexico which
suggests that we still have some depths to plumb in India. When he was driving
his minibus with American licence plates in Mexico City, two policemen stopped
him and said he had exceeded the speed limit. He said there was no sign on the
road to indicate the speed limit; the policemen said there was. Then one of the
policemen asked him for his wallet, emptied it of all but a few pesos, and gave
it back. He went home and warned his wife. Next day she took care to keep below
the speed limit when she drove. But the policemen stopped her. When she said
she was well below the speed limit, they told her the speed limit had been
lowered the night before, and extracted a bribe from her anyway.
But at least one country found him more than it
could take. The officials of a small country complained about the constant
conflict with its neighbours. He told them they should take their country
somewhere else. When they said they could not leave everything behind, he said
they could take the buildings with them. They said, what about our land? He
told them it would be cheaper to move even if they took six inches of their
topsoil. They said even the soil would not be enough; what mattered was their
place in the world. He asked them how the place was determined; by its
coordinates, they said. So he said a new set of coordinates could be developed which
would enable them to move somewhere and keep the same coordinates. They did not
think the location would still be the same. So he told them that the one
characteristic of their location they were intent on preserving was that of
being surrounded by their inimical neighbours; all other properties could be
reproduced elsewhere. He notes the “intensity of their response.”
