Russell Ackoff – U.S. Navy two-day training in Thinking… — Transcript

Russell Ackoff discusses proactive management, the role of technology, and the importance of adaptability and youth in organizations facing rapid change.

Key Takeaways

Change is an opportunity best exploited by proactive, technology-driven organizations.
Experience can be irrelevant in fast-changing environments; adaptability and learning are crucial.
Decentralized, youth-oriented, and informal organizational structures perform better under rapid change.
Planning must be a dynamic, negotiated process focused on objectives rather than fixed tactics.
Successful organizations resemble winning teams that continuously adapt to unpredictable challenges.

Summary

The U.S. managerial doctrine has evolved but must accelerate change to seize opportunities.
Proactive managers embrace change as opportunity and rely heavily on technology and R&D.
Experience is considered the worst teacher in rapidly changing technological environments.
Proactive organizations are decentralized, permissive, and emphasize youth and adaptability.
Such organizations operate like teams with a coaching staff rather than hierarchical command.
Planning involves predicting the future and preparing for it through strategic white papers.
Each organizational level negotiates objectives to adapt strategies to local competitive conditions.
Loyalty to ideas and professional growth often outweighs loyalty to the company in proactive settings.
The metaphor of a winning sports team illustrates the need for flexibility and rapid response.
Reactive planning is unconscious and less effective under intense competition and rapid change.

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The official managerial doctrine of the United States, which we have proselytized to the rest of the world for some 20 years, until the Japanese came along and we ran into trouble. Of course, we don't want to go back to the past. The present may be pretty good, but it's not good enough. We can do a whole lot better than that. The future looks great, and therefore the objective is to accelerate change because change is opportunity. This is clearest if we go back to

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the past the present may be pretty good but it's not good enough we can do a whole lot better than that the future looks great and therefore the objective is to accelerate change because change is opportunity and this is clearest if we go back to

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the metaphor. When the pre-active goes swimming in the ocean and the tide comes along and grabs him and carries him away from the shore, he looks around and says, "Hey, I like where this tide is going," and then he tries to get on the leading

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edge of the tide and swim with it as fast as he can to get to where it's going so he arrives there before anybody else does can climb on shore turn around and collect a toll from those who arrive

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edge of the tide and swim with it as fast as he can to get to where it's going. So he arrives there before anybody else does, can climb on shore, turn around, and collect a toll from those who arrive

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there's more oil and shell than there ever was in the ground than pools if we had done enough research we know how to get it out of the shale economically besides look at all the hydrogen in the ocean all we gotta do is figure out how

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later. Change is opportunity to be exploited by getting there first. Okay, now change is good. Technology is responsible for change. Technology is God. Unlike the reactive organization, all the solutions lie in technology, not the problems. How you got an oil crisis? That's stupid.

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so they're very highly dependent on research and development and therefore the critical thing is the ability to do those things confidence for the pre-active manager experience is not the best teacher it's the worst teacher why it's irrelevant see the fact that you've been driving an

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There's more oil in shale than there ever was in the ground than pools. If we had done enough research, we know how to get it out of the shale economically. Besides, look at all the hydrogen in the ocean. All we gotta do is figure out how

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the critical thing where do you find this and old people are young people younger people and therefore these organizations tend to place emphasis on youth if you're not lucky enough to be young you pretend to be because the young are thought to be more

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to separate it. There's an unlimited supply. If that won't work, let's drill it into the core of the earth, etc., etc. It's just a matter of technology. We just haven't done enough research. We weren't prepared for these things.

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organization we give people their head i can remember one of my bosses once saying to me you know you never asked me for permission to do anything and i said oh boy here it comes he said i like it that way

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So they're very highly dependent on research and development, and therefore the critical thing is the ability to do those things. Confidence for the pre-active manager: experience is not the best teacher; it's the worst teacher. Why? It's irrelevant. See, the fact that you've been driving an

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have at you but as long as you're going okay he lets you alone so the pre-active organization is highly decentralized and permissive in its structure youth tends to predominate informality not hierarchical formalism loyalty is not expected you expect a

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automobile for 40 years doesn't equip you to drive a space vehicle. Technological change makes experience obsolete, and we're in a period of technological change. Therefore, what you need is people who can learn and adapt quickly to change. The capacity to learn and adapt becomes

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else where he does like it so the attitude changes now it's certainly not organized like a family and the world is characterized by intense competition under rapidly changing conditions what is the kind of organization that best demonstrates the capacity to cope

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the critical thing. Where do you find this? In old people or young people? Younger people. And therefore, these organizations tend to place emphasis on youth. If you're not lucky enough to be young, you pretend to be because the young are thought to be more

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rapidly and effectively and come out ahead so the sports team becomes the metaphor they want to be the winning team remember nixon's speeches he had the misfortune of failing to get on the freshman football team somewhere once and he never got over it and he

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flexible and capable of learning. So you get younger organizations, bright people, highly educated in general, capable of learning and adapting. You create an environment in which they're encouraged to do so, and that's not a strong centralized organization; that's a highly permissive decentralized

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it has a team at the top team is normally called the executive office or the executive committee or whatever the name is is a team that runs the team it's a coaching staff not a particular person sure it has a manager

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organization. We give people their head. I can remember one of my bosses once saying to me, "You know, you never asked me for permission to do anything," and I said, "Oh boy, here it comes." He said, "I like it that way."

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look at what it is this type of planning essentially consists of two steps predict the future and prepare for it's predict and prepare this is the basic paradigm of planning used in this country so the plan requires two things a

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He said, "I want it to stay that way, but I want you to know if you ever screw up, I'll have your rear end." That's the typical pre-active manager. He watches you, and if you get into trouble, then he'll

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pre-active organization you've got the executive office up here you can always tell it right away because they're going to have a very highly trained staff reporting to at least one or two phds in it who are highly trained

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have at you. But as long as you're going okay, he lets you alone. So the pre-active organization is highly decentralized and permissive in its structure. Youth tends to predominate. Informality, not hierarchical formalism. Loyalty is not expected. You expect a

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which planning is to be addressed out of the executive office comes a strategic white paper a statement of direction strategic white paper these two basic documents are then passed down to the next level where they are adapted and modified to suit that level for

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bright young scientist to shift jobs every couple of years. He doesn't have any commitment to the company; he has commitment to ideas. He's a professional; he's not an employee. He's a professional. If he doesn't like it, he'll go someplace

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the modified forecast must be compatible with the overall one and you have to modify the strategy because the competitive situation is different in those two countries so what you have at each level is a negotiation with the level above

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else where he does like it. So the attitude changes. Now, it's certainly not organized like a family, and the world is characterized by intense competition under rapidly changing conditions. What is the kind of organization that best demonstrates the capacity to cope

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not tactically as reactive reactivists the tactics are left unconscious just as the strategy is left unconscious and reactive planning the fact tactics never appear in the plan why not each level negotiates its objectives with the higher level this is colbot you

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with those conditions? What's the paradigm in the ability to compete effectively under rapidly changing conditions? The winning team. The team that won the Super Bowl or the World Series. They never know what's going to come next, but they're always able to respond to it

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you got something to say to him so the plan is an objective setting activity rather than the mean selection procedure whereas reactive planning is exactly the opposite it's all mean selection with no setting of objectives working its way down in this way

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rapidly and effectively and come out ahead. So the sports team becomes the metaphor. They want to be the winning team. Remember Nixon's speeches? He had the misfortune of failing to get on the freshman football team somewhere once, and he never got over it, and he

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you haven't prepared well you'll be better off than you would have been otherwise a simple example would be if somebody predicted that today you were going to have temperatures of 50 below zero and a heavy snow storm and you would dress

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kept talking about the quarterbacks and the halfbacks and the team spirit and the coaches and the stores. That's typical pre-active talk. It gets reflected in the very fact that the corporation doesn't usually have a man at the top.

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has been the most discussed topic in american management for the last 20 years we've created a whole new field to study nothing but the future what's it called future ology management will support any effort to get a better view of the future whether

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It has a team at the top. The team is normally called the executive office or the executive committee or whatever the name is. It's a team that runs the team. It's a coaching staff, not a particular person. Sure, it has a manager,

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university of executives that come to talk to us and they always feel apologetic when they do because it's kind of demeaning to an executive to have to come to an academic institution so they always try to explain it

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but the managing of the whole is done by a group of people. The management and planning for this organization is almost exactly the opposite of what it is for the reactive. Before we look at how it's done, let's

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you on is can you tell us what's going to happen see they believe that if they only knew more accurately what's going to happen the rest of it's easy preparation isn't the hard part it's the forecasting news because they recognize that increasingly

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look at what it is. This type of planning essentially consists of two steps: predict the future and prepare for it. Predict and prepare. This is the basic paradigm of planning used in this country. So the plan requires two things: a

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forecasters the econometricians it's awful one of my colleagues the university of pennsylvania recently received a nobel prize for his work in econometric forecasting i was asked if i thought he deserved it and i said of course he did

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forecast of the future and preparation for it, preparation being the steps to take to exploit the opportunities that change will bring about and to minimize the problems or threats that it will bring about. All right, now we look at the top of a

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tell you something that you won't believe i'm sure and then try to go ahead and prove it this concept of management is based on a fundamental paradox that american management has been unwilling to face it's one of the reasons it's in serious

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pre-active organization. You've got the executive office up here. You can always tell it right away because they're going to have a very highly trained staff reporting to at least one or two PhDs in it who are highly trained

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give you a a smart ass answer suppose you're a god now god is omnipotent he can prepare perfectly right nothing god can't do can you imagine anything sillier than god sitting around trying to forecast the future doesn't make any sense because god can

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in management science, operations research, or corporate planning. It's usually called the corporate planning and development department or something like that. There's a division of labor right at the top. That group of experts prepares the official forecast. Out of here comes the basic forecast to

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perfectly well only if the universe is like newton said it was it was a machine that operates with irregularity dictated by the causal laws of nature and its internal structure but if the universe is a machine is deterministic and there is no

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which planning is to be addressed. Out of the executive office comes a strategic white paper, a statement of direction, a strategic white paper. These two basic documents are then passed down to the next level where they are adapted and modified to suit that level. For

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proponents of pre-active planning and i can tell you they respond violently with a very sophisticated argument it goes as follows russ that's a bunch of crap they say [Music] they say we don't care about all that metaphysical nonsense look we predict

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example, if you're IBM and you get a corporate forecast of the world market for computers and you get a strategy worldwide, and now it goes to IBM Japan and IBM Brazil. Obviously, Japan and Brazil are different, so you have to modify the forecast, but

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good point we do predict the weather and perfectly prepare for it and perfectly and we're certainly better off because we do how can we explain that well there is an explanation and it's extremely important here's the weather here's us

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the modified forecast must be compatible with the overall one, and you have to modify the strategy because the competitive situation is different in those two countries. So what you have at each level is a negotiation with the level above

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our preparations have absolutely no effect on the weather now i know some of you don't believe that you think if you carry an umbrella it will keep it from raining that's absolutely not true the weather's going to be what it's going to be

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to set the strategy and the forecast compatible with the one above it, and step by step it works its way down through the organization until it reaches the bottom. Planning is top-down, not bottom-up. It is strategically oriented,

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weather they're forecasting the behavior of consumers competitors suppliers the economy and politics question are those things affected by what the corporation does of course it is it's a whole damn point the only point of planning is to change

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not tactical as reactive. Reactivists, the tactics are left unconscious just as the strategy is left unconscious in reactive planning. The fact tactics never appear in the plan. Why not? Each level negotiates its objectives with the higher level. This is called

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change that demand right he develops a plan this is preparation which is intended to change that but if that changes that makes the forecast incorrect doesn't it so what you got to do now is get a new forecast

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management by objectives, MBO. It's a major activity in the United States today. It's part of pre-active management. You set the objectives; you don't tell the manager how to attain them. That's his job. If he succeeds, fine. If he doesn't, then

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circles until it disappeared up its own anatomy this is only the beginning of the difficulty because you also have to know what your competition is doing and they're sitting up here forecasting this and producing plans which affect this

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you got something to say to him. So the plan is an objective-setting activity rather than the means selection procedure, whereas reactive planning is exactly the opposite. It's all means selection with no setting of objectives working its way down in this way.

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we act as though the environment of the corporation of the government agency is the weather namely unaffected by what we do and that's precisely why the forecast won't work because we make an assumption it's absolutely false namely that our plans will have no effect

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And prepare. They're not equally important. One of them is a lot more important than the other. Which one? Right. If you predict it incorrectly, it doesn't make a damn big difference how well you're prepared if you're p...

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more than one of them the incredible thing about them is they're all the same the only thing they're different is detail all methods of forecasting essentially reduced to one simple procedure logically simple suppose we want to forecast the number of people you're going to

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train next year okay or the sales of a corporation don't make any difference process will be exactly the same first thing i do is get a piece of graph paper let me draw two lines on the graph paper

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this will be time you make a tick mark called now the left-hand side will be the past always is the right is always the future if we want to forecast out five years we can make it a little clearer by

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putting a dotted line at now and a dotted line at the five years out that we will forecast then we plot vertically the variable that we want to forecast like sales or number of students okay that's all preparation

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what's the next thing we always do part to pass every method of forecasting starts by plugging the next thing that is done in every method of forecasting is absolutely identical there are differences only in detail what do we do next

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you fit a line to the points the only difference is whether a straight line a curved line a wavy line or how you fit it but in every method of forecasting you hit a line one way or the other

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next step is always to say what do you do extrapolator project oh there it is four cares now look at the logic of that process it says the future is completely dependent on the past the past determined the future

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and we know that is absolutely false the further then is this is that the greater the distance between now and then the more then depends on what will happen between now and there want to forecast the weather tomorrow do

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you know what the best possible forecast for tomorrow's weather is because i've worked on this problem scientifically it's today's weather no weather forecaster in the country beats that's forecast believe it or not why because not much can change in a day

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but you go out a week and it's not worth a damn go out a month it's even worse go out a year it's awful why because the weather a year from now depends on what's going to happen between now and then not what has

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happened in the past if the future depends more on what will happen between now and then then it is subject to creation and the real objective of management and planning should be to create the future that you want

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you see what we got here is predicting a future that's out of your control and trying to control the effect of that future on you but this says that the very process you're engaged in is nonsense the future is largely subject to your

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control and therefore the objective of management and the planning should be to control the future to create the future that you desire now the question is going to be how in the world do you do that and that's we're going to look at for

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most of the rest of the afternoon how that can be done let me say this much it requires a whole new form of management the three kinds of management we just looked at the primary colors all derived out of machine age thinking

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so now i'm going to cheat there's a fourth type but it doesn't go on that chart because it denies the assumptions which are common to all three of them it says it's not a question which one of these three is right or wrong

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they're all three wrong because they make assumptions which are rooted in the machine age rather than the system stage and we're going to want to look at what those assumptions are and see their impact on the management and our concept of organizational

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effectiveness okay let me pause there for a while let me give you one more thing before we pause let me give you the definition of planning as it appears this new type of management is called interactive management for reasons that you'll see

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and the definition of interactive management or planning is the design of a desirable future and the invention of ways of approximating it as closely as possible the design of a desirable future and the invention of ways of approximating it as closely as possible

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planning is design and invention acts of creation synthesis design and invention are the result of putting things together not taking them apart prediction and preparation are analytical processes so we're talking about synthetic planning as opposed to analytic planning

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now how we do it and how it differs from conventional imagine is the subject as i said we're going to look into let me pause here and see if you got any questions about anything i've set up for now you've now

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got the three basic forms of management in use how effective can any one organizational element in a large environment be in designing and investing in the future when their impacts from all around and they're extremely unpredictable first of all observe there is no such

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thing as an organization that isn't a part of a larger one okay so your question is not how can a unit which is a part of something larger do this is how can any unit do it the answer is by doing it

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since every unit is a part of a larger unit since the ideal would be the plan for the universe simultaneously and that's not possible you do the best that you can so i would rather plan for the university than for the college for the

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college rather than a department but if all i can plan for is the college that's a whole lot better than doing nothing and maybe by planning for the college i will get the university to do something and i'll

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give you examples of where it will the answer uh where you should start is simple as hell you know what the answer is where you are absolutely there is no better place to start than where you are because you control that

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now the real problem is this that any innovation always involves a personal risk and we have raised a generation of gutsless wonders that talk about entrepreneurship and are scared to death of it what we want to know is a way to make change without

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running any personal risk that's a contradiction innovation that's riskless is not possible any other questions okay i suggest this is a good breaking point let's take a five minute break stretch a little bit and then come back we'll take the next

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piece okay now we have we only have about an hour available in the schedule to talk about interactive management uh currently in the introductory course at the graduate level it goes two semesters that's 90 hours so we ought to be able to do it in an

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hour of course we can the main reason for making this book available to you that's what this book is all about creating the corporate future it's a detailed account of the nature of interactive management so all i can do

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here is give you a sense of some of its essential characteristics and hopefully you become sufficiently interested to want to go into it more deeply what i want to focus on perhaps the easiest thing i can do in a short amount

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of time is to identify the fundamental differences from conventional management and linger on those rather than talk about what it is in any detail first let me show you what's perhaps the most critical difference suppose i use this to represent time as we've done

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several times and here's now i can characterize the reactive manager as someone who stands here and looks back to a previous state that he desires and tries to get back there right the inactive manager is standing in the

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same place in the present but where's he looking he's looking down at his feet [Music] same position the pre-active manager is doing what he's standing at the same place but he's looking the other way he's looking out this way and saying how far can i get

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out there right they have something in common what is they all stand in the present so the first thing we're going to change is say that effective management cannot stand in the present well where the hell do you stand

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where do you stand in the infinite future in the infinite future now that sounds popular now before i define what i mean the infinite future let me say this in interactive management you start by saying where you would like

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to be at some time out doesn't make a difference where it is it's where you would like to be and you plan backwards from where you would like to be to where you were it's backward planning from where you

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want to be remember i said effective planning has to be directed to what you want well that's what we're going to do here by making explicit what we want now the first thing that will occur to any sensible person is look

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if i want to go from here to there what difference does it make if i try to go that way or if i work my way backwards from there i want to go from here to los angeles it makes a difference where i figure out

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the best routes from here to los angeles or the best route from los angeles back to here of course not wrong it makes all the difference in the world now there is no way i can convince you of that by argument so i'm going to give

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you a little test here's the test this is a problem i was given when i was about 13 years old a farmer is going to market with a bushel of apples okay he meets his first friend and he gives

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him half of his apples plus half an apple meets the second friend gives him half of his remaining apples plus half an apple same to a third friend same to a fourth friend and he has no apples left

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how many did he start with well let me show you what happens if you're like i was when i was 13 i said oh hell that's a problem in algebra i can do that he started with x apples right

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now how many did he give his first friend well he gave him one half of x right plus one time so this is what he had left after his first friend right so now he comes to a second print

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how many did he give him well he gave him one half of what was left which is x minus one half x plus one plus one that's what he's got left when he comes to his third friend right

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so we will subtract from that one half of what he had left so you can see what's beginning to happen here and by the time i finish writing it out it will take several sheets because when i get to the last term it's big

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but it's simple straightforward algebra and i solved it gave the fellow who gave it to me the solution and he started to laugh at me i said what's the matter is it wrong he said no it's right but god you're stupid

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i said i don't understand he said i know you don't he said look he said how many apples did he have to have when he reached his last friend no it doesn't absolutely independent of how many friends he had

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one it had to be one why half of one is a half plus a half is one and one from one is zero and that's the only number it could have been right how many did he have when he

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reached the third frame i wouldn't have had one left when he reaches fourth fret three three right why half of three is one and a half plus a half is two two from three is one well you ought to have it now how many

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did he have when he reached the second fret not five no first time you're over [Music] seven half a seven is three and a half plus a half is four and four from seven is three how many did he have when he went

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started out well you got one three seven you see the series 15 of course half of 15 is seven and a half plus a half is eight eight from 15 to seven 20 seconds to do it backwards why

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when you do it frontwards you have to consider an infinite number of possibilities that's what the x is x can take on any value when i do it backwards there's only one possible number you could have lined up

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with and i work my way backwards there are only four possibilities versus an incident number now there's another reason why planning backwards is necessary it's not only simpler because the number of alternatives you have to consider is fewer

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but you will see that for reasons i will show you when you stand here and say how far out can i get what you see are all the obstructions of moving from where you are towards what you want

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and so you're lucky if you don't find a way to get to there but once you look at where you want to be and you ask how do i have to modify that the least possible amount so i can get there

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you say how far back from here do i have to come in order to make it feasible and you wind up over here and that's the difference now what's this all about the fundamental idea that lies in interactive management is an adaptation

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of an idea that i wish i could claim to have invented but i did i stole it from bell telephone laboratories i was very fortunate in my youth in 1951 on an incredible accident that occurred to me i had just joined case institute of

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technology as a member of its faculty and very shortly after i got there i got to know quite well the chief recruiter from bell telephone laboratories in murray hill i had a regular recruiter case institute who came out every month

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to talk to the faculty and students to make sure they got our best graduates their recruiter was a young fellow my age who was a rhodes scholar or phd in physics who was head of a very small department

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of laboratories called the microelectronics laboratory in those days his name was peter myers he and i became good friends we started to do some work together not in physics i can assure you it turned out to be quite convenient

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every month when he came out the case he would spend the weekend with me and at least once a month i'd have to go to new york we were doing work in those days i hate to say this word now but

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we're doing work at that time for union carbide so i get to new york and murray hill is just 30 miles out of new york and i would go over and spend a day or two with him so we got a lot of time

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together now i was scheduled to spend the wednesday with him because that thursday and friday i had to be in for a meeting at union carbide uh it happened on the tuesday preceding that wednesday in the morning i got a phone call from

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the company saying an emergency had arisen could i quickly get into new york so i grabbed some clothing hopped the plane got to new york early in the afternoon had the meeting was done went out found a hotel room got up early the next

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morning rented a car and drove to murray hill new jersey and got to pete meyer's office about a quarter nine uh he came in about ten and nine now pete myers was one of the calmest most pragmatic people i have ever known

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he was a just a marvelous person but he came in that morning mad and it's the first time i'd ever seen him angry he didn't say good morning he said where the hell were you last night i said i was in new york

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he said i know that stupid i called your office where were you in new york and i said at such and such a hotel you said why didn't your office know about it so i explained that i'd go in under

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an emergency conditions i didn't know where i was going to stay until late in the evening and so on but i said pete what's the matter what are you all upset about this isn't like you and then he calmed down he said oh he

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said rusty so i'm sorry he's at 4 30 yesterday afternoon the vice president in charge of the laboratories called all the section heads and told us that we have a meeting this morning at nine o'clock and to keep

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the day clear and if it wasn't clear clear it this is first priority and i got to go to that meeting in a couple minutes and i tried to get a hold of you to tell you not to

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come i said well that's a shame i wish you had but you didn't it's not your fault and it's not mine i got some work with me i'll work in your office and if you're not back by noon i'll leave

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well he said i knew you'd do that but i just feel awful i said well they're in the damn thing we can do about it you're about three minutes before your meeting you better get going so he turned and started to walk out of

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the room and he stopped in the doorway and turned around he said wait a minute he said why don't you come with me i said hell i can't go to the meeting with you i'm not a section head

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he said russ i'll never know the difference come on i said yeah but maybe they will and that'll cause you a great deal of embarrassment and he stopped he said wait a minute he said we won't sit together so if they

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catch you i'll pretend not to know you i said well you know it isn't going to embarrass me because they can't do a damn thing to me uh sure i'd like to see what one of your meetings are like so he said come on and

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i went now we went down the hall it came to a room though it's a small classroom it's a rectangular room set up like this with a platform at the end one step up the podium in the middle the big

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blackboard across the back two rows of seats with a center aisle it held about 40 people and the room was filled almost but we're lucky as hell because when we entered the rooms these two seats were empty on the back

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row separated by the aisle couldn't have been more perfect so we took them we're obviously not sitting together but we could talk to each other if we wanted to now the vp wasn't there yet so everybody the room was chit chatting

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and pretty soon they began to look at their watches it was 10 after 9 and he wasn't there yet the back of the room the door that led to the room was on one of these pneumatic things automatic closing

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devices so that whenever the door open you got to squeak and you knew it and sure enough the door opened and squeaked and everybody turned around to see if it was him and it was and they knew immediately that something

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critically wrong had occurred the vp of the lab is a 220 pound six foot two extrovert he was one of these backslapping guys and knows everybody by name and he's chatting with everybody all the time and he looked as though he were in a

Speaker A

state of shock as though he had just gotten word his wife had been killed or a kid had fallen off the roof or the house had burnt down something like that you didn't know but he was clearly in in a terrible state

Speaker A

he was looking down at the floor hunched over instead of his usual straight forward approach he came down the aisle very slowly without talking to anybody and that room was absolutely silent as he came down the aisle came around got behind the podium leaned

Speaker A

on it with his elbows holding his head and just stood there silently and god it was really excruciating for everybody in that room what the hell was wrong and then he looked up and i quote him exactly he said gentlemen

Speaker A

the telephone system of the united states was destroyed last night and then he looked down well the room broke out in oahu we knew damn well it hadn't been destroyed last night how i'd used the phone that morning a

Speaker A

lot of the other people had so he said you know what the hell's up it's either a trickery's office rocker now it didn't look like a trick this guy looked ill the conclusion was he's probably off his rocker we don't know what happened but

Speaker A

we better not report it yet we don't have enough evidence especially when it's your boss so the room quieted down then he looked up again and he sighed and i quote him exactly again he said i know what you were just saying

Speaker A

to each other you were saying you used the phone this morning weren't you well everybody was tremendously relieved because he showed he was in contact with reality so he all smiled you know gave the silly shake of the head

Speaker A

and then he straightened up and he literally shook with rage and he yelled at us damn it i told you the telephone system in the united states was destroyed last night and you better believe it because if you don't by noon you're

Speaker A

fired and he looked down again and i'll tell you the hubbub really did break out cause there's clearly no trick but it's a little dangerous to go calling the psychiatrist or the police at this point and since he wasn't doing anybody any

Speaker A

physical harm they decided to wait it out a little bit so the room calmed down again then he looked up glared at us and suddenly broke out into a great big grin straightened up and he looked absolutely normal

Speaker A

and it was like puncturing a blue all the pressure went out of the room it was a trick how in the world he pulled us off i will never know but it was incredible what happened in that room and he looked at us and he

Speaker A

said okay he said what was that all about he said i'm going to tell you but before i do i want to make two things absolutely clear he's absolutely normal now okay first the telephone system in the united

Speaker A

states was destroyed last night second you better believe it because if you don't buy noon you're fired he said now i'm going to go on from there and let me tell you he had the attention of that group

Speaker A

he said about a month ago i was reading in a journal the bell telephone laboratories are the best industrially based scientific laboratories in the world he said i don't argue with that i accept that it's a matter of fact

Speaker A

he said but it did occur to me to ask why he said the answer is obvious it is assumed that we have contributed to the development of the relevant technology for our industry more than any other industrial laboratory has contributed

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to the development of its technology said i accept that but the question is what has our contribution been so i made a list of what i think are the major contributions of this laboratory to the development of telephonic

Speaker A

communication since its inception he said now i don't want to show you that list i would like to check it against your independent judgment so i want you to tell me what you think is the most important thing we've ever

Speaker A

done he had a pad up at the front of the room and somebody yelled out immediately he said right he said the dial is certainly one of the most important things we've thought so does anybody know when we introduced

Speaker A

it somebody said well it was sometime in the early 30s he said right he said by the way did anybody know when we invented it and somebody it was a little pause and somebody said well i don't know but if

Speaker A

we introduce it in the early 30s it must have been some time in the 20s probably the late 20s he said look i didn't ask you to guess he said i asked if anybody knew does anybody know when we invented it there

Speaker A

was a silence he said i'll tell you when no i don't remember the exact day but it was about 1890.

Speaker A

he said that's not important so let's go on to the next one the second one that was yelled out was one i didn't understand at all i couldn't understand what the hell they were talking about somebody said multi-phasing

Speaker A

i later found out what this was about this is a way of sampling sound so you can send six telephone conversations across the same wire at the same time it was a technique which increased the capacity of the lines of the telephone

Speaker A

system by six hundred percent he said right certainly one of the most important ones he said when did we introduce it i think if a date it was sometime between the two world wars he said right he said any of you happen to know when

Speaker A

we invented it nobody did and he told him and it was before 1900. he said all right let's take another one the third one that was carrick called out was the coaxial case the cable across the atlantic he said

Speaker A

right you've now got my top three same three i've got he said when did we introduce that and i remember the date on that it was introduced in 1882.

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then he stood back and he said now gentlemen doesn't this strike you as odd that the three most important things ever done for this company by this laboratory were all done before anybody in this room was born what the hell are you guys been doing

Speaker A

he said i'll tell you what you've been doing and it's not your fault you've been looking at that system identifying its deficiencies one by one and correcting them but you haven't improved the system one damn bit you recognize that

Speaker A

that was my first exposure to the argument against reactive he said there's something wrong in the way we're doing it we're treating the parts not the system gentlemen the telephone system the united states was destroyed last night and we're going

Speaker A

to spend the next year reinventing it from scratch i said let me tell you what we're going to do nothing else in the united states was destroyed only the telephone system everything else is exactly the same we're going to design the system we

Speaker A

would use to replace the existing system with right now if we were free to do it not in the year 2000 we want to specify the system that we want right now if we could have whatever we wanted

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subject to only two constraints first the system we design is going to have to be technologically feasible i said i don't want any science fiction does anyone want to explain and use the beautiful example he said for example you can't assume

Speaker A

that neighbors will talk to each other with mental telepathy so we don't know how to control that he said however we don't have a communication satellite either but we know we can have one and we're going to and therefore you can use that

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in your design we spent an hour exploring the meaning of technological feasibility and when we thought we had a shared understanding of it he said okay let's take the second criteria the design we produce must be operationally viable

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and he smiled he said now what the hell does that mean he said first let me tell you what it doesn't mean it does not mean that it must be a system we can get to from where we are

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he said that's irrelevant because we're nowhere the system doesn't exist what it does mean is we must be able to show that the system we design if it came into existence would be able to survive in the current

Speaker A

environment therefore it must meet the law it must meet financial obligations the requirements of the stockholders and so on we then spent an hour discussing what that meant now we're about 11 30. and boy he had an excited group

Speaker A

he said now here's the way we're going to organize to do it he said this is too big a group to use as a single team so i'm going to break you up in the sub teams and each team is going to have a

Speaker A

subsystem he said that worries me because i i'm going to break you up into six teams and i don't want six designs at the end of the year i want one design of the whole system therefore each team will select a leader i don't

Speaker A

care how you do it and how often you change them but those leaders are going to meet once a week discuss the activity of their teams and make sure they're coordinated and integrated and if at any time they deem it

Speaker A

necessary they'll bring the teams together to meet together but at the end of the year i want one design of the telephone system and we discussed that for a while and then he started he said i don't believe in any of this fancy

Speaker A

organization theory here's the way we're going to do it the first six of you one two three four five six you're the long line team long lines is the connection between cities say the next six of you one two three

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four five you're the short line team you're in trot city next six of you are the switching and he worked his way back to there and he said the rest of you will redesign the telephone and there i was on the team

Speaker A

not only that but i was on the same team as pete myers and the meeting ended just about noon the team immediately met at the back of the room pete myers introduced me as a ringer the other guys laughed like hell they

Speaker A

thought it was funny and they said well we don't mind if you want to participate you know you're welcome to and that was unfortunate because i spent most of the next year there instead of where i should have

Speaker A

been working back at the university we agreed that we would meet that afternoon at 1 30 to get things started so after lunch we came back to this little room set sat around a table had a pad in the room and said no how do

Speaker A

we start we got the telephone set the actual telephone what do we do somebody said well why don't we start by making a list of all the things that are wrong with the telephone and somebody else said don't you realize

Speaker A

exactly what we've been doing furthermore if we take literally what he said the telephone system doesn't exist it doesn't have any deficiencies because a non-existent thing doesn't have deficiencies and somebody else said well suppose it really didn't exist how would you start

Speaker A

and somebody else said well that's like this building a house if you decide you want to build a house what do you do when you go see an architect i said i can tell you that what you do is you write a set of

Speaker A

specifications they said what specifications i said those are the things you want like i want three bedrooms one kitchen a family room a two-car enclosed garage they said why don't we try that and everybody agreed not because they

Speaker A

thought it was such a hot idea but you couldn't think of anything else to do so we took a clean sheet i said all right let's throw up some ideas about the properties that a telephone ought to have

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right first one was thrown out i want to telephone with no wrong numbers every call that comes in is intended for me and everybody agreed that would be desirable second suggestion i thought was absolutely brilliant i happen to have made it

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i said i want to know who's calling me before i answer the phone they all agreed third suggestion was i want a telephone i can use without hands no hands everybody agreed the fourth one was really marvelous i

Speaker A

didn't make it one of the members of the group said you know i'm tired of going to the telephone when it rings i want it to come to me well we're getting warmed up now we went on for about two weeks

Speaker A

we didn't meet every day we wound up with a list of 92 of these problems and it wasn't a disagreement about a single one of them agreed on every one of them but eventually we ran out so now we sat there and said what do we

Speaker A

do now and one of the members of the group said why don't we take the first item on the list and see if we can design a telephone that would have no wrong numbers now at that point i met a very serious

Speaker A

personal error see i once taught logic i thought i had a special skill there was a value to the group and i tried to use it i said now you realize of course there are two kinds of wrong numbers

Speaker A

one is when you have the right number in your head and you dial it in correctly and the other is when you have the wrong number in your head and you dial it correctly and the same system probably won't

Speaker A

eliminate both one of the members of the group immediately said yeah but suppose you got the wrong number in your head and you dial it incorrectly and get the right number [Music] that shut me up for a while

Speaker A

uh we all agreed however that it was important to know which type of wrong number was the most prevalent now at this point i was able to do something useful i knew the head of the psychology department in the lab i had

Speaker A

worked with him before so i picked up the phone in the room and called him dr carlin and after a few amenities i said to him sam do you happen to know anything about the relative frequency of wrong numbers and the guy exploded at

Speaker A

the other end of the phone he became an inarticulate like sounded like that took him five minutes to calm down it turned out he'd been doing research for 17 years on wrong numbers and i was the first one to ask him

Speaker A

after we finally got him quieted down he gave us the information we needed four out of every five wrong numbers is the right number incorrectly dialed and so that was the first focus of our attention

Topics:Russell Ackoffproactive managementorganizational changetechnology and innovationdecentralized organizationsstrategic planningadaptabilityyouth in managementlearning organizationscompetitive strategy

Frequently Asked Questions

What is the main focus of proactive management according to Russell Ackoff?

Proactive management focuses on accelerating change, leveraging technology, and fostering adaptability to seize opportunities before competitors.

Why does Ackoff say experience is the worst teacher in modern organizations?

Because rapid technological change makes past experience obsolete, requiring individuals who can learn and adapt quickly rather than rely on outdated knowledge.

How does Ackoff describe the ideal organizational structure for coping with rapid change?

He describes it as decentralized, permissive, youth-oriented, informal, and team-based, with a coaching leadership style rather than hierarchical control.

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