If Russ Ackoff had given a TED Talk… 12-minute video from 1994. Rough transcript follows.

Introduction:

« Our next speaker is a scholar, a philosopher, an activist, a teacher, a gentleman, and one of the leading theorists on systems in the world. I take many conversations with Dr. Deming and other experts and the most unusual, and perhaps the most enjoyable, was a conversation between Dr. Deming and Dr. Ackoff. Dr. Ackoff was the only person actually to call Dr. Deming Ed. And Ed really loved it. He was delighted and pleased to learn from Dr. Ackoff and I would like to think that he’s tuned in now as Dr. Ackoff speaks to us on Beyond Continual Improvement. »

Russell Ackoff:

« Thank you… I should explain I really wasn’t arrogant when I was calling Dr. Deming “Ed.” He and I worked together in 1950 at the US Bureau of the Census when nobody called him Dr. Deming. He was Ed. I was not called Dr. Ackoff. I was called “hey boy.”

Quality improvement is something that my principal mentor Winnie-the-Pooh once

called A GOOD THING. You know, capital letters. He always had it. Given that it’s

held so highly, it seems curious that in several national surveys recently conducted, over two-thirds of the managers who had authorized the introduction of quality and improvement programs consider those programs to be failures.

Now the professionals tend to excuse that by saying the criteria for failure is irrelevant, it’s not what we would have used. But that’s irrelevant. Because the definition of quality has to do with meeting or exceeding the expectations of the customer or consumer. And the customer or consumer is the one who authorized the introduction of the program. And therefore if their expectations are not met, it’s a failure, whatever the expert thinks. So it’s important I think to understand why those failures have occurred, given that quality and improvement are a good thing, so that we can increase the batting average.

The hypothesis that I want to set forward to you is the reason for the failures is primarily the fact that they have not been embedded in systems thinking. They have been anti-systemic applications. Now let me try to explain what that means.

First what’s a system? A system is a whole, spelled with a w, that consists of parts each of which can affect its behavior or its properties. You for example are a biological system called an organism and you consist the parts: your heart your lungs your stomach pancreas and so on, each of which can affect your behavior or your properties. The second requirement is that each part of the system, when it affects the system, is dependent for its effect on some other part. In other words the parts are interdependent. No part of a system or collection of parts of a system has an independent effect on it. Therefore the way the heart affects you depends on what the lungs are doing in the brain is doing. The parts are all interconnected. And therefore a system is a whole that cannot be divided into independent parts.

Now, that has some very very important implications that are generally overlooked. First, the essential or defining properties of any system our properties of the whole which none of its parts have. For example, a very elementary system you are familiar with is an automobile. The essential property of an automobile is it can carry you from one place to another. No part of an automobile can do that. The wheel can’t the axle can’t the seat can’t the motor can’t the motor can’t even carry itself from one place to another. But the automobile can.

You have certain characteristics the most important of which is life. None of your parts live. You have life. You can write; your hand can’t write. That’s easy to demonstrate. Cut it off and put it on the table and watch what it does. Nothing. You can see your I can see you can think your brain can think. And therefore when the system is taken apart it loses its essential properties.

If I bring an automobile into this room and disassemble it although every single part is in this room I don’t have an automobile. Because the system is not the sum of the behavior of its parts, it’s a product of their interactions. And that’s been said here in many ways over and over today.

Now what does that mean? If we have a system of improvement that’s directed at improving the parts taken separately you can be absolutely sure that the performance of the whole will not be improved. And that can be rigorously proven. But most applications of improvement programs are directed improving the parts taken separately. Not the whole. The proof is complex and I won’t bore you with it. Let’s just take a simple example.

I read in the New York Times recently that 457 different automobiles are available in the United States. Let’s buy one of each and bring them into a large garage. Let’s then hire 200 of the best automotive engineers in the world and ask them to determine which car has the best engine. Suppose they come back and say the Rolls-Royce has the best engine. You make a note of it. Which one has the best transmission? And they go run tests and come back and say the Mercedes does. Which one has the best battery? They come back and say the Buick does. And one by one for every part required for an automobile, they tell us which is the best one available. Now we take that list give it back to them and say remove those parts from those cars put them together into the best possible automobile. Because now we’ll have an automobile consisting of all the best parts. What do we get? You don’t even get an automobile, for the obvious reasons the parts don’t fit. The performance of a system depends on how the parts fit not how they act taken separately.

You see, the architect who is the profession that I think understand systems best, really has the fundamental idea. When the client comes in to see an architect and they say I want to build a house for my family with three bedrooms a living room dining room and kitchen a family room a two-car garage I wanted on one floor I’d like it to be built out of Redwood and I don’t want it to cost more than $10,000. What does the architect do? He has a set of properties that the client wants. Does he sit down and start to design the kitchen and then the living room and then the bedrooms and then the garage? Is that what he does? Of course not. What he does is produce an overall design of the house. Not only produces designs of the rooms to fit into the design of the house, but he discovers in the process that he can modify the house in such a way as to improve the quality of the rooms. But he will never modify the house to improve the quality of the room unless the quality of the house is simultaneously improved. And that’s fundamentally the principle that ought to be used and continuous improvement.

The second systems principal that is ignored and most of the practices, is that they practice a in a way which derives from the work of Walter Shewhart at Bell Telephone laboratories in 1930s. Shewhart developed statistical techniques for determining defects. A defect is something that’s wrong. Now this should be perfectly obvious. When you get rid of something that you don’t want, you don’t necessarily get what you do want. So finding deficiencies and getting rid of them it’s not a way of improving performance of a system. That’s easy to demonstrate. Take a television set. Go in and turn it on right now. What’s the probability you’ll get a program you want? You probably haven’t calculated and I have: 0.01. Now it’s a defect I can very easily get rid of. All I have to do is turn the channel. What’s the probability I’ll get a program I want? Still 0.01, which means I have a 50-50 chance of getting a program I want even less.

Basic principle. An improvement a program must be directed at what you want, not at what you don’t want. And determining what you want requires you’re redesigning the system not for the future but right now, and asking yourself what will you do right now if you could do whatever you wanted to. Because if you don’t know what you would do if you could do whatever you wanted to, how in the world can you know what you can do under constraints? But people don’t ask themselves that question.

The last point I want to make is that continuous improvement isn’t nearly as important that this continuous improvement. Creativity is a discontinuity. A creative act breaks with the chain that has come before it. It’s not continuous. One never becomes a leader by continuously improving. That’s imitation of the leader. You never overcome a leader by imitating them and improving slightly. You only become a leader by leapfrogging those who are ahead of you. And that comes about through creativity. One final point about that. When we look at the models of quality and we frequently point to the Japanese and what they’ve done to the automobile, there’s no doubt that they have improved the quality of the automobile. But it’s a wrong kind of quality.

Peter Drucker made a very fundamental distinction between doing things right and doing the right thing the Japanese are doing things right, but they’re doing the wrong thing. Doing the wrong thing right is not nearly as good as doing the right thing wrong.

You see the automobile is destroying urban life around the world just visit Mexico City, Santiago, or any of those major cities where you find congestion and pollution so bad children have to be kept home from school. They’re not allowed to walk out of doors because the pollution is so intense. And then we talk about the quality automobiles they’re driving. It’s a wrong concept of quality.

Quality ought to contain the notion of value, not merely efficiency. That’s a difference between efficiency and effectiveness. Quality ought to be directed at effectiveness. The difference between efficiency and effectiveness is a difference between knowledge and wisdom. And unfortunately we don’t have enough wisdom to go around.

Until managers take into account the systemic nature of their organizations, most of their efforts to improve their performance are doomed to failure. Thank you. »


Books by Russell Ackoff:

Management F-Laws: How Organizations Really Work
by Russell L. Ackoff, Herbert J. Addison, Sally Bibb – 180 pages

Systems Thinking for Curious Managers: With 40 New Management F-Law
by Russell L. Ackoff, Herbert J. Addison, Carey, Jamshid Gharajedaghi (Foreword) – 96 pages

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