Show Summary, July 4, 2014: Declaring Independence from the Tyranny of Taylorism

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What is Taylorism?

On our premiere show, Ed and I tackle the ghost and gospel of efficiency, as made popular by Frederick Winslow Taylor, author of The Principles of Scientific Management in 1911.

Taylor was the world’s first business consultant, at $35/day and a classic example a thinker Justice Oliver Wendell Holmes, “a hundred years after he is dead and forgotten, men who never heard of him will be moving to the measure of his thought.”

Taylor set out to prove that management is “a true science” with “laws as exact, and as clearly defined…as the fundamental principles of engineering.” Taylorism can be defined as follows:

The application of scientific methods to the problem of obtaining maximum efficiency in industrial work or the like.

In the past the man has been first. In the future the System must be first.” Taylor separated the doing from the thinking.

One of his disciples: Frank Gilbreth, Cheaper by the Dozen, the book by two of his children, as well as the movie made based on the book starring Clifton Webb.

A lot of efficiency experts died young, leading to the question: why were they saving all that time?


Efficiency vs. Effectiveness

Efficiency is always a ratio: outputs/inputs. It’s not about “doing things right,” as efficiency metrics make no judgment about right vs. wrong.

Effectiveness, by contrast, is doing the right thing.

Was Einstein efficient? How would you know? Who cares?

We can be efficient at doing the wrong things—nothing more wasteful, or useless.


No Such Thing As Generic “Efficiency”

Efficiency cannot meaningfully defined without regards to purpose, desires, preferences, and what we are willing to pay.

We can be efficient with things, but must be effective with people.

Peter Drucker didn’t write The Efficient Executive, but The Effective Executive.


McKinsey Maxim: “What You Can Measure, You Can Manage”

Peter Drucker didn’t write this, nor did he believe it.

It’s false: We can’t change our weight by having a more accurate scale, or weighing ourselves more frequently.

According to Peter Drucker in People and Performance:

Efficiency means focus on costs. But the optimizing approach should focus on effectiveness.

Effectiveness focuses on opportunities to produce revenue, to create markets, and to change the economic characteristics of existing products and markets.

…It then asks, To what results should, therefore, the resources and efforts of the business be allocated so as to produce extraordinary results rather than the “ordinary” ones which is all efficiency can possibly produce?

This does not deprecate efficiency. Even the healthiest business, the business with the greatest effectiveness, can well die of poor efficiency. But even the most efficient business cannot survive, let alone succeed, if it efficient in doing the wrong things, that is, if it lacks effectiveness. No amount of efficiency would have enabled the manufacturer of buggy whips to survive.

Effectiveness is the foundation of success—efficiency is a minimum condition for survival after success has been achieved.

Efficiency concerns itself with the input of effort into all areas of activity. Effectiveness, however, starts out with the realization that in business, as in any other social organism, 10 or 15 percent of the phenomena—such as products, orders, customers, markets, or people—produce 80 to 90 percent of the results.

The other 85 to 90 percent of the phenomena, no matter how efficiently taken care of, produce nothing but costs (which are always proportionate to transactions, that is, to busy-ness).


Business is an Art, Not a Science

Taylor “became famous for the idea of what he was supposed to have achieved—not for what he actually achieved.” In short, Taylor was a fraud, according to Matthew Stewart, author of the seminal book, The Myth of Management:

One can go grocery shopping with a scientific attitude. But it does not follow that there is a science of grocery shopping.

Rather than being a falsifiable theory, Taylorism was a tautology: “An efficient shop is more productive than an inefficient shop.”

In a skillful twist of the McKinsey Maxim—If you can measure it, you can manage it—Stewart says management consultants’ motto might as well be, “If you can’t manage it, measure it!

Better still, organizations should strive for efficaciousness—that is, having the power to produce a desired effect.


Additional Resources:

Book Review: Frederick Taylor: The One Best Way

Book Review: The Management Myth

Blog post: Efficiency vs. Effectiveness

Blog post: Pigs, Productivity, and Purpose

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