The topics under discussion ranged from Professor Mintzberg’s experience of being in on the beginnings of operations research (OR) just after the Second World War, his thoughts on how the field has developed since then, and discussion of a key question ORTEC is currently concerned with: that of how to bring operations research to the boardroom.
With his background in operations research and his extensive work on business strategies and organizational structuring, Professor Mintzberg is of particular interest to us here at ORTEC, and ideally placed to consider the issue of how to bring OR to the boardroom. Asked for his thoughts on this issue, Professor Mintzberg reflected on his own experience of working in operations research:
The question of how you relate and align the strategy to the organizational structure was then considered, and Prof. Mintzberg was asked for his thoughts on balancing different supply chain processes – those that are focused entirely on minimizing cost, those that are more focused on flexibility, etc.:
“Both are important in the structure obviously: you need the structure to cater for where you’re at. Going back to Wal-Mart, I’m sure it’s structured significantly around supply chain issues, but then other aspects of the structure will relate to how they keep flexible in terms of what’s in their stores in the first place. So, you have to do both.
“Structure influences what you do and is also influenced by what you do: it’s not one or the other. I’m uncomfortable with reification, which almost excludes strategy because it assumes that strategy comes out immaculately conceived and then everybody runs around implementing it. Whereas, strategies are very often things that just change over time, they evolve, and emerge, and changes around them emerge over time too. But too many companies are locked into whatever they’ve been doing and they can’t change as a consequence.”
In another related question, ORTEC asked, “In your essay, ‘How productivity killed the American enterprise’ you criticize a CEO who already has her strategy worked out before she’s even spent a day in that company, and also in another work you criticize the MBA culture. What do you think has gone wrong in the way we manage our organizations?”
“I think it’s to do with what I was referring to as reification, that things get too formalized somehow and too rigidified. This idea that you can just walk into a company with a strategy having never spent a day in the company or the industry; you’ve just read about it or got briefed on it a bit like a Harvard case study. You’ve only got very limited, superficial information, very little on history, and you’re shooting your mouth off about it… That’s not how effective or interesting strategies come about. It’s not a chess game … well, even in a chess game you’re reacting to your opponent.”
This prompted the question of what advice he would give to those basing their management approach on Harvard Business School case strategies.
“I think I get into that in the last chapter of my book, ‘Tracking Strategies’. Basically it’s a whole range of strategies from very deliberate to very emergent, depending on the extent to which learning is important. You can’t let deliberate strategies preclude learning; because your competitors will kill you if they’re better learners than you are. On the other hand, if you don’t come up with a strategy nobody will know what you stand for. So, it’s deductive and inductive. You learn from specifics, like the worker who put the table in the car at Ikea. And then once you have the idea, this becomes incorporated in a strategy. I don’t know if this is true, but I heard a few years ago Ikea was selling prefabricated houses the way they sell prefabricated kitchens, and prefabricated tables! You’ve got your strategy and then you extend it to kitchens and then to houses. So that’s deductive in a way, but at the beginning the whole idea was inductive. So, it’s an ongoing process, you have to go back and forth…”
In conclusion, ORTEC asked Prof. Mintzberg, “What do you think of the future of operations research and the position of operations research in terms of decision-making and strategic planning?”
“I go back to what I said earlier, which is maybe success is the problem in the sense that a lot of this has been incorporated into corporate behavior and so nobody recognizes it under that label.”
“So, you would say that making this success visible is one of the key issues for operations research?”
“Yes, and also demonstrating that the training and learning you do enables people to function much more effectively in organizations. Frankly, I saw the field going in one direction, and then Ackoff and Churchman – particularly Ackoff – got hold of the field and reified it in this terrible way, and it all became a bunch of techniques. I mean I had the good fortune to work in an OR department that was run by some Brits, a couple of Brits in particular, who grew straight out of the origins of OR in World War Two. Operations research is about analytical thinking, being able to tackle a problem systematically; it wasn’t about all the techniques that they had developed. I mean techniques are easy to learn, anybody can learn techniques and they’re useful sometimes…
“But, the issue for example at CNR was basically a big inventory problem and the actual solution didn’t involve any of that fancy technology. It really involved centralizing the dispatch of cars so that somebody could look at it overall, and decide which cars should go where. The system they had been using in the Canadian National Railway at the time was that, when a yard ran out of say type 2 box cars, the word went out all over the place that we need type 2 box cars urgently. And so the whole system was filled with empty box cars converging on this yard, and then the yard had far too many type 2 box cars, much more than they needed. And, in the meantime they had to build yards that were bigger, because all these empty box cars were going all over the place. And, all it took was somebody in a central place to say we predict you’re going to need about 10 box cars in the next three weeks. Yard X has 20 box cars, 10 of which they don’t need, so we’ll shift them from yard X to where they’re needed. It didn’t take a genius; it just took an analytical mind.”
“So, it’s not about a bunch of techniques then, but about an integrated approach where you use analytical thinking to come up with a solution?”
“Yes, I mean we were a bunch of smart guys in that OR department, one was a biologist, one was a statistician, I have a mechanical engineering degree. None of them were trained in OR. I’m not saying there’s anything wrong with training in OR, but they were just a bunch of smart people who had all kinds of interesting ideas. One guy came up with an idea to do with what they call ‘hump yards’. These are where box cares are pushed over a little hill one at a time and the cars go out to any one of 80 tracks where they are joined with others to form a train. There was a big issue in railroads at that point in that it wasn’t working very well – simply in mechanical terms. The braking was such that either cars would go too fast and smash into the cars already on the tracks, or they went too slow and you’d have a train with lots of gaps between the cars. And then one of my colleagues, who was an absolute genius, came across this British invention that basically looked like a mushroom, and as the car went over that mushroom, if it was going too fast the mushroom would hit the wheels and slow it down, or if it was going too slowly it would give no resistance, but instead boost it on the way out.
“He thought it could be an interesting idea to could get rid of engines completely and set up the whole railroad network with these mushrooms. So cars could simply travel along one by one being slowed down or accelerated along the track as necessary. I mean it never went anywhere, but that’s the kind of thinking you need in this kind of operation – very creative but very analytical at the same time.”
In response, Prof. Mintzberg was asked whether he sees analytical thinking as also being about thinking how to deconstruct a really complex problem in order to come up with an integrated working solution?
“Yes, of course, the trouble is there’s usually too much of the former and not enough of the latter, because analytical people are great at taking things apart, but not always so good at putting them back together…”
“So, you’re saying that’s where the challenge lies – since if you take things apart and strip them to the bare bones, then maybe it’s easy to apply techniques. But, on its own that is not enough, it’s not the end solution, it’s not integrated…”
“Yes, exactly. This guy who got this idea from these mushrooms, that was integrated thinking, it wasn’t techniques.”
In response, Professor Mintzberg concluded by reiterating his view that operations research is about integrated thinking, and emphasized that it’s about creative as well as analytical processes: “The OR department I worked was in was fun, because they were just a bunch of interesting people, all of whom had analytical training…”
Photo Courtesy of http://www.mintzberg.org/, Owen Egan, 2010.
Edited by Helen Bailey . Interview: Geerhard de Vries(ORTEC)
Part 2 of 2