Thinking about Evolution & Economics and Some Notes on the Natural Selection of Ideas

Part 1 - Education, education, education - a strange tale of Unilever Overseas and the arrogance of intelligent design

Apapa Generators

In 1975 I was grafting hard in the Unilever factory in Apapa manufacturing soap for the teeming millions in Nigeria, and trying to earn a few dollars for myself, my family and my company in London. It was stifling under the soap pans where problems seemed to acquire an added urgency as they were both naively mundane and perplexingly intractable.

My training for this assignment had been rigorous enough. I was nurtured in a strong family tradition feeding on my maternal Great Grandfather’s insistent belief in the magic of 'education and compound interest' and the self help traditions of the ancient wood carvers who learned a trade. My Great Grandfather and his mates had built a business from scratch in rural Cheshire. 'The Weaver Refining Company' found a use for every part of the cow carcase apart from the eyelashes! His productive boasts included all sorts of meats, offals and tripe, black puddings, sausage skins, leather hides, animal feeds, fertilisers, bone china, lamp oils, gelatine, greases, glues and hairs for paint brushes ... and he also supplied tallow to the 1st Lord Leverhume's factory at Port Sunlight ... three generations later I tried to turn this recovered fat into valuable soap.

I studied science and cricket at The King's School in Chester (founded in AD 1541) and then joined the great Scottish engineering tradition at Glasgow University (founded even earlier in AD 1451) where I graduated in Chemical Engineering. At these ancient institutions, perhaps unbeknown to me at the time, I absorbed history like a sponge, growing roots in the radical culture of the English Reformation & Harry 8 and the Scottish Enlightenment & Adam Smith. But looking back I'm sure I learned most of my 'practical know how' and 'empirical tricks' from mates like Tony Bowen and Jost Wendt rather than from the often boring lectures of the sages and soothsayers.  

I joined Unilever at the Port Sunlight factory in Cheshire and soon realised my formative education was only a start and training started in earnest through a series of job experiences, indoctrination courses and tutoring from several venerable mentors.

My first go was commissioning a brand new all singing all dancing Ballestra Spay Drying Plant. I tore into the job, maybe a new kid was on the block, but many others were also applying their expertise. Luciano Saporiti was there, 'I move my hat from there to there, easy. But in Lever you have to have a committee meeting'! Luciano never attended the meetings, he didn't speak the language, he called home and asked for Paulo who came out and got on with the job. The great advantage Paulo had was that he knew how to do it, so he did it. I couldn't figure it out. We were supposed to be experts at soap making so why did we need Italians? I poured over the figures which revealed that Ballestra technology offered better specifications, better prices, better service & guarantees, and better timings; it was a good call so I got on with the job ... I was now in the business of business.

Fresh from the advanced mathematics of thermodynamics I soon found I was no match for W R F 'Willie' Vale who goaded me into coaxing the best out of the old dears on the twilight shift who mixed tablets of coloured soap and put them into cardboard boxes; I soon realised that these ladies knew far more about the factory operations than I did. Fred Hall also desperately tried to add a little business 'know how' onto the bits of science that I managed to remember. This was an indoctrination pushed by a couple of affable 'characters' who I found both dynamic & inspiring; they got on with the job. All this was very different from the expected, rather tiresome regulation, the 'party line' peddled from above by men in grey suits.

A career with Unilever Overseas required embracing more distant influences, the ghosts from the past and folk who will be unknown to many but meant much to me ... and still do -

Dan Gowler & 'Determinants of the Supply of Labour to the Firm', 1969 - 'the ghost of economic man still haunts the corridors of many managerial suites, and his baleful influence manifests itself particularly on those occasions when the problem of labour mobility is being discussed. This is despite the fact that the idea of a local labour market manipulated by an 'invisible hand' of supply & demand seems to fly in the face of the facts and is the object of increasing criticism from social scientists.'
I heard here the echo of Adam Smith, from my old University, who had explained in his 'Theory of Moral Sentiments' in 1759 that the 'invisible hand of supply & demand' was all about 'moral sentiments' and not bribery & corruption ... 

Zvi Eiref & focus on the vital few - depth of understanding and competence comes from specialisation - 'don't sprinkle the desert with a teaspoon' ...

Douglas McGregor & 'The Human Side of Enterprise', 1960 - all folk are different with different skills - it takes two to tango and however macho the command the girls always seem to love to dance backwards ...

Ram Charan at Four Acres & a 'helicopter' overview of reality - a way of thinking which avoided the analysis paralysis of irrelevant 'tittle tattle', it's only through 'detached introspection' that you can grasp how the tapestry emerges - this was Immanuel Kant's 'enlarged mentality' ... empathy ... social intelligence ... a worldview from the perspective of others ...

Samuel Smiles & 'Self Help' - published in 1859 the same year as Darwin's 'Origin of Species' and it has weathered just as well. The First Lord Leverhulme gave away free copies to all his employees, I had to buy mine! - without moral sentiments laissez-faire economics is anarchy, 'red in tooth and claw', and without caveat emptor and due diligence all trade collapses 'in a heap of rubble' ... but with them ... business made sense to me ... as Willie Lever himself said -

'I know that people nowadays are inclined to scoff at Samuel Smiles and his gospel of Self Help, but my advice to the young man of the present generation is to act on the principles taught in Smile's philosophy. He will go further than his competitor who does not'.

- hard word, honesty and thrift ... sounded good ... and it worked for all the successful heroes that I met ... 

When I arrived at Ikeja airport, Nigeria in the early 1970s I imagined that I was honed, fine tuned and ready for action. My confidence had been sharpened by an intensive six month tour round almost every Unilever factory in Europe. With my mate Jim Marshall, I 'learnt the trade' and met 'the people that mattered'. For sure the ‘go-slow’ down the tatty Ikorodu Road in the midday sun was a culture shock but I was acutely aware of the ghosts from the past, the ghosts of my Unilever predecessors in Africa ... many of whom had travelled the same road ... some had wrestled with the ill-fated Groundnut Affair ... the history of this 1946 grandiose plan should be compulsory for everyone ... I had also read The Lion & The Unicorn in Africa ... history doesn't repeat itself but it does rhyme and those that don't learn from history are doomed to repeat it ... it seems patterns emerge from complex economic interactions ... wherever and whenever ... ghosts from the past haunt us all the time but they don't stop us from learning ... overseas was high risk but overseas was high reward ... if you learned ...

The atmosphere in Lagos at this time was frantic, dollars were pouring into the country following the oil price hike after the Yom Kippor war and the Lever business was expanding rapidly and highly profitable. The markets were humming, eager consumers, with their hands full of lucre, were emptying our product delivery vans before they were loaded. 

What a challenge, the business and factory environments were exhilarating, although my wife was less enthusiastic about the living conditions. This was the culmination of all my education and training, I now had the opportunity to apply my skills and contribute by creating some wealth, not least for my two young children who had developed a voracious appetite for cash! Under microbe attack the resilience of their immune systems was being tested as was the family's risk / reward decision to move overseas. I was confident, however, that staying at home in illusionary comfort was also a risky game. In the UK petty political posturing had spawned many grandiose 'groundnut scheme' look alikes - 'comprehensive' state education and a bankrupt National Health Service were unable to cope with the differing demands of my different kids for different reasons. And, with no ill intent the Port Sunlight factory itself appeared to have a rather mysterious and quaint meritocracy with a smattering of largesse and contentment ... such foibles were full of risk!

I quickly devoured the Apapa factory statistics; there was an appalling supply problem, the production facilities were failing miserably to deliver the expected output to the hungry markets. The reason seemed obvious, 30% of the available production time was lost because of the failure of the national power supply to the factory. Without electricity the machines could not run and the warehouses were empty. 

The scale of the problem was enormous, the opportunity was enormous. The solution appeared to be straightforward and did not require much of my extensive scientific training. We would install our own power generators and bypass the unreliable national supply. At a stroke the idle time in the factory would be reduced significantly ... 

We approached the task with a discipline that was commendable, a proposal for the capital expenditure of several million Naira was written quickly and clearly. It was one of the most logical expenditure justifications that I had ever written. The go ahead was given by return and the project team defined within a week. We detailed the specification for the generators, paying special attention to the robustness of design and ease of maintenance which we knew would be necessary in the difficult operating environment in tropical Apapa. 

The equipment selection from a reputable supplier in Europe went smoothly and although there were some delays due to suspicious importation documentation, the installation was successfully completed only a few weeks behind schedule by a reliable expatriate engineering firm. We all experienced a sense of satisfaction and relief that at last we would have a sensible base on which to build the improvements to factory efficiency which were so obviously needed. 

I considered the commissioning event to be significant enough to warrant an 'opening ceremony' and I invited Derek Holdsworth, our invigorating Chairman to do the honours in front of a smiling collection of factory operators and engineers. They were all as pleased as I was at the impending event and anticipated progress. 

A miracle of science and technology the Dawson & Downie 250 KW base load power generator. 

The Chairman proudly cut the blue and yellow tape which was stretched across the access, pressed the start button, the machine burst into life ...

... and we ran out of fuel oil ! 

I was distraught and embarrassed, not only had the fuel in the main tank seeped away due to damage from an errant fork lift truck but all our back up storage drums, carefully checked the day before, were found to be empty after a particularly successful thieving raid. It transpired that a gang led by our own Chief Security Officer had emptied each drum into a stolen road tanker the night before. 

We were resilient and a match for the occasion. Further capital expenditure was immediately authorised to build a substantial 500 ton fuel oil store tank with a robust security system to foil the most ambitious of thieves. 
Unfortunately just as the installation was receiving a final coat of paint, a general shortage of fuel throughout the 'oil rich' country had forced the Government to issue a decree restricting all hoarding of fuel and insisting that only licensed suppliers could hold stocks in excess of 50 gallons. The particular supplier allocated to the Apapa factory went into liquidation shortly after the decree. The problem resulted from embezzlement on a massive scale and included the disappearance of a payment in advance for six months supply of fuel to the Lever factory. 

The impossibly meagre drips of fuel which we managed to get as an alternative soon dried up altogether. It appeared that the installation of stand by generators had been a popular solution to the power failures; the result was in a tenfold increase in the demand for fuel. Only the most adept at selecting the right official to bribe were now receiving supplies. 

At this stage I knew that the supply of fuel was almost irrelevant. Our carefully selected local agent supplying the generator spares had had his import licence revoked following allegations of tribalism at the Ministry of Trade. The generators were out of commission due to the unavailability of a simple $5 printed circuit board. 

I reflected hard and long on the misery and chaos that now confronted me. I knew the Apapa factory had been built to Unilever's rigorous international specifications, with all process controls detailed in the technology 'blue book', no expense spared. The science couldn't be wrong. I redoubled my efforts. I fell back on my training and devised logical networks of cause and effect and drew up detailed plans with built in crosschecks and controls at every key point which would guarantee success ... I even recall a debate about the merits of standby standby generators, and even investigations into the importation of our own fuel oil ... vainly throwing further money at the problem ... I also remember decisions on capital expenditure emerging from discussions and then an authorisation process which became a post rationalisation ... inefficient factories result in higher capital expenditure but higher capital expenditure did not result in efficient factories ... I remembered the groundnut ghosts ... ghosts from the past ...

I got every encouragement from Head Office, including further resources and planeloads of detailed instructions and new updated specifications.  In the vain hope of making the future predictable, acres of information flowed into my office as we measured everything, even the colour of the engineers' socks. And new variables cropped up everyday. I felt like a juggler desperately trying to keep dozens of balls in the air at the same time and hearing an hysterical cry from above 'catch it' ... only to find as the current priority was safely secured everything else collapsed in a heap ... the cost of this avalanche of information and analysis paralysis was astronomical and the benefits meagre. The nature of the problems seemed very different from the ones encountered during my training and they were simply not responding to either 'money' nor 'science'. As a scientist and engineer I felt a little naked in front of this onslaught ... but ... I remembered the ghosts ...

Finally a senior adviser insisted it was all about management competence and we must identify the key person who was to blame and sack him as an example for the others ... the only key person I knew was me ... and the deal was well understood you either get the results or you get the sack ... but I recall there was considerable doubt about the competence of any successor! Pressure continued to build as more desperate instructions from Head Office insisted we must draw up 'detailed plans' to resolve the unanticipated, unexpected events that continuously cropped up to 'deliberately' thwart progress ... I was expected to 'get a grip' on the unknown ... I was a manager 'in power but not in control', it was a devastating criticism ... but control theory required accurate relevant timely information, appropriate set points and standards, cause and effect algorithms for clear decisions and reliable 'actuators' for implementation ... my factory had none of these, the system was immensely complex, full of conflict and intrigue, subject to continual change and successful 'know how' was woefully scarce. Yes I could control 'known' 'knowns' and I could plan for 'known' 'unknowns' but the future was full of 'unknown' 'unknowns' ... if only I could stop folk tying my shoe laces together, stop people doing things, then I would have a chance of disentangling the mess ... but I knew this was not only impossible, it was wrong ... I remembered the ghosts ...

No way could I solve this by myself, I needed other people to help, particularly Joe in the Pan Room who was desperately and loyally willing. Furthermore most of the folk scuppering my plans I hadn't even met! They were our suppliers, customers, competitors, regulators ...  

And there was more; to 'curb excessive profits' Government price controls had been introduced on all soap sales and furthermore in response to the heavy demand, new duties had been imposed on fuel oil. At a stroke the Government had made factory power generation uneconomic and rendered all our capital expenditure calculations obsolete! 

I ruminated again ... the truth was dawning ... 

Everyone was enthusiastically contributing to an elaborate fantasy, an illusion of command & control, blindly accepting that someone was 'in charge' and someone was 'to blame' and assuming and expecting that - 

those at the sharp end would understand the instruction 

they would willingly comply 

they had the physical capacity, skills and tools for implementation 

and that knowledge existed to issue the correct instruction, particularly knowledge about unexpected events, unintended consequences and responses to actions by others, by outsiders ... 

... and the icing on the hoax were the usual profusion of macho managers who interpreted any failure as incompetence and any experimental initiatives as deliberately disruptive. Admitting the boss doesn't know and isn't 'in control' would open a Pandora's Box of indecisive weakness and lead to rapid dysfunctional collapse!  

What was really happening was very different from what was supposed to happen. The failures we were experiencing had no single cause which could be logically isolated, analysed and eradicated. The total system was out of my control. The factory and the environment was a vast interacting network of activity stretching far beyond the factory fence and far beyond the borders of the country ...  

Folk simply did not know what was the best thing to do. Too many, often with the best of intentions, were frantically designing ambitious solutions, acting in their own and other folks interest. The systems were immensely complex with unintended consequences where effects became causes and causes were effects. Each problem interacted with another, they were all interlinked and subjected to deliberate and accidental change. No one person was to blame, everything effected everything else, and 'unkowns' interacted with 'knowns' making 'knowns' 'unknown' ... 'stuff happens' ... 'events dear boy events' ... if you follow! 

So the problems queued up; solve one and another immediately appeared. Worst of all was that however detailed the planning we never knew where, when and what was going to crop up next. 

There were low points, my faith in science and my own ability had been shattered as the unpredictable apparent chaos ate away at all my plans. My six year old daughter could easily pin point a host of problems but their solutions were a different matter ...  

Fortunately there were some folk in Head Office and the Overseas Committee who understood the way the world worked and when they visited the factory I enthusiastically met them at the airport to carry their bags (but for others, purveyors of snake oil, I conveniently ‘lost’ the telex announcing their arrival!) …

I remember in particular, Alf Coathup and Dick Stevens, who were constantly supportive and prodded me into rejecting the myth of top down command & control. Put the right man in the job, approve his 5 year plan, compete for all capital expenditure and let him get on with it! They stressed how essential it was to be responsive, responsive to events and particularly to the poor bloke at the sharp end who didn't understand, who didn't have the skills training and who didn't have the tools for the job ... he needed help not instructions. They knew about resilience, about experimenting again and again and again, about everybody pulling on the same rope ... particularly the supportive girls ... I recall Carole was interviewed for my overseas jobs ... this was a team effort!

My enthusiasm and confidence were undiminished, I knew we were not helpless and incompetent. And in a strange inversion of reason ... I was getting glowing personal appraisal reports and earning a reputation for being a 'good operator' exploiting 'sound scientific methods' and was applauded for an 'enthusiastic attention to detail' and 'a procedural discipline' coupled with a 'no nonsense approach to management' and 'good potential for senior management' ... getting results where my predecessors had failed ... it was the management theory that was wrong not the management practice ... I remembered ghosts from the past ...

( PS during this time of factory chaos the local Workers Union accused me of illegal activity and there were anonymous threats of violence to me and my family. I was charged with orchestrating an 'evil conspiracy' to exploit 'black slave labour', inflating my own salary to an 'obscene' level whilst also 'expropriating profits' from a 'hapless developing country' to 'filthy rich' 'faceless gnomes' in London. I was also accused of refusing to divulge the 'secret solutions' and the science and instructions which were the only justification for my expatriate work permit. The state government was urged to act 'in the public interest' and revoke our license to operate stand by generators, restore the local monopoly power supply and terminate my work permit.  

The works convener fresh from his training in East Germany was enthusiastically peddling the four Marxist myths with a conviction that came from his own particular education and interpretation of reality - a conspiracy of the rich to exploit the poor, a labour theory of value, a State which acted in the public interest and a justification based on a priori 'science' ... ) 

 

The Ajegunle Market

Around this time I was scheduled to visit our customers in the local market at Ajegunle. This was a routine outing for factory personnel, offering an opportunity to see another part of the business and discuss with the customers the products that we were manufacturing. I was particularly keen to see Mrs Adaji one of our biggest retailers as there had been a spate of complaints about one of our popular bar soaps.  

I remember my first impressions of the market; tatty, primitive, sweltering, stifling, chaotic, noisy, a bustling hubbub with pungent stenches and gaudy colours, all far from the reality of intricate sophistication which was later revealed.    

The incessant activity was earnest but every body was smiling, endless separate trades seemed to be transacted every minute, nobody was issuing instructions and unlike my generators it was 'working'!  

Most of Mrs Adaji's questions concerned quality, service, costs and competitive alternatives because they all directly impacted on her income, what she called 'margin and speed'.  

She was frank and honest, we had to get all these right to increase her sales and keep prices above costs. Our package had to be competitive, she had limited space and there were attractive offers from other suppliers.  
Mrs Adaji owned a stall right next to her competitors, she explained everything had to be 'good good' otherwise her customers would vote with their feet and spend their hard earned money elsewhere. Times were hard and they were always looking for a better service, a better price, a better quality or an alternative product? With competitors side by side, a better deal next door means you're out of business. There was no place to hide, if customers wanted soap they came to this area of the market so they could weigh and compare, she welcomed having her competitors next door they kept her sharp!

And there was more, the 'naira' were scarce and no one could be sure they would be spent on soap. It was clear that we were competing with 'Coca Cola' and 'Marlboro' in addition to competitive brands of soap. 
And furthermore Mrs Adaji was selling imported products at competitive prices. She frowned when I asked why? 'I need margin and speed and my customers like'! There was no more to be said ...

Mrs Adaji knew all about tying up valuable capital in stocks and the importance of rapid turnover and reliable replenishment, she wanted credit and daily deliveries. Unit pricing was also important she could sell more by keeping the unit price low, her customers didn't want large expensive packs, she wanted, 'small small fast fast'. I realised she knew exactly what she wanted from us because she was offering her customers similar facilities. There were money back guarantees and an informal system of credit and credit worthiness with blacklists and ostracism. The word soon got round, everybody knew who paid their bills. And crucially it also worked the other way round, there was a traders 'club' where 'short changing' was taboo, rogue traders gave everybody a bad name and customers went elsewhere.

I noted that unusually for Lagos in the 1970's lawlessness and thieving from the open stalls didn't seem to be a big problem? Mrs Adaji explained that everyone in the community of traders acted as their own policemen, thieving would spoil a thriving market, it was in everyone's selfish interests to see off the thieves. Folk who broke the rules were mercilessly outlawed.

Of course there was fraud. We had received complaints that Omo was being diluted with any old white dirt to add weight and profit? But the traders 'club' was at work. Would you buy from this mama? Mrs Adaji was credible, reputable, transparent and independent and her customers came back for more. The adulterers were soon rumbled out of the market into the disreputable suburbs.

Amongst all the apparent chaos and confusion there was effective self policing.

Tribalism was a big problem in the formal economy and in the factory leading to endless friction and corruption and in Nigeria's case a bloody civil war. But here in the Ajegunle market it was less obvious … with some trepidation I broached the subject with Mrs Adaji … the response was a quick flashing smile, 'the Ebo's shilling is just as good as the Yoruba's shilling' … what is trust … ? Of course there were disputes. Stall spaces were inherited and rented without formal documentation but individual property rights were generally accepted, not by 'council' regulation but by 'bossman', usually a senior 'mama', who would adjudicate on any disputes.  

Mrs Adaji was also enthusiastic about new products which she found always sold well and attracted folk to her stall. 'I need to test test' she said. She had a family to feed and educate. She needed to save, she was hoping to invest in a second stall nearer to the central road. There were always alternative suppliers, 'up road or oversea', but she wouldn't be thinking of switching to our competitors if we addressed her concerns.  

Like every good business woman she was evaluating the opportunity costs. Trying to figure out the future, trying things, if it worked she did it again, if not she tested something else, eventually progressing, her decisions depended on what she had learned, what she called 'nous', she knew about unexpected events, long chains of choices, changing circumstances, and crucially what the others were doing, she was doing her best from where she was, with constant revision, not planning a whole strategy step by step, but improvising, doing things on the fly, going for speedy responses to the unknown unexpected twists and turns that always occur …

Mrs Adaji wasn't educated but she was adapting to complexity and change in competitive Ajegunle with remarkable success! Unsurprisingly she complained bitterly about Government bureaucracy and red tape, recently there had been constant intrusions into her activities all costing time and money. She didn't know how to fill in their licence forms and knew some traders had been fined for breach of price controls. She needed to be able to adjust her prices to shift 'slow' stock and to maintain supply of 'fast' stock to her discerning customers. There was no need for licenses and regulations, if she short changed her customers they didn't come back!  
It seemed the red tape, even a well intentioned attempt to help young Adaji to battle with poverty, was being used by the authorities as an excuse to extract bribes or 'dash' from Mrs Adaji and her friends.  
In the end the regulation, corruption and bribery were an irritant but as fast as stalls were closed down they started up again. Mrs Adaji was always going to win as long as her customers came back for more, she could choose not to 'dash'. Price controls didn't work, they were ignored, simply because both customers and traders were happy without them ...

The more I talked to Mrs Adaji the more I understood the power of exchanging specialisation skills to create value for everyone. Relentlessly driven by the mutual benefits of buyer and seller throughout a diverse network which stretched overseas, there were no losers, everybody can win and no one was in charge! If anything it was the interference by top down elites that was stopping the process of specialisation and scale and technical innovation which was the solution to poverty and the chaos in Nigeria.

As I left I knew I had seen a microcosm of a thriving economy and it was working smoothly and efficiently in chaotic Nigeria! Supply & demand and the invisible hand of text book theory described the apparent result of market activity but the texts seldom explained how markets actually work. Folk were discovering the best prices and quality by testing, doing the best they could from where they were, again and again, round and round, order and self-organisation emerged from a complex system which had it's own in built 'control system' -

Sensors - price and quality information and the bundle of product promises. The 'hubbub' was an information flow, trying to get a grip on price and quality, and of course the endless gossip about who to trust and who was not paying their debts.  

Set points - competitive choices, competitive advantage and product differentiation. The teeming interactions and bustling activity came from the freedom to choose and compare.  

Control Algorithm - customer decisions and the 'value' equation of price, quality, service and alternatives. The endless price haggles as folk attempted to resolve uncertainty and trust in promises. Knowing customers could always vote with their feet, the vendors group together, competition was a welcome way of demonstrating trust and confidence.  

Actuators - Mrs Adaji's responses were experiments, she was continually trying to discover more 'margin and speed'. Her strategy was based on plugging into the customers intuition, hunches and beliefs. Investment responses even took side effects on third parties into account.  

There was a continuous stream of bottom up generate and test experiments with no grandiose top down planned designs. There was some immunity from treachery as systems evolved which were much more robust than the hierarchical arrogance of imposed design and instructions.  

It seemed Mrs Adaji had a behavioural strategy - discover some little thing to try and if it worked go! If it didn't work drop it and try again!  

Was this the self regulating 'control system' I had been looking for in the factory?  

It was clear to me that the conventional assumption of management control by planning and instructions was not matching the reality of factory activity, it didn't make sense. Clearly a market could not be created in the factory, transaction costs would overwhelm progress. And I could see that many of the local informal 'rules' would be difficult to transplant to larger groups and become substitutes for the Unilever Accounts Manual and Blue Book Specifications.  

But the principles of the self organising control loop were a much better description of a similar evolutionary process which was relevant in the Apapa Factory ... continuous improvement ...    

Maybe efficiency is survival 'know how' and has to be painstakingly built from the bottom up in a blind evolutionary process, small step by small step as a behavioural strategy -  

build on proven successes, imitate successful outcomes, there is no better place to start, specialise in what works, particularly what works better than the competing alternatives  

freely and quickly choose between options available at the time and the place, unhindered by conventions, particularly avoid 'analysis paralysis' and get moving  

experiment to generate diversity and increase the chances of discovering new tricks, particularly try inspiring innovations and accept the risk of failure  

cooperate with others to discover synergy tricks which are not available to individuals, particularly exploit the benefits of empirical science in a 'networking team' involving blends of skill, experience, influence and nous  

retaliate against the inevitable spoilers and 'not invented here merchants' to defend and accumulate benefits, particularly through investment in success  

learn from the successful outcomes, chase profits and cut losses, stop what doesn't work and try again, start a new cycle specialising and generating economies of scale  

The manager becomes a participant in the team, interacting and responding to the unpredictable by actively imitating success and trying out a diversity of innovative improvements. Real progress emerges around the coffee machine not 'prancing' in the budget meeting ... 'gossip', not 'idle gossip' but an 'excited gossip' about survival, increasing interactions and with the honesty of informality pushing folk to the edge of chaos where breakthroughs can occur. 

Fortunately my boss and confidant at the time, Mike Cowan, well understood the complexities of 'systems failure', the pointlessness of the ‘blame culture’ and relentlessly pushed for the benefits of continuous improvement in emergent informal 'networks'; he was an inspiration, the best boss ever who delegated and expected. Slowly, in this way, over a few years, improvements were secured in the Apapa Factory. It was a sort of 'colonisation' process, the team network grew as the routines that had been established as little pockets of success were adopted by more and more people ...

 'Know how' emerged from a tacit, dispersed and incomplete discovery process in the midst of a mess of immense complexity. Nothing more than a relentless algorithm of continuous improvement - ‘generate and test a diversity of competing ideas, then chase profits and cut losses’.

Unilever Overseas required good managers to develop a clear consistent behavioural strategy not a command and control system. It is impossible to design improvements from the top down because no one can possibly posses the necessary system knowledge, factories can never be 'under' control ... I remembered ghosts from the past ...

Improvements are responsive innovative experiments which work ... and can be imitated, adaptation ... adaptation to a hostile environment ... 

(PS later I learned this Darwinian approach, which I had painfully discovered for myself under the soap pans in Apapa, had been described by the economist and Nobel laureate Herbert Simon. He called it satisficing and successful managers do it all the time!!   

But first they have to break a mind set of top down command & control and highfalutin fads and start building on what works ... from the bottom up ... thru trial & error experiments.   

Unsurprisingly on my return from Unilever Overseas I found similar problems of system failures in the factories in Europe. Perhaps they were more cunningly disguised but the fantasy of 'command and control' budget meetings with a 'cast of thousands' and endless 'analysis paralysis' were sometimes perpetuated to the point of profit destruction in a ‘bureaucratic nightmare’ of cost and sloth. As expected there were some who perceived Darwinian solutions as irrelevant and others who saw them as a threat to their fiefdom. There was a natural tendency for cliques of vested interests in layer after layer of bureaucratic kludge to ostracize such initiatives and dismiss them as 'not invented here' ... but there were always a few innovative folk, always enough to enable the 'colonisation' process to continue.

I recall Jim Louden, a savvy African trader who relentlessly focused on 'the bottom line' and simply asked 'what do we do better than our competitors'? And the fearless wag Dr Keith Watkin who managed to break some of the gray gridlock and drive some innovation! Eventually, of course, the bureaucratic obstacles must be removed and the experiments started otherwise the bankers get cross and Japanese take over ... by pass the blockages to let the blood flow ...

 David Sandoz, a control engineer from the University of Manchester, applied some 'satisficing' principles to spray drying technology. Detailed theoretical control algorithms had failed to model the complexity of our real time thermodynamic spray drying process, but breakthrough success was achieved with an adaptive statistical control package based on the experimental manipulation of inputs and the discovery of outcomes that worked ... )

NB Robert Axelrod from 'The Evolution of Cooperation' -

‘The key to doing well lies not in overcoming others but in eliciting their cooperation. Individuals don’t have to be rational; the evolutionary process alone allows the successful strategy to thrive, even if the players do not know why or how. No central authority is needed; cooperation is self policing’ ...

 

john p birchall

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