Industrial Progress and Human Economics Part 2

In all cities we can see "dead" organizations. Many of these companies that are actually "dead" seem to have life in them because they continue to move, but in many instances the motion is only due to the momentum of a push that was given years ago.

A "dead" organization may show signs of life in its gradual growth in size, but its real character is to be seen in the extent to which it is departing from specialization or by the continued use of antiquated methods and buildings.

The departure from specialization is generally due to either lack of courage to discard obsolete designs or to an inclination to consider the business from the selling end only.

It takes courage to discard an old model and it also takes courage to refuse to build some new invention.

The indifferent management carries the old and takes on the new.

This policy covering many years creates a condition that is far removed from the specialization plan.

The management that views everything from the selling side of the business is also inclined to go on indefinitely increasing the line of goods manufactured.

The drift away from specialization may not be disasters today or tomorrow, especially, if there are no compet.i.tors who are specialists, but the inevitable result will be the burial of the "dead" organization when a real compet.i.tor comes into the field.

The calamity of the existence of "dead" industrial organizations is something more than the ultimate loss to the stockholders, it is the deplorable stagnation in which the workers find themselves with their progress blocked by lifeless management.

SOME INDUSTRIAL HOWS, WHYS AND WHATS.

How groups of men achieve the highest results in expenditure of given energy.

What is necessary to establish such conditions.

What are the most desirable opportunities.

What are desirable industries.

Why the need of building up habit-action.

How a group of men, through team work, acquires a group habit- action by which their product greatly exceeds the product of the same number of men working without cooperation.

How the individual ability and skill, as well as the group ability and skill is only to be acquired by repet.i.tion that establishes habit-action.

Why repet.i.tion of operation is essential to acquisition of skill and special ability.

What are the boundaries that divide the Jack of all Trades, the specialist and the victim of an overdose of repet.i.tion work.

Why industrial managers should know the cardinal principles of invention, of industrial engineering, industrial management, industrial relations and the human factor in engineering and in the industries.

Why a plant may be growing in size and paying dividends and may still be dead so far as the spirit of enterprise is concerned.

Why some men try to manage industrial plants regardless of the cardinal principles of progress of workers and the state.

Why the ideal conditions for the workers and executives can only be found in an industrial establishment that can successfully compete with others.

These "whys", "whos" and "whats" are of importance to all and suggest a line of thought and interest in this industrial discussion.

NEW INDUSTRIES.

The first men to function in the creation of new industries are those who are already well grounded by long experience in some special form of industry. The new organizations must have men well qualified to direct each of its branches.

In general it may be stated that a new organization must start with a superior article to manufacture and the elements of a superior organization. Sometimes it is possible by invention alone to win without the aid of the modern plan of specialized organization. On the other hand, the success may be attained by superior organization without a superior article to manufacture, but in general it is better to combine all of the possible beneficial factors in a new organization.

Organizers should know the market possibilities. If possible, the product should be sold directly to the user. The contact with the ultimate user is of supreme importance in the development of the invention and the organization. In dealing through a selling agency the manufacturer is not in control of the whole business.

The selling agent dictates the policy of the whole business. He dictates the policy of the manufacturing plant from the selling agent's needs and that seldom fits the manufacturing conditions.

The selling department generally demands many changes in product and wide range of articles of manufacture, while the manufacturing conditions require that special skill and ability that can only be developed by continuity of action of a given kind, and this restricts the range of produce.

If the head or one of the heads of a proposed organization knows the market condition and knows what can be done in the sale of a new article, then the question of invention and manufacture can be safely left to those who have been well grounded in such principles. That leaves only the question of the financial arrangements.

The method of forming a stock company under the laws of Vermont is very simple and people are generally well disposed to invest in the stock of the new company providing the men at the head are known to be competent--the inventor as an inventor, the business man as a business man and so on all the way through. The standards of measure of each one of the men and the standards of measure of conducting the business are set forth in other chapters. At this time it is sufficient to say that getting the capital is the easiest part of the job. The real work is the preliminary work of acquiring experience and devising plans.

A plan to create a new industry does not call for disloyalty to the employer, for as a rule it is very foolish to attempt to compete with an established organization excepting on some business that gives the new organization an advantage by one or more of the following points: invention, simpler product, simpler methods, a higher degree of specialization, a more effective and direct scheme of sales or a better spirit of personnel.

One of the essential things for the business man--if the business man is not the inventor--is to grasp the fact that his success is tied up to the inventor. The inventor is needed in the development all the way through, not only in guiding the form of the manufactured article, but in a large degree by dictating the process by which the article is to be manufactured. The inventor usually needs curbing to keep him from disturbing his own market by the creation of newer forms, but these matters are treated under the chapter of invention.

The principle element to set forth now is that it is a waste of time and money for a few business men to buy a patent or an invention and then dispense with the service of the inventor. They are merely going to sea without a navigator. On the other hand it is equally true that the inventor must consider the business side of the problem and do all in his power to devise effective means to facilitate the process of manufacturing.

The point to be made here is that there is no chance to win in this game by sharp practice. It is only through work and the combined work and energy of all the men in the organization that anyone can win.

INVENTOR'S PROPORTION.

In the machine tool industries, one-third of the interest in the plant is given to the inventor. This, to the average investor appears to be an unfair proportion, but it is one of those cases in which the broadest vision is necessary, and a glance at the earning power of such organizations as well as the prestige of the inventions, will bear out the wisdom of the general plan in similar industries.

The plan, however, should not be considered as something that boosts only one man or one group of men. If there is any attempt to exploit labor, the plan is wrong. The scheme must be fundamentally right so that each man coming into the workshop or the office of business finds there his best opportunity to develop and receive his best return for the use of his energies.

It is hoped that succeeding chapters will build up confidence in the scheme that will make it possible for men to see the way to progress in this line, to have faith in each other and to know that their ultimate success will come through a spirit of cooperation, concentration of attention and energies of each man to his own special work so as to attain highest ability and last but not least, the complete coordination of all in one safe, sane industrious organization.

MANUFACTURERS AND NEW INDUSTRIES.

One of the forces that operates against increase in the number of industrial establishments is the fact that we do not realize the need of human progress in our plants. Men should progress from job to job until they reach their best achievement. Some gain their greatest success in some manual work in which they acquire great skill and others go on to executive positions and even graduate to join other organizations or to start new industries.

We fail to see this fundamental law regarding the growth of the manufacturing organization, and seldom realize the prime necessity of the fundamental law relating to specialization. We overlook the fact that stagnation in place of progress of the men in the plant is deadly to the organization, and feel that if we get an extra-efficient man in a certain position that he must be kept there regardless of his own opportunity for advancement. We fail to realize that progress all the way through the organization, should be encouraged--that while man is distinctly a creature of habit, his mind as well as his body must be considered, and that only by changes of a progressive nature does he develop most favorably.

Too often a manufacturer is opposed to the creation of other organizations by men from his own organization, when, as a matter of fact, it would be a great deal better for his own inst.i.tution if he would encourage the growth of other plants that can be created by his own men.

HABIT ACTION, BASIS OF SKILL AND PROFICIENCY.

We have many text books on the subject of industrial finance, of engineering, of invention, of industrial management, and all these books are written on the a.s.sumption that the human being knows his own kind. A study of our failures seems to reveal, however, that we have misunderstood the human being.