Epistemology of Effectiveness

The wisdom of Ackoff

In times of transformation, effectiveness became an incredibly seductive buzzword. Everyone is using it. I spend much time talking to Australian organisations and technical communities about Engineering Effectiveness.

The meaning of effectiveness is often misinterpreted, and only recently we’ve come to understand the difference between efficiency and effectiveness. We used to use it synonymously.

Today, I want to explore the epistemology of effectiveness. For that, I’m bringing condensed wisdom from one of my gurus and greatest systems thinker of all time, Dr Russell Ackoff.

The best distinction I’m aware of is one made by Peter Drucker in his book “The Effective Executive” where he says:

“There is a difference between doing things right and doing the right thing”.

Dr Russell Ackoff commented on this historic line, saying:

“See, doing the right thing is wisdom, effectiveness. Doing things right is efficiency. The curious thing is that the righter you do the wrong thing, the wronger you become. If you’re doing the wrong thing and you make a mistake and correct it you become wronger. So it’s better to do the right thing wrong than the wrong thing right.”

And he continues:

“Every major social problem that confronts us today is a consequence of trying to do the wrong things righter. So instead of looking at the efficiency with which we are pursuing our objectives, we need to re-examine the objectives.”

In another example, in the paper “A systemic view of transformational leadership” (1998), Dr Ackoff compares growth and development as another way of exploring effectiveness. He writes:

“Growth is an increase in size or number; development is an increase in competence. Standard of living is an index of growth, but the quality of life is an index of development. Either growth or development can occur without the other.

Rubbish heaps grow but do not develop. Professors can develop without growing. Growth does not necessarily involve an increase in value; development does. A company can grow without increasing its value, but it cannot develop without doing so.

Values are the concern of ethics and aesthetics. Therefore, they are necessarily involved in the conversion of efficiency into effectiveness. The production of data, information, knowledge, and understanding are primarily functions of science. The production of wisdom, which presupposes all four, is primarily a function of ethics and aesthetics because it involves the conscious insertion of values into human decision making and evaluation of its outcomes.

Effectiveness is a product of wisdom which enlarges both the range of consequences considered in making a decision and the length of time over which the decision is believed to have possible consequences. By taking the ‘long run’ consequences into account, wisdom prevents sacrificing the future for the present.”

In the same paper, he puts value at the core of effectiveness when he says:

“Efficiency is a measure of how well resources are used to achieve ends; it is value-free. Effectiveness is efficiency weighted by the values of the ends achieved; it is value-full. For example, a men’s’ clothing manufacturer may efficiently turn out suits that do not fit well. Another less efficient manufacturer may turn out suits that do fit well. Because “fit” is a value to customers, the second manufacturer would be considered to be the more effective even though less efficient than the first.”

In another opportunity, this time in an interview in 2001, admired by such wisdom and clarity, producer Phyllis Haynes asked:

Phyllis Haynes: “I wasn’t planning on asking a philosophical question, but given the power of your first answer, I need to ask you this question. Since you have this wisdom and this insight, that strikes me as quite powerful, what is the reason that effectiveness isn’t the predominant force? Will this kind of thinking be the predominant force?”

Dr Ackoff: “It goes back to something very simple, which becomes complex quickly. You never learn by doing something right, because you’re already doing it right. You only learn from mistakes. There are two kinds of mistakes: One is when you do something you shouldn’t have done. A company bought another company and shouldn’t have bought. Eastman Kodak bought Sterling Drug, it turned out to be a serious mistake and they had to get rid of it for example. That’s called an error of commission. There is other type of error when you didn’t do something you should have done. Eastman Kodak didn’t buy Xerox when they could have, that would turn out to be a serious mistake.”

Dr Ackoff: “Now it turns out that errors of omission are much more important than errors of commission. If you look at companies, organisations, countries that fail, it’s because what they didn’t do, not because of what they did. But now, if you look at the accounting system we use, public and private, they only record the cost of an error of commission. When you don’t do something, it never appears in the books. So, if you try to find out what cost Eastman Kodak not to buy Xerox you can’t find out. If you try to find what’s the cost for buying Sterling Drug, which they bought, you can find out.”

Dr Ackoff: “All right, now you’re in an organisation that says making a mistake is a bad thing, and you’re a manager, so you want to keep your job and maintain stability. You don’t want to make a mistake. But what kind of mistake? The only kind they record: doing something you shouldn’t have done. Now, how do you minimise the chance at doing something you shouldn’t have done?”

Phyllis Haynes: “By doing nothing?”

Dr Ackoff: “You got it! That’s the answer to your question! It’s our treatment of error that leads to a stability, which prevents significant change. We have to start to recognise the importance of errors of omission, record and correct those errors. That requires a whole new way of thinking.”

I have decided to highlight those snippets because, although incredibly dense, they carry so much wisdom and clarity. I’ve referred to them many times, and I believe they can be helpful for you as well.

Till the next time!

Marcio Sete