Idealized Design: Creating an Organization’s Future

1 Idealized DesignThis page intentionally left blank Idealized DESIGNC reating an organization s FutureRussell L. Ackoff Jason Magidson Herbert J. Addison Prentice HallVice President, Editor-in-Chief: Tim MooreAcquisitions Editor: Paula SinnottEditorial Assistant: Susie AbrahamDevelopment Editor: Russ HallAssociate Editor-in-Chief and Director of Marketing: Amy NeidlingerCover Designer: Alan ClementsManaging Editor: Gina KanouseSenior Project Editor: Kristy HartCopy Editor: Keith ClineSenior Indexer: Cheryl LenserCompositor: FastPagesManufacturing Buyer: Dan UhrigUpper Saddle River, New Jersey 07458purchases or special sales. For more information, please contact Corporate and Government Sales,1-800-382-3419, For sales outside the , please contactInternational Sales at and product names mentioned herein are the trademarks or registered trademarks of their rights reserved. No part of this book may be reproduced, in any form or by any means, without permissionin writing from the in the United States of AmericaFirst Printing April, 2006 Pearson Education Education Australia PTY, Education Singapore, Pte.

2 Education North Asia, Education Canada, Educati n de Mexico, de Education JapanPearson Education Malaysia, Pte. product is printed digitally on demand. This book is the paperback version of an original hardcover of Congress Cataloging-in-Publication Data is on 0-13-707111-6 ISBN-13: 978-0-13-707111-1 Editor: Yoram (Jerry) WindPublishing as Prentice HallPrentice all offers excellent discounts on this book when ordered in quantity for bulk 2006 by Russell L. Ackoff, Jason Magidson, and Herbert J. Addison HRussell L. AckoffIn memoriam to Aron KatsenelinboigenJason MagidsonTo my parents, who have always encouraged and empoweredHerbert J. AddisonTo Gerry, my wife and life s companionDEDICATIONvThis page intentionally left blank FOREWORD BY RAY STATA xxiiiPREFACE xxixINTRODUCTION: THE BIRTH OF AN IDEA xxxiiiPART I: Idealized design : THE BASICS1 CHAPTER 1: THE STAGES OF Idealized DESIGN3 CHAPTER 2: ORGANIZING THE PROCESS27 CHAPTER 3: PREPARING FOR AN Idealized design PROCESS43 PART II: Idealized design : APPLICATIONS THE PROCESS IN ACTION59 CHAPTER 4: BUSINESS ENTERPRISES61 CHAPTER 5: NOT-FOR-PROFIT AND GOVERNMENT ORGANIZATIONS 87 CHAPTER 6: PROCESS IMPROVEMENT103 CHAPTER 7: PROBLEM DISSOLVING117 CONTENTS AT A GLANCE viiviiiIDEALIZED DESIGNCHAPTER 8: FACILITIES AND SITES DESIGN129 CHAPTER 9: TAKE THE PLUNGE137 PART III: Idealized design : NO LIMIT APPLICATIONS TO WORLD CHALLENGES145 CHAPTER 10: THE URBAN CHALLENGE147 CHAPTER 11: THE HEALTH-CARE CHALLENGE159 CHAPTER 12: THE CHALLENGE TO GOVERNMENT171 PART IV: COMPLETE Idealized DESIGNS187 CHAPTER 13: ENERGETICS (BUSINESS ENTERPRISE)189 CHAPTER 14.

3 ACADEMY OF VOCAL ARTS (NOT-FOR-PROFIT)219 CHAPTER 15: WHITE HOUSE COMMUNICATIONS AGENCY(GOVERNMENT)235 ENDNOTES265 ANNOTATED BIBLIOGRAPHY267 INDEX277 FOREWORD BY RAY STATA xxiiiPREFACE xxixINTRODUCTION: THE BIRTH OF AN IDEA xxxiiiPART IIDEALIZED design : THE basics 1 CHAPTER 1 THE STAGES OF Idealized design 3 The Evolution of Idealized design 4 The Process of Idealized design 5 Idealization 5 Realization 7 Constraints and Requirement 8 Anticipating the Future 9 Effects of Idealized design 11 Promotes Understanding 11 Transforms Designers Concept of Feasibility 12 Simplifies the Planning Process 13 CONTENTSixEnhances Creativity 13 Facilitates Implementation 15 Idealized design at General Motors 15 Idealization 17 Realization 19 The Outcome 23 Summary 25 CHAPTER 2 ORGANIZING THE PROCESS 27 Who Should Be Involved? 27 Frequency and Duration of design Sessions 31 Facilitators 32 Recording the Sessions 32 Procedural Rules 33 Constrained and Unconstrained Designs 35 Consensus design 37 Conference Facilities and Equipment 39 Summary 40 CHAPTER 3 PREPARING FOR AN Idealized design PROCESS 43 Formulating the Mess 44 The Mess-Formulating Team 48 Presentation of the Mess 48 Preparing a Mission Statement 51 Specifying the Properties Desired in the design 54 Summary 57 PART IIIDEALIZED design .

4 APPLICATIONS THE PROCESS IN ACTION 59 CHAPTER 4 BUSINESS ENTERPRISES 61 Common Content of Designs 62 Repetitive design Features 63 The Internal Political System 63xIDEALIZED DESIGNThe Internal Economy 68 Organizational Structure 71 Organizational Learning and Adaptation 75A Supermarket Chain at the Crossroads 82 Effects of the Super Fresh design 85 Summary 86 CHAPTER 5 NOT-FOR-PROFIT AND GOVERNMENT ORGANIZATIONS 87An Opera School Reinvents Itself 88 Attracting the Best Students 89 Expanding and Improving the Facility 90 Increasing the Number and Quality of Performances 90 Raising Money 91 Visiting Nurses Face a Financial Crisis 92 Reorganizing Communications in the White House 96 Summary 101 CHAPTER 6 PROCESS IMPROVEMENT 103 Internal Markets Transform Internal Monopolies 104 Opening a Company s Computing Services to Competition 104 Solving the Perennial Problem of Transfer Pricing 106 Transforming a Procurement Process 107 Facilitating a Joint Venture 112 Summary 115 CHAPTER 7 PROBLEM DISSOLVING 117 The Four Ways of Treating Problems 117 Ending Labor Violence on City Buses 119 Improving Productivity at Coated Papers 122 Preserving an organization That Preserves Life 126 Issuing Licenses in Mexico City 127 Summary 128 CHAPTER 8 FACILITIES AND SITES design 129 Improving Sales by Improving the Layout of a Store 130 Improving the Quality of Air Travel 132 CONTENTSxiGeneral Objectives 133 Entering the Plane 133 Getting Seated 133In the Air 134 Onboard Lobby and Bar 135 Summary 135 CHAPTER 9 TAKE THE PLUNGE 137 Overcoming Today s Crisis 138 Making a Good organization Better 138 Making Work More Satisfying 139 Overcoming Obstacles to Idealized design 139 Psychological Obstacles 140 Procedural Obstacles 140 Overcoming Psychological Obstacles 141 Overcoming Procedural Obstacles 142 Summary 144 PART

5 IIIIDEALIZED design : NO LIMIT APPLICATIONS TO WORLD CHALLENGES 145 CHAPTER 10 THE URBAN CHALLENGE 147An Urban Automobile 147A Redesign of Paris and Beyond 153 CHAPTER 11 THE HEALTH-CARE CHALLENGE 159A National Health-Care System 159 The design 161 The Effects of the design 164An Application 164A Health-Care Mall 165 CHAPTER 12 THE CHALLENGE TO GOVERNMENT 171A National Election System 172 Ballots 172 The Obligation to Vote 173xiiIDEALIZED DESIGNP olitical Parties 173 Platforms 173 Campaigns 174 Terms of Office 174A New United Nations 175 Introduction 175 Desirable Properties of a New United Nations 176 Governance of the Union 177 Getting into the Union 178 Separation from the Union 180 Conditions of Continued Membership 180 Services Provided by the Union 180 The Rights of Member States 181A Response to Terrorism 181 Resources 183 Development 183 Democracy 184 Corruption 185 Monitoring 185 Collaborative

6 Development Reduces Terrorism 185 PART IVCOMPLETE Idealized DESIGNS 187 CHAPTER 13 ENERGETICS (BUSINESS ENTERPRISE) 189 Introduction 189 The Internal Economy 193 Organizational Structure 197 Organizational Learning and Adaptation 202 Human Resources Development 210 Expectations 211 Feedback on Performance 212 Compensation and Benefits 212 Recruiting and Hiring 213 Job Postings 214 Termination, Resignation, and Retirement 214 Personnel Policies Audit 215 Communications 215 Community Relations 216 Facilities and Equipment 217 CONTENTS xiiiCHAPTER 14 ACADEMY OF VOCAL ARTS (NOT-FOR-PROFIT) 219 Introduction 219 The organization Involved 220 The Planning Process 220 The Application 223 What Has Been Done 228 Results 228 Impact Assessment 229 Conclusion 232 References 233 CHAPTER 15 WHITE HOUSE COMMUNICATIONS AGENCY (GOVERNMENT) 235 Introduction 235 Meet WHCA 237 Setting the Stage 238 Enter the Change Agent 239 Understanding the Culture 241 Key Cultural Influences 244 Getting Started 245 Changing the System 246 Organizational Redesign 248 Board Structure and Participation 252 Results 254 Other Changes 255 Managing Fear 257 Role of Leader 258 Holding the Gains 259 Further Study 260 Organizational design 261 Organizational Psychology 262 Note 262 References 262xivIDEALIZED DESIGNENDNOTES 265 ANNOTATED BIBLIOGRAPHY 267 INDEX 277 CONTENTSxvThis page intentionally left blank The authors thank the many organizations andmanagers who have undertaken Idealized their confidence that they would achieve theirgoals, the concept of Idealized design would haveremained just that a concept without testing in thereal page intentionally left blank Anheuser-Busch Professor Emeritusof Management Science.

7 The Wharton School,University of Pennsylvania, and was the August , Jr. Visiting Professor of Marketing, John M. OlinSchool of Business, Washington University, St. Louis,Missouri, 1989 through 1995. He received hisundergraduate degree in architecture (1941) and in philosophy of science from the University ofPennsylvania (1947). He was a member and formerchairman of the Social Systems Sciences Departmentand the Busch Center, which specializes in systemsplanning, research, and design both within theWharton School. Dr. Ackoff is the author and co-authorof 22 books, including Redesigning the Future , The Artof Problem Solving, Creating the Corporate Future ,Revitalizing Western Economies, Management inSmall Doses, Ackoff s Fables, The DemocraticCorporation,and his most recent books Re-Creatingthe Corporation, Ackoff s Best, Redesigning Society,andBeating the System,the latter two with SheldonRovin.

8 He has also published more than 200 articles inABOUT THE AUTHORS xixxxIDEALIZED design books and a wide variety of journals. A charter member andformer president of the Operations Research Society of America,founding member and former vice president of the Institute ofManagement Sciences, he has received the Silver Medal of theBritish Operational Research Society and the George E. KimballMedal of the Operations Research Society of America. He is also aformer president of the Society for General Systems Research. Hehas received honorary Doctorates of Science from the Universityof Lancaster (UK), Washington University (St. Louis, MO), theUniversity of New Haven (New Haven, CT), the PontificiaUniversidad Catholica Del Peru in Lima, Peru, and the Universityof Lincolnshire and Humberside (UK), and has been elected amember of the Academy of Natural Sciences of the RussianFederation. He was recently honored (September 2000) by theestablishment of the Ackoff Center for Advanced SystemsPractices at the University of Pennsylvania.

9 His work in research,consulting, and education has involved more than 350corporations and 75 government agencies in the United States Ackoff played a key role at the University of Pennsylvania, bothin the early history of the Operations Research Group and inestablishing the Social Systems Sciences Graduate Group. Sincebecoming Emeritus, he has been honored by the establishment ofthe Russell L. Ackoff Endowment in the Wharton School and TheAckoff Center for the Advancement of Systems Approaches in theEngineering School, through which his legacy at the University ofPennsylvania currently director of innovation processes atGlaxoSmithKline, where he has engaged employees, suppliers, andcustomers in developing innovations, new insights, andbreakthroughs in a wide range of processes. In the procurementfunction, he and his team used Idealized design to help thecompany save hundreds of millions of dollars. For more than 20years, Jason has engaged end users the source of mostinnovations in product, service, system, and organizationaldesign.

10 He has applied innovation methods with numerousFortune 1000 organizations and nonprofits. Jason has also writtenxxifor publications including Harvard Business Reviewand theJournal of Product Innovation received hisundergraduate degree in Business Administration from theWharton School of the University of Pennsylvania and a the Union Institute & University. spent his career in book publishing, thepast 20 years of which he was a sponsoring editor at OxfordUniversity Press specializing mostly in business and managementbooks for practicing managers, business students, and businessacademics. In 2000, he formally retired and has continued to workas a consulting editor and writer in business. He has written a briefhistory of business that appeared in The New York Times Guide toEssential Knowledge (2004). That history, together with aglossary of business terms that he also wrote, constituted theentire entry in that subject.