University of Chicago: “Where fun goes to die!”

I am a proud alumnus of the University of Chicago.  I wanted to study there since I was a boy.  On family trips to Chicago’s Museum of Science and Industry, my father would drive next to its Gothic buildings bordering the Midway Plaissance (59th street).  “That’s where atomic energy was born,“ he said pointing to the campus. “It’s where smart people go to learn.”  My father’s comments hooked me —  I aspired to study at U of C ever since.

As an adult professional, I was accepted by the university’s Booth School of Business.  On one of my earliest visits to campus, I found the spot where the first controlled, self-sustaining atomic chain reaction occurred.  Henry Moore’s sculpture “Nuclear Energy” commemorates the event near the location where Enrico Fermi and his colleagues gathered in December 1942.  There I also encountered the unofficial motto of the University.  A fellow student joined me in front of the sculpture, her sweatshirt emblazoned with the sobriquet “The University of Chicago – Where fun goes to die!”

A national survey of undergraduate programs had earlier ranked the College second-to-last in the US for “student social life.”  The United States Military Academy at West Point earned the bottom ranking!  U of C students took enormous pride in the “fact” that students’ social life consisted chiefly of spending lots of time in Regenstein Library.  Much has changed at the University since those days, but its students still proudly wear those self-same sweatshirts.  Today Regenstein Library is open around the clock!  In other words, academic discipline and rigor form the “honor code” of U of C students … my apologies to West Point cadets.

Your company: “Where ideas go to die?”

U of C’s academic community cherishes scholarly writing, original research and critical thinking.  While some might consider its social life wanting, nobody refers to Chicago as the place “Where ideas go to die.”  The University encourages and fosters open inquiry, multidisciplinary research, and evidence-based debate.  As a result of this academic spirit / culture / philosophy, Chicago has shaped innovative “ways of thinking” about education, sociology, nuclear science, survey research, law and economics / business since its founding.  I have not always agreed with the application of those philosophies.  For example, I question many of the neoclassical assumptions underlying the Chicago School of Economics. I will always be grateful though to the University for having taught me how to question “accepted” theory, to think critically, to read extensively, and to debate persuasively / respectfully.

I later served as Knowledge Manager for the Operations Strategy and Effectiveness Practice at McKinsey & Company, the management consultancy.  McKinsey has a unique culture and environment.  At the firm, I not only befriended some of the most accomplished people I ever met in my career – amongst them a physicist, surgeon, mathematician, engineer, and psychologist — I learned that  “the best idea wins”.  To ensure the most valuable ideas were properly heard, examined and debated at McKinsey, the firm instilled in consultants not just their right, but their obligation,  to dissent.  I watched teams of consultants practice this principle.

“The best idea wins”

I didn’t always agree with every decision reached by consultants.  However, I never questioned the correctness of their decision-making process.  I have seen its power in practice.  I recall a meeting where a junior McKinsey Analyst (who only recently joined the firm from undergraduate university studies) questioned his fellow consultants’ thinking.  The Analyst offered an alternative explanation, supported by client data, suggesting a conclusion different from the one reached by most of the team.  A prominent McKinsey Director (i.e. a senior partner of the firm) encouraged the group to consider the Analyst’s arguments – even though it might necessitate conducting additional analysis.  While the project took longer to complete than originally planned, the best idea ultimately won.  The Analyst prevailed.  The McKinsey team delivered far greater value to the firm’s client.

As a PhD student, I later read about the concept of Jidoka embedded in the Toyota Production System (TPS).  Toyota’s workers are empowered to halt production by pushing a stop-line button to prevent further production of vehicle with defects.  TPS stresses the elimination of waste by all employees so that value is maximized.  I also read about companies lauded for service delivery excellence.  For example, every housekeeper at a Four Seasons Hotel is authorized to improve a guest’s hotel experience by delivering necessary value-added services (even at an additional cost to the hotel).  At their discretion, Four Seasons employees could spend a certain amount (up to a pre-determined limit) to make the guest more comfortable, i.e. to increase value to the customer.  I learned of retailers that generously accept customer returns – even of used merchandise — if their clients are not completely satisfied.  Employees at two high-end retailers in Chicago reported accepting returns of merchandise that was not even sold by their respective employers!  These employees independently decided that the ongoing relationship with an important customer was more important / valuable to the retailer (than avoiding the cost of the return).    The best ideas won.  Value was optimized.

Complexity theory: Solving “wicked” / “messy” problems

Can you envisage your company making the above decisions?  Are your employees so empowered?  Making independent decisions for “the greater good” is complicated.  These problems are often difficult / complex due to incomplete, contradictory, and sometimes changing requirements.  In the 1960s, Horst Rittel named such problems “wicked problems.”  Arson (2011) described their inherent “messiness”:

Messy situations, like systems, have multiple entities and multiple interconnections. The idea of a system can be a mental tool for creating a more orderly appreciation of a mess. If I think of a mess with its multiple elements and interconnections through the idea of system, I can begin to disentangle the elements from each other and begin to disentangle my appreciation of the mess.”

Systems thinking / complexity science fortunately provide valuable tools to manage such messes.  Optimizing value within the firm and across its value chain is a particularly “messy” business challenge.  See my previous articles on Integrated Value Management (Part 1 and Part 2).

Integrative Value Management  —  “How to avoid killing value”

Dynamic, matrix-based, adaptive, and market-driven businesses are complex. Executives are exhorted to coordinate intra- / inter-firm value activities for multiple stakeholders while simultaneously maintaining profitability.  To do so, executives need a “new way of thinking” about Integrated Value Management and a more relevant set of management principles based on systems theory / practice.

In An Empirical Framework for Evaluating, Implementing and Managing a Value-based Supply Chain Strategy (PhD thesis accepted by the University of Bath School of Management — ProQuest publication number 3121355), I created the Integrated Value Process (IVP).  IVP proposes (a) a framework describing how a firm can conceptualize, configure and implement its value-based strategy, (b) a high level “meta” definition of the term ‘value’ that maps to the framework, and (c) five “first principles” that drive the framework.

Using the IVP framework, I documented interruptions in value flows across multiple UK and US value streams.   I named these blockages ‘value gaps’ — the loss to overall system value whenever value (as defined by the firm’s multiple stakeholders) is misaligned or mistranslated.  IVP promotes an integrative and holistic approach to value management.  A “new way of thinking” about value — one that is interdisciplinary, cross functional, and systems-based.   IVP enables companies to detect / eliminate / prevent the value gaps within their value chains. (See my previous article)

Is your company the place “where value goes to die?”  To solve this “wicked” problem and avoid “messy” consequences, use the IVP approach to ensure value flows across your value chain.  (See my previous article)

Please email me at andrew.swan@columbia.edu or go to my website http://www.andrewjswan.com if you’d like to learn more about value theory / definitions, value chains / streams, value management, and knowledge (management).

Additional articles:

Blockchain: Hunting its elusive (illusory) value

Managing Value – Energy of the “business cosmos”

Business Management: “Tongue-tied by the language of value”

(Digital) (Knowledge) (Mgmt): “Mind your words!”​

Value-added Knowledge Management (KM): Whose value anyway?

Source: Armson, Rosalind (2011) Growing Wings on the Way: Systems Thinking for Messy Situations