AT&T’s lesson in leadership: How to break paradigms

Article originally published in the Philadelphia Business Journal on August 4, 2015

As manager of operations planning early in my career at PQ Corporation, one of the most impactful lessons I learned was the imperative of breaking paradigms. Paradigms are an established and accepted set of beliefs, and in this context, ways of doing business. Our CEO, Paul Staley, asked Russell Ackoff, then professor of management at the Wharton School of the University of Pennsylvania, to talk with the senior leadership team at PQ about applying his idealized design approach to our manufacturing technologies to break our paradigms. I was very fortunate to be included in these sessions.

Ackoff described a meeting that he attended in 1951 of engineers and scientists at Bell Labs, a division of the phone company AT&T, in which the facilitator abruptly announced to the meeting participants that the phone system in the U.S. was just destroyed. How would they not only rebuild the system, but also improve it? The only criteria that they needed to meet were that the new phone system design had to be technically feasible and operationally viable. The facilitator was asking the meeting participants to break their paradigms and think out of the box.

In the process of identifying the specifications of the new phone system, the participants realized that given the expected growth of phone usage, continued use of the rotary dial phone system was not practical. Touch-tone dialing cut 12 seconds off the time it took to dial a phone number, and required much less investment than the capital intensive rotary dial system. At that moment in history, the touch-tone dial system became the technology of choice for the future phone system. Little did the participants know the significant impact that touch-tone dialing would have on our lives in the future.

A number of years later as president of PQ’s Industrial Chemicals Group at a meeting with our plant managers, I posed a similar question to the one that was posed at Bell Labs. I told the group that our Augusta, Georgia, manufacturing plant, built many years ago, was just destroyed. How would they redesign and build the plant to fulfill the product needs of the plant’s customers? The only criteria were that the design needed to be technically feasible and operationally viable.

The first individual to comment stated that he would rebuild the plant the way it was. When I ignored his comment, everyone realized that I was looking for another type of response. Soon we had listed on a flip chart state of the art technologies and manufacturing approaches used by similar industries, which we wanted to include in the new plant design. The cost to build and operate the plant would be significantly less using these new technologies.

We called this approach our ideal plant concept, similar to what Ackoff called his idealized design. Whenever capital additions were made to our plants, we considered the risks involved in adopting new technology, and whether we needed to de-risk the decision by applying and testing out the new technology in a less risky way. We also recognized that what is the latest state of the art today will be surpassed by new innovations tomorrow. In addition, this approach fit with our commitment to the continuous improvement of our manufacturing plants, as well as other aspects of our business operations.

Ackoff was considered a pioneer in the field of management science, systems thinking and operations research. He passed away in 2008. I regret that I did not think to reach out to him in his later years, and let him know the significant impact he had on my thinking.

Leaders, create a culture focused on breaking paradigms. Be familiar with technical advances within your industry so when the opportunity to make process improvements or add manufacturing capacity arises, you know the latest state of the art technology. This is a way to differentiate and create a sustainable advantage over your competitors. Remember the story of how the touch-tone phone system was adopted and its huge impact on how we communicate today. You might have a similar innovation within your business waiting to be discovered.

Stan Silverman is a writer, speaker and advisor on effective leadership. He is the Leadership Catalyst at Tier 1 Group, a firm of strategists and advisors for preeminent growth. Silverman is vice chairman of the board of Drexel University, a director of Ben Franklin Technology Partners of Southeastern Pennsylvania and former president and CEO of PQ Corporation. Follow: @StanSilverman. Connect:

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