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Management is the Art of Playing Human Nature
Frank Li Feb. 9, 2014，in Waterloo, On. Ca.
http://www.kwcg.ca/bbs/home.php?mod=space&uid=61910&do=blog&id=3781
Human behaviors are determined by dual natures: The cultural nature of those acquired altruistic qualities, and natural (animal) nature of those inborn selfish instincts.
The Management is to finish purposeful tasks with the culture nature driven by meeting the animal nature with payment under the enforcement of regulations.
Therefore, the Management is the Art of playing human natures.
Whether the Corporate Culture or the Organizational Culture, they all should be composed of the measures that can motivate the maximum exertion of employee’s cultural nature with minimum play of employee’s animal nature to maximize the production efficiency.
Do not simply use morality to cover up human animal nature, do not use of so-called value to perform social governance.
The success of any enterprise is the result of very good played human nature.
The famous American management consultant Peter Drucker said that: “The purpose of an organization is to make ordinary people do extraordinary things.”
Management is efficiency. Management is profit.
Below is a comment from my article Why did Keynesian fail in saving Japan's economy?
"The great economists, and, as well as the entrepreneurs, philosophers are mostly profound insight into human nature. For example:"
"Noted economist Adam Smith, his own favorite book was The Theory of Moral Sentiments, while Keynes wrote The end of laissez-faire, I think, he was in the analysis of the impact of human nature to social progress. The greatest spiritual teacher Dale Carnegie who wrote Human weakness, human nature and the advantages of communication arts. And Scottish philosopher David Hume wrote A Treatise of Human Nature, by which he strove to create a total naturalistic "science of man" that examined the psychological basis of human nature."
A well understanding of human nature is also significant for effectively improving corporate management.
--- Frank March 16, 2015, in Waterloo, On. Ca.
Content
1.. Foreword
2.. The motivation for the topic
3.. Reverse-thinking for Canada's mid-sized firms decline
4.. An Mindless Employee made a Company Closed
5.. Human brain's maturity determines the level of intelligence
6.. Workplace Troublemakers may have Brain Problems
7.. Human Nature and Crowd Psychology
8.. Reverse-thinking for Saving Energy 30% by ISO50001
9.. The Analysis of Crowd Psychology Affecting Efficiency
10..The absurdity of modern social governance
11..To motivate productivity by well playing human nature
11.1. Patent-related bonus drives IBM's patent invention
11.2. Rationalization proposals drive German manufacture outstanding
11.3. The payment calculated based on the production yield
11.4. The Art of Playing Human Nature in 2300 years ago China
11.4.1. The development of the characters and writing expression
11.4.2. The Birth of the The Art of War
11.4.3. Incentives Drive the Birth of Unified China
11.4.4. Qin dynasty had implemented the accountability in manufacturing
12..The solution for Canadian Corporate Management
1. Foreword：
Corporate Management relates to the production of material wealth for human survival, it is vital for all of us. However, it is inevitable that there some people's irrational behaviors negatively affect the normal production. Therefore, the conduct for human behaviors by promoting the positive and reducing the negative has been the significant part in the Corporate Management.
Generally view the results of many studies, human behaviors are determined by dual human natures: The natural (animal) nature of those inborn selfish instincts and the cultural nature of those acquired altruistic qualities.
Suppose that it is without the animal nature of selfish instinct, babies would be unable to suck nipples naturally, and human beings would starve to die from birth. If there is no inborn hormonal-driven sexual behavior between men and women, human beings would be unable to breed. Under such a common inborn nature of human beings, there is no one qualified to be self-believed as nobler or acted as nobler as global supervisor.
Suppose that it is without cultural nature of acquired qualities, people would have no ability to make rational reasoning for the unbearable consequences of own improperly behaving; they would recklessly violate the law and social morality, so that would be no gentle-man or gentle-lady. Therefore, the elegant manner of man or woman is the co-cultured products of the acquired qualities integrating the restriction of the law and social morality.
If there it is no government in forcing people to obey social order, for surviving, under inborn animal nature, all of human members would be acted as that of wild animal, there would be no so called social morality. The one of the reasons that human society establishes government is for curbing the exertion of human inborn animal nature, thereby create a livable environment. The holy value for the politicians is to act the function of government.
In consideration of human natures, we may say that, the Management is the Art of playing human natures, which is to finish purposeful tasks with human culture nature by meeting human greedy of animal nature with payment under the enforcement of regulations.
Therefore, the Management is the Art of playing human natures.
The best example for understanding the management is the art of playing human nature is the process of taming animal actors, in which, the beast-master tempts animals to learn cultural nature for serving human by meeting their greedy of animal nature with foods under the enforcement of whipping.
For the success of taming animal actors, the foods and the whips are equally important, both are indispensable. In the same way, for well playing the Art of the human natures, the payment and regulations are both indispensable.
The failure of the socialist practice was not fully due to the Autocracy Governance and the Planned Economy, but essentially was due to that it over relied on the human culture nature by madly suppressing the exertion of human animal nature under the enforcement of State Apparatus.
The success of the capitalist practice is not fully due to the Democracy Governance, but due to the Market Economy that benefits society by meeting the greedy of human animal nature through gaining profit according to the needs of the society in the marketplace.
There were a lot of researches on the economic success of China, and most of them attributed the success to the magic of the Invisible Hand. But, that was not fully true with ignored the essence - it was that China has broken the egalitarian wage system, that implemented for decades in the socialist period, to have largely increased the share of work performance-related payment.
In consideration of market competing, Adam Smith's Invisible Hand is mainly driven by human animal nature - selfish and greedy.
The driven force for German outstanding manufacturing mainly comes from their legislated management for rationalization proposals, which is to extract bonus from the profit gained in the application of the rationalization proposals to motivate all staff to pay their full talent into the business running since Mr.Krupp initiated it in 1872. That is 142 yeras ago.
The driven force for patent invention of 102 years old IBM has been counting on the top of those world-class corporate giants in the United States for 20 consecutive years is the patent-related bonus incentive system.
The payment of Canada with less work performance-related is following the dust of failed road of former Socialist Camp. It is the main reason that Canadian firms are less competitiveness or even vanished, and it provided significant potential and direction for saving our firms.
Whether the Corporate Culture or the Organizational Culture, should be composed by those measures that can motivate the maximum exertion of employee’s cultural nature with minimum play of employee’s animal nature to maximize the production efficiency.
Those above are the key for well understanding what I will discuss in follow and the key for improving Canadian corporate management.
2. The motivation for the topic
I have a friend, as a strategic analyst, who is working at Canada Alberta branch of a large multinational oil company that headquartered in the United States. We often long chat via telephone to talk about the corporate management, especially for the successful experiences of the world class companies.
We both worry about the economic downturn in Canada.
He said that, in the recent years, the house rent is skyrocketing in their neighborhood, a same basement room was $300 per month before, now is $450. The tenants are mostly from Eastern Canada.
The rapid increase of the house rent demonstrates two facts:
1. The production is thriving in Oil and Gas producing areas in West Canada.
2. There more and more job positions are disappearing in East Canada.
People may be excited for the thriving in oilfield region, but I have to pour cold water on your happy mood with bad news that exciting prosperity is beginning to recede due to the energy export market for Canada is shrinking and new clean energy is replacing polluting fuels of Oil and Gas, which threatening Canada's major wealth that supports our hospitals, schools and more.
We are facing The Oncoming Energy Crisis of Canada, which is determined by the development trend and will be irreversible historically.
If we do not explore new economic growth point as alternative as soon as possible, then, the waiting time for the medical treatment will be much longer, the teachers for educating our kids will be not enough, and even, there no enough police manpower to protect our families, and much more.
Previously, for long waiting of medical treatment, I blame doctor's poor work ethic, but recently, there two facts happened around me to have completely changed my views.
My colleague said that his relative had a pulmonary resection with thoracotomy, simply says that is a surgery to open chest and belly, and then cut down some part of lung. Think about it, how terrible it is. However, only three days after the operation, the doctor let him back home for recovery treatment.
Other colleague's daughter broke her hip bone and femoral head when skiing, the next day after surgeries, doctor let her back home for convalescing.
For such large complex surgeries, in China, after operation, at least 7 days stay in hospital for possible bad reactions’ observing and incision sutures removing.
Above stories gave me a clear sense of that, in Canada, the doctors has been doing every effort to hardly manage the limited medical resources to meet the need of more people. Now, I am tearful.
I think that there few people would rationally consider such urgent economic dilemma, with only complaining the government did not fulfill their duty. But, I would like to mention that, please look around the world today, besides the Government of Germany, the Government of Canada is most rational.
For promoting economic development, for great many years, the government of Canada has been actively exploring the international market, and the start is earliest with significant achievements. I appreciate the rational of Canadian governors and have made the similar comments in my article <The Oncoming Era of the Globalized Free Trade>.
Canada is the place sharing by all Canadian for survival. Facing today difficult living situation, it is not the only responsibility for the Governors, but for all of Canadians. We should not just complain, but should seriously reflect on own responsibility, whether we have done the best for what we should have done as a Canadian for our home-place.
Due to our energy wealth is losing value, for Canada, for a long-term development strategy, for our greater good, the only hope is in our industry of manufacture and agriculture.
More and more job positions disappearing shows that there more and more job providers - enterprises are disappearing.
That is a clear sign that industry of Canadian manufacture is in declining.
Many people would blame that the decline of the manufacturing sector in Canada is the result of world-wide economic recession. But, I firmly believed that is not main reasons.
As my observation from the past 12 years intended working in different type of enterprises of Canada, the most of them have been shrouding with absurd ideological, it is that there is a serious antagonism between employees and employers, which leads to some employees, even some management personnel lack of the sense of responsibility, and even makes vandalism in workplace. It results production inefficiency, and that is the main reason of the most of enterprises' closure.
In view of this, I have written some articles, such as, <The Fatal DNA of RIM & Canadian Enterprises>, <My View on the Argument of Social Polarization> and <My view on Entrepreneur and Enterprise inspired by Peter Shoore>, with the hope to make people establish a clear sense with that.
Essentially, the Enterprise is the lifeboat to be sharing by owner and employee to struggle for survival in nowadays hard time.
However, for the rational people, my above preaching is talkative. For those irrational people, the preaching is acting as that of howling at the moon, it is certainly ineffective.
Today, I would like to try to discuss the more effective way, the way that can stop some of employee and management staff chiseling holes on own lifeboat.
3. Reverse-thinking for Canada's mid-sized firms decline
For the job position losing and the businesses disappearing, in Feb. 13, 2013, the Business Development Bank of Canada (BDC) issued the survey report to have given a proof with exact data – Canada's mid-sized firms have declined by 17% — from 9,370 to 7,814 — from 2006 to 2010, in which, the manufacturing sector reduced more than half, from 2,807 to 1,381 between 2001 and 2010.
For searching proportion of mid-sized firms in the enterprises of Canada, I got following information.
Sep. 10, 2013, Industry Canada issued <Key Small Business Statistics - August 2013>: As of Dec. 2012, there were 1,107,540 employer businesses in Canada, in which 1,087,803 were small-sized business (01-99 employee) that make up 98.2% of employer businesses, medium-sized businesses (100-499) make up 1.6% of employer businesses and large businesses (500+) make up 0.1% of employer businesses.
In view of the small-sized business is 98.2% and mid-sized is only 1.6%, with consideration of the number of declined mid-sized firms, that the number of declined small-sized business may be much more. For large business, RIM, is a good example, now is the Blackberry also ......
The fact shows a real disaster in the economy of Canada.
As Canadian, we have enough reason and responsibility to search that - why and how?
The report of Canada's mid-sized firms decline has given the answers for the firms' decline: the rapidly appreciating Canadian dollar, financial crisis, recession, fierce competition, availability of financing and employee acquisition and retention.
Above reasons sound reasonable, however, we should break the traditional way of thinking to actively seek a way out from passive to active, rather than merely pessimistic sigh.
We should question that, in the same poor economic environment, why there many companies are still survival, even against the plight to have grown and developed?
Since that I have been concerning about the corporate management, in the past 12 years, I specifically worked in different types of enterprises in Canada to have observed their management, and inspired by the experiences I have written some articles. Such as, the <Canada's Corporate Management & Reducing Psychological Pressure> .
In <Canada's Corporate Management & Reducing Psychological Pressure>, I introduced some of Enterprises as good and poor examples in anonymous.
In general comparison, the management level of foreign companies is much better than that of local Canadian companies.
The closure of some firms was even simply caused by some mindless employee. In the article, I have taken the DEF Company (Anonymous) as example.
4. An Mindless Employee made a Company Closed
I once worked in the final section of a production line in a machine assembles Company (Anonymous asDEF) that located in Waterloo Ontario with 1300 employee, which was a branch of a transnational company headquartered in the U.S. in manufacturing machines of banking and cashing.
When I newly work there was with 6 people to assemble machines. My job is installation of electrical wires and switches on the empty case-frame of the machine, and then other people install the parts insides and make final testing for sending to customers.
In my team, there was a gentleman Jim who was in a very good appearance with good personal civilized, but he was supervising others to slow down their work with smile.
After first hour of my first day’s work, Jim friendly told me that: “my friend, please do not work too hard like this; you may go to washroom to have a rest, or go to other work station to talk with friends. Any way, you should slow down the work.” Then, I noticed that other people were talking and joking with parts holding on hands, but did not put on machine. Due to that my team was in the final section, thus, the production capacity of whole production line has lowered 50% around.
Compared with other Companies, that DEF has occupied the top of the supply chain with welcomed end products, it certainly has greater profit margins supported by an enviable team of skilled technicians and operators. So that it should be running better and sustainable. However, it moved to Mexico before outbreak of Financial Crisis 2008. Jim and other 1300 people lost high quality jobs – good paid with good work environment, which is that Prime Minister Stephen Harper has been striving hardly.
The jobs of our team were assembling Cashier Machine with the parts that finished by the teams in the top of the production line. This kind of jobs was similar as that of assembling a big computer, it was not heavy physically and could not work fast also. I am still wondering that why Jim did that? His behavior was no any interest for himself or any others? If it was not what I had seen, I would never believe that was true.
About half a year later, after the DEF Company was shut down, in a supermarket, I met Jim, at that time, he was looking for a new job after worked a couple of months in a job agency. I felt sadness when talking with him; he was enjoying the bitter fruit that he planted. Viewing from social perspective, he made a big trouble for other 1300 colleagues and their families.
The mindless employees as that of Jim are common in Canadian businesses, although most of them are not severe in harming company as that of Jim, but their boldly pranks greatly reduce the productivity, it also can cause business failures indirectly. Such as the supervisor John that introduced in my article <Family Business and Management Board>.
People might ask that, why no management person stops their ridiculous behavior? Why do not fire them? The answer is not as simple as that of people's common sense.
I would like to use the fruits of modern medical researches, from the perspective of human physiology, human nature, crowd psychology, and social governance, to discuss this issue.
5. Human brain's maturity determines the level of intelligence
According to my personal experience, in Canada, in the majority of enterprises, it always has certain individuals to do nonsense without rational reason, and in most cases, with no management person dared to punish them, or even dissuade them from troublemaking.
I deeply feel the fatal problem for Canadian corporate is that can not effectively restrict those mindless employees making trouble in the workplace.
I deeply feel that there is necessary to dig the reason and the solution.
Thanks modern medical technology for revealing the mechanism of human brain and revealing the mystery of why some people are rational, and some are not, or even mindless.
The Magnetic resonance imaging (MRI) dynamic scans of human brains have gradually revealed the relations between the brain structures and the intelligence or the physical behaviors. Human behaviors, whether it is mental or physical, are dominated by certain cells in certain area of the brain.
The studies show that human brain development varies greatly from person to person, so, people's intelligence and behaviors are also a great difference.
The article <Einstein's Brain Reveals Clues to Genius> said that the brilliant physicist had extra folding in his brain’s gray matter, the site of conscious thinking. In particular, the frontal lobes, regions tied to abstract thought and planning, had unusually elaborate folding.
Sept. 27, 2013, the article <Musicians 'have sharper minds': study> reported that researchers measured the behavioral and brain responses of amateur musicians compared with non-musicians when performing simple mental tasks and found that Musicians have sharper minds and are able to pick up and correct mistakes quicker than non-musicians. Musicians also responded faster than those with little or no musical training, with no loss in accuracy.
This study has showed us meaningful method to evaluate a person's intelligence and ability for doing some meaningful work.
Obviously, those musicians have a well developed brain for finishing any job perfectly. In other hand, those people who, although, are not musician but have achieved fruitful accomplishment will certainly have well developed brain.
6. Workplace Troublemakers may have Brain Problems
Apr. 01, 2011, report <Scans reveal differences in brain structure of antisocial teens> said that:
“The neuroscientists used magnetic resonance imaging to measure the size of particular regions in the brains of 65 teenage boys with conduct disorder (CD) compared with 27 teenage boys who did not display symptoms of behavioral disorder. Their findings revealed that the amygdala and insula – regions of the brain that contribute to emotion perception, empathy and recognizing were strikingly smaller in teenagers with antisocial behavior. ”
“The greater the severity of the behavior problems, the greater the reduction in the volume of the insula.”
Mar. 04, 2011, article <Criminal Minds Are Different from Yours, Brain Scans Reveal> reported that:
“The latest neuroscience research is presenting intriguing evidence that the brains of certain kinds of criminals are different from those of the rest of the population.” “While these findings could improve our understanding of criminal behavior, they also raise moral quandaries about whether and how society should use this knowledge to combat crime.”
Above studies show that development degree of the human brain determines the brain’s working state; the brain's working state determines human behavior. Or we may say that, it is that human brain’s physical structures determine human psychological state, and the psychological state determines the physical behavior. It is that abnormal brain caused human abnormal behavior.
We may infer that even if people have no significant behavioral problems as that of the criminals, but, the character of each individual is also a big difference. Some people can do any thing rationally; some people are prone to impulse and radical, those are also due to the differences in the degree of mature of the brain development.
Those workplace troublemakers may also likely have problems of inadequate brain development. Although, some of their behaviors are not severe to be considered as crime, but, with the amplifying-effect of Crowd Psychology, its harm may be huge.
One such a mindless person, in the environment of large scale production, may play a role of greatly reducing the production efficiency, even make a good business have to be closed. Above Jim in DEF Company is a good proof.
Although, the absurd behavior of workplace troublemaker is not to be considered as crime yet, but, its harm may be much severe than that of criminal, because of it may make much more people jobless. Currently, there are no corresponding legal provisions for inhibiting or punishing them yet.
This point, we must seriously take measures.
Those findings on human brains provide us a new potential for improving the management of Canadian corporate, since that corporate management, essentially say, it is to select a certain group of people to rule certain group of people to finish purposeful tasks. In this process, no matter for the rulers or being ruled, to select a brain well matured one is important.
But, in the practical recruitment process, we can not scan any candidates by MRI machine. Even, some questions would be too sensitive to be asked. We must find alternative way.
I discuss it in Recruit employees by the quality of brain, not the academic degree.
7. Human Nature and Crowd Psychology
7.1. Human Nature
There are many studies on human nature. Generally say that humankind has dual nature, namely animal nature (natural nature) and cultural nature, human behavior is determined by the two natures.
The animal nature is obtained genetically, they are those basic survival instincts that conduce to oneself, such as, greedy, egoistic, etc., and the cultural nature is mainly acquired through learning in practical life, they are those cultivated behaviors that may conduce to society, such as, self-discipline, altruistic, etc.
Although, such a description is not perfect accurately, but, as a reference to discuss management issues, I think it is feasible.
Talking about human nature, I think of Adam Smith, in his famous book <The Wealth of Nations>, he suggests that benefits society by meeting the selfish and greedy of human animal nature with free competing in the marketplace under the control of invisible hand.
In consideration of market competing, Adam Smith's invisible hand is mainly driven by human animal nature - selfish and greedy.
In viewing of this, I call Adam Smith as the good player of the human animal nature.
The successful social practice by following the vision of Adam Smith, have achieved prosperity of the material wealth and to reach the goal of benefiting humankind.
However, the disaster Financial Crisis 2008 has induced people to reflect the flaws of the capitalist system.
In April 13, 2012, 9:45 am, the Founder and Executive Chairman of World Economic Forum, Prof. Klaus Schwab posted an article The End of Capitalism -- So What's Next? on his Blog atwww.huffingtonpost.com with that:
"This year's World Economic Forum in Davos saw intense debate about the future of capitalism. Many participants were asking whether capitalism, with all of its excesses, still has a place in today's world. The media, meanwhile, speculated that if even managers and bankers were raising doubts about the system's future, then perhaps capitalism had already been laid to rest in Davos."
"The reports about capitalism's imminent demise may be somewhat exaggerated, as the ideology of a free but socially committed and fairly regulated market economy was never questioned in Davos. However, there was some discussion as to whether capitalism in its present form serves or undermines the free market economy."
People began to rethink Marx's communist ideology world widely. It is said that in Germany, the sale of Marx's Das Kapital increased.
The vision of Karl Marx：”From each according to his ability, to each according to his need.” Critique of the Gotha Programme 1875 was perfect ideal social system.
However, more than 100 years of the communist movement, and more than 70 years of practice of socialist, which involved the countries almost half of the world, finally failed. Although the vision of Karl Marx is perfect for human beings, but practice proved that it did not work.
The reason for the failure of the practice of communist and socialist, most people blame the improper political and rigid planning economy.
But, as my view, the true essential, it was that the perfect social system over depended on the exertion of human cultural nature with madly suppressing the exertion of human animal nature.
Also, as my view, the reason of people losing the faith for the capitalism is that the capitalist system over depended on the exertion of human animal nature with less proper regulation.
Nowadays, the economic structure is changing, the economic capacity in increasing, the population in increasing, over-developed Financial Economy , especially, the rapid flow of the large number of international hot money to help bestial mad plunder to the Real Economy as easy as once finger click.
The social governing is not updated with the pace of social advancement yet. So that the human animal nature is able to be over exertion.
A successful society must be the one that can well play human nature. As similarity, a successful corporate management must be the one that can well play human nature.
7.2. Crowd Psychology
Besides the impact of human natures, other significant one is Crowd Psychology that generated when people grouping.
In the book <The Crowd: A Study of the Popular Mind> 1895, the writer Gustave Le Bon claims that there are several characteristics of crowd psychology:
"impulsiveness, irritability, incapacity to reason, the absence of judgment of the critical spirit, the exaggeration of sentiments, and others...".
“determines in the individuals of a group special characteristics which are quite contrary at times to those presented by the isolated individual.” “To understand this phenomenon it is necessary to bear in mind certain recent physiological discoveries. We know to-day that by various processes an individual may be brought into such a condition that, having entirely lost his conscious personality, he obeys all the suggestions of the operator who has deprived him of it, and commits acts in utter contradiction with his character and habits.”
“The most careful investigations seem to prove that an individual immersed for some length of time in a group in action soon finds himself—either in consequence of the magnetic influence given out by the group, or from some other cause of which we are ignorant—in a special state, which much resembles the state of fascination in which the hypnotised individual finds himself in the hands of the hypnotiser….”
“The conscious personality has entirely vanished; will and discernment are lost. All feelings and thoughts are bent in the direction determined by the hypnotiser.”
In the book , Monsieur Serge Moscovici said that: In short, the era of mob is a handful of people on the illegal use of a huge crowd in order to achieve the purpose of the interests of small groups face sounding era.
Note: I could not find in English. The Title of and what Monsieur Serge Moscovici said is translated from the book of the version in Mandarin that released in April 2003. Therefore, above wording may be not exact correct, but the main meaning is true.
About Crowd Psychology, Monsieur Serge Moscovici has touched the essential soul that huge crowd was coerced by a handful of people for the purpose of the interests of small group people.
As our experience, in the crowd environment, individual is not to be hypnotized, but is in a sober state with retaining their opinions without speaking out.
The key of the problem is that why a few people can successfully control the majority of people to do some thing that may harm the interest of the majority or the society.
This is because, I think that, some few people lack of the ability of rational thinking, they do some thing with their animal nature, only in consideration of the interests of them selves, and they never consider the interests of others and the harms for others.
It also is the matter of brain immature.
It is the reason that Jim in DEF Company, as a general operator, could play a severe bad role.
8. Reverse-thinking for 3M Canada Saves Energy 30% by ISO50001
March 13, 2013, the Canadian Manufacturing Online published the report of <Power play>, said that 3M Canada saves Energy 30% by ISO50001.
The achievement was great, but the process was unexpected simple: “We try to treat the plant as we would our homes. If we leave a room, we turn off the lights and shut down equipment when it’s not being used. ”
There were reports taking the energy save 30% in 3M Canada as a proud achievement. However, I would like to question that, by the same group of people with the same equipments in the same place, why they could not effectively save the energy similarly before the implementation of ISO50001 standards?
Why they could not treat the plant as that of in own homes to turn off the lights and shut down the equipment when it’s not being used before the implementation of ISO50001 standards?
The achievement of energy saving is also reflecting the CHAOS in the management of 3M Canada. It is common in many Canadian enterprises, which is one of the reasons of the mid-sized firms is declining. It is not my surmising boast at all. It is the terrible facts of my personal observation and experience in the enterprises of Canada.
I think that the corporate management may be the most intricate and most grueling tasks, since it has to deal with the labors – human beings who are with the brain that can act of their own accord.
If there was no mandatory of the ISO50001 standard to strictly enforce the staff as that of the law enforcing social members, only relying on their management team and their own developed management rules, 3M Canada would never get such an achievement.
As a senior engineer in metal material, I have been involved in the development of ISO standard application for oil drilling pipe. The deepest impression was that every aspect of every operation in the production, there are written procedures with specific people to take responsible. In fact, the role of ISO is to track responsibility by tagging on the forehead of specific individual.
The experience of 3M Canada in energy saving has a significant role of providing us a direction for reversing the state of CHAOS, which is to copy the model of ISO50001 standard to optimize our firms’ management to dig out huge potential for gaining profit with an easy way.
We are clear that, in the business running, there are many management aspects besides energy saving with the plenty of room for cost-saving improvement. We can imagine that, if 3M Canada improves efficiency by 30% in all of their management aspects, then, see, what will happen? If we all firms in Canada are able to improve the efficiency by 30%, and then, see, what it will happen?
The CHAOS in the management of 3M Canada before the implementation of ISO50001 standards was also caused by the bad effect of the Crowd Psychology.
It also proves the correctness of my idea of the Corporate Management is the Art that plays human natures, which is to finish purposeful tasks with human culture nature by meeting human greedy of animal nature with payment under the enforcement of regulations. For well playing the Art of the management, the payment and the regulation is both indispensable.
9. The Analysis of Crowd Psychology Affecting Efficiency
The report said that, according to the requirements of ISO50001 standard, 3M Canada has developed a roles and responsibilities matrix to identify workforce needs to support the system, in which making plant manager accountable for the entire system and all operators and supervisors have defined roles to support the system and make sure it works.
I think that, in essence, that made a roles and responsibilities matrix is to put the responsible label on the forehead of each individual. It is the key for the success.
Because, only in this way, 3M Canada can enforce those irrational staff who have no rational sense doing a rational job to have to do a rational job, and to provide a reason for those rational staff to do rational job happily without worry about.
The worry about is induced by the Crowd Psychology.
According to the common sense from our daily life, we may easily imagine that, in 3M Canada, before the implementation of ISO50001, it was not that the employees and management staff did not see the facts of energy wasting, also it was not that nobody wanted to change the status quo, but it was that no one dared to do so. It caused by the harmful effect of Crowd Psychology.
As general employees, they were afraid to draw fire against themselves, and as management staff they were afraid to draw fire against themselves with legal proceedings, or even personal revenge.
This social phenomenon is a common behavior of mankind or may call it as common sick due to it harm to community, and as long as people grouping, it will inevitably take it bad effect.
It also is the reason that Jim in DEF Company could play a severe bad role without any people dared to inhibit.
These ordinary human crowd relations, we clearly knew not correct, but it is taking for granted, to be involuntarily and carefully observed. It seemingly is normal since that every one has to act as that. In fact, it is very absurd with a very bad effect to make daily operation of enterprise into a bad trap, in which many people are aware that lot things urgently need to do, but no one dare do. It causes production inefficiencies, or even causing enterprise bankruptcy, thus causing the loss of job, the loss of tax revenue. It is hazardous to the economy and our normal life of ordinary people.
Now, we can see the essence of the management: it is the art of playing human nature pestered with Crowd Psychology.
Besides above absurd interpersonal relations caused by Crowd Psychology, for some enterprise of Canada, there is an even worse phenomenon that is without proper regulations to regulate the daily operation.
We must find a proper approach to save enterprises from being closed by those mindless behaviors of those mindless people, thus, to save Canadian Firms from declining and save the job for those mindless people.
The achievement of 3M Canada saves Energy 30% by ISO50001 has provided us a useful inspiration for improving our corporate management.
10. The absurdity of modern social governance
Now, we have made clear that mature degree of human brain varies greatly from person to person, so, it is inevitable that always there are some brain immature people in human community or enterprises to badly interfere the normal life or normal production. The Crowd Psychology promotes the matter more complicated, and more thorny.
Jun 25, 2013, in the article <My view on Entrepreneur and Enterprise inspired by Peter Shoore>, I indicate that:
"The Entrepreneurs run Enterprises to create job position for citizen livehood-making and revenue for social governing, from this point of view, the Entrepreneurs are the best civil servants, and the communists in reality."
"However, historically, in worldwide, it has been lacking of concerning and supporting for Entrepreneurs, even, until now, there great many people are with hostile attitude toward them. The law seems to have ignored this group also, but tended to protect employees without updating of the outdated concept from the times of Industrial Revolution with ignoring that modern society has provided thoughtful social welfare and comprehensive legal protection."
"The outdated ideology and practice has badly affected the work ethic of employees and to have made Enterprises difficult for managing, even, encouraging some mindless employees' pranks boldly in the workplace without the fear of being punished. It not only badly affecting the production efficiency, but more terrible, it even caused the closure of some Enterprises."
Nowadays, those being over advocated of freedom, human rights, etc., are with lesser meaning for those people who are law-abiding to make livehood with full-hearted working, but for those brain immature, the freedom and human rights are being misused as protection umbrella for endangering our society recklessly.
In my view, it is the absurdity of modern social governance. Such absurdity has been badly impacting the normal work of the rational people in the production of social wealth of the essential for human survival.
In above mentioned DEF Company, there was a supervisor who took charge of our team, but he never say any thing besides hard working as same as that of the general operators. Even in the busy time of before Christmas, when company had hired a lot temporary workers to finish year long piled orders, he told me that he will take two weeks vacation.
I was suppressed after making clear what he said was not joking, and immediately thought of your guy stupid enough.
But later what happened shocked me very much.
One day, it is 2006, when I came in workplace, my colleague asked me that: Have you watched TV this morning? I said: No. He said: last night, the temporary workers mobbed riots, even smashed equipments after heard that they were laid off.
Now, looking back the cause of the incident, a group of temporary workers who did not well know of each other yet, how to organize together to boldly make trouble? Who was the organizer of it? It must be some organization.
I am afraid that Jim was the member of the organization, too.
At this point, I came to understand that why the supervisor dared not control Jim's pranks, and that he had to take vacation at the most busy season of the company.
It was that some special organization made the good run DEF company closed, and also made them selves of the members of the organization jobless.
This organization is composed of a group of fools, company is the ship that helps people for surviving, most people onboard strive to ensure safe, but those fools are making holes on the hull.
It was that State Apparatus supports the fools' organization boldly nonsense with the protection of absurd legislation. In essential, it is that State Apparatus supports the destruction of the enterprises - the essential cells of the national economy, and then to finish a state.
The powerful State Apparatus can not control the behavior of the brain immature that endangers our society, it is a tragedy of modern human society.
11. To motivate productivity by well playing human nature
The absurdity of modern social governance is difficult to be changed; we must change our mind to seek a new way to improve the production efficiency..
I said above, that human behavior is determined by the dual natures: animal nature and cultural nature.
The prosperity of Capitalism under market economy is to drive human culture nature by meeting human animal nature and the failure of Socialism under planning economy is over rely on human cultural nature with inhibiting human animal nature.
In above section <4. An Mindless Employee made a Company Closed>, I have taken Jim in DEF Company as example.
From all aspects of assessment, he was well self-cultivated showing very nice and friendly without flaws in personality. His attitude towards work also is common in most of people universally, although, most of them are not as severe as that of Jim.
Any way, we can not deal such people with fire simply, because, that makes such mindless people jobless will make big trouble for community, and also they and their families need survival.
Indeed, for those successful world class Companies mostly have their own incentive methods to deal with this thorny issue by motivating those people's work ethic to reverse the unfavorable to favorable.
In essence, all kind of incentive methods are with same purpose that is to drive human culture nature by meeting human animal nature?
11.1. Patent-related bonus drives IBM's patent invention
Dec. 22, 2011, in the article <The DNA of the Success of IBM & America's best-run companies>, I mentioned that, the driving force for 102 years old IBM is still full of vitality and the patent invention has been counting on the top of those world-class corporate giants in the United States for 20 consecutive years in 2013 is the patent-related bonus incentive system. In IBM, for any staff, published an article, approved a patent, all have assessment records with regulated cash awards.
Following are the excerpts from article <The DNA of the Success of IBM & America's best-run companies>.
"Accumulates one point on each published being approved article regarding science and technology on the ."
"For each patented patent, the inventor will accumulate 3 points. The bonus for first patent is $1,500, plus souvenirs and gold-plated pins, etc.. For each subsequent patented patent will award cash $ 500."
"For each accumulation of 12 points, issue a Plateau Award $ 3600 with publishing the names and photos of the winner in company publications. Another accumulation of 12 points with another Plateau Award, and so on. Company may also give quota of awards depending on the circumstances from $10,000 to $100,000. It is very few of people who could achieve third Plateau Award."
11.2. Rationalization proposals drives German manufacture outstanding
May 28, 2012, in the article <The DNA of the Success of German Manufacturing>, I mentioned that, the driving force for German outstanding manufacturing mainly comes from their legislated management for rationalization proposals (RP), which is to extract bonus from the profit gained in the application of the rationalization proposals to motivate all staff to pay their full talent into the business running, since Mr.Friedrich Alfred Krupp initiated it in 1872.
Now, in all German businesses, their staff can use computer network systems to easily submit or query their proposals.
Following are the excerpts from article <The DNA of the Success of German Manufacturing>.
" The award criteria for RP are basically same in different German companies. It is according to the net cost savings after implementation of RP in the first year. It divided into several grades, specifically, the annual net cost savings within the 2,500 Euros, according to the following standard bonuses:"
Annual net cost savings | Bonus |
250 Euros | 20 Euros |
251-750 Euros | 75 Euros |
751-1750 Euros | 150 Euros |
1751-2500 Euros | 250 Euros |
"Annual cost savings are more than 2500 euros, then, the bonus is 25% of the actual amount of net cost savings. For example, net cost savings is 5000 EUR, and then the prize money amounted to 1,250 Euros."
"In such a corporate atmosphere, German business leaders have been emphasizing people-oriented, and taking the staff as working-capital. They encourage more employees to involve in optimizing the corporate management by exploring and exerting every potential to promote the development of enterprises."
11.3. The payment calculated based on the production yield
In the article <Canada's Corporate Management & Reducing Psychological Pressure>, I have discussed about this issue, which is dealing this thorny issue with well playing human animal nature. For reading convenient, I copy some section as follow.
"Management is a kind of art rather than a rigid technology, it provides a special stage for performing intelligent dramas, however, some of them may be enjoyable, and some may be not."
"Such as, for the shutdown of the DEF Company, one of important reason might be unsatisfactory productivity that caused by that of payment was not associated with the working-performance, which was no different for operators who finished 3 machines or 6 machines in a shift. Obviously, this kind of payment method was acting as a cooler to cool down employees’ working-enthusiasm. It also was one of the reasons that had triggered the collapse of former socialist countries. So I once said that in other article, capitalist countries are following the dust of the road that socialist countries have been past."
"The romance of payment and work-efficiency is a good topic for a good management drama."
"Suppose that, in the DEF Company, takes 3 machines as basic task of a team per shift, after finished first 3 machines, the fourth one pays $6 to each operator as bonus, the fifth pays $9, the sixth pays $12. Thus would incent the operators to work with full-load. In this way, every day will make extra profits from three extra machines by only extra payment of $189 that may only a little bit compared with gained extra profits. If so, the Company would be still running, that gentleman might still work there with a better payment rather than that of anxious for job-looking."
"Here, there a more detailed account can be calculated. When production without bonus, finished 3 machines per shift, suppose the profit margin is 20% after deduction of raw materials, wages, utilities and other basic costs. On this basis, for finishing extra 3 more machines, only need to increase the cost of raw materials and bonuses, then, the profit margins from extra 3 machines may be much higher than that of 20% of from first 3 machines."
"The bonus possesses magical effect that can satisfy both employees and employers at the same time."
11.4. Incentive Rewards in 2300 years ago China
China noted as 5,000 years of the history of civilization, which is based on the historic monuments, text written, bronzes and so on. Especially, the emergence of Chinese characters.
As my view, the essence of the 5,000 years civilization or the valuable part was the written records – the accumulation of the experiences in failed and succeed - the wisdom of the people of China.
11.4.1 The development of the characters and writing expression
In about 8,000 years ago, Chinese characters have emerged, but, until around 600 BC, the development of the characters has been just able to help to communicate ideas in writing. The various ideologies began to bud, such as, Confucianism, Taoism, and Legalism, etc. Those ideas were continuing to be improved by descendants to have formed systematical theories today, and to have affected the development of China, the countries in neighboring and South Asia.
Many historical documents of China are recorded on the stones, bronzes, Ceramic-utensils and bamboo-slips, so that they could be saved to today for restoring the history.
The most famous book about war strategy in Ancient China, the Art of War is inscribed on the bamboo slips in around BC 514.
11.4.2. The Birth of The Art of War
After a long primitive society, in about BC 2070, the nation Xia emerged in China. In about BC 1600, Xia Dynasty was destroyed & replaced by Shang. In about BC 1046, Shang Dynasty was destroyed & replaced by Zhou.
Since the throne could only be passed to one son, the monarch of Zhou had to give certain area of land as fiefs to other sons, which formed vassal states, and then the sons gave certain area of own land as fiefs to their own sons, in this way, from generation to generation, formed more than 100 large and small vassal states.
In BC 771, the state of Zhou was out of control. The selfish of human animal nature began to exert freely. The wars of plundering and occupying were one after another in between the vassal states and the dependencies, which last about 500 years, known as the periods of the Spring and Autumn (771 - 476 BC) & Warring States (475 – 221 BC) of China.
In BC 514, more than 200 years endless wars created rich experiences that promoted the birth of the famous book on military strategy - The Art of War. Today it has been taken as efficacious military Bible world widely. Also it is used for commercial competition.
Left: Bamboo slips of The Art of War Unearthed in a tomb of the Han Dynasty in Shandong, China, Apr. 4, 1972,
Right: A copy of modern imitation of Bamboo Book of The Art of War.
The writer was Sun Tzu (BC 535- 470). His Great-grandfather and grandfather was both the famous warrior of the time. In such a family, since childhood, Sun Tzu interested in studying the art of wars.
From the photo, I think of that, we should thank the late of the invention of the paper; otherwise, many precious ancient thoughts might be destroyed, because of paper records can not last longer under or on the earth.
At that time, the state of Qin was a weak vassal state located in today’s Shanxi province China. Please see following map.
The map of China in 5th century BC, the state of Qin located in the left side
11.4.3. Incentives Drive the Birth of Unified China
In 361 BC, Qin's new monarch determined to make the state stronger; therefore, he issued an order for recruiting competent people from all of the states.
Shang Yang, a famous Legalist, from the state of Wei came to Qin, and the talks about national affairs with the new monarch continued for 3 days and nights. The monarch appreciated the opinion of Shang Yang very much. In 356 BC, Shang Yang was appointed to reform the old social system.
Shang Yang established a law system according to the Legalism, which focused on the enhancement of the military force and the food production for military logistical supply. This might be the earliest and most detailed law system world widely.
At that time, people had no any sense about the law. In order to improve the unordered social situation, Shang Yang put a long wood at the South gate of the city, and announced that: who can move the wood to the North gate, would get reward of 12 gold cakes (Φ5.1Cm 260G 99%Au). People did not believe that was true, no one was willing to try. Then Shang Yang increased the reward up to 50 gold cakes. Finally, a man moved the wood to the North gate with a mind of trying, but he immediately got award of 50 gold cakes.
Thus, Shang Yang established the trust for that what government announced in the minds of the citizen, and the reform was quickly and smoothly spread.
One of the laws was that made 20 title of nobility to reward those who contributed to the state.
According the law, the soldier who beheaded an enemy will obtain a prime rank of the title with Material Rewards: a certain area of farming land and a house with several servants. Beheaded more enemy will get higher rank title with more awards.
In the war with cold weapons, the mortality rate was almost in the two sides of the war. It said that killing 1000 enemies, the winner side will lose 800 people at least. A person once went to the battlefield, it meant to face the death. However, China’s history books described that, the citizen of Qin heard that will start the war, they eagerly wanted to go to the battlefield impatiently, simply did not care the matter alive or death.
In the battlefield, they did not like to wear the helmets and armours to protect themselves, because of it would reduce their running speed. They were left hand with a head of enemy, and right arm tucked a captive, to courageously chase enemy - their preys - the farming land, the house, and the prominent social status.
The incentive rewards made weak Qin state stronger and destroyed many states to form a unified nation – China. It was the origin of the name of China today.
In the management of modern enterprises, the method of incentive rewards from Ancient China will still possess significant value. Since the nature of ancient people and modern people is similar, it does not matter whether the Easterner or the Westerner.
"An important step of the success of China's economic reform was have broken the old wage system that was continuation from that of the Soviet Union, and largely increased the share of payment that associated with individual’s work performance."
"Some simple management measures could reduce the severity of the antagonism between employees and employers, and that will be good for all with reducing psychological stress in workplace, also can increase social wealth by improving the efficiency of production."
11.4.4. Qin dynasty had implemented the accountability in manufacturing.
In Qin terracotta warriors and horses unearthed in China, the weapons were engraved with manufacturer's name. It was clear evidence that in 2000 years ago, Qin manufacturing had implemented the accountability to a specific operator.
12. The solution for Canadian Corporate Management
Now we are clear that Corporate Management is the Art of playing human natures, which is to finish purposeful tasks by use of human culture nature driven by meeting human greedy of animal nature with payment.
Besides, to drive human cultural nature by meeting animal nature, a good management needs strict regulations to regulate all members in the enterprise as that of law regulates social members.
Indeed, many companies have detailed management regulations, however, that seems useless due to difficult to implement, management staff manage based on own personal preferences.
The success of 3M Canada under the enforcement of ISO50001 standard provides us a perfect inspiration, that is, to legislate the management regulations by copying that of ISO standards to enforce the management of Canadian businesses by the power of State Apparatus.
The legislation means that is enforced by State Apparatus, and the State Apparatus is more powerfulthan that of no legal effect of ISO - the International Standardization Organization.
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Organizational Excellence Is About Being Perfect Together
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