Recreating the Corporation is Ackoff's best work on utilizing the use of systems thinking to understand how to make not only pieces of companies better, but how optimizing the entire company can lead to dramatic improvements. Those who know Ackoff's work will appreciate his freshening of material contained elsewhere and the addition of new concepts to make the framework wholistic.

Since Peter Senge eloquently introduced business readers to the importance of systems thinking in The Fifth Discipline, companies have been grappling with how to apply that aspect of the learning organization. In Re-Creating the Corporation, Russell Ackoff has written the most complete description of how such an organization can be created.

A system is any grouping of parts that is influenced by its parts and requires their coordination to create the best result. A car is an example. You can take the best transmission from one type of car, the best engine from another, and the best brakes from a third, and they will not work together. This is a typical quality of systems: If you optimize any part of the system, you reduce the effectiveness of the whole. But most organizations are set up to seek optimization of the part rather than the system, creating disasters like the car example I just used.

Although he makes only limited reference to it, Professor Ackoff is clearly influenced by complexity science. He has created fractals (small versions of the whole that scale up and down) in his organization, and is trying to expose the widest number of people to the widest possible perspectives on the systems issues of an organization.

The book is designed as a series of essays to explain what systems are and how they operate; processes for planning, design, implementation and learning; organizational designs that apply the concepts of democracy, economy and flexibility; and an overview of the weaknesses of management fads and panaceas, and the benefits of working on organizational and transformational leadership instead. His goal is to create an organization that is as stable as possible in order to create an organization that is as flexible as possible. Let me explain. He wants to avoid reorganizations of roles and jobs, but he wants the organization as a system to evolve rapidly and easily in serving stakeholders.

I found the concepts to be quite consistent with the realities of a wired world, by putting a structure and a thought process together that will provide a context for gaining benefits from enhanced communication. Basically, the structure relies on creating a three dimensional organization -- one that relies on input (functional) units like purchasing, finance, and legal that are primarily used internally, output (product or service creating) units such as the manufacturing activities, and market or user defined (customer or geography) units. Most organizations emphasize one of these three dimensions or the other. By keeping them in place in a balanced way, the idea is to avoid needing to make adjustments to create or abolish any of these types of units.

A second major innovation to aid this organizational structure is the idea of using interacting boards to supervise each unit. This creates more participation, more democracy, and more interconnection across the organization.

To this, Ackoff combines a common process for systems solution creation and implementation that all would learn in the organization.

With organization, thinking, and doing processes in place, he then proposes that organizations go for transformational change rather than incremental change.

I found the book to be full of fresh thinking and interesting examples of how this can be applied based on Mr. Ackoff's consulting experiences with his well-known, long-term clients like DuPont and Anheuser-Busch.

For those who want to learn more about systems thinking at the micro level, I suggest reading the sections on that in The Fifth Discipline Field Guide. That will help you understand the concepts much better than the material in this book.

While I agree with the concept of keeping the organization as stable as possible, I found the proposals here to be a pretty ponderous way to accomplish that end. I suspect that simpler versions of this concept could work almost as well in coordinating systems thinking, and might work much more rapidly. For a newer, smaller organization, the structure would be overly complicated.

My own idea is that companies should move beyond organizational design and problem-solving structures as their focus to concentrate instead on creating an overriding mission, vision, strategy, tactics, and means of implementation (with employees and stakeholders who are energized by this diretion) that are all-encompassing in perspective and in providing direction, and perpetual in appropriateness. Then, by focusing on the key points of potential progress, the organization should constantly make large improvements in its business model that are more adaptable to the changing business environment. I think this concept of the organization that I have just described is easier to understand and apply once it is formulated in an organization than the ideas described here from Re-Creating the Corporation.

Even though I disagree with the proposed solutions in this very interesting book, I gave the book five stars for raising most of the right questions. We learn more from good questions than from the first sets of proposed solutions, and I hope that others will take these questions seriously and pursue them as well.

After you have read this book, ask yourself where in your organization you are pursuing optimization of an area or a part of the organization's activities. When will that optimization be harmful? How can you prevent that harm? What means of coordination could create a better combined result for your organization?

"This book is a product of applying systems thinking to the management and organization of enterprises". Russel L. Ackoff writes, "therefore, an understanding of the nature of systems and systems thinking is essential for understanding what this book is about. Although most people can identify many different systems, few know precisely what a system is. Without such knowledge, one cannot understand them, and without such an understanding, one cannot be aware of their implications for their management and organization and for treatment of the most important problems that currently face them" (p.5).

Thus, he firstly argues that a system is a whole consisting of two or more parts that satisfies the following five conditions:

(1). The whole has one or more defining properties or functions.

(2). Each part in the set can affect the behavior or properties of the whole.

(3). There is a subset of parts that is sufficient in one or more environments for carrying out the defining function of the whole; each of these parts is necessary but insufficient for carrying out this defining function.

(4). The way that each essential part of a system affects its behavior or properties depends on (the behavior or properties of) at least one other essential part of the system.

(5). The effect of any subset of essential parts on the system as a whole depends on the behavior of at least one other such subset.

Hence, Ackoff summarizes his argument that a system is a whole that cannot be divided into independent parts without loss of its essential properties or functions, and additionally argues that when the performances of the parts of a system, considered separately, are improved, the performance of the whole may not be (and usually is not) improved.

Within this general framework, he:

* defines four different types of systems, and shows their effects on organizations and the way they are managed (more detailed discussion see Chapter 2):

(1). 'Deterministic', systems and models in which neither the parts nor the whole are purposeful.

(2). 'Animated', systems and models in which the whole is purposeful but the parts are not.

(3). 'Social', systems and models in which both the parts and the whole are purposeful.

(4). 'Ecological', systems and models in which some parts are purposeful but as a whole have no purposes of their own.

* by considering three primary forms of traditional management and planning (reactive, inactive, and preactive) and their deficiencies, discusses systems-oriented/interactive form of management and planning.

* discusses five aspects of interactive planning in separate chapters as follows:

- preparing the state of the organization or a situational analysis (more detailed discussion see Chapter 4).

- determining ideals, objectives, and goals or ends planning of the organization (more detailed discussion see Chapter 5).

- identifying the gaps between what the organization is and is now doing and where it wants to be and to be doing (more detailed discussion see Chapter 6).

- considering resources such as money, plant and equipment (capital goods), people, consumables (materials, supplies, energy, and services), data, information, knowledge, understanding, and wisdom, and asking and answering following questions:

i. How much will be required, where, and when?

ii. How much will be available at the required time and place?

iii. How should each shortage or excess be treated? (more detailed discussion see Chapter 7).

- implementing and controlling with learning and adaptation (more detailed discussion see Chapter 8).

* describes and explaines circular type of organization as a democratic hierarchy.

* discusses internal market economies as substitution of the centrally planned and controlled economies within the organizations.

* discusses the multidimensional design and organization that eliminates the need to restructure when internal or external changes require adaptation, and argues that "the circular organization, the internal market economy, and multidimensional design can all be combined in one organization. The power of each is significantly enhanced by its interactions with the others".

* examines currently popular panaceas such as downsizing, TQM, continuous improvement, benchmarking, and process reengineering and the reasons they fail, and argues that "there are no simple solutions to complex problems. Furthermore, since problems are interdependent, their solutions should be. Interdependent problems constitute messes, systems of problems. Therefore, their solutions must also form a system. A system of solutions is a plan, and plans are complicated, not simple. It is not possible in a few minutes to find behavior that will resolve, solve, or dissolve a set of problems that took years to cultivate".

Strongly recommended.

This book's great. It presents a very pragmatic way of getting around, and teaches you how to undermine the system.

This book is great! It is so easy to read and so full of good information!

In 1970 I taught from this book when it was entitled
"Choice, Communication and Conflict"

What makes this book "magical" is Ackoff (from his
management and behavioral science roots) provides
"operational definitions" for many ill-defined words
and concepts -- from defining 'knowledge' & 'understanding'
to providing definitions of feelings/emotions that --
operationally -- you know -- that if certain events take
place in a person's life, that you know the feeling they
have.

This is only a glimmer of what this book is about. In
terms of Kuhn's idea of "paradigm shifts" -- this book
represents a shift that has yet to be appreciated, thirty
years later !

Being a disciple of W. Edwards Demming, Peter Scholtes has a quality department's process bias; emphasizing systems, processes and statistics. Was I reading another new age quality assurance textbook? Because of this, I felt he overemphasized the present moment. True leaders are going places and have many loyal followers. The book rarely talks about this visionary thinking or how effective organizations are moving into new areas. This is a good book for beginners as long as you're aware he presents a different viewpoint, and because of this, he did bring some useful ideas that other books didn't have. Ironically, he openly admits that you may not agree with some of his viewpoints.

Scholtes expects to shock people right from the first page of his Preface. Let me quote extensively:
"More than 95 percent of your organization's problems derive from your systems, processes, and methods, not from your individual workers....

We look to the heroic efforts of outstanding individuals for our successful work. Instead we must create systems that routinely allow excellent work to result from the ordinary efforts of ordinary people.

Changing the system will change what people do. Changing what people do will not change the system.

Certain common management approaches--management by objectives, performance appraisal, merit pay, pay for performance, and ISO 9000--represent not leadership but the abdication of leadership.

Current buzzwords like empowerment, accountability, and high performance are meaningless, empty babble..." (ix-x)

The old organizations's leaders need: forcefulness, ability to motivate and inspire, decisiveness, willfulness, assertiveness, result- and bottom-line orientation, being task-oriented and having integrity and diplomacy.

Scholtes' new leadership competencies (much influenced by Edward Deming's ideas...) are based on a new mentality and understanding of: systems thinking, variability of work, how we learn, psychology and human behavior, interactions of these components, and vision, meaning, direction and focus.

The bulk of the book gives clear elaborations of these new competencies, with charts, illustrations, pertinent questions and many tools. Ch. 4 on "Getting the Daily Work Done" is a tough one, partly because it takes much effort to grasp the author's use of a Japanese term, "Gemba" (even when I can read the original Chinese characters). Issues of waste, standardization, change versus improvement, performance without appraisal, use of measurement data... are all seen in the new light of systems thinking.

Carefully study the differences between "Crazymakers" and "Healing and Learning" in the workplace (pp378-387). There is a summary of the book under "The 47 Habits of Pretty Good Leaders" (pp391-6). Peter Senge's books give excellent background material. This one is a real handbook that should be methodically studied, discussed, adapted and applied to one's own institutions. One must not forget the advice given in Chapter 1: "leaders must be patient with themselves and others, persistent, and humble, and allow themselves and others to be inelegant." (p12,p391)

Having attended one of his talks, I gathered this book to be condensed from Scholtes' personal experience and practical knowledge which can also be seen in his "Teams" predecessor. A functional manual covering leadership in all aspects, with its depths and substance manifested in simple and easy to follow guidelines.

An ideal recommendation for any modern manager.

to be quite frank, he could have done better, the content was informative but his explanation were too wordy and repetative. he could have explained his system thinking theory's in half as much time by sticking to the point, not adding paraphrases that were confusing and misleading. question is "does he get paid by the number of words he uses or the content?".

Ackoff presents his organization design based on democracy and free market as organization principles. Most people generally believe democracy and free market are good principles for societies, while most business and government organizations have internal organizations based on autocratic authority and monopoly of services, resources and markets. Why does this happen? Ackoff is very objective in his view of the corporations as social systems, which must satisfy their stakeholders. He presents very objective solutions for the problems of quality of working life, power and authority distribution, performance evaluation and control and structure design. The title of this book promises a radical prescription, and that is a very good description of the contents. The book is dense with well thought, well developed ideas, with examples of their successful application! If you have a position about democracy and free market you should carefully read this book, even if you don't agree with everything Ackoff proposes.