Business Regressing to The Pin Factory Division of Labor

Business Regressing because of Dumb Rules
Business Regressing because of Dumb Rules

My recent experiences and research show business regressing to Adam Smith’s 18th century Pin Factory productivity ideas, and Frederick Taylor’s division of work between managers’ (thinkers) and workers’ (doers) roles. Both concepts turned workers into pawns and robots. Society moved from those decadent ideas, but today, several firms embrace them. When you call some companies, have you noticed how painful it is to connect with a knowledgeable human? Often you get a bot with limited replies. How many times do you reach call centers where people don’t answer precise questions, but read irrelevant scripted answers?

In the past three months, I had bizarre interactions with customer service folks at several companies, but my experience with Canadian oligopoly, Bell Canada, was absurd. Their evisceration of front-line workers shocked me, but is typical of today’s tendency to dehumanize employees.

Bell Canada (Bell) Experience Shows Business Regressing

Day 1: 

  • Me: Called Bell to switch internet providers to access their pure fibre service (service).
  • Bell: Service requested does not exist in your area.
  • Me: My neighbor has it. In fact, he and I saw Bell run the line across the street to our houses.
  • Bell: I looked in our system and the service does not exist in your area.
  • Me: Asked to speak with a supervisor, who “looked in the system” then repeated, “the service does not exist on your street.” I gave him the name and address of my neighbor who has the service, but he insisted it does not exist.

Day 5: 

  • Me: Spoke with a supervisor and asked whether he could send someone to verify the information about their service on my street that I know exists.
  • Bell: Will check the “back office” and get back to you.

Day 7: 

  • Me: Escalated problem formally to Bell’s “executive office.”

Day 21: 

  • Bell: Executive office called. After initial greetings, elated, I thanked them for the expected resolution. But they confirmed the service does not exist on your street.
  • Me: Asked Bell to check their billing office because my neighbor has been paying for the service for a few years.
  • Bell: Sorry, we can’t do that.
  • Me: Please send someone to my house to check the service? It exists!
  • Bell: Can’t send someone if our system says the service does not exist, but will refer the  matter to the “back office.”

Day 28:

  • Bell: “We have great news for you. We did you a favor! Our back office says the service exists on your street!”
  • Me: Surprised I held my composure: “Hmm; that’s what I said, and said, and said!”
  • We arranged for a technician to visit my house in one week. 

Adam Smith’s Pin Factory In Action 

The technician visited my house as planned and the hilarity, stupidity, bizarreness… I’m not sure how to describe it, rolled on. He said: 

My boss told me I should connect the system to your house from the box on the street to the south, but I see a box opposite your house. I have to check back with my boss because another department has to deal with this. He left without further comments.

Source: Bell Canada Technician

In the next three hours, three different Bell representatives called, welcoming me to Bell and selling me their products. But nobody called about the failed attempt to connect their system to my house. Later that day, my current internet carrier phoned to confirm disconnection of my internet service Bell had requested. I asked them to cancel the request. Bell hasn’t contacted me since.

The basic issue today is inappropriate use of artificial intelligence and robotics to take us back to 18th century worker exploitation. Adam Smith and Frederick Taylor wanted to reduce jobs to non-thinking steps in manufacturing. Firms today have taken this one step further and developed non-thinking jobs to deal with customers — a recipe for disaster in the long-term. These businesses hire people at or below minimum wages for jobs they view incorrectly as menial. Then they claim “cost savings” from this exploitation!

Understanding where we came from will help us appreciate where many firms are today, so let’s look at the origin of operations management.

Operations Management Evolution

At the outset, operations management dealt with craft production—artisans using special tools to produce goods for individual customers. The production process was straightforward, managing was simple, production slow and expensive, and quality issues identified and fixed easily. 

Operations management developed in spurts. A huge leap forward occurred at the end of the 18th century. In 1776, economist Adam Smith introduced division of labor to the factory. Smith argued that specialization of workers would improve productivity and be an engine of economic progress. His application to the famous Pin factory produced this specialization:

Division of Labor

One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head… to whiten the pins is another; it is even a trade by itself to put them into the paper… in this manner, [work is] divided into about eighteen distinct operations… all performed by distinct hands… [My emphasis]

Source: Adam Smith, An Enquiry into the Nature and Causes of the Wealth of Nations (New York: Random House, 1947), pp. 3-5, 7, 11-12.

Although division of labor boosted productivity considerably, Smith hoped government and society’s affluent would educate workers to help them rise above division of labor’s monotony.

Some attention of government is necessary in order to prevent the almost entire corruption and degeneracy of the great body of the people.… Government [must] takes some pains to prevent it. 

Source: Adam Smith, An Enquiry into the Nature and Causes of the Wealth of Nations (New York: Random House, 1937), pp. 734-5.

Several innovations followed Smith’s, each improved productivity a bit, while reducing workers to robots—eliminating their need to think. In 1911, Frederick W. Taylor, one of the first management consultants, continued this pattern by applying scientific methods to production. Taylor suggested managers take workers’ knowledge about their jobs and summarize into rules and formulae they follow mechanically. Taylor wrote: 

[Remove] all of the traditional knowledge which in the past has been possessed by the workmen and then [managers] classifying, tabulating, and reducing this knowledge to rules, laws, and formulae which are immensely helpful to the workmen in doing their daily work.

Source: F. W. Taylor, Scientific Management, The Early Sociology of Management and Organizations, Volume 1, Routledge, p. 36

Treating People Well is Profitable

The focus shifted to the softer side of operations management in 1930 when Elton Mayo published his paper on worker motivation. Mayo studied Western Electric’s employees to understand effects of worker’s compensation and working hours. His main finding was the benefit to employees of taking rest periods throughout the day to reduce fatigue while they worked.  He observed that four ten-minute breaks during the day improved “… the mental and physical condition of the men.” Workers rarely achieved their goals before taking these breaks. 

Mayo’s findings boosted labor productivity, and showed what’s obvious today: when we treat workers fairly, they become more reliable and more productive. This breakthrough was significant to the industrial world that demanded from workers, long hours, challenging working conditions, and high output. 

It’s clear during the evolution of operations management, leaders viewed workers as essential pawns to produce goods. Division of labor, the assembly line, mass production, and the different productivity enrichment processes didn’t improve the human condition.  But we progressed and over the years restored dignity to workers, though we have a long way to go. Today, why are we regressing and demeaning workers? That’s unfair and awful for business! Greed, fueled by short term executive focus that generates huge bonuses, is the main culprit.

Stop Business Regression

Business is the economy’s growth engine. But we have selfish, incompetent, greedy CEOs ripping off workers for personal gain. These folks, eager for bonuses, don’t realize when we treat people fairly, profits surge — their myopia and greed blind them. Any wonder there is an inverse relationship between high CEO pay and poor corporate results!

Let’s not give up on business and on capitalism. People drive systems and the love of money sometimes leads people astray in any “-ism.” That’s why Jesus warned us to “… be careful to guard against all forms of greed, because even if someone is rich, his life does not consist in what he owns” (Complete Jewish Bible, Luke 12:15). 

Some leaders forget frontline workers are crucial to their organizations, have vital knowledge about markets and customers, and can create substantial value when given meaningful responsibility and authority with proper accountability. How simple it would be in the Bell example for someone to think and check the billing department, or send someone to my house? Instead of focusing on getting me on board, one silo began selling me stuff, while another silo struggled with the firm’s bureaucracy to get me in the system! No doubt they needed the “back office’s” intervention! Go figure!

We must encourage and pressure firms to move away from short-term thinking and treat employees fairly. That’s not only the right thing to do, but it will yield significant benefits to business.

© 2021 Michel A Bell

SEE ALSO:

Capitalism Isn’t Dead

APPLE Leadership Principle Leads to High Productivity

Michel A. Bell

Michel A. Bell is a former senior business executive, author of six books (including Business Simplified released in 2018), speaker, and adjunct professor of business administration at Briercrest College and Seminary. Michel is a Fellow of the Chartered Certified Accountants (UK), holds a Masters of Science in management degree from Massachusetts Institute of Technology and a Doctor of Business Administration honoris causa from Briercrest College and Seminary. He is founder and president of Managing God's Money.

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