Increasing Efficiency In Business by Walter Dill Scott (desktop ebook reader .txt) 📕

CHAPTER III

COMPETITION

 

AS A MEANS OF INCREASING HUMAN

EFFICIENCY

 

THIRTY years ago American steel

makers were astonishing the world

with new production records. What

English ironmasters, intrenched in their

supremacy for centuries, had regarded as a

standard week’s output for Bessemer converters,

their young rivals in mills about the

Great Lakes were doubling, trebling, and even

further increasing. Hardly a month passed

without a new high mark and a shift in possession

of the leadership.

 

To this remarkable increase in efficiency

William R. Jones—“Captain Bill” Jones as

he was familiarly known—contributed more

than any other operating man. He was a

genius among executives as well as an inventor

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of resource and initiative—a natural leader

and handler of men. When he was asked by

the British Iron and Steel Institute in 1881,

to explain the reasons for the amazing development

in the United States, he attributed it to

organization spirit of the workmen and the

rivalry among the various mills.

 

“So long as the record made by a mill

stands first,” he wrote, “its workmen are

content to labor at a moderate rate. But let

it be known that some other establishment

has beaten that record and there is no content

until the rival’s record is eclipsed.”

 

_It was on this idea of competition for

efficiency—of production as a game and achievement

as a goal—that the wonderful growth of

the steel industry was based_.

 

On the intensive development of this idea

by Andrew Carnegie, within his expanding

organization, hinged the tremendous progress

and profits of the Carnegie Company. “The

little boss” matched furnace against furnace,

mill against mill, superintendent against

superintendent. He scanned his weekly and

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monthly reports not merely for records of

output, but for comparative consumption of

ore, fuel, and other supplies, for time and labor

costs in proportion to product.

 

If a superintendent, foreman, or gang failed

to respond to this urging, failed to get into

the race for the famous broom which crowned

the stack of the champion Carnegie mill or

furnace, the parallel showing of the other mills

became a club to drive the laggards into line.

So intense was the competition, so sharp the

verbal goads applied that Jones, after resigning

in indignation, parodied in sarcastic

notes in this manner the Carnegie fashion of

bringing executives to task: “Puppy dog

number three, you have been beaten by puppy

dog number two on fuel. Puppy dog number

two, you are higher on labor than puppy

dog number one.”

 

How effective was this system of pitting

man against man, plant against plant, was

shown by the dominant position of the Carnegie

Company in the trade when the Steel

Corporation was launched and by the stag-

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gering value put upon its business. Indirect

testimony of the same fact was given another

time by Jones when he refused thousands of

dollars in yearly royalties for the use of his

inventions by outside companies, this though

the men who sought them were personal friends

and his contract with the Carnegie Company

allowed such licenses. His excuse was eloquent

of the power residing in the Carnegie

contest for efficiency and results: leadership

for his charge, the Edgar Thompson works, in

output and costs, meant more to him than

money and a chance to help his friends.

 

_The Carnegie system was one of the most

comprehensive applications in business of man’s

instinct of competition to the work of increasing

individual and organization efficiency_.

 

In the handling of executives it was carried

to such extremes as few great managers would

approve to-day. Undeniably, however, the

contest idea was an important influence in the

building up of a vast business in relatively brief

time, while the influence on the pace of the

whole industry gave the United States its

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present supremacy in steel and iron. It survives

in the parallel comparisons of records

with which the Steel Corporation measures

the efficiency of its units of production and

keeps its mill superintendents to the mark.

It is utilized, in some degree and in varying

departments, by hundreds of successful houses.

 

Let us analyze the facts, the habits of

thought, the emotions behind competition and

determine where and how it may be applied

to the task of increasing our own and our

employees’ efficiency.

 

The experienced horseman knows that a

horse is unable to attain his greatest speed

apart from a pacemaker. The horse needs the

stimulus of an equal to get under way quickly,

to strike his fastest gait and to keep it up.

In this particular an athlete in sprinting is like

the horse. He is unable by sheer force of will

to run a hundred yards in ten seconds. To

achieve it he needs a competitor who will push

him to his utmost effort.

 

_The struggle for existence, one of the main

factors in the evolution of man, has raged most_

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_fiercely among equals; without it, development

scarcely would have been possible_.

 

So fundamental has been this struggle

that the necessity for it has become firmly

established within us. We require it to stimulate

us to attain our highest ends.

 

As is made evident by a consideration of

imitation we are eminently social creatures.

We imitate the acts of those about us. Imitation

is, however, only the first stage of our

social relationship. We first imitate and then

compete. I purchase an automobile in imitation

of the acts of my friends, but I compete

with them by securing a more powerful or

swifter car. By erecting a new building because

some other banker has done so, the

second individual does more than imitate.

He competes with the first by planning to

erect a more magnificent structure and on a

more commanding site. Or a great retail

store, announcing a “February sale” of “white

goods” or furniture, invariably tries to surpass

the bargains offered by rival establishments.

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We do indeed imitate and compete with all

our associates, but those whom we recognize

as our peers are the ones who stimulate

us more to the instinctive acts of imitation and

competition.

 

_Our actual equals stimulate us less than those

whom we recognize as the peers of our ideal

selves—of ourselves as we strive and intend to

become. The man on the ladder just above me

stirs me irresistibly_.

 

The effect of one individual upon others,

then, is not confined to imitation. There is

a constant tendency to vary from and to excel

the model. My devotion to golf is mainly due

to he example of some of my friends. My

ambition is to outplay these same friends.

Imitation and competition, apparently antagonistic,

are in reality the two expressions

for our social relationships. We first imitate

and then attempt to differentiate ourselves

from our companions.

 

The manufacturer or merchant imitates his

competitor, but tries also to surpass him.

Indeed it is a truism that competition is the

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life of trade. In the shop and in the office,

on the road and behind the counter, in all

buying and selling, competition is essential

to the greatest success. Competition, the

desire to excel, is universal and instinctive.

It gives a zest to our work that would otherwise

be lacking. In every sphere of human

activity competition seems essential for securing

the best results.

 

_We assume ordinarily that competition exists

only between individuals. As a matter of fact,

a slight degree of competition may be aroused

between a man’s present efforts and his previous

records_.

 

While not so tense or so compelling as is

competition between individuals, it has the

advantage of avoiding the creation of jealousies.

In all the more exciting and stimulating

games, rivalry between individuals is a

prominent feature. In golf the game is frequently

played without this factor, the only

competition being with previous records or

with the mythical Bogy.

 

Such competition adds considerable zest

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to the game, and the same principle is applicable

to business. The most compelling rivalry

is between peers; without this, however,

it is possible to pit the possibilities of the

present month against the achievements of

the previous four weeks or the past year or

even against a hypothetical individual “bogy.”

This bogy may be fixed by the executive, and

the man induced to compete with it. Thus

the dangers of competition may be minimized

and the advantages of the human instinctive

desire for competition be gained.

 

In the average well-organized business the

carrying out of such a plan would not be difficult.

Studying the previous records of his

men, a manager or foreman could determine

what each individual bogy should be. The

employee should know just what the _*record

is_ that he is competing with, and that his

success or failure would be recorded to his

credit or otherwise. Above all, the bogy

must be fair and within the power of the man

to accomplish.

 

Competition need not be confined to individuals.

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_Frequently one city finds a stimulus in competing

with another. Nations compete with one another.

In any organization one section may compete

with another_.

 

In an army there may be competition between

regiments. Within the regiment there

may be the keenest rivalry between the different

companies. We are such social creatures

that we easily identify ourselves with our

block, our street, our town, our social set, our

party, our firm, or our department in the firm.

Like teams in any game or sport, these groups

may be rendered self-conscious and thus made

units for competition.

 

It is possible to create such units for

competition in business organizations. In some

instances individual employees of one firm

are pitted against those of a competing firm,

the contest proving stimulating to the men in

both. In other instances the competition is

restricted to the house, and similar departments

or sections are the units.

 

The closer the parallel between the units

and their activities, as in the Carnegie blast

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furnaces and steel mills, the more interesting

and effective the competition becomes.

 

This principle has received widest recognition

and achieved greatest success in the

sales department. Here individuals are on

a footing of approximate equality or may be

given equality by a system of handicaps based

on conditions in their territories. Success

has also attended the pitting of selling districts

against each other. These larger competing

units work against bogies of the same

character as do the individual ones. The whole

house may be keyed up to surpass previous

records or to attain some fixed standard.

 

To ascertain to what extent the principle

of competition was consciously employed by

business firms and what methods were used

to apply it in increasing the efficiency of the

men, a number of successful business firms

were asked the following questions:—

 

_How do you utilize competition in increasing

efficiency among your employees?_

 

(1) Do you regard it as unwise to stimulate

competition in any form?

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(2) Do you encourage men to excel their

own records of previous years?

 

(3) Do you encourage competition between

men in the same department?

 

(4) Do you encourage competition between

your own departments?

 

(5) Do you encourage competition with

departments of competing establishments?

 

(6) In competition do you make it fair

by “handicapping” your men?

 

What reward does the winner receive, e.g.:—

 

(1) Monetary reward?

 

(2) Promotion?

 

(3) Public commendation?

 

_In answers by equally successful managers

great diversity of opinion prevailed. Some

men were afraid of all forms of competition_.

 

They believed that co<o:>peration was essential

to success and that any form of competition

among the men tended to lessen such

co<o:>peration. Most of the men