I worked as a research scientist for a major French industrial company for 16 years. In that time and since my retirement not one new product or service that I worked on has made it to the market. It is not just me, this was true for my particular research & development (R&D) group in total. This occurred in spite of the fact that this company is very well respected, well run, and profitable. This article recounts my reflections on these incongruent facts.
In this article I will not name the company nor any person, but it is easy enough to determine the company by reviewing my research record (Ira M. Katz (researchgate.net), Ira Katz – Google Scholar). I will follow this practice here to emphasize the general nature of my reflections that I believe apply beyond this one organization.
The first important point to grasp is the size of my company, tens of billions in sales, tens of thousands of employees, mainly based in France, but with major operations, including R&D, spread around the world. While it is a traditional company, the families of the founders are still involved in the management, it is run as a thoroughly modern company. In short, the company is run by a technocratic (but I will explain, not necessarily technical) and bureaucratic elite. In the essay Will The West Eat Itself? – by Aurelien (substack.com), the modern bureaucratic way of thinking is explained.
“This kind of thinking values surface novelty as a release from boredom, but cannot really produce new ideas: it therefore turns to derivatives of existing ones. It reacts to setbacks by doing the same thing again but more. Its motto when things go wrong is “do it again:” it never asks if it should be doing something else. It adds controls, oversight, layers of supervision and management, because it cannot conceive of a big picture. It’s always the next reorganisation, the next layer of oversight, that will solve the problem. And the next and the next. It deals with corruption, for example, about which I’ve recently written, by producing more and more regulations and more and more layers of control and oversight. The actual solution, a culture of honesty, can’t be measured and reported on, and only exists as an overall, right-brain concept.”
I had the exceptional experience of participating in several Mises Circle-like seminars in Paris organized by Guido Hulsmann with his students and other invited guests. One (in a rather shabby modern university building proximal to the Pantheon) began by the reading of a paper on the characteristics of government bureaucracy by one of the students. My comment was that I saw similar behavior in my company everyday. For example, our group went through some kind of reorganization in about three-year intervals.
Aurelian mentions a “right-brain concept.” This alludes to the brilliant expositions by Iain McGhilcrist on human understanding of reality by the two hemispheres of the brain. Here is an introductory passage in the capstone chef-oeuvre of his career The Matter With Things: Our Brains, Our Delusions and the Unmaking of the World. (In quotes from this book I have removed numbered references to notes.)
“We have been seriously misled, I believe, because we have depended on that aspect of our brains that is most adept at manipulating the world in order to bend it to our purposes. The brain is, importantly, divided into two hemispheres: you could say, to sum up a vastly complex matter in a phrase, that the brain’s left hemisphere is designed to help us ap-prehend – and thus manipulate – the world; the right hemisphere to com-prehend it – see it all for what it is. The problem is that the very brain mechanisms which succeed in simplifying the world so as to subject it to our control militate against a true understanding of it. Meanwhile, compounding the problem, we take the success we have in manipulating it as proof that we understand it. But that is a logical error: to exert power over something requires us only to know what happens when we pull the levers, press the button, or utter the spell. The fallacy is memorialised in the myth of the sorcerer’s apprentice. It is hardly surprising, therefore, that while we have succeeded in coercing the world to our will to an extent unimaginable even a few generations ago, we have at the same time wrought havoc on that world precisely because we have not understood it.”
Notwithstanding the relevance of McGhilcrist’s brain hemisphere argument, he hits the mark on his descriptions of the modern, managerial approach. For example, in a meeting presenting to a big boss from headquarters (siège or seat in French) my colleague explained the potential of several research avenues, the boss responded by noting that this was all very interesting but we simply need the return on investment to make a decision. My thought was if decisions are simply made based on a very uncertain metric, why do we need big bosses at all?! In this way real innovation was always, in the end, stifled. As McGhilcrist further notes,
“Creativity is predicated on uncertainty. Strive for certainty and you kill creativity. As Smolin [Lee Smolin, a theoretical physicist who wrote The Trouble with Physics] says: On a personal level, to think in time is to accept the uncertainty of life as the necessary price of being alive. To rebel against the precariousness of life, to reject uncertainty, to adopt a zero tolerance to risk, to imagine that life can be organised to completely eliminate danger, is to think outside time. To be human is to live suspended between danger and opportunity.”
McGhicrist has more to say on the modern managerial culture.
“The historian Jerry Muller, in his devastating critique of contemporary managerial culture, in academia, in medicine and the other professions, The Tyranny of Metrics, makes many important points. One is the way in which making things explicitly measurable not only, as is very well known, distorts the practice that is being measured, focussing attention, both for the professional and for the bureaucrat, on what is measurable at the expense of the important elements that are not, but how it narrows our sense of what we are dealing with – confirming the point that an intuitive understanding takes into account far more, not less, than the management measures. ‘Quantification’, writes Muller, ‘is seductive, because it organises and simplifies knowledge. It offers numerical information that allows for easy comparison among people and institutions. But that simplification may lead to distortion, since making things comparable often means that they are stripped of their context, history, and meaning.’ Real life is complex, and when we single out certain aspects for measurement, we inescapably diminish the importance of all the others; and, if they do not become actually invisible, they come to be neglected. Muller notes: When organisations committed to metrics wake up to this fact, they typically add more performance measures – which creates a cascade of data, data that becomes ever less useful, while gathering it sucks more and more time and resources … Because belief in its efficacy seems to outlast evidence that it frequently doesn’t work, metric fixation has elements of a cult. Studies that demonstrate its lack of effectiveness are either ignored, or met with the assertion that what is needed is more data and better measurement. Metric fixation, which aspires to imitate science, too often resembles faith.’”
One observation I would make about my company, the use of metrics, data, or marketing research was the complete absence of error bars or any recognition of the uncertainty involved in using these results. McGhilcrist recognizes a fundamental mode of being, for lack of another expression, of how individuals act within the large hierarchical, bureaucratic organization of a large corporation in contrast to how an entrepreneur (he used the term professionals) running a small startup might act.
“Professionals rely much more on intuition, which is anathema to managerialism. They see the human whole, which the managers don’t; and the more they are made to conform to managerial metrics, the more narrow their vision and practice becomes. Thus is killed the goose that laid the golden egg.”
The hierarchical (in France the differential behavior in the hierarchy is expressed by the phrase oui chef) and bureaucratic culture was occasionally recognized as problematic by upper management by initiatives explicitly stated to provide avenues that bypass the bureaucracy. But like the peloton retaking a breakaway rider in the Tour de France bicycle race, within a couple of years (if not at its creation), the innovation in management would be pulled back into the bureaucratic decision making structure. On a daily basis decision making was stuck in the middle management hierarchy. For technical people this could be a nightmare because if you truly focused on technical questions you were not a manager, and thus, had no power. Managing even a single person resulted in a fundamental change in status, in particular being privy to information with invitations to decision making meetings. I was never in the room for discussions of topics for which I had the greatest expertise.
A fundamental question is how could this failure continue within a profit making company? My rationalization was that R&D did provide management training for its engineers (they are project managers not researchers) who typically left R&D after three years, with a select few staying in R&D to preserve the technical knowledge of the company. But the most day-to-day utilization of R&D was essentially for public relations. So from where did any real innovation come from in the organization? It was bought or outsourced.
Beyond the overall culture I have described, that I believe applied throughout R&D in all of the groups, there are also very relevant reasons for our ultimate failure: My particular R&D group was involved in medico/pharmaceutical projects within an industrial corporation. Upper management did not understand the financial and regulatory landscape of the projects. As competing uses of capital were much more clearly understood, with a history of profitability within the company, the lack of unequivocal decision-making was understandable.
There was cognitive dissonance among my colleagues that was disturbing to me. Meetings were always upbeat with congratulations all around even while obvious past and future looming failures were ignored. I said many times to my immediate colleagues that one day someone will walk in and tell us “stop what you are doing.” I was surprised at the institutional inertia that this occurred only several years later. In the end, soon after I retired (but having nothing to do with my absence) the group I joined soon after its inception was reorganized a final time out of existence.
Finally, I should add that I had perhaps the best job you can imagine. I had expat pay and benefits grafted onto a French contract (almost 10 weeks of time off, subsidized family trips, excellent medical and retirement coverage), low pressure, lots of freedom, not much recognition but plenty enough for me, likable colleagues, personal satisfaction from teaching (interns and PhD candidates), external scientific collaborations (for example; Harvard Medical School in the US, Ecole Polytechnique in France, and CSIRO in Australia) and scientific output (over 170 papers, posters, presentations and patent applications during my years with the company). It was like scoring lots of goals for a soccer team that never wins.
There is much more detail I could add, including my personal arrival and experiences, the science, technology, personnel, organization, and interesting history of the company, that must wait for another day.
