Corporate Planning

AN OVERVIEW OF INTERACTIVE PLANNING


    Source:     Flood, R. L., & Jackson, M. C. (1991). Creative problem solving: Total systems intervention. Chichester, UK: Wiley. [Chapter 7]

    If you read the newspapers and are still satisfied with the state of the world, put this book down; it is not for you. My objective is not to convert those who are satisfied -- even though I believe they need conversion -- but to give those who are dissatisfied, cause for hope and something to do about it.     [R. L. Ackoff, in Preface to Redesigning the Future]


    INTRODUCTION

    Russell Ackoff’s work has had a major impact upon all of the various branches of the management sciences about which he has had his say: operational research, corporate planning, applied social science, social systems science, management information systems -- to mention only the most obvious. One explanation for the depth and breadth of Ackoff’s influence lies primarily in the power of his vision for the management sciences. The job of the management scientist is not to build the mathematical models that purport to     predict the future and, therefore, help key decision-makers prepare their enterprises for the inevitable. Rather, it is to assist all of the participants of an organisation to design a desirable future for themselves and to invent ways of bringing it about.


    While carrying out development work with leaders of the Mantua ghetto in Philadelphia, Ackoff was pleased to find many of the lessons he was trying to impart to management scientists captured in the motto of the Mantua Community Planners: “    Plan or be planned for.” The sentiments of this motto, in turn, bring to mind the words of the English poet William Blake: “I must Create a System, or be enslav’d by another Man’s.” It is indeed the case that the spirit of Blake’s maxim is well captured by Russell Ackoff’s work. He was shown why it is apposite to the management science, and why it is just as relevant, probably more relevant, to the modern era (the “systems age”) as to the time when Blake wrote it. Ackoff’s achievement goes beyond this, however. For in his book Creating the Corporate Future, subtitled “plan or be planned for”, Ackoff sets out a detailed methodology through which desirable futures can be planned and pursued. This “interactive planning” (IP) has as its operating principles that planning should be continuous, holistic and participative, and has, as its most original element, the idea that the phases of the planning process should be centred around the design of an “idealised future”. It is a methodology that effectively realises the insight of “plan or be planned for” (and Blake’s vision) by endorsing it in its philosophy and providing a set of practical procedures through which the philosophical message in empowered. Thus, Ackoff would not only be sympathetic to Blake’s maxim, but could point to interactive planning as the means of doing something about it.

    More prosaically, and in terms of the logic of this book, the power of Ackoff’s work can also be seen to lie in the manner in which it addresses a wide variety of organisational concerns as revealed by a number of important metaphors. It responds to the idea that they are “    cultures”, as well as recognising that they should be designed to promote learning, like “brains”. The “system of systems methodologies”, set out in Chapter 2, would record Ackoff’s interactive planning as assuming problem contexts are complex-pluralist, since it pays attention to both the complexity of the organisations that managers face and the pluralism inherent in those organisations conceived as purposeful systems.

    Detailed discussion of interactive planning follows adopting the normal style of the book and considering in turn     philosophy, principles and methodology.

    PHILOSOPHY OF IP

    Like his friend and colleague C. West Churchman, Ackoff was much influenced by the pragmatist philosophy of E. A. Singer. We charted in the previous chapter how Churchman’s reworking of that philosophy produced a new understanding of “    objectivity” in the systems approach. Ackoff, as well, has contributed to and endorsed that new understanding. For him, the conventional view that objectivity results from constructing value-free models, which are then verified or falsified against some “real world”, out there, is a myth. Objectivity in the field of social systems science has to be rethought. Purposeful behaviour cannot be value-free. Objectivity, therefore, should be seen as resulting from the open interaction of multifarious individual subjectivities. It is “value-full”, not value-free.

    From this, stem a number of significant Ackovian conclusions. The need for wide participation and involvement in planning and design follows. So does the notion that “rationality” should be seen interactively. The attribution of irrationality by an analyst to a client, for example, is simply a statement that their models of reality differ. If the analyst would serve that client, he/she would be better off attributing rationality to the client and irrationality to himself/herself, so that improvement is sought in terms of the client’s own criteria. Also linked, is the idea that one of the major banes of the professional planner’s life, how to quantify     quality of life so that it is possible to plan well for others, can be side-stepped once it is recognised that people should plan for themselves. All that is needed is a planning methodology that people can use with the aid of professional planners, and which makes their own ideals and values paramount.

    Ackoff’s general philosophical orientation, which we have been discussing so far, takes on a precise form once we relate it to the changes he sees as taking place in the would in which planners and systems scientists have to operate. In order properly to appreciate these changes, Ackoff believes that we need a changed conception of the world and a changed conception of the nature of corporations. Then perhaps we will be able to recognise what kind of planning approach is required by the new circumstances.

    A new conception of the world is wanted if we are to understand the profound changes advanced industrialised societies are undergoing. About the time of the Second World War, Ackoff reasons, the “Machine Age” -- associated with the industrial revolution -- began to give way to the “Systems Age”. The systems age is characterised by increasingly     rapid change, by interdependence and by complex purposeful systems. It demands that much greater emphasis be but upon learning and adaptation if any kind of stability is to be achieved. This, in turn, requires a radical reorientation of worldview. Machine-age thinking, based upon analysis, reductionism, a search for cause-effect relations, and determinism, must be complemented by systems-age thinking which proceeds by synthesis (or putting thing together) and expansionism (understanding starts from the whole), tries to grasp less direct producer-product relations, and admits the existence of free will and choice.

    Those who would manage corporations in the new systems age also need to alter the way they think about these enterprises. In the past, it has been usual to regard corporations either as “machines” serving the purposes of their creators or owners, or as “organisms” serving their own purposes. Today a much richer conception is needed. Organisations should be considered as serving     three sets of purposes. They are themselves purposeful systems and have their own goals, objectives, and ideals which must be taken into account. But they also contain, as parts, other purposeful systems: individuals, whose aspirations must be met. And they exist, themselves, as parts of wider purposeful systems whose interests also should be respected. Hence corporations, have responsibilities to themselves (control problem), to their parts (humanisation problem) and to the wider systems of which they are parts (environmentalisation problem). Managers should seek to serve the purposes of all three “layers”, developing the entire organisation’s “stakeholders” and removing any apparent conflict between them. If this is done, all the “stakeholders” of the organisation, whether internal or external, will continue to pursue their own interests through it, and the organisation will remain viable and effective.

    These changing conceptions of the world and of the corporation demand a different kind of planning which properly reflects the new thinking --     interactive planning. As we have already suggested, for Ackoff planning should be participative and should be about enabling others to plan effectively for themselves. The said, Ackoff sets up the case for interactive planning by comparing it to three other ideal types of planning: reactivist, inactivist and preactivist.

    Reactivist     planners are always looking to the past and want to return things to the state of affairs they believe existed in some “golden age” in the past. They deal with problems in a piecemeal fashion rather than systematically and, of course, are out of touch with present realities. Inactivist planners are wedded to the present. They want to keep things as they are. They too treat problems separately as they attempt to muddle through and satisfice, avoiding any real change. Organisations governed by inactivist thinking only survive as long as circumstances are favourable to them. Preactivist planners are future orientated. They welcome change for its own sake and believe that quantitative forecasting techniques will enable them to predict the future so that, organisations can be designed to perform optimally when it arrives. This predict and prepare thinking is what Ackoff so criticises in operational research. To Ackoff it is illogical, since if the future were so determined that we could accurately predict it, there would also be nothing we could do about changing or preparing for it. Fortunately, we are able to affect the future by what we do now, and that means we need a different kind of planning.

    Interactivist     planners do not want to return to the past, to keep things as they are, or to accept some inevitable future. They take into account the past, the present, and predictions about the future, but use these only as inputs into a process of planning aimed at designing a desirable future and inventing ways of bringing it about. They believe that the future can be affected by what organisations and their stakeholders do now. What they all should do, therefore, is reach out for ideals. If inactivists satisfice and preactivists optimise, then interactivists “idealise.”

    Sometimes Ackoff presents the difference between interactivists and other types of planners in an alternative formulation. According to this representation, while other planners seek to “resolve” or “solve” problems, interactivists want to     dissolve them. Resolving problems is the approach favoured by most managers. It is a “satisficing”, trial and error approach, based upon a mixture of experience and common sense. Managers using this approach seek a course of action that is “good enough”. The resolving method eschews any scientific assistance. Solving problems is the optimising approach practised by most operational researchers and management scientists. It employs scientific methods and techniques and mathematical models. Unfortunately, in its enthusiasm to make reality fit the tools at its disposal, it often ignores or distorts the essential properties of “messes”. Dissolving problems, the interactivist’s solution, involves changing the system and/or the environment in which the “mess”, the “set of interrelated problem”, is embedded so that “problems” simply disappear. The minority of managers and management scientists who favour dissolving problems idealise rather than satisfice or optimise, and pursue the “development” of organisations rather than simply growth or survival.

    Ackoff provides us with a good example of the dissolving (or “design”) approach at work in a large machine tool manufacturing company. This company was faced with abrupt changes in demand for its products and tended to respond by alternatively hiring and firing personnel, many of whom were skilled workers. This policy led to low morale, poor productivity, and bad labour relations. Management sought to “resolve the problem”, tackling symptoms as they arose on the basis of experience and common sense. Because the “problem” did not go away, however, and indeed seemed to be getting worse, it was decided to use the skills of some operational researchers to “solve” it once and for all. The problem was defined by the operational researchers as one of production smoothing. Data were collected and the relevant system identified and modelled. Optimum solutions were suggested on the basis of the performance of the model. Unfortunately, the results obtained were only slightly better than those yielded by the managers’ feel for the situation. Obviously the success of the simulation depended crucially on accurate forecasts of demand being incorporated into the model, but the dynamics which gave rise to demand were in reality just too complex to model.

    Finally, a design or “problem dissolving” approach was tried. The “problem” was formulated as one which required a reduction in the fluctuations in (rather than simply a response to) existing demand and the organisation was redesigned to achieve this. It was found that demand for road-building equipment was counter-cyclical to that for machine tools and, furthermore, production of road-building equipment required much of the same technology and marketing and distribution skills, and some of the same parts and subassemblies. Adding road-building equipment as a product line reduced combined fluctuations in demand to a small fraction of the fluctuations from machine tools alone. Stable employment was achieved with a consequent improvement in productivity, cash flow difficulties and the industrial relations climate.

    Interactive planning, therefore, is the specific methodology recommended by Ackoff to translate his general philosophy into practice. We shall now consider the “principles” of interactive planning.

    PRINCIPLES OF IP

    There are three operating principles of interactive planning which we need to discuss before setting out the methodology itself. These are the “participative” principle, the principle of “continuity” and the “holistic” principle.

    The principle that planning should be     participative rests upon two connected ideas in Ackoff’s thought. The first is that the process of planning is more important than the actual plan produced. It is by being involved in the planning process that members of the organisation come to understand the organisation and the role they can play in it. It follows, of course, that no one can plan for anyone else -- because this would take away the main benefit of planning. The second idea is that all those who are affected by planning should be involved in it. This is a moral necessity for Ackoff, but it also stems directly from the philosophical argument that objectivity in social systems is “value-full”.

    The participative principle states, therefore, that all stakeholders should ideally participate in the various stages of the planning process. To help in the institutionalising of this, Ackoff has produced an organisational design for participative planning. In this design the different levels of the enterprise are organised into planning boards, with heads of units at each level being members of boards at three levels; their own and the ones immediately above and below. At the highest level, representatives of external stakeholders are represented on Board 1 and, at the lowest, all workers are members of their unit’s Board. Although this arrangement may seem unwieldy and time consuming at first, with some managers being on as many as perhaps ten boards, Ackoff’s experience is that the benefits in terms of co-ordinated activity, organisational integration and motivation (which are what a manager should be spending his or her time on anyway) are very considerable.

    Of all the questions asked of the participative principle, the most frequent must surely be: “What is the role of professional planners in this process?” and “How does higher management react to having to involve other stakeholders, especially low-level employees, in planning?” Ackoff replies that professional planners are by no means excluded from the process; it is simply that their role has changed. They now use their expertise not to plan for others, but to help others plan for themselves. Thus the benefits of the “solving” approach (and the “resolving” as well) can be included in an essentially “dissolving” orientation. On the stakeholder involvement issue, Ackoff admits that there can be a reluctance to permit full participation. However, in these circumstances, if other groups can first be gained admittance as “consultants”, it is usually then possible to increase their involvement over time.

    The second principle is that of     continuity. The values of organisation’s stakeholders will change over time and this will necessitate corresponding changes in plans. Also, unexpected events will occur. The plan may not work as expected, or changes in the organisation’s environment may change the situation in which it finds itself. No plan can predict everything in advance, so plans, under the principle of continuity should be constantly revised.

    The final principle is the     holistic principle. We should plan simultaneously and interdependently for as may parts and levels of the “system” as possible. This can be split into: (a) a “principle of co-ordination”, which states that units at the same level should plan together and at the same time -- because it is the interactions between units rather than their independent actions which give rise to most difficulties, and (b) a “principle of integration”, which insists that units at different levels plan simultaneously and together, because decisions taken at one level will usually have effects at other levels as well.

    With these principles in mind we can now pass on to the interactive planning methodology itself.

    IP METHODOLOGY    :

    Introduction

    There are five     phases of interactive planning. These, however, must be regarded as constituting a systemic process, so the phases may be started in any order and none of the phases, let alone the whole process, should ever be regarded as completed. The five phases are:

    *     formulating the mess;
    *     ends planning;
    *     means planning;
    *     resource planning;
    *     design of implementation and control.

    Formulating the Mess

    During this Phase “problems” and prospects, and threats and opportunities facing the organisation are highlighted. A recommended way of doing this is to work out the future the system     is currently in. This is a projection of the future that the organisation would be faced with if it did nothing about things, and if developments in its environment continued in an entirely predictable way. Such a projection requires, according to Ackoff, three types of study:

    *     Systems analysis - giving a detailed picture of the organisation and how it works, who it affects and how, and its relationship with its environment;
    *     An obstruction analysis - setting out any obstacles to corporate development;
    *     Preparation of reference projections - which extrapolate on the organisation’s present performance in order to predict future performance if nothing is done and trends if the environment continue as now.

    Synthesising the results of these three types of study yields a     reference scenario, which is a formulation of the mess the organisation is currently in.

    Ends Planning
    Ends planning concerns specifying the ends to be pursued in terms of ideals, objectives and goals. The process begins with “idealised design”, which is both the most unique and most essential feature of Ackoff’s approach. An idealised design is a design for the organisation which the relevant stakeholders would replace the existing system with today if they were free to do so. An idealised design is prepared by going through three steps;

    *     Selecting a mission -- which is a general-purpose statement incorporating the organisation’s responsibilities to its environment and stakeholders, and propounding a vision of what the organisation could be like which generates commitment;
    *     Specifying desired properties of the design - a comprehensive list of the desired properties stakeholders agree should be built into the system;
    *     Designing the system - setting out how all the specified properties of the idealised design can be obtained.

    It is desirable to go through these steps twice to prepare two idealised designs -- one     constrained, assuming no changes in the wider containing “system”, the other unconstrained (i.e., with changes in the containing system allowed). If the differences between the two versions are great, then the organisation will clearly have to concentrate much effort in bringing about changes in the so-called “wider-system” during the rest of the planning process.

    Idealised design is meant to generate maximum creativity among all the stakeholders involved. To ensure this only two types of constraint upon the design are admissible. First, it must be     technically feasible, i.e., not a work of science fiction. It must be possible with known technology or likely technological developments; but it should not, for example, assume telepathy. Second, it must be operationally viable. It should be capable of working and surviving if it were implemented. Constraints of a financial, political, or similar kind are not allowed to restrict the creativity of the design.

    Ackoff is equally clear that the aim of idealised design is not to produce a Utopia which specifies what the “system” should be like for all time. This would not be sensible since the values of stakeholders, and what they hold to be ideal, are bound to change. Hence they should be able constantly to modify the “system”. Nor would Utopia be possible, because the designers will not have at their disposal all the information and knowledge necessary to resolve some important design issues or to predict the state of the organisation’s environment far into the future. For all these reasons, it is essential that the designed system be capable of rapid     learning and adaptation. It must be highly flexible and be constantly seeking to improve its own performance. It short, what is intended is the design of the best “ideal-seeking system” that the stakeholders can imagine. This will certainly not be static, like Utopia, but will be in constant flux as it responds to changing values, new knowledge and information, and buffeting from external forces.

    An “ideal-seeking system” obviously requires a very particular kind of organisational design, capable of rapid and effective learning and adaptation. Ackoff, in fact, supplies an outline for such a “responsive, decision system”. This contains five essential functions:

    *     identification and formulation of problems (threats and opportunities);
    *     decision making -- determining what to do about the threats and opportunities;
    *     implementation -- doing it;
    *     control -- monitoring performance and modifying actions to prevent repetition of any mistakes;
    *     acquisition or generation, and distribution of the information necessary to carry out the other functions.

    There are further recommendations in Ackoff’s work about the design of appropriate management information systems, about issues of organisational structure (e.g., centralisation versus decentralisation) and, as we have seen, on how to achieve a participative organisation.

    Those organisations willing to undertake idealised design should, according to Ackoff, reap considerable benefits. In particular, the process is said to:

    *     facilitate the participation of all stakeholders in the planning process;
    *     allow incorporation of the aesthetic values of the stakeholders into planning;
    *     generate a consensus among those who participate;
    *     release large amounts of suppressed creativity and harness it to individual and organisational development;
    *     expand participants’ concept of feasibility, revealing that the biggest obstruction to the future we most desire is ourselves;
    *     ease implementation, since people are more inclined to implement plans in which they have a say.

    The remaining three Phases of the planning process are directed at approximating the idealised design as closely as possible. We shall spend less time on them, and interested readers should consider Ackoff’s own work, especially     Creating the Corporate Future.

    Means Planning

    The output of Phase 1 of interactive planning was a reference scenario setting out the future the organisation is currently locked into if it does nothing and if the environment does not change its behaviour drastically. The output from Phase 2 was an idealised design setting out in detail the future the organisation would like to have. During Phase 3,     means planning, policies and proposals are generated and examined with a view to deciding whether they are capable of helping to fill the gap between the desired future and the way the future looks like being at the moment. Creativity is needed to discover ways of bringing the organisation towards the desirable future invented by its stakeholders. Alternative means to reach the specified ends must be carefully evaluated and a selection made.

    Resource Planning

    During this phase of planning, Ackoff recommends that four types of resource should be taken into account:

    * inputs -- materials, supplies, energy and services;
    * facilities and equipment -- capital investments;
    * personnel;
    * money.

    For each type of resource, questions have to be asked in relation to the chosen means. For example, it must be determined how much of each resource is required, when it will be required, and how it can be obtained if it is not already held.

    Design of Implementation and Control

    This phase of interactive planning concerns itself with seeing that all the decisions made hitherto are carried out. “Who is to do what, when, where and how?” is decided. Implementation is achieved and continually monitored to ensure that plans are being realised and that desired results are being achieved. The outcome is fed back into the planning process so that learning is possible and improvements can be devised.

    So much for the philosophy and principles behind interactive planning and the details of methodology; we now need to see it at work.

    IP IN ACTION: The Example of Super Fresh

    Introduction

    In this section we are going to consider an interactive planning consultancy worked on by members of INTERACT, the Institute for Interactive Management     http://www.interactdesign.com/. We are indebted to A. Barstow for allowing us to include his account of this project in the book.

    Super Fresh

    In 1982, the Great Atlantic and Pacific Tea Company (A&P) supermarket chain closed over 40 stores in the Philadelphia area, resulting in the loss of more than 2000 jobs. Volume-driven profits based on very narrow margins, the historical pattern in food retailing, were under pressure from a changing environment.

    A&P had been in trouble nation-wide from the early 1970s. Mounting losses had resulted in several changes in management and ownership, and the number of stores had been cut from around 3500 in 1970 to near 1000 in 1982. In 1979, A&P was acquired by Tengelmann, a large German food merchandiser. The new corporate strategy was to scale down A&P and to increase the rate of return on the chain’s remaining assets. A higher proportionate     return on equity became the new bottom line.

    In the Philadelphia area, A&P considered its major problem to be the high labour costs of its unionised workforce. Despite high sales per employee, as compared to the rest of the industry, labour costs were higher than average: 15% of operating revenues as opposed to 10% for the industry. A&P began layoffs, which, due to seniority clauses in the labour contracts, affected mostly part-time, younger, and lower salaried workers.

    Early in February 1982, Wendall Young, President of Local 1357 of the United Food and Commercial Workers (UFCW), contacted several consultants to discuss the then-pending closure of the Philadelphia stores and to consider possible ways forward. Local 1357, which represented most of the employees of A&P, had already lost 40% of its members because of numerous supermarket and department store closings within the previous few years. Young knew the situation was critical, but he had a plan: to accumulate a large fund of employee contributions, and to borrow whatever was necessary beyond that to buy 21 of the soon-to-be closed stores.

    With the facilitation of outside consultants, the Union began to use     mess formulation techniques to outline the issues facing the proposed plan. The participants in the process emphasised the need to reform management policy and practice, regardless of who was managing. After all, the primary interest of Young and the UFCW locals was to protect the jobs of A&P employees and to avoid the impact that mass closing would have on the Union’s pension fund.

    The key role for the external consultants was to assist Union Leadership in educating its members about the need for the union to change its traditional roles, in the face of a changing environment. There was considerable scepticism and questioning about whether such education would be a proper role for the Union, and whether sufficient knowledge and expertise were available to make the plan work. The main question for A&P management was whether the union could succeed where the company had failed.

    Despite reservations among some of its top officers, Local 1357 made its bid to buy 21 of the stores on 2 March 1982. Two weeks later it was announced that 600 members had pledged USD 5000 each as seed money to build a purchase fund. This was a radical departure from traditional union roles such as organising, bargaining, and pension administration.

    In time it became clear that the union plan to buy 21 stores was not feasible. The union and its outside consultant designed a new     idealised plan, which became known as the “Quality of Work Life Plan”. Its prominent feature was worker participation in management of the Stores. The new position taken by Union Local 1357 caused A&P to rethink its position and consider alternatives to mass closings.

    A&P recognised that the workers had invaluable knowledge, hitherto untapped, about the operations of the stores. A&P executives became more receptive to the concept of worker participation in management, and in sharing earnings that might be realised by revising provisions in the existing labour contract concerning wages, hours and benefits. A&P agreed to consider the plan.

    The     ends planning phase of interactive planning and management was used to design the Super Fresh Quality of Work Life programme. Both union and management participated in the design of a structure that could realise the intent of their agreement that the company shall share power with the employees.

    The development of the programme can be described in two stages: design and implementation. In the first stage,     idealised design, approximately 30 people were involved. Included were corporate employees from A&P and Super Fresh employees, from the president and store managers to full-time and part-time hourly employees, and staff from the Union locals. All meetings included representatives from both labour and management.

    Three groups were formed; each of which generated an idealised design of supermarket chain. These groups were then reshuffled into two groups, each of which produced a synthesis of designs. These two designs were synthesised by a smaller working group. This design was then presented to the original 30, who after a few modifications approved it. The final design was printed in a pamphlet entitled, “Quality of Work Life for United Food and Commercial Workers Local 56 and Local 1357 with Super Fresh Food Markets”.

    A system of     Planning Boards was proposed. This provides the opportunity for all employees to participate in the planning of the corporation by means of a structured management system throughout the organisation. Planning Boards are formed at every level of management, with every manager heading a Board whose membership includes his or her manager. Each Board is responsible for the horizontal co-ordination of the activities within its unit. Vertical integration ensured the presence of three management levels on each Board. There is direct contact and interaction with as many as five levels of management, since most managers will serve on Boards in each of three capacities: manager, manager’s manager, and member.

    A&P and UFCW Locals 1357 and 56 reached an agreement incorporating this plan in May 1982. The New York Times (2 May 1982) called it an agreement for a “new life” for the A&P chain. The agreement had three innovative features.

    * A&P agreed to reopen 21 stores as units in a newly created subsidiary. The new chain was named Super Fresh Food Markets, Inc.
    * Profit sharing was accomplished through the Employee Incentive and Investment Fund. Every store that succeeded in keeping its yearly labour costs below 10% of operating revenues would receive 1% of the store’s gross sales apportioned among eligible employees according to the number of hours each worked in the course of the year. An employee became eligible after a period of one year. The 1% share would be reduced if labour costs exceeded 10% of revenues and would be increased if labour costs fell below 9%.
    * Management and the unions agreed to utilise a Quality of Work Life (QWL) structure to provide a mutual basis for “problem solving”, which was to be implemented concurrently with the opening of the stores. It was further decided to utilise mutually agreed upon outside sources to provide guidance and advice to increase the effectiveness of this programme.

    To attain these innovative features the union conceded three main things.

    * Total compensation was to be reduced through several methods, including a 20% wage cut, elimination of various overtime provisions, and reductions in vacation time.
    * A permanent two-tiered wage system was introduced, whereby new hires received lower wages and fewer benefits for work equivalent to that performed by higher-paid existing employees.
    * Chain-wide seniority and transfer rights for all employees were conceded.

    The results in this case were remarkable. In the face of store closings, conflict was dissolved and a new venture based on management-union co-operation was created and realised. Super Fresh opened its 29th store by December 1982 and hired 2015 workers during a period characterised by the highest unemployment rate since the Second World War. The original goals were 24 store openings and 2000 hired workers by the end of 1982. The very same stores that had been closed down only six months earlier began to establish record sales and profits almost every week. In June 1983, A&P announced its first profitable quarter in two years. In November 1986 A&P renamed its 47 Washington and Baltimore stores Super Fresh. As     Businessweek said, and Tom Peters repeated in his book, Thriving on Chaos, “A&P’s rivals said [it was] crazy to offer one percent bonuses in a business where profit margins are not much larger. But the dividends from the Philadelphia experience have silenced them.”
    FURTHER READING

    Ackoff’s main works relevant to this text are:

    Ackoff, R.L. (1974).     Redesigning the Future, Wiley, New York.
    Ackoff, R.L. (1978).     The Art of Problem Solving, Wiley, New York.
    Ackoff, R.L. (1981).     Creating the Corporate Future, Wiley, New York.

    Also of considerable interest on Interactive Planning are:

    Ackoff, R.L. (1981). The art and science of mess management,     Interfaces, 11, 20-26.
    Ackoff, R.L. (1983). Beyond prediction and preparation,     Journal of Management Studies, 20, 59-69.
    Barstow, A. (1990). On creating opportunity out of conflict: Two case studies,     Systems Practice, 3, 339-55.

    For the critique of Ackoff see:

    Jackson, M. C. (1982). The nature of soft systems thinking: The work of Churchman, Ackoff and Checkland, Journal     of Applied Systems Analysis, 9, 17-28.
    Ackoff, R.L. (1982). On the hard headedness and soft heartedness of M.C. Jackson,     Journal of Applied Systems Analysis, 9, 31-3.
    Jackson, M. C. (1983). The nature of soft systems thinking: Comments on the three replies,     Journal of Applied Systems Analysis, 10, 109-13.

    Further insights into Ackoff’s life and works can be found in the special     Festschrift issue of Systems Practice, Volume 3, Number 2, published in April 1990.