Management Consultancies
Let's Know Things
Colin Wright
4.8 • 593 Ratings
🗓️ 9 March 2021
⏱️ 26 minutes
🧾️ Download transcript
Summary
This week we talk about McKinsey, Taylorism, and Purdue Pharma.
We also discuss Fordism, scientific management, and Enron.
This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit letsknowthings.substack.com/subscribe
Transcript
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| 0:00.0 | In 1893, an American mechanical engineer named Frederick Winslow Taylor started a management consultancy in Philadelphia. |
| 0:24.3 | This consultancy was fairly unique at the time, specializing as it did in the systemization and |
| 0:30.4 | optimization of management and manufacturing processes. He focused, in other words, on helping businesses, especially those that made things, |
| 0:41.3 | figure out the optimal way to make more of those things faster, cheaper, and ideally of a higher |
| 0:47.3 | quality as well. And he did so through rigorous application of experimentation, data collection, and eventually the adjustment |
| 0:56.2 | of often minor facets of the requisite processes, so that the whole business would get stronger |
| 1:02.1 | when those tweaked pieces were then put back together and applied holistically. |
| 1:07.3 | Taylor's conception of what he called scientific management was primarily oriented around formalizing previously rule-of-thumb style metrics and approaches, |
| 1:17.3 | hiring and training employees more intentionally and uniformly, providing very specific instructions and expectations for each employee, |
| 1:26.2 | and making sure that those up top, the managers, |
| 1:29.9 | did as much work as the laborers, that work consisting mostly of collecting data, |
| 1:35.9 | crunching that data for insights, and then applying those insights in a more scientific way, |
| 1:41.4 | so as to continue improving these processes over time. |
| 1:45.7 | Taylor's overarching theory was that there was likely an optimal way to do everything, |
| 1:52.0 | and the closer a business or a worker within that business could get to that optimal state, |
| 1:57.8 | the better the business, the better the worker, and the better the people on the |
| 2:01.7 | other end of whatever good or service they produced would be. When applied appropriately |
| 2:07.3 | and consistently, these principles did tend to result in at times significant improvements |
| 2:13.7 | in output, and at times dramatically more efficiencies, especially efficiencies of scale. |
| 2:20.8 | And many of these new efficiency-derived improvements stemmed from Taylor's aforementioned |
| 2:25.2 | technique of breaking large tasks, or even the whole of a job, into discrete pieces, and then |
| 2:32.0 | optimizing each of those pieces. Unfortunately, this collection of |
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