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Volume I. 


The True Basis of 



(Sir Ernest Cassel Professor of Accountancy and Business Methods 
in the University of London) 



H J= 3-6- 

Prefatory Note 

to the first volume of "Studies in Commerce. 

Some addition to the specialised literature of Commerce is 
the natural and inevitable outcome of the institution by the 
University of London of the new degree in Commerce. The 
syllabus for the degree involves both the development of new sub- 
jects and the re-shaping of material already available but ill- 
adapted for the special purpose in view. The adequacy of the 
syllabus to the needs of the student provides one measure of the 
value of the scheme ; a far more important measure is to be found 
in the facility with which the student can grasp the matter dealt 
with in the syllabus. The most perfect syllabus, on paper, is of 
small value in the absence of the proper equipment for its hand- 
ling. Such equipment, on the academic side, consists in the 
main of lectures and books. A good text-book provides a frame- 
work around which the complete structure can be erected. 
Without such a frame, the pressure of time reduces criticism and 
explanation to a minimum ; a lecture, at the best, tends to 
become a mere lifeless recapitulation of those essential facts 
which are far better studied in more permanent form in print. 
The student, too, who must perforce devote much of his scanty 
working hours to laboriously chasing information through 
scattered sources, has little energy left for thought or under- 


standing of the real problems with which he is faced. Time 
spent in the unnecessary collection of data is time wasted. 

It is, therefore, essential to the complete success of the scheme 
of Commerce Degrees to provide not merely text-books, but text- 
books specially adapted to the various parts of a somewhat 
elaborate syllabus. 

On some subjects, a literature exists sufficient in quantity, 
though not always in the form most suitable for the student of 
commerce ; in others there is nothing whatever which can be 
used as a summary or working basis. This is notably so in 
regard to the trade and the local economic organisation of many 
countries or areas within the scope of the syllabus, while there 
are also wide gaps to be filled in the literature dealing with 
special aspects of industry, trade and shipping. To fill such 
gaps is one purpose of the series. There are other purposes, 
however, almost equally important. 

The series may be regarded as an offshoot, a development on 
special lines of the existing series of general studies in 
Economics published by the School, the limits of the offshoot 
being laid down by the syllabus for the degree in Commerce. 
Within these limits there is a wide field, and the provision of 
text-books, though important, represents only one side of the 
work to be carried on. The formal text-book is necessary, but 
tends in use to produce mechanical methods. Such tendency 
may be corrected in lectures, but there is room in a series of 
text-books for occasional studies of wider or deeper range, on 
special problems, or for a critical treatment of existing literature 
as a guide to methods of study. Here, too, the written may 
supplement the spoken word ; it may take the place, among a 
wider public, of the lecture or discussion. The main purpose 
of such studies must not be so much to inculcate facts as to pro- 
duce an attitude of mind, to encourage sounder and deeper 
thought in the handling of existing material. 


The term efficiency has become a catchword ; the problem of 
efficiency pervades both industry and trade. It is essentially 
modern and up-to-date. Moreover, it possesses a literature amply 
furnished with pitfalls for the unwary reader. The need is not 
so much for text-books as for criticism of text-book learning. 
It is into this class that Professor Dicksee's volume, the first of 
the new series, falls. It is hoped that others of like kind will 
appear from time to time as the pile of the more formal 
volumes increases. 

W. H. B. 
A. T. S. 

To the millions of Mothers of 'Britain, 
Who for four long years or more 

Steadfastly endured 
The almost unendurable, 


I dedicate this book. 

Teach its message to your children to those of them 
who survive : 

" God is Light, and in Him is no Darkness at all." 
" Ye cannot serve God and Mammon." 

" Work while it is day, for the night cometh when no 
man can work.' 

"He that endureth to the End, the same shall be saved." 



PREFATORY NOTE . . . . . . v. 


PREFACE . . . . . . xi. 

NOMIC RECOVERY . . . . . . i 

CHAP. I. TRAINING .. .. .. 17 

II. EQUIPMENT . . . . 33 

,, III. LEADERSHIP .. .. .. 53 

,, IV. MORALE . . . . 69 


(By JOHN MURRAY, M.P.)* . . . . 85 

* Reproduced with the kind permission of the proprietors of The 
Evening Standard from their issue of i5th July 1921. 


The object of this book is to suggest that what we 
do is primarily the result of what we are, and that, 
therefore, the efficiency, or otherwise, of our actions 
will be determined in the main by what we are ; 
that the habit of Right Thinking must be formed 
before we can expect Right Doing ; that Character 
and Vision are the Bed-rock of all true Efficiency. 

The book comprises four lectures delivered by me 
during the session 1920-21, reproduced very much 
as originally delivered. I put forward no claim to 
have exhausted the subject ; I think it best first to 
see whether we can agree as to what constitutes 
li The True Basis of Efficiency " before proceeding 
to elaborate in detail as to how that state may best 
be attained. To the objector, who thinks that he 
has disposed of my case by pointing out that I have 
mixed up religion with business, I would say : " Are 
you so satisfied with things as they are that you 
find it impossible to believe that we may have been 
travelling along the wrong road ? " We have had 
plenty of materialism in the past, but it has not led 
us within sight of True Efficiency. Is it too late 
to try " A More Excellent Way? " 

1 1 th November 1921. 

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" Your heavenly Father knoweth that ye have need of all these 
things. But seek ye first the Kingdom of God and His righteousness ; 
and all these things shall be added unto you." 

The choice of the subject of my lecture to you this 
evening has been that of your Chairman, and I am 
particularly glad it has been so, because it struck me 
as being one of the most useful subjects for a single 
lecture, where the aim is necessarily not so much to 
convey exact information as to inspire interest in a 
course of study. Our present subject the vital 
importance at the present time of efficient admini- 
stration is a particularly happy choice for those 
studying accounts, because there is rather a tendency 
on the part of those in charge of the accounts of an 
undertaking to adopt the attitude of the disinterested 
spectator. This attitude is quite a proper one for 
accountants from one point of view, but the tendency 
is rather for the accountant to regard himself as 

*A lecture by Professor Lawrence R. Dicksee, M.Com., F.C.A., 
at a meeting of the London Branch of the School of Accountancy 
Students' Association, at Essex Hall, Essex Street, Strand, London, 
on Thursday, i6th September 1920. 


someone cut off from the actual business, instead 
of being a co-worker. The place where the account- 
ant does his work is called the office. The place 
where the outside people do their work is called the 
warehouse, the works, or the factory. In South 
America, the name given to the works or factory is 
" officina." The words n office " and " factory " 
really mean the same thing the place where the 
work is done ; but the fact that we use the words 
" office " and " factory " as implying two quite 
different things shows, I think, that we have got in 
our minds a sort of close partition between the 
accountant's work and the work of the practical 
business man. Few people realise that " office " is 
really the same as " factory." It is, therefore, worth 
our while now and again to get more closely into 
touch, in mind and in spirit, with the workers. 

Efficient administration, as suggested by the title 
of my lecture, is a prime necessity for Britain's 
economic recovery. The use of the word " recovery " 
suggests that one has to recover from something ; 
that there has been ground lost, and that we have 
got to win it back. We all know that that is so, as 
compared with 1914. There has been great wastage 
of property, many persons have been diverted from 
production, stocks of essential commodities have 
been brought low, credit and exchange disorganised, 
transport facilities rendered inadequate, and, worst 
of all, the morale to-day can only be described as 
deplorable. It may seem out of place, now that 
the war is over, to hark back to it and call up painful 


memories by use of similes suggestive of war. I 
will come to that point later, but at the moment I 
may say I am doing it deliberately, because I think 
it the only useful way to approach our subject. 

When the Armistice came, the idea, as put forward 
in the newspapers, was that the men should come 
back and get to work and achieve the economic 
recovery that we all felt was necessary. They came 
back all but the best of them but they have not 
done much else. The appeal made to them to get to 
work and repair the wastage of w r ar was not so very 
absurd when we bear in mind the claim put forward for 
some years before on behalf of organised labour, as 
being the sole producer of all the wealth in the world ; 
but we have to take things as they are. Whatever 
our precise shade of political views may be, we must 
admit that efficient direction is not now conspicuous 
among the workers. If labour was now trying to 
do its best towards economic recovery, it might be 
reasonable to admit the claim that labour is the 
source of all wealth. But what at the present 
time is organised labour doing ? To a very large 
extent we must all agree that it is using its organisa- 
tion to withhold production, with the result (whether 
it is intended or not) of creating a further shortage. 
The appeal to labour to repair the wastage of war 
has so far had no good effect. My suggestion to 
you this evening is that to a large extent the failure 
is due to the appeal having been made, I will not 
say to the wrong parties, but in the wrong way- 
direct to labour, instead of being made through 


administration. Labour can do great things, but 
little or nothing without guidance. That guidance 
it is the function of administration to provide. 

If we pause to consider for a moment what the 
word " administration " means, we find that it still 
further reinforces that idea. To administer is to 
render aid or service. Such administration will be 
efficient when it achieves a desirable result, and it 
will, in the main, consist of doing the right thing, 
in the right way, at the right time. 

It seems to me that efficient administration has 
two aspects, material and spiritual. In each of these 
aspects it should be educative rather than directional. 
It suffers very often from the wrong assumption that 
authority of itself gives knowledge. If we take the 
view that administration represents the leading force 
in connection with all useful w r ork, we shall see that 
it cannot be effective if it always operates from the 
rear. One can drive from behind, but one cannot 
lead from behind ; and, in so far as leadership is 
necessary, the rank and file, no matter how able 
they are, can do very little without leaders. Here 
you see I come across the military simile again. It 
is difficult to speak on the subject in any other way. 
Perhaps some of you may wonder why I use terms 
recalling these unpleasant things. It is because I 
think it is essential to Britain's economic recovery 
for us to remember that we are still at war, and that 
we shall always be at war so long as the world lasts. 
If we are not warring against one thing we are against 
another. Just now we are at war against ignorance 


and sloth, and without that kind of war there can be 
no progress. 

If administration represents enlightened leadership, 
it may give very good value to the rank and file by 
enabling them to concentrate upon their own particu- 
lar job. We all know that there are men in a small 
way of business who are never free from worry, who 
never make good ; men who would be far better off 
as employees, simply because they have no adminis- 
trative ability. If we were to abolish administration, 
all employees would be in that position, save the few 
that had administrative ability. 

One of the functions of administration is to find a 
job suitable for each member of the rank and file. 
By that I do not mean to find a job in the sense of 
creating positions that are paid for whether there is 
any use for them or not. I mean, considering the 
work that has to be done, resolving it into its con- 
stituent parts, finding out the qualities required for 
the performance of each separate part of the work 
and distributing that work among the workers in the 
best possible way staff selection it is sometimes 
called. And hand-in-hand with staff selection goes, 
or should go, staff training. 

The old-fashioned method of managing a business, 
I need hardly remind you, was and to a large extent 
it still is to call out for qualified workmen, and then 
to grumble at those who offer, and complain that they 
are deficient. The last thing the old-fashioned 
administrator ever thought of doing was to train his 


staff ; he expected them to come to him ready 
trained. If it were possible for them I do not 
mean exceptional individuals, but as a whole to 
train themselves in the best possible way, that would 
be reasonable, but a little enquiry into facts is 
sufficient to show that it is not possible. It is only 
the exceptional man that can achieve any reasonable 
standard of competency by being self-taught in 
whatever line of activity we may choose to think of. 

Being self-taught means picking up your ideas as 
you go along by observing others, and, in the vast 
majority of cases, without the possibility of observing 
the best people. It is a system which, under the 
most favourable conditions, serves to perpetuate 
mediocrity, and very often it does much less. That 
is what, as a nation, we have been very much in the 
habit of doing with regard to those kinds of things 
that, after all, make up the prosperity of our country. 
How little in our heart of hearts we believed it to have 
been an efficient system is shown by the fact that we 
never think seriously of adopting that method in 
connection with our games. Boys at school do not 
pick up cricket and football ; they are taught them. 
The man who wants to play bridge without losing 
his money takes lessons If a man wants to excel 
at golf he takes lessons from a professional. We 
always appreciate the importance of training and 
teaching in connection with our amusements. 
Directly the matter is in any way within the range 
of athletics we realise that training is something 
rather apart from teaching, and perhaps even more 


important, and we recognise that good results cannot 
be produced unless we live the life that makes it 
possible to produce good results. 

Then another point. Directly we want to achieve 
something more than the mere passing of the time 
by these recreative pursuits, we take and young 
people come to it instinctively a very great interest 
in records. The average schoolboy knows a great 
deal more about the statistics of cricket, and attaches 
a great deal more value to them, than the average 
business man knows of statistics in connection with 
his own work. Of course, everything can be over- 
done. We can devote so much attention to burying 
our heads in figures and statistics that we really have 
no time left to look up and see what is going on ; 
but it is very important that we should study what 
is happening, because only by that means can we 
possibly tell what it is reasonable to expect. 

You will, I am sure, all bear me out, when you 
come to think of it, when I say that there is a general 
tendency for us all to be too easily satisfied with our 
achievements not perhaps all our achievements, 
because we most of us probably have some particular 
thing that we are careful of and doubtful about, 
and perhaps that is the very thing we do best ; but 
with regard to most of the things we do, or ought to 
do, we are quite satisfied that we do them well. 

There are various ways, of course, of testing 
whether a thing is done well or badly. Some are 

B 2 


easier than others, but just as an illustration and 
only as an illustration let us try the test of speed. 

In connection with practical business it is obvious 
that in the long run the remuneration of the worker 
has to be provided out of the work produced, and it 
is clear, therefore, that speed of production is a matter 
of importance. It is not a matter we can afford to 
overlook, although, like everything else, it is an 
idea that can be overdone. In regard to this question 
of speed because it is the one aspect of the matter 
that I can put before you in a more definite way 
than any other I should like to draw your attention 
to a few figures. Men employed in shovelling coal 
from one place to another were found to average, 
doing it in their own way, 16 tons of coal per day, 
but when they had been taught how to do it they 
were able to shovel 59 tons per day with less exertion. 
Bricklayers, left to their traditional methods, were 
in the habit of averaging 120 bricks per hour, but 
when taught how to do it they could readily lay 
350 per hour. Compare that with the number of 
bricks laid per day in this country at the present 

Now let us get on to something perhaps more 
within the practical experience of many of you here 
this evening. Supposing someone is regarded as a 
competent typist ; that very likely means he, or 
she, could average on fairly straightforward work 
from 40 to 45 words per minute. That is not bad 
typing. At the present time, to the best of my 
knowledge, the world's record is 143 words per 


minute. In shorthand, the shorthand clerk varies 
his speed more than the typist ; it may be anything 
from 80 to 1 20 or 130 words a minute. The world's 
record is 322 words per minute. I am not suggesting 
for a moment that every worker could achieve a 
world's record ; that would be as absurd as to suggest 
that everybody could run 100 yards, or a mile, in the 
record time ; but beyond doubt a knowledge of 
what has been done by others is a most useful spur, 
and a very good corrective of that self-complacency 
we are all very apt to fall into. 

I will give you another illustration which you can 
test for yourselves. Most of you shave in the morn- 
ing ; the probability is that the great majority of you 
have never counted the number of strokes you make 
with your razor in the process. The number of 
strokes you make is not necessarily an index of your 
ability that is to say, the smallest number is not 
conclusive proof that you do it better or quicker, 
but you may be sure that the number is as large as 
it is mainly because you do not think beforehand 
what you are doing, but you just go on with a sort 
of reflex action of the hand without thinking what you 
are doing. Try the experiment next time, and 
count how many strokes you make ; then make up 
your mind that that number can be reduced by 
half in a fortnight, and I am perfectly certain you 
will find you can do it. I have tried that with a 
number of students, and have never known it other- 
wise. In my own case I found I took as many as 
320 strokes, which is certainly a large number. I 


got it down to 1 1 2 quite easily. Then the first time 
I put it to a body of students I found that, compared 
with their experience, 1 1 2 was quite a large number, 
their best being 52. That was rather a shock to me, 
but I was not to be beaten, and I got down to 52 
within a week. From 320 to 52 is a big difference. 
The funny part about it is that if you do not count 
for a week you will find the number going up again. 
That is typical of everything ; if we are not always 
on our guard, we find that we are always slipping 

But administration, of course, does not consist in 
forcing the pace : speed, and nothing else. In so far 
as it is possible to increase speed it does so, in the 
main, by studying precisely what motions are per- 
formed in the fulfilment of the task. Cutting out 
useless motions diminishes fatigue. In this matter 
we have been greatly assisted by the camera. We 
can get instantaneous photographs of the most rapid 
operations, and throw them upon the screen to get 
the general effect of how the thing has been done, 
or should be done, as the case may be. We can then 
reduce the pace at which they are thrown upon the 
screen, so that the movements may be analysed 
exactly. It is not to be expected that those who 
have been aiming at a high rate of speed in the past 
have accidentally stumbled upon the best possible 
method. Good results come only as the result of 
careful study. In the illustrations I have given you 
we have seen that there is scope for very considerable 
improvement. That is, scope for still further study. 


Administration, again, does not consist merely of 
staff training so as to speed up results ; it also 
involves study of the psychology of fatigue. This is 
very necessary if we are going to maintain these 
results, so that we may find out the conditions under 
which work can best be done. The average indi- 
vidual rank and file worker knows little about that. 
He is in no danger of smashing himself up by neglect 
of the necessary rests ; but on the other hand there 
are casualties every year, probably every day, from 
this cause, and these casualties in the nature of 
things often occur in connection with the most 
promising of workers. There is great scope for 
further inquiry in this direction, although during 
quite recent years a good deal of pioneer work has 
been done. 

But we have to take a much wider outlook yet, 
before we can really claim that we have been admini- 
stering to the needs of the worker. It is not enough 
merely to watch the individual worker at work and 
instruct him in the best way. We have also to see 
that he is supplied with the conditions that make 
for good results. This is classified to-day under the 
heading of Welfare Work. In all the large factories 
to-day are welfare workers, whose functions differ 
very materially according to the circumstances. 
The welfare worker may be anything from a domestic 
factor}' inspector on the one hand to a games master 
on the other. Very often the w r elfare worker has 
the engagement of employees. Looked at from 
this point of view, we are dealing with what we 


may call the personal aspect of employment, and 
the aim is to supply that human factor in con- 
nection with employment which was formerly 
crowded out in large undertakings when the number 
of employees became so considerable that the manage- 
ment lost touch with the employees as human beings. 
There is much room for development on these lines, 
and much scope for administration ; but nothing, 
it seems to me, can take the place of some sort of 
human intercourse, however slight, between the 
individual workers and the chief. My experience 
is that the more works managers, or managing 
directors, are able to keep in personal touch with 
all their workers, the better. The}^ should not only 
know them by name, but be able to talk to them. 
We might regard that as one of the tests of admini- 
strative ability. 

But that is not all there is to be said. There is 
such a thing as suitable housing, and provision for 
suitable recreation, and education, and so on. And 
as regards housing, we have also to consider the 
actual position of the worker while at his work. If 
we are expecting from A. and B., two workers, a 
similar output in quantity and quality we are mani- 
festly unreasonable, unless w y e not only give them 
similar tasks to perform but also give them similar 
means of performing them and similar conditions. 
If we want to get the best results we must supply the 
best conditions for the production of them, and it 
is up to the administration to do that. In the 
ordinary course of events it is not reasonable to 


expect good results in the absence of suitable equip- 
ment, suitably placed. 

It is up to the administration also to provide 
continuity of work, and that can only be done by 
very careful planning, which often involves thinking a 
long time ahead. We have got to consider, when we 
are deciding whether to take a particular order or 
not, how we are to carry it out. 

In so far as it is the function of administration 
to guide, it can only guide, as distinct from driving, 
by pointing out the way and pointing out that it 
is the right way and keeping the rank and file 
informed of what they are doing. We want to be 
continually comparing what is with what should 
be. Competition has its uses in this regard, as was 
proved by the competition amongst rivetters in 
shipbuilding during the war, when one yard was 
competing with another as to the number of rivets 
that could be driven in a given time. 

A very common criticism of any attempt to 
centralise administration is that it makes work 
monotonous. Don't believe it. The really mono- 
tonous or uninteresting job is always the job that is 
indifferently done. Whatever it may be, if it is 
really well done, you may be quite sure that it is 
not uninteresting to the man who does it. If we 
can get workmen to take a really living interest in 
what they are doing they will never complain that 
their work is uninteresting. 


But above all, administration means the inspira- 
tion of uplifting ideals, that brush away of all clogging 
doubts and distrusts and banish fatigue. It must 
be upon the right lines materially, because it has to 
deal with material things ; but at heart it is essen- 
tially a matter of the spirit. Nothing can per- 
manently succeed, if done in the wrong spirit. It is 
for the efficient administrator to renew a right spirit 
within us, so that we each no longer seek the welfare 
of ourselves, our families, or even of our class. So 
that we may strive in work not only to find our own 
soul, but also the great One-Soul of all our race. 
Then, and then only, shall we be irresistible 
because Efficient. 

Do the Right Thing, in the Right Way, at the 
Right Time. 

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i* In?.' 1 

Chapter I 


" For the body is not one member, but many." 

Efficiency is a subject about which there has 
been a great deal of talk for some years past, but 
a subject which really, when one comes to read the 
books that have been written upon it, seems to mean 
something quite different in the case of almost every 
authority. We have the one word expressing many 
different kinds of things, if we may judge by what 
they say ; and, if we are to infer from what they 
say what their ideals are, it would still seem that 
there is a great deal of difference between their 
methods of approach to a large extent at least, 
because they seem to be trying for essentially different 
results. I want to put the matter to you from yet 
another point of view. In that respect I am hardly 
doing anything different from what everybody has 
done up to the present. I want to put it from a 
point of view, however, which is radically different 
from all the others, because it aims at getting deeper 
down to the causes of things. 

*A lecture delivered at the London School of Economics and Political 
Science on ist June 1921. 


Efficiency," as the term is ordinarily used both 
in this country and in the States, seems to amount 
to very little more than a scheme of doing things 
which will, in the American phrase, " get there " 
a way of getting things done. The best that they 
have to say for it in the most favourable circum- 
stances, apparently, is that it represents the study, 
as applied to a complex business organisation, of 
the art of " making good." We need not, perhaps, 
quarrel with that particular phrase, if we put into it 
all that the expression <( making good " is capable 
of ; but we are so little likely to do that that I would 
sooner express it in the more old-fashioned phrase 
41 well-doing," which although it means nothing more, 
regarded as mere words, yet certainly does imply a 
great deal more. And we want it to imply a great 
deal more, in that schemes of efficiency conceived 
solely in the interests of those who are concerned 
with profits will never be able to put forward any 
stronger appeal for support than we could expect 
where all that we have to offer in exchange is mere 

I do not want to minimise the importance of 
money we all know it is an exceedingly important 
factor in life but those who have had much experience 
as employers also know perfectly well that you cannot 
as a rule get better results than those which you are 
at present getting merely by offering people higher 
pay. The offer of higher pay appeals to one aspect 
of their character, and only one, and that not the 
highest. We have got to remember, further, that 


there is no finality to be reached on those lines. If 
you offer employees, say, 10 per cent, increase of 
pay, from the time they have received the increase 
they are 10 per cent, better off, and for a time they 
appreciate the advantage of being 10 per cent, better 
off. That advantage very soon wears off ; but the 
appetite for being 10 per cent, better off does not 
die so quickly, and can only be satisfied by a further 
increase. Simultaneously, the fact that large num- 
bers of persons are in receipt of higher rates of pay, 
and, therefore, have more money to spend, naturally 
brings them into the market as purchasers to a larger 
extent than before, and this increases the demand 
for certain kinds of goods, with the inevitable ten- 
dency to put up prices, so that the whole 10 per 
cent, advantage is not permanent. That only tends 
to accelerate the date w r hen the contented effect of 
the advance will wear off, and a further increase 
will begin to be looked for. 

The principle upon which F. W. Taylor started 
out to evolve a better system of works management 
in the United States under the title of " scientific 
management " was to increase the productive power 
of the worker by training him in a more scientific 
way of performing his work, thus increasing his 
earning capacity, and also increasing what the 
employer could afford to pay him. Taylor never 
used the word " efficiency " as far as I know ; it 
seems first to have been used by Harrington Emerson 
(another American), who has written tw r o quite 
interesting books upon the subject, one called 


" Efficiency " and the other called " The Twelve 
Principles of Efficiency." I do not think we need 
worry over-much about Emerson's twelve " prin- 
ciples " at all events, not beyond the first two, 
which are respectively " clearly defined ideals " and 
" common-sense." If we take them as our founda- 
tion, we may very well let him keep the other ten, 
because they do not really add anything fresh. But 
although Emerson uses the term " ideals," when we 
come to examine what he writes upon the subject, 
we find that he is certainly not using the word in 
the sense in which it is used in this country. What 
he means is rather what we should call " ideas," and 
it is at least open to question whether that is not 
where he falls short. His objective is not on the 
highest possible plane. But he has at least a clearly 
defined objective, and that must always be the 
starting point of any attempt to improve upon 
existing conditions. We want to see clearly what 
it is that we are aiming at. But we may just as 
well realise for it is true, whether we realise it or 
not that, unless we aim high, we shall in all proba- 
bility miss the target altogether by firing below it. 

Now, chiefly because I have only four evenings in 
which to talk to you about efficiency, I am dividing 
the subject up into four groups. I am not going to 
call them " principles," but simply " groups," and 
I am going to suggest to you that our subject is 
capable of being dealt with in so far as a matter 
of this kind is capable of being sub-divided at ail- 
under the headings of " Training," " Equipment," 


" Leadership/' and " Morale." This evening I want 
particularly to talk to you about Training. 

Do not let us make the mistake that is so often 
made of starting with the root-idea that what we are 
out for is simply a way of getting " workers " to 
achieve better results, using the term " workers " 
in the ordinary, popular sense of the term, as being 
more or less the rank and file of the industrial army. 
There is not really any room for non-workers any- 
where. If w r e assent to the proposition that every- 
body who is worth a place in the team is a " worker," 
then we have only to concern ourselves with 
" workers " ; but there would be very little, indeed, 
gained by effecting considerable improvements in 
the rank and file, if there were no improvement 
whatever in the organisation under which they are 
necessarily obliged to work, and in those who are 
responsible for the administration and practical 
working of the organisation. All equally are very 
far from being perfect at the present time, and if 
there is scope for improvement in the direction of 
training, you may be quite sure that that equally 
applies to all. 

When we come to the question, Who is to give the 
training ? we must realise, of course, that we cannot 
get far until we have decided what the nature of the 
training is to be, because, whatever the training, it 
should be given by persons competent for the purpose. 
The attempt has sometimes been made, and some- 
times (but very rarely) made successfully, to get the 
workers (whom I prefer to call, as being more definite, 


the rank and file) to initiate all improvements for 
themselves. In the ordinary course of events I 
think we may say that all the profit-sharing schemes 
that have ever been put forward all the schemes 
for paying the rank and file upon the basis of improved 
results when we come to look into them, are based 
upon the suggestion that if we leave the rank and 
file to do the work hitherto done by the administra- 
tion, we may get very much better results or, any- 
how, that it is worth trying. If we really could 
get the rank and file to manoeuvre perfectly without 
any officers at all, it is clear that a considerable 
amount of expenditure is wasted upon the remunera- 
tion of officers ; but there are very few cases that 
anyone could point to where a scheme of the kind 
has proved successful, even where the administra- 
tion have not abdicated, but have merely shown 
themselves as being very amenable to suggestions 
on the part of those in closer contact with the practical 
side of the work. A good deal, of course, depends 
upon the intelligence and reliability of the rank and 
file as a whole. If they are highly skilled workers, 
the probability is that they are persons of some 
education and some general ability, and in such cases 
it is only reasonable to suppose that, as a result of 
experience, they may have suggestions to put forward 
which are really valuable ; but the lower the intellec- 
tual grade of the worker, and the lower his moral 
grade, naturally the less likely it is that he will be 
able to help us much in this respect, and the less 
likely is it that he will be willing to do so. We do 


not want to hamper ourselves at the outset by any 
fixed idea as to the particular quarter from which the 
best training can come. 

A good deal has been done during recent years in 
the matter of speeding up work as the result of 
training, and the speeding up has been brought 
about by a study of the nature of the work, the 
separation of it (as far as may be convenient) into a 
larger or smaller number of successive processes, 
and allotting those processes to different workers 
so that they may each specialise within a com- 
paratively narrow field, thus aiming at further speed- 
ing up on the lines of what is called " motion-study," 
by examining precisely what physical movements 
are essential in connection with each particular 
piece of work, cutting out all w r aste movements, and 
generally working upon what is really very much 
the same principle that the performer on a musical 
instrument works upon when he first begins to learn 
it : First of all finding out the simplest and there- 
fore the best way of doing each possible movement 
that may be required, and, having found out the best 
way, always doing it that way if possible. If in a 
particular case that way is impossible, by reason of 
what goes before or after, then finding out the second 
best way, and so on. But always, when the work 
is a mere repetition of something that has been 
done before, doing it in exactly the same way. By 
that means, and by that means alone, can we get a 
really high rate of speed. What can be done in that 
direction is shown by the extraordinary reduction 



in the time allowance for certain different standard 
kinds of work to which motion-study has been 
systematically applied results which I think we 
may fairly say would seem incredible, if we did not 
know that they had actually been achieved* Motion- 
study is in its infancy, in the sense that it has only 
been applied to a very small minority of the things 
to which it can be applied. 

But speed is by no means everything, and in 
many cases it is by no means the most important 
thing, for often the quality of the work is far more 
important than the speed at which it is done. We 
find that out at once, directly we think, not of work 
accomplished in a factory, but of work accomplished 
in an office. We can apply the idea of speeding up 
to all the more usual and more mechanical operations 
in an office, such as shorthand, writing, typing, and 
addition of columns of figures, the filing of papers, 
and so on ; but we have accomplished nothing 
whatever unless those operations are performed 
accurately. If we are going to have an advance in 
speed of even 50 per cent, as a result of an increase 
of 10 per cent, in inaccuracy, that emphaticalry is 
not worth while. We must always be prepared, 
therefore, to keep in mind the relative importance 
of the speed of the work, and of the quality of the 
work ; but the more we are able to divide the work 
up into small parts, upon the lines of specialised work, 
the more practicable shall we find it to speed up, 
because in a complex operation we often find that 
it is only at one point that care is all-important, and 


that at other points no particular difficulty is observed 
in getting the required quality plus speed. 

If we increase rates of pay as a compensation for 
those who take the trouble to learn, and to give us 
consistently more speedy or better quality work, we 
are naturally making it more likely that we shall 
get the result that we are aiming at ; but, in general, 
I think we may safely say that the improved results 
will not be permanent if the work, as reorganised, 
imposes any undue strain on the worker. 

That brings us to the next question, the question 
of what is usually spoken of as Fatigue Study. The 
general conclusion that seems to have been come to 
with regard to fatigue study is that all really satis- 
factory workers require to be restrained, and that 
if they are left to themselves, with the incentive of 
the possibility of increased pay which a reasonable 
scheme may be assumed to provide, they will tend 
to " race " like an engine without a governor, and 
in the long run the result will be bad for the worker 
and bad for the work. That is to say, without some 
restraint imposed from without the individual worker, 
we shall find that we cannot achieve any permanent 
improvement upon these lines. We can be quite 
sure that where the worker is over-driven, whether 
the over-driving force comes from within or without, 
the result cannot be permanently satisfactory. 

However, we can, I think, very easily get too 
frightened about this suggestion of over-driving ; 
we want to remember that what we are doing here 


is in the nature of training, and that it must neces- 
sarily be governed by at all events much the same 
laws as training in athletics. Two of the most 
important laws here are : (i) that we must not train 
too fast. If the improvement is to be permanent it 
must be gradual, because a real improvement can 
only be the result of an improved physical and mental 
condition, which necessarily can only be built up 
slowly. (2) That w r e must recognise that what we 
want done which in the main is a matter of muscular 
movement (controlled, of course, by a mind) 
cannot be accomplished without any regard what- 
ever to the material that we are working upon -that 
is to say, without any regard whatever to the mind 
and body of the individual worker. Even although 
we aim at specialisation, the training must be general, 
at least up to a point. When we are talking about 
athletics, we know that " going into training " 
involves, to a greater or smaller extent according 
to the circumstances but always to a quite appre- 
ciable extent a life of self-denial while it lasts. 
We shall never get any great results in athletics from 
those who will not undergo proper training. 

But I do not want to exaggerate the importance 
of that in connection with practical affairs, because 
we want to remember that we are not aiming here 
at turning out prodigies. The supreme effort that 
may be essential for the purpose of beating a w r orld's 
record is not essential or, at all events, not in the 
same degree for the purpose of achieving a very 
high standard of form. We must not attempt to 


put our ideal too high, because, if we do, necessarily 
the results will not be permanent. We know that 
no one can always remain in what athletes would 
call " perfect condition " without suffering in health. 
It is not a permanently healthy state for anybody, 
although it may be the proper state for an isolated 
occasion, or over a comparatively short period of 
time. It is not a condition in which one could go on 
living. We must not, therefore, press the idea too 
far ; but it has at least this obvious bearing upon 
our subject, that those who want to conform to a 
reasonably high standard that is quite within their 
capacity will never get there unless they realise 
that what they do outside their working hours has 
a very distinct bearing upon what they are able to 
do inside their working hours. 

If we have not a good mental and muscular basis 
to build our training upon, we, of course, run the 
risk of simply smashing up our workers provided 
they will let us. Nothing could be more extravagant 
to put it at the lowest possible standpoint. But 
if we " hasten slowly," and take care that our gradual 
increasing of the severity of the task does not proceed 
faster than the development of the worker makes 
possible, we can go a very long way. That applies 
to tasks that are simply tasks of muscular strength ; 
it applies to tasks which are tasks of muscular neat- 
ness as well as strength, and also to tasks that bring 
the mind into play as well as the muscles. 

One of the commonest forms of waste is mis- 
applied energy. I think we might safely say that 


hardly anybody can exert one quarter ot the physical 
strength that he is capable of exerting until he has 
been taught how to do it. That is certainly the 
case, for instance, in connection with such operations 
as boxing. Until a man has been told how to hit, 
there is certainly not a quarter of the strength in 
his blow that he is capable of putting into it with 
skill. As regards weight-lifting, again, with proper 
training, practically anybody w 7 ho is physically fit 
can be taught to lift at least twice the weight that 
it w^ould have been wise for him to attempt before 
being taught how to do it. These are illustrations 
of things that almost everybod} 7 starts by thinking 
he knows all about ; things concerning which nobody 
can teach him anything. When we go into the 
matter we find that there are very few exceptions 
to the general rule that the self-taught person does 
not know so very much after all. The trouble, of 
course, is that the self-taught person is not as a rule 
the most teachable person. 

Of course, it goes without saying that all persons 
are not equally apt at responding to the same kind 
of training. That is really only another way of 
saying that the whole object of dividing the w r ork 
that has to be done into different tasks, and allotting 
different tasks to different workers, is to recognise 
that it is practicable to train specialists within a 
comparatively narrow field, so that they may excel 
over the all-round person, and the aim of training 
is to create such specialists out of suitable 


Everybody is not suitable material for every kind 
of purpose. An essential part of our programme, 
therefore, is the selection of the right material for 
our purpose. There is nothing to be gained in the 
long run by spending time and money upon training 
persons to perform work at which they are not able 
to become skilled. To a very limited extent that 
is to say, while only a very limited number of business 
houses are attempting to work upon these lines it 
may be easy to secure the desired number of workers 
in each different department that we want to train 
workers for, because we have a very wide field to 
select from, and it is thus mainly a question of whether 
we can or cannot out-bid other people in order to 
get the pick of those available ; but it is a short- 
sighted policy to try to organise our undertaking 
upon the basis that it is going to be a vast assembly 
of picked workers, because we know perfectly well 
that all the work in this country cannot be done by 
picked workers, because the whole of the population 
is not " picked." We should be on a sounder basis 
we should be nearer the ground, and less up in the 
clouds if we tried to frame a scheme upon the lines 
that the tasks we want performed are capable of 
being performed by quite average persons, if properly 
trained. As a rule, there does not seem to be any 
particular difficulty about that, so long as we provide 
them with the proper equipment. There will doubt- 
less always be a certain residuum who do not come 
up even to that level, and they will always present 
difficulties to those who are concerned with the social 
welfare of the country as a whole ; but, even so, 


the more we specialise the more likely we are to be 
able to provide a means of absorbing the actually 
unfit. That applies not merely to those who are 
unfit physically, but also to those who are unfit 
mentally or morally. The whole object of specialisa- 
tion is to provide a job for the individual that calls 
for fewer different qualities upon his part than does 
unspecialised work. By specialisation, therefore, it 
should be possible to find jobs for everybody who has 
even one good quality capable of being further 

But, if we are going to work upon practical lines, 
it is particularly important for us to realise that 
nothing can be more extravagant than frequent 
changes in our personnel. That applies even where 
employees are not trained by us. It has been cal- 
culated and although the calculation is only a 
rough one, I think we may take it as being approxi- 
mately correct that every time there is a change of 
a worker, the loss to the employer (direct and 
indirect) as the result of the change, will be something 
between one and three months' pay for that par- 
ticular kind of work. If we take the lower of these 
figures, just think what it amounts to, when you bear 
in mind that it is not a very uncommon thing in 
many kinds of industry to find that the " labour 
turnover " in a year is more than 100 per cent. 
that is to say, on an average, the worker remains 
less than one year at a job. That represents a very 
appreciable increase in labour costs, none the less 
real because the accounts do not show it under 
that heading. 

fljaf arc test Hwrffj 

Chapter II 


" Plan your work. Work your plan." 

By the term " Equipment " I mean not merely 
machinery, but everything with which we surround 
the worker everything that goes to make up the 
conditions under which the work is done. If we 
confine ourselves to anything short of this, we 
certainly are not dealing with the subject as a whole. 

We all know, I suppose, that we have got beyond 
the days of craftsmanship into the days of mechanics, 
and that, accordingly, our problem will always 
require us to consider, not so much what mechanical 
aid we can best give to the workers in order to 
produce the results that we want, but rather how 
much of the work that we want done we can get done 
by mechanical means, and how much of it we must 
leave to be done by the human worker. It sounds, 
perhaps, a little revolutionary and the matter is 
not always put quite so bluntly but I think we 
may be quite sure of this, that we are not upon the 

*A lecture delivered at the London School of Economics and 
Political Science on 8th June 1921. 


most efficient lines possible so long as we are con- 
sidering the matter primarily from the point of view 
of finding employment for the largest possible number 
of persons, and only considering secondarily the 
equipment that we are going to provide them with, 
to help them to do their work in the best possible 
way. We must reverse the process, and consider 
the work itself as being more important than the 
worker ; as being really the matter of supreme import- 
ance more important than anybody connected with 
the work, in whatever capacity he may be so con- 
nected. In the past, the general tendency of 
course there have been numerous exceptions has 
been rather to think of introducing mechanical 
equipment only when one found oneself compelled 
to do so as a means of reducing costs, and always 
to be content with costs higher than they need be, 
so long as one could get other people to pay the price. 
When we come to think of it, that is a very low 
ideal for a producing house, and I do not think that 
we ought to allow the fear of causing wholesale 
unemployment to dismay us, because we may be 
quite sure that the only real remedy for unemploy- 
ment is increased production. Everything else is 
a mere palliative. Even where we find machinery 
in use, we very often find that the power by which 
it is driven is human power, and that is a point upon 
which a good deal of equipment might be modernised. 
Human power is certainly the most expensive form 
of power that there is, and, generally, it is not so 
well under control as mechanical power. 


We must, of course, have quite clear ideas as to 
the nature of the work we want done before we can 
consider what is the most suitable equipment for 
the purpose ; but there can, I think, be little doubt 
as to the desirability of employing a standardised 
form of equipment as soon as possible, so that we 
may have only one type of equipment in use for each 
particular purpose. As soon as we have found out 
what type is the best, we may be quite sure that it 
is the only one that we ought to have ; but, apart 
from that, I need hardly point out to you that it is 
not fair to individual workers in charge of equip- 
ment, if we expect similar results from them and give 
them dissimilar equipment to work with. Whilst 
matters are still in an experimental stage, and it 
has yet to be determined what is the best type, we 
must, of course, be trying more than one type in 
order to find out ; but the sooner we can get the 
point settled, and the sooner we can standardise 
our equipment, the better we shall find it from every 
point of view, and particularly from the point of 
view 7 of setting an equally fair task to each worker 
thus making it possible for those who supervise the 
workers to perform their duties fairly. 

One danger about standardisation and about all 
kinds of uniformity is that it has a tendency to 
keep things as they are. It is, of course, a much 
more serious matter to change the whole of an 
extensive plant for something newer, or better, than 
it is to acquire one or two of the latest machines and 
use them side by side with those we already have 


that are still in quite good working order. Accord- 
ingly, there is a danger in connection with standardisa- 
tion of keeping to what we have got, rather than 
breaking through the standardisation. But we have 
to remember that the rule about standardisation 
only holds so long as we are satisfied that our equip- 
ment is the best possible. We must not let the 
standardisation idea interfere with our continual 
search for something better. When we come to 
think of it, it is really very improbable that the 
existing equipment will never be improved upon. 

One point where, at all events until quite recently, 
the American manufacturer had a decided pull over 
the British manufacturer was that in the designing 
and construction of his equipment he never attempted 
to build for eternity, whereas the traditional British 
practice has always been to construct equipment 
upon the most solid and permanent lines possible. 
Unless we are quite satisfied that the design we have 
is so incapable of further improvement that there 
is no risk of it becoming obsolete before it is worn 
out, the common-sense course would certainly seem 
to be to encourage ingenuity in the direction of 
designing plant that will serve our purpose for a 
limited time only, at the smallest possible cost 
consistent with doing its work thoroughly within 
the time-limit. 

Turning to another point : Hardly any kind of 
equipment is entirety automatic. To a greater or 
smaller extent, practically all equipment has to be 
tended or supervised, if you like to call it so by a 


human worker. The manner in which the machine- 
minder does his (or her) work will certainly have a 
definite bearing upon both the quantity and the 
quality of the work, whatever the machine may be. 
That being so, we cannot afford to disregard even 
if we felt disposed to do so, which would certainly 
be unwise anything that makes for putting the 
worker into the best possible conditions to do his 
(or her) best ; and we shall probably find that the 
difference between good and bad conditions is often 
a neglected matter. It is care that is required far 
more than capital to make all the difference one way 
or the other. For instance, in the nature of things, 
workers are not all of the same height, and all have 
not the same length of arm. Accordingly, whatever 
the precise type of machine may be, it is certain that, 
if no adjustments are possible, it cannot be operated 
with equal ease and comfort by everybody. There 
must be a capacity for adjustment somewhere, or 
somebody will be working under uncomfortable, 
and, therefore, unsatisfactory, conditions. If a 
worker has to keep his arms above the waist-line 
for any appreciable length of time, the position is 
very fatiguing ; if a worker has to keep his hands 
too far away from his body for any appreciable 
length of time, the position is very fatiguing ; and, 
if he has to keep his body bent forward for any 
appreciable length of time, the position is also very 
fatiguing, because in all these cases the worker is 
being called upon to sustain weights even although 
they are weights of parts of his own body which 



in a position of greater comfort would not fall upon 
the same muscles at all. To a very large extent 
these unnatural and uncomfortable positions can be 
avoided : how, will depend, of course, to a large 
extent upon the precise nature of the machine. 
When the work has to be done standing, if the 
worker stands upon a platform that can be raised 
or lowered, it will naturally make all the difference 
between comfort and discomfort. If the work can 
be done sitting and we may be pretty sure that, for 
the great majority of the workers it would be better 
done sitting than standing, provided the seat is a 
comfortable one we should remember that no 
seats can be equally comfortable for all workers 
unless they are adjustable in height, and commonly 
they will not be comfortable unless they provide 
some support for the back. In exceptional cases 
we may find that these things are impossibilities, 
but in the vast majority of cases they are anything 
but impossibilities, and would represent an actual 
cost of a few pence a day only. 

The effective tending of a machine almost certainly 
involves both seeing and hearing. We must there- 
fore pay attention to these matters also. Under 
modern conditions it is probably the rule rather than 
the exception to find that equipment is well lit in 
the daytime, but it is commonly very badly lit when 
daylight has gone. It is certainly not always pos- 
sible that all work should be done by daylight. The 
problem of providing artificial light for the benefit 
of the worker is really a perfectly simple one, so 


long as we realise that its function is not to illuminate 
the whole works, but to illuminate that particular 
point and it is rarely much more than a point 
which the worker has to watch, and that, therefore, 
the lighting cannot be effectively provided by one 
or two huge arc lights in the roof. We must have 
scattered lights light intelligently directed where 
it is wanted, and intelligently shaded from where 
it is particularly not required, namely, in the worker's 
face. If we pay attention to these matters we shall 
probably find incidentally that we effect a saving of 
at least 60 per cent, in our lighting bill. Some 
general illumination will, of course, be required, 
but very much less than is commonly provided. 

Then we come to the question of hearing. A 
worker can rarely tell whether his machine is work- 
ing as it should, unless he can hear it. The more 
delicate the machine, the more important it is that 
he should be able to hear it. But, clearly, he cannot 
hear it properly if he is surrounded by other noises, 
particularly if they are very much louder. We 
cannot cut out the question of noise altogether, 
because some noises are absolutely incidental to the 
work, but in these days a good deal can be done 
in that direction. For instance, we have already on 
the market a noiseless typewriter, and motor omni- 
buses and aeroplanes are much more silent than 
they used to be. The question of noise can at all 
events be considered to this extent ; by grouping 
our equipments we can at least avoid the very 
frequent mistake of having some of the least noisy 

D 2 


machines entirely drowned by others in their imme- 
diate vicinity. Also, by grouping, we can materially 
add to the comfort of the workers who are not 
attached to noisy machines. 

Another important factor in connection with 
comfort is the question of heating and ventilation. 
These matters are to a certain extent studied under 
modern conditions, because they have to be under 
the Factory Acts ; but they would probably be 
studied to better advantage, and better results would 
be secured, if it were always realised that there is a 
certain amount of similarity between the way in 
which the human worker operates and the way in 
which a machine operates. Nobody would expect 
to get any considerable pressure of steam out of a 
boiler unless there was an adequate draught in the 
furnace, but many persons certainly do expect the 
human machine to be able to function when there 
is not a sufficiency of ventilation to enable it to do so. 

Reverting to the question of watching the work, 
by means of sight, while it is being done, and after it 
is finished while it is being inspected, or " viewed " as 
it is sometimes called, for the purpose of seeing 
whether it is what it should be. This, in the nature 
of things, will never be done satisfactorily, unless 
the conditions provided are such as to enable those 
who are looking really to see what they are looking at. 
What they have to watch is commonly the outline 
of an object. To some extent they make tests by 
measurement, and then to some extent they may 
be able to work by a sense of touch, but still to a 


very large extent they must always depend upon the 
eye, and the eye will be apt to mislead them unless 
we provide it with a certain amount of assistance. 
We are not providing any reasonable amount of 
assistance, unless we provide some colour contrast. 
If you are looking at a grey object against a grey 
background, you will never see the outline of the 
object as clearly as you would see it against, say, a 
white background. Whatever the colour of the 
object to be seen may be, the background should 
be such as will show it up. If we cannot provide a 
natural background that is sufficiently contrasting, 
we should provide an artificial one, and, after all, 
that is very easily done directly we realise its 

In matters that come under this heading of 
consideration for the comfort of the worker, and also 
to a certain extent in connection with the type of 
equipment to be employed, we shall find that we 
can almost always get some help from workers them- 
selves, when once we have got them to believe that 
we are anxious for their suggestions, and are quite 
prepared to consider them on their merits. In some 
cases it may be found that workers are diffident in 
putting forward suggestions and disclosing their 
identity at the same time. We can readily imagine, 
for instance, a diffidence on the part of some (not all) 
workers to suggest that seats should be provided 
where hitherto they have never been provided. 
Such a difficulty can be and sometimes is very 
easily got over by getting the workers themselves 


to appoint a Suggestions Committee, and arranging 
that the suggestions should in the first instance go 
before that committee. 

For what we may call ordinary suggestions as a 
rule nothing very extensive in the way of prizes is 
necessary ; but suggestions may be anything from an 
idea that is perhaps just worth adopting, up to a new 
invention which may entirely revolutionise methods 
of production. A very large proportion of the 
most noteworthy inventions in engineering have 
been made by those who are actually connected with 
the work. A 55. or ics. prize is clearly not adequate 
as a reward for a suggestion of this kind. If we want 
to encourage workers to invent, we must at least do 
the fair thing by them when we adopt their inven- 
tions and the result is highly profitable. One of the 
reasons why some houses find it difficult to retain 
their best workers is that they treat them so shabbily 
in the matter of inventions. 

It has already been pointed out that equipment 
will naturally be very much more effective if it be 
run by mechanical power rather than by human 
power, but we can very easily get a serious loss of 
efficiency through waste in mechanical power. For 
instance, supposing our power is steam, and supposing 
the steam is generated (as it commonly is) from coal, 
manufacturers generally place their contracts for 
coal on the basis of a price per ton. They commonly 
invite quotations per ton from various sources, and 
usually give the contract to the lowest quotation. 
That would be a perfectly reasonable system, if it 


were a fact that the steam-producing power of all 
kinds of coal was equal, or even approximately equal ; 
but it would certainly not be over-stating the case 
to say that there is more than 30 per cent, difference 
in the heat-producing qualities of different kinds 
of coal bought by manufacturers in this country. 
It may very well be, therefore, that those who are 
paying the lowest prices per ton are paying the 
highest price per unit of power. Then there is another 
point (I do not want to be over-technical, but it is 
essential to illustrate one or two technical matters, 
so that you may realise how important they are in 
practice) : Wherever we have steam, it has to be 
conveyed by means of pipes from one place to another. 
If it is simply a question of conveying steam from the 
boiler to the engine that is to generate the power, 
clearly the shorter the communication the better ; 
if it is a question of using steam as a means of heating, 
then, of course, it is essential that the communica- 
tions should be lengthened. But in either case the 
main point to remember is that there will be a loss 
of heat (and, therefore, a loss of power, as compared 
with the units of fuel consumed) if any heat radiates 
through the connecting pipes, save at points where 
one wants it to do so, e.g. at radiators. That waste 
can to a very large extent be overcome never 
entirely, but to a very large extent by a proper 
covering up of the pipes. There are still in existence 
works that are losing 40 per cent, of the heat they 
generate through having uncovered steampipes. The 
cost of covering them would be saved in a few 7 months. 


Then, again, when we are working through a central 
power as is certainly usual where the power is 
steam or gas the power has to be conveyed to the 
actual places where it is wanted by means of shafting 
and belts. There must always be some slight loss 
of power in the process, but the loss need not be 
anything like as large as it commonly is. If belts 
are properly looked after, and shafting properly 
placed and designed in the first instance, there should 
be very little slipping. That is to say, the number 
of revolutions of the two w T heels which are con- 
nected by a belt should differ hardly at all from what 
one would expect having regard to their respective 
diameters. It should be almost the same as if the 
two shafts were connected with cogged wheels and 
a chain. But there will always be a slight slip, and 
we want to keep the slip down as low as possible, 
because naturally the output of the w r ork will depend 
upon the number of revolutions run by the machine 
in a given period of time ; and if we have slipping, 
we shall not have the right number of revolutions 
in relation to the power consumed. I came across 
a case about a year ago of a works that was losing 
40 a day in output on a single machine through the 
unnoticed slipping of a belt. You may look at 
revolving wheels, and may have had a good deal 
of experience in doing so, and yet not notice small 
differences in the number of revolutions if they are 
not continually being tested. It is only by testing 
them daily that we can see whether belts are as 
efficient as it is possible to make them. 


Then comes another point : If we have central 
power sufficient to drive all our power machines, 
and they are not all in use, for the time being we have 
more power than we want. That is not necessarily 
all dead loss, because we may be able to economise 
in the central power ; that is to say, the cost of keep- 
ing our engine going is not always constant, regard- 
less of the load. But we may be quite sure that the 
cost of power tends to increase in proportion as our 
equipment tends to be infrequently used. We may 
find that this reaches to such an extent that we 
should be better off if we decentralised our power. 
That, of course, is a purely technical point ; but it 
is such a very common view that there should always 
be a centralised power, and the engine house is so 
very often the u show place " in a factory that it 
is certainly worth mentioning that, before we decide 
to have a centralised power-house, we should make 
sure that it will be the most economical way of 
getting power in our particular case. If power is 
only wanted very infrequently, we may quite likely 
find that we can get it more economically by decentral- 
ised electric motors instead of central steam, and, if 
we do that, we can cut out an enormous amount of 
shafting and belting. 

Of one thing we may be very sure, that, where every 
possible attention is being paid to these matters, 
the general effect will be, among other things, to 
improve the performances of the workers. Apart 
altogether from the fact that everyone is keyed up 
to do his best where all the conditions surrounding 


him are favourable, whereas nobody is when he is 
fighting a losing battle against bad conditions, we 
can rarely expect good quality work from poor 
equipment, even if we have got what wje are not very 
likely to have in those conditions first-class workers. 
With really suitable equipment we shall find a 
material improvement in quality, and we shall find 
a material reduction in the waste arising from defective 

What may constitute " defective w r ork " depends 
entirely upon the nature of the \vork itself, but we 
have got to remember that in most kinds of work a 
very little thing, which occupies perhaps only a 
few seconds, may spoil something that took hours, or 
even weeks, to do. A great deal of ingenuity has 
been developed during recent years in devising 
schemes for the remuneration of workers so that 
they shall be provided with an incentive to increase 
the quantity of work produced. In quite a number 
of cases the quantity is, of course, all-important ; 
but, for all that, in a very large number of cases the 
quality is infinitely more important than the quan- 
tity. It is not very easy for a theorist, sitting in 
an armchair, to devise a practical scheme for the 
remuneration of workers on the quality basis, but 
the problem is not really at all difficult when 
approached by a practical man familiar with the 
particular kind of work, if once he gives his attention 
to it. We have got to remember that in the case of 
many kinds of articles it is only first-class work that 
is really wanted, and yet a very appreciable percent- 

KOt Il'.MKNT. 47 

age of second-class or third-class work is regularly 
made, apart from what is actually rejected as spoilt. 
These second and third-class qualities are little more 
than by-products, and often have a marketable value 
amounting to little more than the cost of the materials 
of which they are made. If we bear that in mind, 
we realise what a heavy burden is thrown upon the 
first-class goods that have to pay for second and 
third-class work. Anything that can be done to 
multiply first-class work, and reduce the percentage 
of seconds and thirds, is almost certainly very well 
worth while, and good equipment and good conditions 
will go quite a way in that direction, if coupled with 
a system of remuneration that makes it pay the 
worker better to turn out only first-class work than 
it does to turn out a large quantity of work with a 
high percentage of seconds and thirds. 

The more we are working upon progressive lines, 
in the nature of things the more frequently shall 
we be calling upon workers to do something different 
whether greatly different or only slightly different 
from what they have already done. If we are con- 
centrating upon quantity of output, all these altera- 
tions are exceedingly vexatious to the worker, and 
will seriously reduce his earnings unless we find a 
way of compensating him. Yet we can, I am sure, 
over-stress the idea that we want our workers to 
carry the idea of specialisation to the utmost possible 
extreme. We have to remember that every kind 
of specialisation is, in principle (although it may be 
so only to a microscopical extent), a deformity, as 


being a departure from the perfectly normal type. 
We can carry specialisation so far that our workers 
cease to be adaptable at all ; and unless we are 
dead certain that there will never be any alterations 
that we are going to call upon them to make, that 
means that we may carry it too far in our own 
interests, apart from the fact that we are taking it 
much too far in their interests. Although specialisa- 
tion is an excellent thing, a certain amount of change 
of occupation is also an excellent thing. There is 
not really in the long run, I think, anything lost by 
encouraging a reasonable amount of versatility. 
We are not really out to train workers in the perform- 
ance of world records. What we want to aim at 
is to train them to a very high average standard of 
performance, and that is not at all inconsistent with 
a reasonable amount of versatility. As an illustra- 
tion it is only an illustration, but it is an illustration 
which, I think, has a definite bearing upon the 
subject take the question of music. It is a quite 
possible thing to get a very good standard of per- 
formance on the part of an individual upon three 
or four different musical instruments, and, as you 
no doubt know, a very large number of professional 
musicians do play two or more instruments. If 
our idea of what we expect from a professional 
musician is somewhere about the standard of one of 
the best that the world has ever known, it may very 
well be that a lifetime devoted to one instrument 
is all too short ; but if we simply want a very capable 
performance, we need not be afraid of a reasonable 
amount of versatility. The Royal Academy of 


Music requires all professional students to take up 
a second " subject." 

It is a very simple thing, if one wants to do so 
and is not afraid, to find out exactly what is the 
capacity of the individual worker on an individual 
machine (that is to say, the ordinary machine, where 
we are able for all practical purposes to test what we 
want by the number of times that machine has 
operated within an hour) ; the output during that 
time, and the percentage of first, seconds, thirds, 
and " spoils." There is no difficulty, of course, in 
counting the output, and we can very well count 
the number of operations performed by a machine 
by a device of which I have only seen one example in 
this country, but which I believe is quite common 
in the United States, called the " Productograph." 
The Productograph looks rather like a self-registering 
barometer. It has a metal cylinder covered with 
paper, which revolves at a very slow rate and is 
marked by means of a pencil. In the self-registering 
barometer the pencil is connected with the mercury, 
and moves as the height of the mercury varies ; 
in the case of the Productograph, the pencil is con- 
nected electrically with the machine, and registers a 
short stroke upon the revolving drum for each 
operation that the machine has performed. Every 
tenth stroke is rather longer than the other nine, and 
thus one can get a very large number of strokes into 
an inch, and yet they can be very easily counted. 
A limited number of recording drums is sufficient for 
all practical purposes, because they can be switched 
from one machine on to another in turn. The 


Productograph not merely counts the number of 
operations that have been performed during the hour 
(or other time period) ; that, of course, could be done 
mechanically in other ways much as it is done on 
printing machines by means of a numerating attach- 
ment. But the Productograph shows gaps wherever 
the machine has had a standstill, even for the frac- 
tion of a minute. One is able to tell by looking at 
the graph whether the machine has been working 
steadily or whether it has been liable to interruptions ; 
whether it has been working at a uniform rate or 
at varying rates, and so on. This graph will enable 
a manager, without leaving his office, to find out a 
great deal that he probably would never find out 
if he was on his feet in the factory all day long. 
Apart altogether, however, from its possibilities as 
a driving force upon the workers, the Productograph 
has, I think, even greater possibilities in the direction 
of enabling the one whose duty it is to determine 
who shall do what, to see exactly what are the 
difficulties encountered b}^ each individual worker 
in handling different types of work and different 
types of machine, and in that way to find out which 
of his workers has the greatest aptitude for certain 
specified processes, instead of having to rely upon a 
general impression gathered while they are working 
under observation. He can thus secure real data, 
sufficient in quantit} r to make the impression a 
reliable one, and in that way it becomes possible for 
him to deal fairly by the workers, and to allot to 
them those kinds of work for which they are 
respectively best suited. 

hrill bt great among gon, let 
I|im fre ijonr minister ; antt 
be rl|ief amon^t yxru, M fjim & 

|c a 

ixTlin0, ant* caret 1| not for t(|c 0I|ecjJ ...*' 
goob el|^p!|Brtt gitn>ff| f|t life for 

Chapter III 


" Follow me." 

It is often thought that a leader is merely someone 
who has been appointed, or who has otherwise 
acquired power, to lead or direct others ; but that is 
a very restricted view of leadership, if it is not an 
entirely erroneous one. We have only to look back 
to the origin of the word itself to get the key to 
what leadership ought to consist of. The word is 
directly akin to the word " lode " in " lodestone " ; 
and the central idea is accordingly magnetism-- 
personality without which we may very well say 
that there could be no real leadership. At one time 
it was thought, even as, regards the purely physical 
world, that the quality of magnetism was limited to 
iron ; but it is now very generally recognised that 
the same quality exists (although to a far less degree) 
in a very large number of metals, if not in most ; 
and, indeed, it is at all events possible that it exists 
in all cases, even although perhaps its presence 

*A lecture delivered at the London School of Economics and 
Political Science on i3th June 1921. 


has not yet been detected. If we take the wider view 
of magnetism, and use the same word to imply that 
in the personality of another which either attracts 
or repels, I think we may very well recognise that 
there is probably some magnetism even in the most 
neutral of personalities ; but for leadership we want 
very much more than a trace of it, and we must 
realise that the law which holds good with regard to 
electrical magnetism is probably equally true as 
regards human magnetism, and that attraction and 
repulsion are apt to go hand in hand. 

It is certainly not enough to possess the power of 
attraction and leave it at that. The power, being- 
possessed, has to be used in a way that will further 
efficiency, or it is useless as an aid to efficiency. 
That is to say, a leader must have quite clear ideas 
of the direction in which he proposes to lead. There 
can be no effective leading without a very definite 
plan on the part of the leader. If there are any 
perceptible signs of hesitation on the part of the 
leader, we shall probably find that his powers of 
attraction have entirely ceased, and that there will, 
on the contrary, very likely be a tendency to break 
away a reaction not altogether dissimilar from the 
phenomenon of repulsion in connection with electrical 
magnetism. What we are looking for here is the 
power of attracting others for a purpose ; and while, 
of. course, the precise methods cannot be determined 
without regard to the psychology of those whom it 
is desired to attract, I think we may very safely say 
that we are much more likely to be upon sound lines 


if we aim at attracting by an appeal to the good 
qualities that we find in those whom we are attempt- 
ing to influence ; recognising that it is far more 
important to search out their good qualities, and 
to appeal to them (however difficult the task may seem 
to be with unpromising material), than to try the 
negative course of finding out first of all the weak 
points of the other side and then striving to keep 
clear of them. 

Very obviously, leadership, properly exercised, 
calls for a great sense of responsibility arid a great 
sense of duty on the part of the leader ; but if we 
have anything approaching the right elementary 
qualities with regard to the leader, I do not think 
that we need as a rule worry ourselves in advance 
as to how he is going to persuade the others to be 
led. The true leader will never lack followers. 
The true leader will necessarily possess self-confidence; 
he will not be exhibiting self-confidence if he is always 
doubtful as to his ability to lead. The great majority 
of persons are not really self-reliant, even although 
they may not be prepared to admit it. A very large 
number of persons do not go out of their way to 
seek positions of high responsibility, but are only 
too pleased to leave them to others ; and almost 
everybody is quite susceptible to the heartening and 
encouraging effect of good leadership. A little while 
ago a sales manager of considerable experience 
mentioned to me that the principal part of his work 
consisted of " reinflating " his subordinates when 
they came back from their journeys, and that his 



function was in the main to hearten them, and re-equip 
them mentally and morally to go out and take the 
road again with confidence. We may be quite sure 
that if that be true of salesmen in general, in varying 
degrees, according to circumstances, it is very largely 
true of others. Those who are not susceptible to 
this process of reinflation on the part of a good 
leader are not suited for good team work. 

In connection with business affairs, we very 
often make use of the term " confidence." We do 
not, perhaps, ahvays stop to consider quite what 
we mean by it. There may be confidence of all 
sorts, and probably all sorts are necessary for good 
results. We must have a sufficient amount of 
confidence in ourselves, and we must have confidence 
in our leaders, particularly if we have to work away 
from their heartening influence ; and we must also, 
before we can really reasonably expect good results, 
have confidence in our cause that is to say, in 
the work that we are doing. Having confidence is, 
of course, exactly the same thing as having faith. 
It is not the fashion in these days to talk very much 
about Faith, but after all it is an old-fashioned word 
that expresses a good deal. It is worth while remem- 
bering that without faith of a sort each one of us 
would be practically paralysed. Without faith we 
should find, for instance, it was impossible to turn 
in bed : that is, without confidence in our ability 
to do so, we should find it impossible for our will to 
exercise the force required to get the muscles to act. 
Confidence is at the root of all action, and, if we lose 


confidence, action is bound to suffer, even if it does 
not stop altogether. 

One of the great paralysing forces, in connection 
with humans at least, is fear. That is another thing 
which we are not very much given to talking about, 
and should be very much disinclined to recognise 
as having any possible effect upon ourselves ; but 
a good deal depends upon what one means by the 
word. It is impossible to carry on business at all 
without realising that from time to time things do 
not happen according to plan, and if their failure to 
happen according to plan is going to be inconvenient, 
or serious, or disastrous, in varying degrees (according 
to the seriousness of the failure and according to its 
probability), we must, from time to time, have 
passing through our minds emotions which are in 
the nature of fear. The great thing is not to give 
way to them, but simply to regard them as reminders 
that all possible precautions have to be taken. 

One of the functions of a leader is as far as possible 
to take all these fears upon his own shoulders, so 
that those under him may do their work unafraid. 
You may express that in more business-like language, 
and say that it is the function of those occupying the 
most responsible positions to do the worrying ; but 
I do not know that that way of expressing it really 
gets as near to the bottom of things as to talk of 
" fearing," instead of " worrying." If we were not 
afraid of using the term " fear " we could readily 
realise that it is when we are alone that fear is most 
likely to overtake us. One of the functions of leader- 


ship is to provide companionship, so as to dispel the 
sense of loneliness and its undesirable results. Com- 
panionship is a word that we very frequently use, 
again without thinking overmuch about what it 
means. If we go back to the origin of the term, 
companions are those who break bread together. 
There can be no real companionship unless there is 
some kind of community some kind of human 
link and there can be no leadership without 

Think of it from yet another point of view, and 
you will find that we shall come to very much the 
same conclusion in the end. Not only modern 
business, but practically all business as we can 
understand the term under modern conditions, is 
based upon credit. Not only business, but all 
organised effort is in a sense based upon credit ; 
upon belief in the good faith and trustworthiness of 
others. Where that belief does not exist there can 
be no business relationship between strangers, let 
alone any effective team play between those who 
are working together as members of an organised 
body in connection with business. The word " be- 
lief " again has an old meaning which possibly many 
of you may have forgotten. The person believed 
in is the person beloved. There is no difference 
whatever between the roots of the two words. So 
we get down to this, that no business relations are 
possible without the right kind of brotherly feeling 
between those who are seeking to establish those 
relations. There is no other way of getting credit ' 


no other way of getting confidence. You may get 
a state of affairs that masquerades as credit, but. 
which is not built upon this sure foundation of 
brotherly love and esteem ; but it will not stand 
the strain when any strain is put upon it. You may 
try in all sorts of ways to eliminate what some 
may call the metaphysical and keep to the " facts," 
and you will find that the problem does not work. 
We know, of course, that business is frequently 
interrupted in one way or another by wars, strikes, 
lock-outs, litigation, and what not, and in each case 
the root cause is the same absence of belief in the 
other side. It is no good reckoning that we. can 
build up a science of business on " facts," using the 
term in its ordinary sense, and ignoring all that, by 
way of contrast, you may prefer to call " fancies," 
because you will find that in times of stress those 
so-called fancies are far stronger than all the so-called 
facts put together. This must have been very well 
realised by those who made up our language in the 
past, or we should not find this more than remarkable 
coincidence that the words in common use, such 
as " confidence/' " credit," and " belief," all tend in 
the same direction. 

Leadership, then, I think, we must school ourselves 
to realise, even although the idea may seem fanciful 
at first, is the attraction exercised by the beloved 
leader ; and very obviously it is much more difficult 
for the leader to keep up while going through the 
monotony of the daily round than it is to inspire 
in times of great excitement and stress. But it 


has got to be done, because we must have the right 
state of mind or state of heart, as it really is 
between the parties so constant as to become a matter 
of ingrained habit before we can really rely upon it 
at all times. The common idea of leadership is, of 
course, that the leader is one for some reason or 
another good, bad, or indifferent empowered to 
issue orders, and entitled to expect that they shall 
be obeyed implicitly. In some cases implicit and 
blind obedience may be essential to efficiency, but 
it is not an essential part of the idea of leadership. 
While it is perfectly true that knowledge is always 
power, the converse is not true ; power (or authority) 
is by no means alw r ays knowledge. Power (or 
authority) exercised without knowledge is sure to 
lead to a breaking point before it has gone very far. 

In the nature of things we cannot expect all 
desirable qualities to be centralised in any one 
human being. If w r e are picking out our leaders for 
their power to attract, and to secure a loyal following 
on the part of the led, we shall probably find that 
those leaders are very deficient in many of the 
qualities which naturally one would wish to attach 
to leadership. The mere giving of orders is, after 
all, nothing but a means to an end. The true func- 
tions of a leader, I think, we may rather put down 
as teaching, correcting, encouraging, and generally 
influencing in the right way ; and for the purpose of 
teaching at least and in a lesser degree for all the 
other purposes we shall want to link up with the 
leader in one wav or another a considerable amount 


of expert arid technical knowledge. Otherwise, our 
leader will by no means always be leading in the 
most desirable direction. 

When business management was looked upon from 
the point of view of an ' owner " assisted by 
41 vassals/' it might very well be regarded as being 
beneath the dignity of the owner to seek advice in 
any way ; but we have got a very long way from 
that state of affairs in connection with business, and, 
therefore, this problem which was a very real one, 
perhaps, one hundred or two hundred years ago is 
of little practical interest to-day. Those who are 
leaders in business to-day are not the owners. They 
may but by no means always do have a proprie- 
tory interest in the undertaking. (That is to say, 
if it be a company, they may be shareholders. It 
may even be an essential condition that they should 
be shareholders ; but, even so, the amount of capital 
that they have at stake in the undertaking is in prac- 
tically every case a mere trifle of the whole capital 
adventured by all the proprietors as a whole.) It 
is quite absurd, therefore, for the ordinary person 
connected with the management or administration of 
a business undertaking whether he be chairman 
or managing director, or what not to regard himself 
as being the owner of the business. He will certainly 
be much more accurate if he describes himself as the 
servant of the proprietors ; and unless he looks upon 
himself in that capacity, and as one who, although 
having authority, yet in his turn has to yield to 
higher authority, he will never get the true perspec- 
tive of his own position. 


If we could once get this idea widely recognised, 
particularly among the rank and file of employees, we 
should probably have made a very large advance 
towards industrial content, because we should have 
killed that vicious fallacy that industrial disputes 
are disputes between " Capital and Labour," whereas 
they are never .anything of the kind. Capital, as 
represented by the shareholders of an undertaking, 
is in present conditions a helpless spectator ; not 
so organised as to make it possible for it to take 
any effective part in the disputes which take place 
between management on the one hand and the 
employed upon the other. Whoever's fault the 
dispute may be, you may be quite sure it is not the 
fault of the shareholders ; but, whenever the manage- 
ment and the employees do contrive to adjust their 
differences, it will almost certainly be found that 
they have done so at the expense of " capital." We 
might look a long while for an example of an industrial 
dispute settled as a result of the management's agree- 
ing to forego, or to submit to a reduction of, their 
remuneration. They may have to submit to a 
reduction of remuneration, in so far as it is dependent 
upon profits ; but the financial sacrifice, wherever 
there is one, falls almost entirely upon those who 
took no part whatever in the original dispute and had 
no power to bring it to an end the so-called 

We might get a better understanding with regard 
to the rank and file of employees, if we recognised 
that there were three types of organisation at work, 


all going to make up a business house : Labour, 
Management, and Capital. Further, a recognition 
of this fact is absolutely essential before we can 
really expect that either Labour or Management 
will reach its full level of efficiency. By recognising 
that there are other factors besides their own, and 
that it is not a question of pleasing themselves, or of 
issuing orders on the one hand and expecting them 
to be obeyed ; and, on the other, of determining 
whether they will, or will not, obey those orders. 
In each case it is a question of belonging to an 
organisation, by virtue of which they have certain 
rights and privileges, and also certain duties and 
responsibilities. It is, of course, an axiom that there 
can never be rights without responsibilities, but we 
all tend, naturally, to claim the one and to neglect 
the other. Now, there is above all things the 
necessity of carrying on the work. If the work is 
not carried on there is a failure on the part of all, 
but particularly on the part of those whose fault it 
is that the stoppage has arisen. So long as the 
view is almost universally held that people go into 
business simply for the sake of the amount of money 
that they are able to extract from the business, it 
is useless to expect any very strong sense of duty or 
responsibility on the part of anyone connected with 
it. We must get a much clearer idea than that as 
to what we are there for, before we shall get a 
glimmering of what it is up to us to do in the way 
of " carrying on." 


There is, of course, no perfect institution in this 
very human world of ours, but it is at least possible to 
point not merely to individuals but to whole groups 
of individuals who for a very considerable number 
of years past have contrived to w r ork upon these 
lines that the work is the all important thing, 
and the wealth that they get out of it a matter of 
secondary importance, which will follow. (That, 
again, is a question of having faith.) We can point 
to such examples, and, that being so, we can well 
ask ourselves why they should not be extended. In 
most of the professions we find that there is some 
such ideal operating with the vast majority of those 
who follow the profession, and probably we shall 
find that the percentage of those who are true to such 
an ideal is highest among those who are following 
an artistic profession. We do not as a rule find that 
those who are most true to the ideal are those who 
make the least out of it. However that may be, we 
may be quite sure of this, that whether or not they 
are as wealthy in proportion to their skill and oppor- 
tunities as those who follow business as a career, 
they are infinitely happier and more contented, and 
it is a very open question and I should imagine 
that a great many working people are now regarding 
it as more than an open question whether an 
increase of wealth always means an increase of 

However that may be, we cannot reasonably 
expect to put back the hands of the clock, and, that 
being so, as regards those who have to make their 


living out of industry, not by means of their brains 
but by means of other hands, they have got to face 
the fact that unless they are content with a very 
small income indeed their work will have to be 
done for them largely by means of machines of a 
highly specialised character, which involves their 
concentrating their life's work not upon " things," 
but upon minute parts of things to a very large 
extent. It is not to be expected that the individual 
worker can get quite the same satisfaction out of 
making parts of something which he perhaps has 
never seen as a connected whole, as the old-world 
craftsman might have got out of constructing an 
entire article from start to finish ; but the modern 
worker may secure a good deal of that satisfaction 
if and only if he concentrates upon doing the 
work that he has to do to the best possible advantage 
in the best way of which he is capable, and one of 
the most important and most arduous of the functions 
of leadership we might almost say the most impos- 
sible, in present conditions -is to get the rank and 
file to appreciate that as a living truth ; that they 
have responsibilities, just like everybody else, and 
that satisfaction with their condition in life is not 
to be expected until they are really trying with all 
their power, using every possible opportunity of 
keeping their end up. That is to say, the real 
function of the leader, when we get down to bed-rock, 
is to inspire loyalty. 

Here, again, if we get back to first meanings, we 
shall find that it clears up a good deal of misunder- 


standing. Loyalty does not mean doing work in a 
satisfactory way for somebody who takes no interest 
whatever in us, and recognises no duty whatever 
towards us. If the word means anything at all, 
the idea it conveys is the idea of being true to one's 
King and a king is an entirely different person from 
an emperor as far as words go. The word " emperor " 
simply means the man who gives orders the man 
who can give orders and must be obeyed ; that is, 
the ruler of a conquered race. The king, on the 
other hand, is the head of the clan, or family ; one 
who is akin to all his people the one to whom 
naturally they owe fealty. In being true to him, 
they are simply being true to their own selves, or 
at least to the best part of themselves. There is 
no loss of self-respect whatever in an unreserved 
loyalty to one's own family, 

It is not by any means an impossible ideal, how- 
ever difficult it may be of achievement, to regard all 
of those who are associated together in any business 
enterprise whatever it may be, and however large 
it may be as having in one sense become members 
of the same family, " members of one body," each 
having duties to all the others, and to the body as 
a whole ; but on the condition that every other 
t member of the body equally has duties to them. 
That is to say, they have got to pull together, and 
realise the idea of companionship. If once we can 
get that ideal at work, we shall find that really 
without any particular effort upon anyone's part 
Efficiency will follow. 


This is not altogether a wild dream ; it is not 
something which has never happened in this world, 
and in all probability never will. It is the kind of 
thing that has been accomplished in the United States 
at any rate in some dozens of cases. It is not, 
perhaps, anything like such an accomplished fact 
in this country, but we have got very near to it in 
some cases, and probably we shall get nearer. So 
far as my experience goes, it is only upon these 
lines that one really approaches the real efficiency 
of combined effort, and it would certainly seem 
to be only upon such lines that we can expect that 
any scheme of organisation that we may build up 
will stand the strain of continued bad times. 

nxrf : faltete mtlg," 

, antJ 

Chapter IV 


" Let not your heart be troubled." 

It remains for us to consider the bearing of what 
I have called " Morale " upon Efficiency. In general 
terms, what we mean by Morale is the manners or 
customs of any group of persons, large or small, 
and there may be either bad or good Morale. But 
although that is so, and although also the Morale of 
any particular group may very well be modified from 
time to time, Morale is something quite different 
from mere mood. It is something very much more 
ingrained. We might almost regard it as comprising 
the qualities of the inner self ; the qualities that 
provide a power of resistance against outside forces 
that it is determined to combat. Morale is accord- 
ingly a matter of paramount importance in connec- 
tion with Efficiency, and it is of paramount import- 
ance that we should establish the right type of 
Morale, or we shall find all our efforts to attain 
Efficiency absolutely unproductive. 

*A lecture delivered at the London School of Economics and Political 
Science on the 22nd June 1921. 


The morale of a group of individuals (which we 
may regard as their collective morale) may, I think, 
to a large extent be regarded as some sort of crystalli- 
sation of their collective thoughts and feelings. It 
is partly inherited and partly acquired from teaching, 
but in so far as it is taught, it is very much more 
than discipline. " Discipline " is a word which 
implies something acquired as a result of teaching ; 
but discipline may be, and very often is, nothing 
more than a habit of mind that tends in the 
direction of doing what is expected or desired a 
habit of conformity, which by no means necessarily 
is thoroughly ingrained in the individual, and has 
therefore become an essential part of his character ; 
whereas morale is very much more the real person. 
It may be, of course, that the real person is unknown 
to the individual, and the revelation of the real 
person may and in moments of stress quite often 
does come in the nature of something very like 
a great surprise. It is one of the functions of a 
good leader not to be taken by surprise at any 
manifestation of morale. It is his function, I think 
we may take it, to see that the morale takes the 
form of a preparation to provide an effective resist- 
ance against the undesirable that may happen 
from without : a condition of affairs that will ensure 
that the fruits of his leadership may be reaped, 
whatever happens. 

In so far as morale is inherited as the result of 
racial instinct, we may be quite sure at least of this, 
that it is far less likely to change from time to time 

MORALE. 7 1 

than when it is the result of training. The racial 
instincts will always be those that are most deeply 
ingrained. Arising out of that, it is open to question 
whether it is reasonable to expect real efficiency 
when one is dealing with groups of individuals of 
mixed races. The mixing may be, and very often 
is, unavoidable ; but it is a source of weakness. It 
is not the habit of business men as a rule to take 
into consideration at all the question of race in the 
matter of deciding what positions shall be filled by 
different individuals, but it is certainly interesting 
to bear in mind that F. W. Taylor speaks in one of 
his books of considerable success having attended 
experiments in the direction of dividing workers into 
groups (where it may be practicable for such a 
division to take place) according either to their 
nationality or their religion, and then putting it up 
to them, as homogeneous teams, to compete with 
other teams. The results, he tells us, were entirely 
satisfactory. The experiment would, of course, by 
no means always be possible, and it does not follow, 
on that slender evidence alone, that it would always 
work equally well ; but, in so far as we are going to 
rely for efficiency upon effective team work, it 
is clear that we must consider the question of 
nationality. Any sort of cross-current that tends 
to divide humanity into groups is something that 
we cannot ignore something that may seriously 
interfere with our team work. 

In so far as morale is the result of teaching, we 
have to remember that we cannot begin to speak of 



it as morale, as distinct from training or skill, until 
it has become a distinct habit of mind and of feel- 
ings ; a habit, therefore, likely to be sufficiently 
permanent to be regarded as something that we 
can rely upon for our purpose. 

However nebulous it may be, I think we may take 
it that, deep down, everybody has some objective 
in life, although on the surface we may see perhaps 
very little evidence of it. So, in connection with 
this question of morale, we may appropriately review 
the question of objective, and I think that we shall 
find that we may look at it broadly from the point 
of view of someone passing down a road. He may 
walk on either side of the road, and may readily 
cross over from side to side ; but after a time the 
road forks, and then if he finds that he is not in the 
turning in which he wants to be, he has either to go 
back or else, with considerable difficulty, to find 
some cross-cut leading from the wrong road to the 
right one. On the one hand, before we come to the 
dividing line, we may very well say that one definite 
objective in life is represented by the term " indi- 
vidualism." Individualism has many advocates, and 
at all events in the first stages, one can have nothing 
but praise for it. The first stage of all, perhaps, is 
the recognition of one's responsibilities, and of the 
fact that one has got to bear one's own responsi- 
bilities or burdens in this world ; that it is up to one 
to look after oneself ; that we must first make 
ourselves fit before we can reasonably hope to help 
others. If we concentrate upon that too much, 


however, it necessarily follows that we are so busy 
bearing our own burden that we think very little 
about the burdens of others. Forty or fifty years 
ago there was a very widely read book called 
" Success in Business " ; one of the maxims in that 
book was, " Have nothing to do w r ith an unfortunate 
man." That is a perfectly logical statement of one 
of the ideals of individualism to cut out of one's 
life all that will interfere with its progress. But 
what an objective in life ! At the present time 
we hear, perhaps, little about Self-Help, but a good 
deal about " Self-Expression." Every individual, 
no doubt, has the right, if he can, to express himself 
that is to say to leave his mark in the world as an 
individual, and not merely as one of a crowd ; but 
self-expression can lead to all sorts of excesses, and 
at all events in some cases it does. It leads some 
people, for instance, into the writing of books that 
ought to be burned ; it leads other people into the 
Divorce Couit, and so on. Then we have Self- 
interest the keen appreciation of the main chance, 
and what is going to help one and carry one along. 
If we concentrate upon that too much we naturally 
by the law of nature which tends to atrophy every- 
thing that is not used take less interest in the welfare 
of other people. We then come to what may be 
frankly called Selfishness Self-Absorption a really 
hardly sane frame of mind, in which one seems to 
regard oneself as the only living being in the Universe, 
everybody else being more or less a mere shadow. 
That is to say, we are on the one side, and everybody 


else is on the other side. You have only got to look 
at it from their point of view to recognise that you 
are, from their point of view, without the pale an 
outsider. Surely this is not the way to get effective 
team-work ? 

Let us now see where the other road might take 
us. We start with the idea that it is not good .for 
man to be alone, and, therefore, that there has got 
to be in some kind of combination. The word 
" combination " means, of course, " two together," 
but we are not necessarily limited to two, and as 
ordinarily used, the word does not express merely 
the combination of two, but of a number of persons. 
We get a very intimate or personal aspect of com- 
bination if we speak of it as companionship, or 
comradeship. Companionship is really the sharing 
of bread together ; comradeship is literally the shar- 
ing of a room together. But, curiously enough, 
both these relationships do not depend upon there 
actually being anything to share. There may be 
companionship among those who have nothing to 
eat, and there may be comradeship between those 
who have no roof over their heads. There was 
certainly a fair amount of both in the trenches. 
Along this road w y e realise that, by uniting together, 
we can become far more formidable for any kind of 
combined effort, whether it be for attack or defence, 
and, of course, in business nothing upon a scale worth 
speaking of can ever be achieved by a single individual 
working alone. In some branches of activity, per- 
haps, more may be possible than in others, but 


nothing really worth regarding as considerable is 
ever possible to one human being unaided. If, for 
that reason alone, we seem, therefore, to be very 
much more upon the right road if we keep to this 
side of it. 

Combination leads naturally, if we combine with 
Intelligence, to Organisation that is to say, to the 
formation of a combination which aims at encourag- 
ing, as far as may be desirable or necessary for the 
work in hand, specialisation in different kinds of 
functions, but specialisation which will never lose 
sight of the importance of the interplay of a team. 
In that way, arid upon those lines, big things in 
every sense of the word can be accomplished, because 
we have got big ideas instead of belittling ideas. 

This reflection has nothing whatever to do with 
the view that has sometimes been expressed that 
" Labour " (meaning manual labour) is the sole 
source of production of wealth, and that everybody 
else is a mere parasite living upon Labour. It does 
not mean that at all ; but it does mean that where 
there is combination in the proper sense of the 
term, of working in a team (the team may, of course, 
be sub-divided to any extent), we are excluding the 
other possible idea (or objective) of looking at life 
or for that matter at business as a form of war. For 
purposes of efficiency we have clearly got to root 
out the idea that there should be, or must necessarily 
be, a state of war between those who are members 
of the same business house. We can go further than 
that, and say that there is not the slightest reason 


why there should be a relationship akin to war as 
between business houses, even although they may be 
what is called competitive. Take the case of a 
Public School. For convenience of organisation, 
the boys of a public school are divided up into 
" houses," and in the same way the students in a 
university are divided up into colleges. For the 
purpose of encouraging efficiency sometimes in 
sports alone, and sometimes in work also these 
houses are put into competition with each other. It 
is not only possible, it is a common thing, for a very 
lively state of competition to exist between the 
houses without anything approaching feelings of 
enmity. There is really not the slightest reason why 
competition, properly carried on, should produce 
feelings even approaching enmity ; and it will not, 
if we are able to get what it seems to me is a proper 
conception of the true unit in business life. I shall 
come to that in a moment, but there are one or two 
points that I want to bring before you first. 

First of all, there is the idea that there need not 
be enmity between competing business houses, and, 
still more, that there need not be enmity between 
a business and its customers, from whom it draws its 
livelihood. That idea is not mine (as a matter of 
fact I do not think that any of the ideas which I 
am putting before you in connection with this 
course originated with me, although, perhaps, I 
may be collecting them together for the first time). 
The idea that business can best be conducted on what 
we might call non-warlike lines is the keynote of 


that very large group of business men throughout 
English-speaking countries who are members of the 
different Rotary Clubs. As I daresay you have 
noticed, a delegation from the Rotary Clubs in the 
States is at present* in this country ; but there 
are Rotary Clubs here, too, and have been for many 
years. The motto of a Rotary Club is " Service 
before Self." That is to say, the primary object of 
the business house is not to take money out of its 
customers, but to provide them with something 
they want. That idea was certainly not born of 

On the other hand, by way of trying to keep the 
balance fairly, I should like to mention that, in 
support of individualism, it is often said, and very 
rightly said, that the true source of wealth is the 
brains of the good employer the man who by his 
knowledge, skill, and research ascertains what is 
wanted and the best way of providing it, and is 
thus able to give employment to others who could 
never have ascertained those things for themselves, 
and would not have known what to do with the 
knowledge if they had got it. There is a great deal 
of truth in that, but it is simply another way of 
saying that no highly organised body can live with- 
out its head. It all amounts to nothing that need 
worry us at the present time, if we adopt the view 
that all those who are pulling their weight in the 
boat no matter how are co-workers, and that 
the efficient cox is a co-worker too. If we take that 

In June 1921. 


view, then clearly those co-workers are the source 
of all wealth, and we may be quite sure that their 
productive capacity will depend partly upon the 
skill of those connected with administration, partly 
upon their credit (which enables them to obtain the 
necessary supply of capital), and partly upon the 
support they are able to get from the rank and file, 
which support will depend partly upon their ability 
as leaders and partly upon the worthiness of the led. 
But it is not until they have all been welded into one 
effective body that we shall find that there is much 
for anyone certainly not anything like as much as 
there ought to be and, of course, where there is 
less wealth produced as a result of effort than there 
ought to be, naturally there are likely to be differences 
of opinion, and heartburnings, as to how the wealth 
ought to be shared. If production were enough, 
then clearly, if all were reasonable, the division 
would be a comparatively simple matter. 

Good Morale, in effect, I think we may take it, 
is Efficiency based upon good training, by wise 
leaders, in an uplifting cause. And in proportion 
as the intelligence of the general body of workers 
increases, so will increase the importance of the 
cause being a sufficiently uplifting one to produce 
good Morale. When we find that Morale is not merely 
what we may regard as a favourable atmosphere to 
work in, but a real driving force, it is clear that it 
must have been kindled into something like enthu- 
siasm, and for that purpose we shall want something 
which, if we do not fight shy of the expression, we 


may perhaps best describe as " hero-worship " ; 
and it is probably where we are not frightened of 
using that expression that we are most likely to 
find that such a state of enthusiasm exists. I really 
do not know why anyone should hesitate about using 
the word " worship " in this connection. It is not 
really in any sense an exaggeration, if you bear in 
mind what the word means. Worship is really 
nothing more than an acknowledgment of worthiness, 
and is so used in connection with such a title as 
" His Worship the Mayor," or " The Worshipful 
Company of Painters." But, if the use of the term 
is unobjectionable when we bear in mind how com- 
paratively colourless it is at root, it has at least this 
advantage, that we have come to regard it it is 
perhaps one of our racial instincts as involving 
self-surrender. And forgetfulness of self is essential 
for a good morale, which, in its turn, is essential for 

The advantage of a frame of mind like this is that 
it makes it easy for us to realise what the rank 
individualist would never be prepared to concede : 
that self is not the important unit that the individual 
is not the unit at all, but that he is a part only of 
an organisation without which he cannot exist, and 
in which he is or should be an essential part. 
It makes it possible for us to realise that the world 
is not a fortuitous collection of individual inde- 
pendent beings. When we have once come face 
to face with that we shall find that it is not an asser- 
tion that stands alone, uncorroborated by anything 


else observable round about us. It fits in with what 
we know to be a scientific truth : that a living being 
is not merely one person, but contains within his 
body enormous numbers of other living bodies, each 
of which in its turn contains other life, and so on, 
apparently, to infinity. In the purely physical sense 
of life within life, we are able to say (or we think 
that we are) that we stand at the top, and are not 
atoms within a bigger physical life ; but we do see 
that when we are working together efficiently in 
teams, although that state of affairs does not give 
rise to a superior, containing, physical body, it does 
give rise to at least a conception of a body, of which 
each member of that team is a member a very real 
body, which we sometimes express as being " the 
house," sometimes as " the trade," sometimes as 
11 the country," sometimes as " the church." It 
is a conception which we may all recognise, that when 
a sufficient number of persons pull together in a 
particular direction, they build up into what we 
may, for want of a better term, describe as a spiritual 
body, within which they all dwell, and which to 
put it at its lowest assists in their well-being so 
long as they assist in its. 

If we realise this, it gives us, I think, a far better 
idea of the importance of effective team play than 
we could get by any other means, because it puts 
before us, so to speak, a superior ideal -not merely 
our own welfare, but the welfare of something better 
than ourselves. At times like the present it is, of 
course, very uphill work everybody finds it so 

MORALE. 8 1 

to keep morale even where it stands, and almost 
impossible to improve it. That is apparently due 
to a very widespread feeling, for which, clearly, there 
is abundant cause, that those who have gone through 
the trials of the war, and ' done their bit," have 
earned the right to rest. I think we must all admit 
that, so far as the right goes, there is probably a 
good deal in that contention ; but if everybody who 
had done his duty during the war were now to sit 
down and take his rest, I am afraid that those who 
did not do their duty during the war would be found 
quite insufficient as regards both quantity and 
quality to keep the world going. So that, however 
desirable that state of affairs might be, it is frankly 

But, after all, while any of us are here, can 
we really think that we have " done our bit " 
and finished our work ? When that time does 
come, surely " our numbers will be up." While 
we are here, we may take it, I think, as very reason- 
able to suppose that we still have work to do. In 
this work that lies before us, of building up this 
country in such a way that all may not merely 
understand, but may actually realise, that they are 
parts of a very much larger and very much more 
important body, clearly all can help, and equally 
clearly all can mar. I think we may take it that 
there can be no real Efficiency save by general con- 
sent. Efficiency is not a state to be brought about 
by any small number of enthusiasts, but must be a 
state of heart generally assented to. We must want 


to be efficient before anybody can make us efficient 
by any formuke. Can we yet honestly say that we 
want to be efficient ? The demand at the moment 
seems to be rather for prophets than for mere 

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fl?af alribrfli in Blc, aub 3 in f]im, fl|r same 
Imnflcf ft fxtvf[| muclr fruit : fin* Utif I|xtut B5r ije 
can fra 




By JOHN MURRAY, M.P., for West Leeds. 

For some time now Mr. Murray has been engaged 
in a series of public debates with leaders of Labour, 
Socialism, and Communism round London. 

Unrest, of course, is one of the great modern 
discoveries, the fruitful subject of much talk and 
lecturing and writing and debate. Half the country 
is in the grip of unrest, and the other half searches 
earnestly for the cure of that unrest. Thus the two 
halves, each performing their due part, exhibit the 
great principle of the division of labour. 

But the unrest abates nothing. It even gathers 
force and confidence from recognition. It feeds 
on the very solicitude and all the inventive thoughtful- 
ness of those who would fain cure it. Unrest is, 

* Reproduced (by the kind permission of the proprietors, and with 
the approval of the author) from 1 he Evening Standard of i5th July 


wives, bad husbands, bad children, bad friends 
anything, in fact, that can be bad. All spleen and 
spite, all weaknesses, all the dulness of despair, 
vent themselves in industry. Capitalism, as a system 
of co-operation, is not very different in spirit from 
those who work under it. 

People who make Difficulties. 

The Socialists blame the Capitalist system with 
sublime naivete. The system -has its faults. But 
much of the blame lies with those who wish the 
system ill, who embitter its working, who are so 
constituted that they would impede the working 
of whatever system they were born under. There 
are always multitudes of people who can only make 
themselves felt by making difficulties, and their 
ambition has to be satisfied. 

So many outward conditions contribute to unrest 
that the complete cure of it, through treatment of 
these conditions, must be inconceivably difficult. 
Pending that remote and unthinkable triumph of 
human ingenuity in the manipulation of what cannot 
be manipulated in the sense in which Socialists think 
it can, let us consider the inward conditions of the 

Much unrest is mere fidgeting, and without dignity 
of any sort. Much is brooding, and contrary to 
good sense. Much of it is lack of self-control. It 
is a very unhappy and unfortunate state. But 
very often the wisest and kindest thing that can be 
said to the sufferer is, " Rise up and get out of it." 


Serenity about the Old Earth. 

A much better cure than Socialism for unrest 
would be serenity. Several Socialist audiences have 
taken this suggestion from me rather badly. Never- 
theless, 1 believe it is almost the best that can be 
offered to them. 

No one has a new Heaven and a new Earth to hand 
to them, complete, over the counter. These things 
come piecemeal, in very small pieces and exceedingly 
slow. In the meantime, there is a gain in cultivat- 
ing serenity about the old earth we have to live on. 

That serenity offers no spectacular victory over 
the environment or the system, and no outward 
pomps of success. The gifts of spiritual control 
are impalpable and unheard. 

Others know of them only by their fruits ; only 
by a revivification of charity, by the forbearance 
and the toning down of crude egoism that sweeten and 
lighten the whole movement of life. 

The speeches of Socialists begin, usually, with 
respectful obeisances to brotherhood and the golden 
rule, and from thence advance at a bound to the fierce- 
ness of class-egoism and the mad hope of making 
everybody happy and good by prodigies of thorough- 
ness in changing the system and the machine. 

They think themselves a salutary tempest, and 
will not listen to the small still voice. They pay 
lip-service to moral and spiritual things, yet sow 
the ambitious bitter seed of unrest and forget that 
the beginning of improvement is that a man should 
keep the peace of his own soul. 


J/I/V 24 1948 


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