Russell L. Ackoff and the F-Laws of business

Since I recommended Peter Day's World of Business in my top 10 podcasts for social entrepreneurs, it's only become more relevant. In the past few weeks, the programme has covered the Salvation Army (once described by Peter Drucker as the most effective organisation in the world, in any sector), Project Alcatraz (or how a Venezuelan businessman became a social entrepreneur) and, most interestingly of all for me, the thoughts and learnings of the late Russell Ackoff, a management and business thinker.

Ackoff speaks much sense about a whole range of topics related to business and management, but I was particularly interested (given our work here at SSE) in his emphasis on learning. He's strong on the difference between teaching and learning (something which we still struggle at times to get across). He emphasises that an ability and willingness to learn are the keys to a successful organisation, and that one can only learn from doing something wrong (or making a mistake). Further, the best opportunities for learning come in the face of adversity or difficult times: perhaps we should reframe 2010 as "a great year of learning for the third sector". More seriously, this chimes exactly with our belief in learning-by-doing.

I particularly like his distinction between errors of commission and errors of omission. The former consist of doing something that should not have been done; the latter consist of not doing something that should have been done. Ackoff contends that errors of omission are much more serious, because they cannot be corrected or retrieved…they are lost opportunities; and that organisations fail more often because of what they do not do, rather than what they do. But this is not often reflected in practice, because it is only errors of commission (i.e. what has been done wrongly) that are recorded and noted, which tends to make people averse to risk and less prone to challenging the status quo. Which makes an entrepreneurial ethic all the more important in establishing, leading and working within an organisation.

I've added three Russell Ackoff books to the SSE bookshop:

Management f-Laws: how organisations really work

Turning Learning Right Side Up

A Little Book of f-Laws

You can also download a pdf of the latter for free from

Highly recommended.

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One thought on “Russell L. Ackoff and the F-Laws of business

  1. The ‘errors of omission’ point is a very important. It’s particularly pertinent for organisations who – as many social enterprises do – couple big ambitions with limited resources (or both cash and person time).
    I’ve worked with several organisations who’ve spent lots of time (often months, in some cases years) deliberating over whether a particular course (or some courses) of action is the right one to achieve their goals and in the process have failed to do anything much at all.
    Obviously really stupid decisions are to be avoided but when faced with several fairly sensible options, it’s more important to pick one of them and work hard to make it successful than it is to endlessly beat yourself up about whether you’re picking and have picked the right one.