University of Wisconsin Center for Wisconsin
Rural Cooperatives, September/October 1996, pp. 29-30.
Published by the Rural Business and Cooperative Development Service 

A Management Strategist For Our Time

Bruce J. Reynolds
USDA/RBS Cooperative Services

Last spring, a retired business executive—a longtime family friend—and I were discussing the challenges cooperatives face in pursuing consolidation strategies. He recommended the writings of Mary Parker Follett (1868-1933), a business management theorist who is beginning to gain newfound popularity long after her death.

My friend was introduced to Follett's work as part of his MBA curriculum in 1939-1940. Many years later, he found that her ideas proved valuable when he was negotiating various kinds of labor contracts and joint ventures for a large electronics firm. I found it intriguing that a business writer, who had lived about as long in the 19th century as in the 20th century, had provided him with useful business ideas.

A check of the catalogue of books-in-print last spring revealed no listings for Follett. Nor did a check of several university libraries and a large public library turn up any titles under her name. Then, last summer, a brochure from the Harvard Business School Press landed in my in-box announcing the just released book: "Mary Parker Follett: Prophet of Management: A celebration of writings from the 1920s." The book has selected writings and commentaries by some of today's leading business thinkers, including an introduction by Peter F. Drucker, from which the title of this book is taken.

Following are three excerpts from Follett's book which provide a glimpse into her ideas on the topics of power, negotiating and strategic management, all of which I believe are relevant to cooperative managers today, even though her words were written in the 1920s.

Developing and Using Power Within Organizations

"We have an unfortunate precedent in the use of such phrases as the delegation of power, etc. Many writers on government say that the power of the state should be divided among various groups; many tell us that power should be transferred from one group to another; many that it should be conferred on the smaller nations. Hence it has been natural for many economists who write of something they call "industrial democracy" to tell us that power now held by owners and managers should be shared by the workmen. These expressions, while containing indeed a partial truth, nevertheless at the same time hide an important truth, namely, that power is a self-developing capacity And we must not omit to mention that most common of fallacies: that when we join with others, we deliberately give up a part of our "power," as it is called, in order to get certain privileges which will issue from the union. When a grower signs a cooperative contract, he is supposed to give up a certain amount of "power." Does he? His marketing capacity is certainly increased by his joining with others..."

Later in the text, she develops what commentators believe to be the earliest and one of the most clearly articulated conceptions of what we today call empowerment:

... The manager cannot share his power with division superintendent or foreman or workmen, but he can give them opportunities for developing their power.

Follett takes the view that power inside organizations is something that is created by effective working relationships or by coordination among individuals or groups. Power in competitive or conflict situations is a different matter. She is careful to differentiate between zero-sum situations and those permitting opportunities for coordination. Today we use terms such as "empowerment," which is often viewed as though it were a right to fight for as opposed to capabilities we develop in working and coordinating with others.

Follett on Negotiating

"A dairymen's cooperative league almost went to pieces over the question of precedence in unloading cans at a creamery platform. The creamery was on the side of a hill. The men who came down the hill thought they should not be asked to wait on a downgrade and that therefore they should unload first. The men who came up the hill thought equally that they should unload first.... Both sides, you see, were thinking of just those two possibilities: should the uphillers or downhillers unload first? But then an outsider suggested that the uphillers and downhillers could unload at the same time. This suggestion was accepted by both sides. Both were happy. But neither was happy because he had got his way. They found a third way. Integration involves invention, the finding of the third way, and the clever thing is to recognize this and not to let one's thinking stay within the boundaries of two alternatives which are mutually exclusive. In other words, never let yourself be bullied by an either-or situation. Never think you must agree to either this or that. Find a third way...In domination, you stay where you are. In compromise, likewise, you deal with no new values."

Although the creamery example is antiquated, her analysis captures a key element of current expert advice on improving negotiating strategy. She uses the term "integration" to capture the process of two or more individuals or groups developing a new position that satisfies and often advances mutual interests. When impasses arise, finding a third way involves stepping around the entrenched positions to find ways of satisfying each sides’ interests, rather than their positions.

In contrast, a domination approach usually fails and both sides end up leaving money on the table. Even when there is compromise, success is often ephemeral and merely involves sharing a fixed pie. Follett's notion of integration involves a brain-storming process where real added value can be created.

Strategic Management

".. business estimates are ... based on the probable future conditions....The leader, however, must see all the future trends and unite them. Business is always developing Decisions have to anticipate the development....

This insight into the future we usually call ...anticipating. But anticipating means more than forecasting or predicting. It means far more than meeting the next situation, it means making the next situation. If you watch decisions, you will find that the highest grace decision does not have to do merely with the situation with which it is directly concerned. It is always the sign of the second-rate man when the decision merely meets the present situation. It is the left-over in a decision which helps develop the situation in the way we wish it to be developed In business we are always passing from one significant moment to another significant moment, and the leader's task is pre-eminently to understand the moment of passing."

Most of the commentators in this recent release of Follett's writings dwell on the originality and foresight of her work. However, attributing originality is often a precarious and imprecise exercise. The main reason she communicates well today is the result of her writing without using the jargon and buzzwords of her era.

To many contemporary readers, Follett's writing may seem wordy, and we want it summarized in a word, whether it be "vision," "re-inventing" or "empowerment." Yet she had a knack for describing complex mental processes in a concrete way, that gave fresh insights to the many different topics she addressed. That is why she is worth reading today, and not for edification on the history of ideas. On many topics of management and organization, Follett provides more insight than many of today's business books.

No doubt, the fact that Follett was in many ways ahead of her time and almost forgotten makes her interesting. The commentators ponder various reasons why Follett's works became neglected, such as sexism and the hierarchial management structure that was popular during her era. In my view, it reflects a preference in many sectors of American society to avoid the kind of cooperative solutions she advocated because they involve the extra responsibility of coordinating our actions with others.

Another explanation for her neglect in America is offered by a commentator from Japan, where Follett has had a strong following for many years. In fact, about ten years ago, the Mary P. Follett Association was established in Japan. This Japanese commentator noted that in America " management studies anything more than 10 years old is set aside as old hat and not worth looking at." If that is the correct explanation, my friend who introduced me to Follett's writing was lucky to have done his MBA within ten years of her last writings. But why did he wait so long to share such a great management tip?

Minnesota Co-op to Use Alfalfa to Produce Power

The lowly green leafy alfalfa plant, long a mainstay crop fed to dairy herds in the Upper Midwest, is gaining new stature as a feedstock for producing electrical power.

And the vehicle for getting the job done is a new cooperative at Granite Falls, Minn., the hometown of the late Congressman Andrew Volstead. He co-authored the Capper-Volstead Act which gave members of cooperatives limited antitrust protection for their group efforts in marketing farm commodities.

The Minnesota Valley Alfalfa Producers, the cooperative, has been given a $4 million grant by the U.S. Department of Energy (DOE) for the biomass power project jointly sponsored by DOE and the U.S. Department of Agriculture. This is the first of $44 million in DOE grants to support the Minnesota Agri-Power biomass power plant. Combined government and industry investment will total $200 million over 5 years.

The plant will turn alfalfa stems into a gas that will be burned in the power plant. The approach is better for the environment because vegetation is a renewable fuel and produces less pollution when burned. This project turns farmers into energy producers and everyone benefits. Minnesota farmers get new markets for their crops. Residents get cleaner energy production and new jobs," said Secretary of Energy Hazel O'Leary. "Together, Minnesota and DOE are meeting President Bill Clinton's challenge to improve the environment and economic security at the same time," she said.

Dedicated energy crops such as alfalfa, create a significant new opportunity for renewable electricity generation. With the eventual construction of this new agri-power facility to house the alfalfa processing system, the producers hope to generate 75 megawatts of electricity, enough power for 50,000 to 75,000 homes. The $4 million grant will be used to complete the planning and design phase of the demonstration project that will use alfalfas for electricity generation and production of other high-value products such as feed pellets, liquefied protein supplements, pharmaceutical bases, and natural fragrances and dyes.

The City of Granite Falls has donated 100 acres of land for the power project and provided a loan guarantee to assist in meeting immediate cash-flow needs. The Minnesota state legislature appropriated $200,000 to assist the cooperative in developing alfalfa production and processing capabilities. Other partners are Northern States Power, Westinghouse Electric Corp., Stone and Webster, Polsky Energy Corporation, and the University of Minnesota.

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