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  • Uncle Henry, Charlie Kellstadt, and Donald Trump

    Posted by David Foster on January 24th, 2017 (All posts by )

    As President Trump has focused on persuading certain specific companies to increase their US employment (or at least to refrain from decreasing it as much as originally planned), concerns have been raised about his ability to operate above the level of the single case and to think in terms of framing general policies.  I do share this concern to a certain extent.

    But I’m also reminded of Peter Drucker’s story about two old-line merchants.

    The first of these, called “Uncle Henry” by those who knew him, was the founder and owner of a large and succesful department store. When Drucker met him, he was already in his eighties. Uncle Henry was a businessman who did things by intuition more than by formal analysis, and his own son Irving, a Harvard B-School graduate, was appalled at “the unsystematic and unscientific way the store was being run.”

    Drucker remembers his conversations with Uncle Henry. “He would tell stories constantly, always to do with a late consignment of ladies’ hats, or a shipment of mismatched umbrellas, or the notions counter. His stories would drive me up the wall. But gradually I learned to listen, at least with one ear. For surprisingly enough he always leaped to a generalization from the farrago of anecdotes and stocking sizes and color promotions in lieu of markdowns for mismatched umbrellas.”

    Drucker also knew another leading merchant, Charles Kellstadt (who had once run Sears.) Kellstadt and Drucker served together on a Department of Defense advisory board (on procurement policy), and Kellstadt told “the same kind of stories Uncle Henry had told.” Drucker says that his fellow board members “suffered greatly from his interminable and apparently pointless anecdotes.”

    On one occasion, a “whiz kid” (this was during the McNamara era) was presenting a proposal for a radically new approach to defense pricing policy. Kellstadt “began to tell a story of the bargain basement in the store in Chillicothe, Ohio, where he had held his first managerial job, and of some problem there with the cup sizes of women’s bras. he would stop every few sentences and ask the bewildered Assistant Secretary a quesion about bras, then go on. Finally, the Assistant Secretary said, “You don’t understand Mr. Kellstadt; I’m talking about concepts.” “So am I,” said Charlie, quite indignant, and went on. Ten minutes later all of us on the board realized that he had demolished the entire proposal by showing us that it was far too complex, made far too many assumptions, and contains far too many ifs, buts, and whens.” After the meeting, another board member (dean of a major engineering school) said admiringly, “Charlie, that was a virtuoso performance. but why did you have to drag in the cup sizes of the bras in your bargain basement forty years ago?” Drucker reports that Charlie was surprised by the question: “How else can I see a problem in my mind’s eye?”


    Reflecting many years later, Drucker observed: “There are lots of people with grasshopper minds who can only go from one specific to another–from stockings to buttons, for instance, or from one experiment to another–and never get to the generalization and the concept. They are to be found among scientists as often as among merchants. But I have learned that the mind of the good merchant, as also of the good artist or good scientist, works the way Uncle Henry’s mind worked. It starts out with the most specific, the most concrete, and then reaches for the generalization.”


    “Fifty years or more ago the Uncle Henry’s and the Charlie Kellstadts dominated; then it was necessary for Son Irving to emphasize systems, principles, and abstractions. There was need to balance the overly perceptual with a little conceptual discipline…But now we again need the Uncle Henrys and Charlie Kellstadts. We have gone much too far toward dependence on untested quantification, toward symmetrical and purely formal models, toward argument from postulates rather than from experience, and toward moving from abstraction to abstraction without once touching the solid ground of concreteness. We are in danger of forgetting what Plato taught at the very beginning of systematic analysis and thought in the West, in two of the most beautiful and moving of his Dialogoues, the Phaedrus and the Krito…They teach us that experience without the test of logic is not “rhetoric” but chitchat, and that logic without the test of experience is not “logic” but absurdity. Now we need to learn again what Charlie Kellstadt meant when he said, “How else can I see a problem in my mind’s eye?” (emphasis added)

    I think a big part of the rage against Donald Trump’s election is that people of the Irving variety are afraid that their claims to methodological universality in problem-solving will be challenged by the Uncle Henrys and the Charlie Kellstadts.

    It remains to be seen whether or not Trump can “start out with the most specific, the most concrete, and then reach for the generalization,” or whether he will turn out to have a “grasshopper mind” that can never reach beyond the specifics.  But it is quite clear that there is a wide-ranging rebellion against the excessive claims of the Irving approach, and justifiably so.


    6 Responses to “Uncle Henry, Charlie Kellstadt, and Donald Trump”

    1. dearieme Says:

      “start out with the most specific, the most concrete, and then reach for the generalisation”: my experience in university teaching is that many people, including intelligent people, are better at generalising from a special case than they are at trying to build some universal truth, and then specialise it for application.

      On the other hand, the power of abstractions is yuge in maths and physics. But running most businesses isn’t much like maths or physics, even when the business consists largely of applying maths and physics.

    2. James the lesser Says:

      In my (admittedly limited) observation some mathematicians noodle around with some models for a while, find something interesting and try to expand it as far as they can, and then go back and prove the results. If they succeed, the published result bears no trace of the noodling–it reads as though the ideas sprang full grown like Athena.

    3. Grurray Says:

      Here is Feynman on the difference between mathematicians and physicists

      You might think of it in terms of Platonic vs Aristotlelian, to use a reference from the previous post. Or that may be a gross simplification. I have recently been feeling that Plato has been getting a bad rap lately actually. Anyway, at least Feynman is entertaining. It’s like watching one of the Marx Brothers give a physics lesson.

    4. Gringo Says:

      In my (admittedly limited) observation some mathematicians noodle around with some models for a while, find something interesting and try to expand it as far as they can, and then go back and prove the results. If they succeed, the published result bears no trace of the noodling–it reads as though the ideas sprang full grown like Athena.

      Which reminds me of the famous Sidney Harris cartoon: then a miracle occurs.

      Inductive versus deductive logic: Inductive versus deductive logic: using a specific to make a generalization, versus using a generalization to make a specific example.

      Most of my political beliefs are inductive: making a generalization from life experiences.
      I wonder if this is because inductive proofs were hammered into me during high school math: assume it works for n, then prove it works for n+1, then it works for all n.

    5. Mike K Says:

      I was working for Sears when Kellstadt was CEO. He toured the Boyle Street store where I was working. It was located in east Los Angeles, a very Hispanic area of the city.

      He walked thorough the men’s department and saw this hideous tie on display. It had dyed feathers on it. He told the manager to “get rid of that tie !”

      As he walked on, several employees in the department wondered if they should tell him it was out best seller.

      I am still sad about the fate of Sears which I saw from the inside and even I could see was in big trouble.

    6. David Foster Says:

      Mike K…Would have been smarter if he had *asked* ‘why do we have that ugly tie?’…he might have learned something before issuing an edict.

      People pretty much understand that lower-level people in an organization lack some of the knowledge available to those at higher levels; for example, the mailroom crew should not be deciding on advertising policy. What is less-well-understood is that it also works the other way around.

      The current vogue for ‘Big Data’ seems likely to make things much worse from this standpoint.

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