Chapter 3. Pal’chinskii’s Principles
Uncertainty is a “fundamental and irresolvable characteristic of our lives”.[1] Rather than relying on rigid plans that give an illusion of control, we should embrace uncertainty and learn from it. For example, the 2002–3 SARS outbreak — another coronavirus — struck Asia, sparking fears of a global pandemic. However, lessons learned from their mistakes [2] enabled many Asian nations to cope far better with COVID-19 two decades later.[3] Uncertainty is a powerful teacher for those willing to learn from it. And one country that has experienced more than its fair share of uncertainty is Russia, meaning its history contains valuable lessons for those willing to learn. One of those is the story of the most famous Russian even most Russians have never heard of — Petr Pal’chinskii.[4]
Pal’chinskii was a bright, confident and almost absurdly honest engineer. In 1901, at the age of 26, he was sent to the Donbass to study the modernisation of Russia’s coal mines. Gathering data on everything he could he uncovered a huge gap between investments made in new mining technology and a lack of investment into the living and working conditions of miners. Pal’chinskii reported back to the government in St.Petersburg, arguing that true modernisation required investing in the workforce as well. He reasoned that investments in new technology are ineffective if workers are unable or unwilling to use it. Improving the living and working conditions of miners therefore, so they are both capable and motivated to use new technology productively, would generate far greater returns than investing in just technology alone.
Pal’chinskii’s report caused a political scandal in St.Petersburg, leading to his exile to Siberia. After a few years he escaped to Europe where his ideas — seeing technical problems in their social and economic contexts — gained traction. Major European ports in cities like Amsterdam, London, and Hamburg saw significant productivity gains by applying his ideas: better cranes and warehouses were not enough; workers needed the right skills and incentives as well. Pal’chinskii wrote up his methods in a four-volume study and toured Europe to spread his ideas, gaining fame.
Fig.8: Petr Pal’chinskii at a Trade Fair in Turin, Italy (1911)
In 1913, after receiving a royal pardon, Pal’chinskii returned to a politically turbulent Russia where the government of the embattled Tsar had launched a modernisation drive to try and conserve royal power. Pal’chinskii became a government adviser, but his uncompromising honesty continued to court controversy. He criticised the government’s obsession with “disruptive technologies” pointing out that, “graduates of Russian engineering schools think that every problem is a purely technical one, and they assume that any solution that incorporates the latest science is the best solution”.[5] Though an avid reader of foreign technical literature himself, Pal’chinskii sought guiding principles that would help tailor technologies to Russia’s unique conditions, rather than ready-made ‘solutions’ to copy unthinkingly. If decision-makers could learn to see technologies as part of the local context, rather than apart from it, Pal’chinskii argued, Russia would become a competitive force globally.
After the October 1917 revolution — and a brief spell in prison — Pal’chinskii was invited to advise the new Soviet government on its modernisation program. This was the time of ‘gigantism’: Massive prestige projects such as Dneprostroi, a major hydroelectric station; Magnitostroi, a major steel mill; and the White Sea Canal, connecting the Baltic and White seas. Pal’chinskii criticised these projects fiercely, arguing they would only succeed if there was an abundance of both highly-skilled workers and cheap energy locally — both of which were lacking. He proposed an alternative model of modernisation, one grounded in an understanding of local conditions and guided by three key principles — what we might call ‘Pal’chinskii’s Principles’[6]:
- Experiment with a variety of ideas to increase the chances of success.
- Accept that some failure is inevitable,[7] so keep projects small enough that failure is survivable.
- Develop effective feedback loops between decision-makers and those closest to the action to quickly identify and select what works in the local context.
In 1926, Pal’chinskii published ground-breaking research supporting these principles. His meticulous data showed that the most productive Soviet enterprises were not those with the latest equipment but those that utilised their workers best. He argued for a greater focus on the biggest “non-utilised force” the Soviet Union had — its eighty million workforce — in comparison to which, “all the other great natural riches of the country paled in significance”.[8] Utilising this correctly would “will bring more fruits than anything else”.[9]
However, Pal’chinskii views were increasingly out of step with the times. In 1928 he was arrested and, the following year, executed. Although Pal’chinskii paid the ultimate price for his honesty, his principles today are a powerful guide for modern leaders, offering insights in how to navigate an uncertain world and adapt effectively. Let’s now look at these in more detail over the next few chapters.
1/ Quoting Boyd in ‘Science, Strategy and War. The Strategic Theory of John Boyd’. Frans P.B. Osinga (2007)
2/ https://www.ncbi.nlm.nih.gov/books/NBK92479/?t
3/ China and Vietnam were two of the Asian nations with the most cases and deaths from SARS. Yet their outcomes with COVID-19 were amongst the best in the world. Cases/deaths per million (Feb 2022): China 74/3, Vietnam 23,337/386, Global average 49,900/735, UK 257,225/2,304, USA 230,928/2,756. https://www.worldometers.info/coronavirus/#main_table
4/ Based on the book ‘The Ghost of the Executed Engineer’ by Loren R Graham (1993)
5 ‘The Ghost of the Executed Engineer’. Loren R Graham p.14
6 Coined by Tim Harford in his 2011 book ‘Adapt: Why success always starts with failure’. p25
7 Because everything breaks eventually https://www.wired.com/2012/10/ff-why-products-fail/?cid=co9198914
8 The Ghost of the Executed Engineer. Loren R Graham (1993) p.97
9 The Ghost of the Executed Engineer. Loren R Graham (1993) p.38
