Chapter 3. Pal’chinskii’s Principles
In 2002, a SARS outbreak — another coronavirus — struck Asia and sparked fears of a global pandemic. Mistakes[1] were made in the response but valuable lessons were also learned as Asian nations coped far better that the rest of the world when COVID-19 struck two decades later[2]. Uncertainty — a state of doubt regarding the future — is a “fundamental and irresolvable characteristic of our lives[3]” and a powerful teacher for those willing to learn its hard lessons. One country that has experienced more than its fair share of uncertainty — and therefore has a long history of rich lessons for those able to learn from them — is Russia. One of those lessons comes from the most famous Russian that most Russians have never heard of — Petr Pal’chinskii[4].
Petr 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. His reasoning was that investments in new technology are ineffective if workers are unable or unwilling to use it. Therefore, improving the living and working conditions of miners so they are both capable and motivated to use the 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, eventually leading to exile in Siberia. After a few years he escaped to Europe where his ideas of seeing technical problems in their social and economic contexts gained traction. Major European ports in 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, becoming increasingly famous.
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. The government of the embattled Tsar had launched a modernisation drive to try and conserve royal power and Pal’chinskii became an adviser. However, 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 in them that would help tailor those technologies to Russia’s unique conditions, rather than trying to copy ready-made ‘solutions’ unthinkingly. Pal’chinskii argued that, if decision-makers could learn to see technologies as part of the local context, rather than apart from it, Russia could 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. The absurdly honest 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. His proposed alternative model of modernisation, grounded in an understanding of local conditions, was guided by three key principles:
- Experiment with a variety of ideas to increase the chances of success.
- Accept that some failure is inevitable[6], 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[7]”. Utilising this correctly would “will bring more fruits than anything else[8]”.
However, Pal’chinskii views were increasingly out of step with the times. In 1928 he was arrested and, the following year, executed. Pal’chinskii paid the ultimate price for his honesty, but his principles today are a powerful guide for modern leaders, offering insights in how to navigate an uncertain world and adapt effectively. We’ll look at how to apply ‘Pal’chinskii’s Principles[9]’ over the next few chapters.
1 https://www.ncbi.nlm.nih.gov/books/NBK92479/?t
2 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
3 Quoting Boyd in ‘Science, Strategy and War. The Strategic Theory of John Boyd’. Frans P.B. Osinga (2007)
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 Because everything breaks eventually https://www.wired.com/2012/10/ff-why-products-fail/?cid=co9198914
7 The Ghost of the Executed Engineer. Loren R Graham (1993) p.97
8 The Ghost of the Executed Engineer. Loren R Graham (1993) p.38
9 Coined by Tim Harford in his 2011 book ‘Adapt: Why success always starts with failure’. p25
