It should be an invariable rule to develop several alternative solutions for every problem. Otherwise there is the danger of falling into the trap for the false either or. Most people would protest were one to say to them: All things in the world are either green or red. But most of us everyday accept statements – and act on them – that are not less preposterous. Nothing is more common than the confusion between a true contradiction – green and non-green for instance which embraces all possibilities, and a contrast green and red, for instance which lists only two out of numerous possibilities. The danger is heightened by the common man tendency to focus on the extremes. All color possibilities are indeed expressed in black or white but they are not contained in it. Yet, when we say black or white we tend to believe that we have stated the full range simply because we have stated its extremes.
The old plant of small plumbing equipment manufacturer had become obsolete and threatened the company with the total loss of market position a highly competitive and price conscious industry. Management rightly concluded that it had to move out of the plant. But because it did not force itself to develop alternate solutions, it decided that it had to build a new plant. And this decision bankrupted the company. Actually nothing followed from the finding that the old plant had become obsolete but the decision to stop manufacturing there. There were plenty of alternative courses of action: to sub contract production for instance or to become a distributor for another manufacturer not yet represented in territory. Either one would have been preferable would indeed have been welcomed by a management that recognized the dangers involved in building a new plant. Yet, management did not think of these alternates until it was too late.
Other example is that of a big railroad which, in the postwar years, experienced a sharp increase in traffic volume. It was clear that facilities had to be expanded. The bottleneck seemed to be the company’s biggest classification yard. Situated halfway between the main terminal points the yard handled all freight trains, breaking them up and rearranging them. And the jam in the yard had become so bad that trains were sometimes backed up for miles outside either end and had to wait twenty four hours before they could even get in. The obvious remedy was to enlarge the yard. And this was accordingly done at a cost running into many millions. But the company has been able the enlarged facilities. For the two subsidiary yards that lie between the main yard and the two terminals, north and south respectively simply could not handle such additional loads as would be imposed on them were the new facilities put to use. Indeed it speedily became clear that the real problem all along had been the limited capacity of the subsidiary yards. The original main yard would have been able to handle a good deal more traffic if only the subsidiary yards had been larger and faster. And the enlargement of these two yards would cost less than a fifth of the sum that was wastefully invested in enlarging the main yard.
These cases reveal how limited most of us are in our imagination. We tend to see one pattern and to consider it the right if not the only pattern. Because the company has always manufactured its own goods, it must keep on manufacturing. Because profit has always been considered the margin between sales price and manufacturing costs, the only way to raise profitability is cutting production costs. We do not even think of subcontracting the manufacturing job or of changing the product mix.