Ira M. Millstein: ’49 Law: Samuel Johnson Medalist
The following speech was delivered by Ira M. Millstein, the first winner of the Samuel Johnson Award given by the Columbia Engineering School Alumni Association to an alumnus for distinguished achievement in a field other than engineering.
My major gift to the reputation of the Columbia School of Engineering was not to become an engineer. In addition, had I become an engineer, I surely would not have been honored with any kind of a medal.
When I was first approached about this medal I was surprised, and not sure why I had been chosen, but accepted, thinking it might cause me to think through why I ever went to engineering school in the first place, and then to think further about whether the engineering education was a foundation for what I became - a lawyer. I found that the answer was that the engineering training, the engineering process, was indeed the foundation for my career as a lawyer. It engrained in me a way, or method, of approaching a problem, any problem.
First, why did I come to the Engineering School? At the time I really hadn’t a fixed idea. It was a natural flow. I had been picked out of the public schools along with 30 or 40 other little kids barely out of knickers (does anyone remember knickers?) to enter the brand new experimental Bronx High School of Science. I was 13 or 14 at the time. I never got a swelled head because in my classes both before, during and after Bronx Science, was my friend Harold Brown, later Secretary of Defense. Harold was just plain brilliant. Whatever grade I got in any subject, his was one or two, at least, better. We rode the subways together devouring science fiction pulps, and learning the scientific method in the Bronx, aside from typing (just in case we depression babies couldn’t find another job).
When it came time for college (I was all of 16 years), why of course my science background led me to believe that engineering would be my cause. But it was wartime and after a term or two at Columbia, I enlisted, at 17 years old, in an Army program which was to lead to an officership in the Corps of Engineers, but that program broke up. I returned to school for awhile and then was sent to infantry basic, where I promptly got sick, was medically discharged, and went back to school.
Then reality began to set in, engineering studies began in earnest. I gave up on electrical engineering when I found that I just didn’t believe in electricity. I couldn’t see it, and the thought of something that important running in a wire was improbable to me. Chemistry was equally unbelievable, I had to take everyone’s word for what was happening in tubes changing colors and the like. Advanced calculus, spherical trig, and thermodynamics hit a wall. I would look at the pages and blank out. And in the labs I was a total disaster if not a truant. My fondest memories were sailing paper boats in races with friends down the weir tank until reprimanded; of accidentally stopping a torque test and flooding the room with the cooling water in the fly wheel; damaging equipment during stress tests; and, I could go on with a myriad of mishaps.
Finally, someone, seeking to preserve the school’s equipment if not its buildings, said “Try Industrial Engineering, maybe you can learn the Taylor method and learn to use a stop watch.” Low and behold I found my home with a mentor, Walter Rautenstrauch, whose book I use until this day.
Next, what did I learn? After I switched to Industrial Engineering, I began to see two things. First, I really enjoyed the whole concept of industrial organizations. Even today I use a modern version of a chart on page 81 of Rautenstrauch’s book, showing the forces at work on the corporation, namely vendors, trade associations, labor unions, the state, commercial banks, investment banks and customers. The forces change names – but they are still there. Walter left out stockholders, and I added them later. Moreover, I treasure this simple proposition. He said, at page 254, “In the process of manufacture there is also a flow of energy through the system. The energy is in the form of money or its equivalent credit....” And he pointed out that the object of manufacturing is to convert that energy efficiently into value.
This I understood, and understand. Those forces on the corporation, and the corporation’s conversion of the energy of money (or capital) into something of value, are the basis of what I deal with today when I work with boards of directors and shareholders. A very general proposition by Rautenstrauch - but elegant and descriptive.
But perhaps more importantly I learned the discipline of engineering, which despite my ineptness in applying it to engineering problems, formed a thinking process which again lasts to this today.
Engineering, at least to me, involves creating or fixing something which helps make a system work, or work better. Whether it’s a bridge, a computer, a building, a turbine, a manufacturing process, or even a whole corporation. Whether it’s structure, safety, impact, or whatever the objective may be, to do that means solving a problem - what do you need to create or fix something and make it work, or work better? The answer doesn’t leap out just by talking about it. To solve such a problem means first defining it. What is it you are trying to do? Then, patiently and carefully studying each component involved in the problem separately, and determining what that component needs in order to function more efficiently. Maybe discarding the component, modifying it, improving it, or whatever may be necessary to solve the problem at hand. Then putting it all back together, testing it, and judging honestly - have you made it better, more efficient, in the search for a solution?
Granted that to you “real” engineers, this may be a gross oversimplification, but in looking back, I know this way of thinking started for me at the Engineering School. Returning to history, Professor Rautenstrauch finally said, “This field isn’t for you. Your brain is good and you understand the process, but you just can’t apply it here, and, anyhow, you still don’t like, or can you properly work, a stopwatch.”
Luckily I had taken Law for Engineers from the Associate Dean of the Law School, gotten the one decent grade at the Engineering School, and the Dean snuck me into the Columbia Law School. There I found another mentor. The antitrust Professor Milton Handler saw my aptitude for industrial organizations, and I saw that antitrust was the then-method of keeping the then-dominant organizations of the 50’s and 60’s under some kind of functioning control.
But as the years progressed, and antitrust waned under the pressure of today’s global competition, the engineering process led me to the next phase of keeping corporations under some kind of control, and that phase is probably the basis for the medal, namely my work in corporate governance. It’s really not a stretch. When I started looking at corporations in the late 60’s and 70’s, management was basically operating without checks and balances. Silly mergers to enhance size and compensation but not efficiencies, some very nasty practices, and what Holman Jenkins once called “entrenched ineptitude” on the part of management. I saw a problem; the system wasn’t working efficiently, and many of our icons were losing out competitively.
Why? To find an answer, I had to take the corporate system apart and look at all the pieces to find what was at fault. The system was simple – stockholders elect boards, boards pick and monitor managers, and managers manage. I found that when managers didn’t manage well, their boards were generally supine and asleep, and the stockholders were powerless to do much about it. It seemed pretty obvious to this engineer that fixing the system required fixing the board of directors, and later somehow fixing the inability of shareholders to affect the situation.
Simple enough to say, but years later I’m still at it. Boards have become much better, but not yet fixed enough, and we have a long way to go before the shareholder lever can be worked right. This engineer will continue to try to fix the pieces so that the corporation uses efficiently the energy flow of capital that Rautenstrauch showed me so many years ago, just a few steps from where we’re sitting tonight. The work involves patience, diligence, the participation of many great collaborators, and constantly experiencing, testing, creating and discarding. An engineering process.
Would I recommend an engineering training to anyone interested in the efficiency of our modern enterprises? Most assuredly. They will always need fixing, not just in production and distribution as markets globalize, but more importantly in their leadership and the system by which their managers are selected, incentivized and monitored. There will be no single magic bullets, just constant “fixing” of each and every component of their corporate governance.