MANAGEMENT: Reform for Pay

“We are not do-gooders. We are quite willing to reform the world, but we insist on being realistic about everything we do. We are a profitmaking organization.” So says President Raymond Stevens of Arthur D. Little, Inc., the Cambridge (Mass.) research firm, which has done a notable job in reforming seven countries —at a price. Last week, adding luster to its reputation for solving social and economic problems from Iraq to Puerto Rico, A.D.L. took on two new projects: ¶ It contracted with the International Cooperation Administration and the Philippine government to expand 300 credit-lending rural coops. Organized in 1952 to free small farmers from local Chinese moneylenders, the co-op system needs expert management help. ICA will pay $368,000 to cover A.D.L.’s U.S. expenses (including a $38,300 fee), while the Philippines pay the company’s overseas expenses with counterpart pesos. In return, A.D.L. will set up 700 more coops, train a local staff for each, steady the flow of produce to market, stabilize nationwide food prices for farmers and consumers. ¶ It contracted with the Norwegian government to plan industrial development in three northern provinces ravaged in World War II. A.D.L. will survey the region’s unused hydroelectric power sites and untapped mineral wealth, try to attract such U.S. industries as aluminum which need cheap power.

A.D.L.’s ability to revolutionize backward economies is based on 70 years of practical experience. Started in 1886 by the late Arthur D. Little, a chemistry student who left M.I.T. before graduation when he ran out of money, the organization has 450 topnotch researchers (out of a total 900 employees), can field a team of experts in everything from banking, law and engineering to outer space.

Sow’s Ear. In 1921, to show clients what it could do, the company literally produced a silk purse out of a sow’s ear,* has since turned out industrial ideas by the dozen. It helped develop Owens-Illinois’ Fiberglas, a new kind of blast furnace for Republic Steel, American Viscose’s rubber fiber Filastic. When Bristol-Myers’ brushmaking subsidiary, Rubberset, could get no more hog bristles from Red China in 1950, A.D.L helped invent a chemical substitute from chicken feathers. Its special taste laboratory has aided dozens of U.S. foodmakers. Its smell laboratory, which developed special chemicals to help American espionage agents outwit enemy bloodhounds in wartime, has advised industry on everything from salad dressing to air conditioning.

A.D.L. has put the same resources to work in helping other nations to help themselves. As the planners behind Puerto Rico’s highly successful “Operation Bootstrap,” the company has helped bring in 450 new plants, creating 36,000 new jobs with an annual $46 million payroll, indirectly created thousands of additional service jobs (TIME, May 14).

Last year in Iraq, A.D.L. acted as ICA’s agent in drawing up an exhaustive blueprint for industrialization. Iraq is now reclaiming sulphur from abundant natural gas, making paper from reeds, building a date-sugar plant to use its huge date surplus. A gas pipeline is being laid; new plants to make rayon, fertilizer and steel are rising; the nation’s industrial bank is being reorganized.

Brass Tacks. Even in Egypt, where development has been hard hit by Nasser’s foreign policy, some A.D.L. plans have borne fruit. A plan to use caustic soda in projected paper and rayon plants uncovered a highly important use for a byproduct chlorine. The chlorine, which seemed useless, can go into making sodium pentachlorophenate—a chemical that kills the river-borne parasites causing bilharziasis, a disease chronic in Egypt for centuries.

A basic reason for A.D.L.’s success is that it gives advice only by invitation and only for pay. Since foreign governments want their money’s worth, they are more anxious to put the projects into effect than if the help were free.

*By boiling up several hundred sows’ ears into “glue” resembling a silkworm’s glandular secretion, adding acetone to make jelly, filtering and spinning under high pressure into fine “threads” hardened with chrome alum and formaldehyde, weaving on a hand loom.