Monthly Archives: July 2013

Management by Statistics – Chapter 19 of The Natural Laws of Management: The Admin Scale

statistic-graph-measure-production-arte-maren-natural-laws-of-management-admin-scaleBeing unreasonable and having no options increases production. And production is regulated and monitored by statistics, the next level up on the Admin Scale.

Stats are best represented on graphs. A graph helps keep you unreasonable. The graph does not tell you that “it snowed” and therefore “things were difficult that day”. It doesn’t give you any “reasons”. It simply shows production or non-production. Products are a physical reality, and if you wish to manage with reality, you must have real information. Management survives to the degree that it has sufficient data to determine what is working so as to reinforce it–and what is not functioning well, so as to change that action or system. And the first type of information needed is not lengthy reports, but correct, condensed data: a stat.

A stat is:

The only sound measure of any production or any job or any activity.1


1 “Statistic” (definition), Hubbard, Modern Management Technology Defined


Do You Have Your Admin Scale?

Exchange: The Outflow and Inflow of your Business – Excerpt from Chapter 5

The law of exchange can be an unnerving, difficult thing to work with unless one understands it and uses it to his advantage. The subject of exchange then becomes a simple and powerful tool. It’s all about outflows and inflows. You produce (outflow) your product or service for others who want it, so that they will give you what you want (the inflow). Most “problems” are really problems of exchange.


People, all too often, talk about the “inflow” problem that they have: i.e., not enough money, customers, sales, etc. They keep “solving” their inflow problem, but it never solves. Why? It very obviously was never an inflow problem; it was a problem of outflow. You can’t solve the wrong problem. Outflow governs inflow.

Outflow, per L. Ron Hubbard,

…is holier, more moral, more remunerative and more effective than inflow.1

People stuck on inflow are trying to directly control the inflow. And you can’t control the inflow directly—unless you are a criminal. You cannot directly control the exchange unless you are a thief. Thieves don’t run the cycle from the creation of product to generating demand for the product to delivery so that they can get the exchange. They try to jump over the “invisible wall” between product and exchange. They take the exchange. They try to control the exchange directly, rather than control the exchange through pro- duction, through the interchange and exchange of services or articles.

You cannot directly control the inflow. If you want to see some really tired people, talk to those who try to “handle” the inflow side without the necessary outflow. Show me someone with attention stuck on inflow alone and I’ll show you a tired person, losing in the game of life.

The good news is that you can control your production directly (outflow). If you are making ten clocks, you can make twenty clocks. You can get more people to make clocks. You can keep the plant open longer hours and raise the quality. You can do more promotion and do it better.

The simplest and easiest way to get your exchange is to create such a heavy outflow that it simply creates or forces in the exchange. It happens as a natural phenomenon!


1 Hubbard, “Outflow, Policy Letter of 6 July 1959, Organization Executive Course

Do You Have Your Admin Scale?