Now a group when it gets together, if it's got the idea of where it's going and what it is doing, and if it isn't all individuated one from the next and so on, can normally pull together so that it eventually will make it. For instance, in the Sea Org we've been crawling up toward a two year survival, and we're just making the grade. You see people around, they're not too well uniformed at the present moment, because there's no edge, there's no margin.

1.) I thought this would all go in easy after a bit of hatting on what the Product Officer and Org Officer do. Now the role of the HAS (HCO Area Sec) has to be made clear.

We'll eventually make this. We're in the teeth of not only a relentless enemy who, unfortunately we hear his, a death rattle amongst his midst every once in a while. But we're in a world which is very topsy-turvy economically and otherwise and so on, just buying survival. And it's a minimum survival of just two years without making a penny.

2.) We are dealing with Products 1-4:

You can do that, you'll survive. And during that two years you can get busy. And first, I'll give you an idea of how rickety things can get. For some reason or other cash/bills were so bad over the world that I didn't expect Scientology organizations to survive, as of October 1969. And I don't know who was, who was saying what about which, but boy they certainly were, by anybody's criteria, insolvent. Their cash/bills ratio was crossed, they were in a horrible condition. It was a mess. Ghastly.

1. The Establishment.

Mary Sue originated, as part of the LRH programs, and didn't take full credit for it, FP number one, the LRH ED which is financial planning, program number one. And she put that out, and she rode that hard, and so on. And as of now the stats may not look all that great across the world and so forth, but those orgs are all solvent. She achieved that in seven or eight months of very hard slug. Back and forth, back and forth.

2. The Establishment's Product.

And she was dealing with the cost of the organization in almost every case. And she found out that most organizations had a very unreal idea of how much they cost. They didn't really know how much they cost to run a week, so they didn't know how much money they had to make.

3. The Corrected Establishment.

Now if we've achieved that, we will achieve the next step. Which is just this, that it is not good enough to make as much money as you need for the next week, you have to buy survival. And your survival is a minimum of a two year run without a penny ever walking in the front door. And that's a minimum. And that would get you over most political, other crises.

4. The Corrected Product.

So let's look at this. Let's take a look at this various criteria. These are the hard facts of life. Now you're up against the hard facts of life. So how much establishment can you afford? Well you obviously cannot afford an establishment which doesn't produce.

3.) If you want to improve the VOLUME of production, you have to organize.

And you obviously cannot afford people in the establishment which doesn't produce. And you obviously can't afford to harbor machinery which doesn't produce, and offices which have no service use. And these are the things you can't afford.

If you want to improve the QUALITY of a product, you have to organize.

There was a trick that Johannesburg, in its early forming days when it was under Jack Parkhouse, used to pull, which was, I was horrified at, is they balanced their books by firing staff members. So that as the stat went up and down, they would fire staff members and take on staff members in order to balance their books. Well now that's the wrong way to do this. The way you do is hat, train and get better on post, the staff members you have.

If you want to improve the VIABILITY of a product, you have to organize.

Now a manager always has the responsibility of providing work for his workers. And that is something that somebody had better learn in Russia. Just that. A manager has a responsibility. You find yourself, it works two ways. It's how much establishment, well it's how much production. Now we're back to resources. What resources does the HAS have that can be utilized by production?

4.) If you get bad products - seldom - and at great expense - ORGANIZE!

Now you think, boy you must be in the airy(c)fairy world and so forth, and that it must be terribly difficult and so forth. No it isn't terribly difficult, it's very, very simple. Our average income for the last three months was X, therefore our expenditure and establishment for the next three months must be one half X, and our income must be 2X. And you're immediately at a quarter. And you target it and try to strive for it.

5.) If you have trouble with VOLUME of product, organize for better delivery of raw materials and do preparation of the product on an assembly line basis.

So, it's not very difficult to work out. You will find when you first face an organization that it's inefficient in the extreme, and you're not the hard hearted whip master that says immediately, "This many must go because we don't have," the General Motors answer. See? "We're closing five plants now, ha ha, ha ha, ha ha." Idiots. I use the word advisedly. Actually it's an insult to idiots. That's about the lousiest management that anybody ever heard of. Look, they've got that much establishment. Now what; now let's get it worked in reverse. What responsibility does this hand to the product officer of that org? He's got to get it consumed. He's got to get his product consumed, not reduced. You don't reduce production, you increase consumption.

6.) If you want to improve the QUALITY then go down the the line and find out who hasn't got the tech of their job. Hat them better. Improve duplication.

Every time you find yourself thinking in terms of, "Well we've got too many auditors and so forth now, and so on, and therefore," and so on. No, you've got resources. Resources have been furnished to you, you have to quick like a bunny figure out where's this production going to go? So it's one thing just to produce, and it's another thing to produce with some place to put your production. So when you're dealing with commodity of auditing hours it doesn't seem to occupy much storage space, but actually you have a total vacuum. What are you going to do with this? We got twelve auditors, and we don't have any more work than for six auditors. Wow! Wow! We're not going to lay off six auditors, we're going to get the consumption increased for those idle auditors. And that is a responsibility of managing. And a good manager, and a good production officer, and a good organizer will

7.) If you want to improve the VIABILITY you analyze the line of extra costly steps and do-less motion and duplicated functions that aren't necessary. You get a less costly product of the same volume & quality.

balance these factors out.

8.) The OUTGO-INCOME law applies. Always make more than you spend.

Now you go down to the dist division, or you go over to promotion somehow or another, and you're going to increase that, and that is why PR is so very, very, very important. You've got to know reliably what people want. You've got to estimate what they want and predict what they want. Interesting?

9.) INCOME MUST EXCEED OUTGO. OR EXPENSES MUST BE LESS THAN INCOME. That's the basic law of good finance.

Now you don't think we've ever done this. Oh boy, yes we have. What do people want? Well they want new tech. But the answer to wanting new tech is the old tech hasn't been produced. And they don't necessarily want new tech at all, they want tech. And they hope that the new tech will produce more than the old tech. The factor missing there is quality. Quality of tech.

10.) Just knowing that you become a financial genius. And you really become one when you realize the LOSSES are in the money you DIDN'T GET. If your org CAN make 10.000 per week and it only makes 5000 you are LOSING 5000 per week. This is the senior economy. The junior economy is saving money by finding a cheaper price for paperclips and buying in bulk at a discount, etc.

We've got somebody walking around this ship right now being talked to by the master at arms and other people, and so forth. Trouble with her is, is she never had an engram run and erased. Tough problem. Really tough. We got a thirteen year old auditor that would probably run rings around any HDC in the world. She could sit there and run an engram out, except nobody's ever gotten her to an auditing session by an auditor who would run an engram out. Most of your basic problems of production are never connecting up, see, never connecting up the guy who can do it and the guy who wants it. It's simply that, see?

11.) When you see this in an org (the GI dropping), it requires something from the Product Officer. A BIG IDEA. (To promote to get back the stat in normal or above.)

Now you try to connect up a guy who can't do it to a guy who wants it, and you're immediately going to have production problems, boy. You're going to have the fullest qual you ever heard of.

12.) So don't try to "economize" out of an Emergency, That's deadly. Get a BIG IDEA and promote it.

Very funny, recently we were talking about stalled cases and difficulties, and so forth. The failure of quals, over a period of time, was the failure to use the primary tool of qual. And I was, just investigated this about seventy; oh I don't know how long ago it was. Fifty days ago. Now you know that the primary tool of qual is a green form. And the green form was turned out for qual. Now a survey of the situation shows that the use of the green form was used like this. They'd start in at number one on the green form, go to number two on the green form, go to number three on the green form. By that time they're into, they're just into rudiments, see? And then you get an F/N on the rudiments. You try to go any deeper into the green form, and for some peculiar reason or another, why the TA will go up or something like that will happen. The net result is that only the first page and a tiny margin of the second page of the green form have ever been used. And if you look in all of the stuff; now this doesn't seem to you to be a production/consumption problem, but it is. How do we get green forms consumed? Actually the problem was how do we crack some of these cases. I think I was cracking cases like this that walk up, you know, and they seem to me awful bad off cases. Boy!

13.) That's what's wrong with Capitalism. They always worry about "profit" instead of just going ahead and making millions. If their stat goes down, They economize to cut expenses so they can still show a profit and they begin SHRINKING.

So, a type of assessment was adapted to this which all of a sudden gave us back the green form in its totality. It is do a green form once through, take the best read. Bang, you'll crack the case every time, if the auditor can read the meter. If he then runs the process he's supposed to run for that. Consumption of green forms.

You could actually, on terms of consumption; let's look at this now. Alright, here's a little technical breakthrough. It isn't much of a; it's a breakthrough just to the degree that this 1965 development, or I think it was even before that, is suddenly used. Now we're going to use it. Now do you get this? Do you get this? You've had it all this time. All of a sudden we look this thing over, how are we going to use this? And that is most of your big ideas that you get in production, is something you already got, and you're going to get the idea of how are we going to use this? You got it? So you look around and you will always find resources of this character. So you start a hell of a campaign. Start a hell of a campaign. Free green form. I'm just giving you an idea. Free green form. Only green form wasn't popular. People got awful tired of these green forms because they never had a green form. People began to shudder when you said green form. So, it's a free case analysis. A case cracking analysis. Dream it up any way you want to. "Anybody who appears at the organization between four and six in the afternoon and so forth will be given a case cracking analysis. Present this card."

Now if you're going to do that, somebody's going to have to run like hell to put the lines in. So that is why your org officer is not your establishment officer. Because the establishment is hard enough to maintain with all these wild hats running around in it, without also having an org officer and a product officer who are getting ideas. So you're going to have to put in some temporary line. It's just a temporary line. You're going to have to beef it up more.

16.) What does it take to be VIABLE? This is quite a universe to be viable in. If a farmer needs 20 Tons of Wheat to be viable, he's a god damn fool if he doesn't raise 250 Tons!

So the org officer of the organization always to ask the problem of, "How are we going to get this temporary line in in order to handle this new consumption of product? So a consumption of product here is vitally necessary. Now how are we going to get these people received?"

17.) Your org, if VIABLE, should be able to run for at least 2 YEARS WITHOUT MAKING ANY MORE MONEY or FIRING A SINGLE PERSON!

They walk in with this card, they show this card to reception. Well does reception leave them there for two hours? No, now somebody's got to have that reception, and this person doesn't know his way around through the organization, so somebody's got to escort him down to this terminal, and then there's got to be an auditor who sits there, and that auditor has to know how to do a once through assessment on the thing. And then there's got to be some PR person perhaps there to say how great that is. But then that wouldn't give you that somebody ought to lead him back to the registrar about this time. So the registrar gives him his results. Well if a registrar gives him results, the registrar can say, "Buh! It'll only take five hours to handle this. Twenty(c)five hours to handle this." It doesn't much matter what the registrar says. Or the registrar says, "Well that actually, that actually carries along with it the case cracking intensive, which is of no specified number of hours at all, but it just costs X dollars. You're not under any obligation to pay it. Feel better now don't you? Very good. That's fine. Oh you do, you want that. Oh, well alright. Here, sign on the dotted line and so forth, and go on down the line and pay the cashier and so on. I'm very glad you are. Thank you." And you've got to have that line in.

18.) About then, you MIGHT have obtained "better" SURVIVAL.

If you haven't got that line in, all the ideas that the production officer gets to increase consumption and get the six auditors busy will fail. We had the most marvelous, marvelous caper one time, it was called a hospital caper. And we had volunteer auditors all over the place, and a certain number of hours of the day they were going into hospitals and seeing patients, and pepping them up and patting them on the back and so forth, and giving them little cards. Marvelous! The person in charge of the project broke it right in half and crashed the project right down through the middle, in spite of the hard work put in by these people for weeks. You know how he did it? There was no reception sitting at the other end of the phone number these people were being given, and the office he had had and was rented, was never manned. They couldn't reach it by phone, they couldn't reach it by feet. So the org officer is responsible to make sure that these lines exist.

19.) So get out of the "hand to mouth" idea of just "paying bills" and "having enough left over". That's NOT survival in this Universe.

Now the HAS would eventually incorporate this kind of thing into his organization. Now he's busily running an organization. So therefore, an HAS has to have HCO expediters who can then put together immediate types of lines and set ups to handle special traffic. They usually send them into file and CF, when years ago they should have had two file clerks in CF. And they're usually used, expediters, to put together what HCO should have long since had as establishment.

20.) If you want to bribe enough senators and buy enough prime ministers and do all the things you want to do, change your way of thinking about finance.

Now an HCO expediter is somebody who goes down and gets in the special line and sits in as a special escort who handles the special action, so that you don't have to remove people from key posts in order to fit out these wild ideas. Otherwise, the HCOAS is going to get very impatient with you. "What, you need another receptionist? Well, we'll take one of the letter reg typists. Yeah."

21.) If you raise or lower prices too much you will get an income crash.

Now he should have some HCO expediters, and if those people are not totally employed all the time then they ought to be studying. So any slack time they have, any slack time they have during the day, then they ought to be studying. If he's going to have any full time people on course who are going to something or other something or other, and he doesn't think he can afford full time people in course, why'd he make them HCO expediters? And then not send them off to fix up a file someplace, but use them, put in special traffic lines.

22.) If you lower your prices on a gradient, you will NOT survive. Why? Because the currencies of the world are all INFLATING.

Now an HCOAS therefore has to maintain the establishment. The establishment is pretty well established by org board. That org board is not an arbitrary which simply sets up, there is, actually was production oriented. And the end of every one of those departments had a product. When we state that thing loud and

23.) As money becomes worthless it buys less, so if you keep prices the SAME (not adjusted for the buying power of the currency) you will go eventually insolvent in an inflation economy.

clear, and start to work it all backwards, we wind up with the same '67 org board we had in the past. What do you know? Somebody must have been bright someplace.

24.) So you must get a BIG IDEA to re-position or repackage your products to look like a brand new super-product so you can get a higher price for it.

Anyhow, so he's actually organizing backwards, even though he's organizing, he thinks, front-wards. Because he's got a canned org board that he puts there, and bang, that org board is spot on is no reason that makes him the first action. He builds that org board backwards. How does he fill it? He fills it up to the degree that it is demanded by production. So he expands his establishment by increasing the posting of his existing org board. And he too must have resources. And I've given you one of his pools of resources.

25.) Man is not rational where it comes to pricing. He does not sit around and figure it all out.

Now very often, as you will find in the personnel series, you have personnel people who think each division, particularly the better running divisions, are personnel pools. And if you've ever seen screams go up in all directions, it's missionairing in the Sea Org. This is a horrible chapter of something or other from the viewpoint of people who are trying to hold the organization there and keep it going, because missionaire has priority. And this makes a mad mess. One day you've got a captain, the next day you haven't. You know? I mean it's that kind of thing, it's that ghastly. And don't think it doesn't just rip everything to ribbons. But it is necessary to do so, because production in the Sea Org comes first. Production happens to be Scientology around the world, and it is now expanding to be Scientology around the world. So, a missionaire has to go, has to go, has to go. Well that's that. Alright, the rest of us will cope, one way or the other.

26.) Now DON'T raise your prices without giving service to match. If you give 10 times the service you WILL get 10 times as much income, provided you don't tell people you have raised the price.

Now actually it puts too heavy a burden on, in the Sear Org, the division is the third mate, the HCO. Now it puts too heavy a burden on him, and so on. But, he should get clever. He should get clever. There are some old FOs that talk about a missionaire unit. So he's got a second pool, a second pool he has. So he's got a missionaire unit.

27.) You don't dare RAISE the price, so you do something else - you reprice and repackage the service.

Now in view of the fact there's a heavy demand on highly trained personnel, your missionaire unit spend most of its time at home on guard duty and study. And therefore you have very highly trained people, and you can circulate people who are successful missionaires and also holding executive posts, or less exhaulted posts, you can circulate them into the missionaire unit and so on, and take people in the missionaire unit and put them on up. There are ways and means by which you can shift this sort of thing around. But it gives the personnel pool.

28.) Now this is an airy-fairy world - you ask people on a survey and they give you nothing but lies.

So the main problem of an HAS is personnel pools, because his main flub, exclamation point, is destroying whatever organization has been put there.

29.) You have to do a "trial & error" sometimes - you offer something else alongside what you are already delivering and you find what the price is to keep your org viable.

Alright, somebody is working, working, working, working, working, to put a qual there. And they work hard and they get the people trained in and grooved in, and then next thing you know HCO regards qual as a personnel pool. Or there's another thing, because qual

30.) Rolls Royce for instance - you pay for the comfort and durability and no obsolescence because the model doesn't change - but they have no pickup or acceleration. They ask 12.500 pounds for a USED one. (A Buick will run rings around it.)

can be doubled in brass with tech in an organization, you get the disgraceful action of, "We've got a backlog now, so I have all the qual auditors and so forth. They're going to have to audit on the tech lines." Oh boy, that's nuts! But it says the person in charge of HCO has not allowed for an ebb and flow of traffic, and does not have any auditor pool. So who does it say is out? The HAS. He did not predict. So he's operating on no resources.

31.) There is "status" involved in it. So there are all kinds of factors in this subject called PRICING.

Now what are his basic resources? His basic resources, you say of treasury or money. No, that's also the HASs resources. People, hatted people, trained people, very valuable people, people of all sorts and descriptions, not just this blank file filled up with a body. I told you the other day, you can find all the bodies you want in a mortuary.

32.) If you CAN'T fool with pricing, you CAN fool with VOLUME, but you have to make sure your costing is adequate, so you don't go insolvent.

So, he must be running some kind of an HCO which is a poverty HCO, because he doesn't have the resources that you would expect from an HCO. So he has to unmock what he builds. That's kind of crazy. A fellow builds a house, then to build a second house he has to take all the timbers out of the first house to build the second house. And then he takes out the... It's nuts. And somebody comes along one day and says, "Say, simple Simon, why don't you have a pile of spare lumber?" "Oh I couldn't do that, I couldn't get that through FP. Yeah well, they can't afford that." Oh I wouldn't say can't afford that. If I were an HAS at that point I would shake my head at every FP meeting, sadly, while looking at the production officer. Sigh. I wouldn't ever say anything.

33.) All these factors determine how BIG of an establishment you are going to maintain.

Any time anybody asked me for anything I would say, "When you fellows get around to producing something you can come back and talk to me. Why don't you produce something with what you've got?" would be my standard attitude as an HAS. "I must have, instantly and at once, twenty spares." "Twenty spare what?" "Twenty spare staff members." "Yeah, what for?" "For having spares." "Yeah I know, but there's only fifteen staff members in the org." I'd say, "I know. I'm tired of transferring fifteen transfers every week. You must be running a thirty-five man org. That must be what's wrong with this place, that's the why. You're trying to run a thirty-five man org with fifteen men. And yet we don't seem to have enough money here to deal with, not making very much money. All seems to be very sad. I wonder if we shouldn't train up a production officer?" See, this kind of thing, you know? It could get dirty after a while.

34.) The Product Officer's CAPABILITY of getting products out economically, in volume & high quality - can determine the potential VIABILITY of the org.

But when production is not adequate for the establishment, then the establishment goes poor in all of its resources. And its main resources of course are trained staff members, willing auditors who want to come on staff. It includes the estate being coaxed into looking around and see if there aren't any cheap empty office building around here. It's looking around and seeing whether or not there aren't some thisas and thatas, and how can we get a bunch of file cabinets. The wrong way to go about it is to present to FP eight thousand, six hundred and fifty-five dollars for three new steel desks for the product officer, org officer and HAS. That's not quite the way to go about it.

35.) Most businesses and governments follow the rule "to expand and absorb all the income". Except they expand INTERNALLY, ADMINISTRATIVELY with DUPLICATIONS to absorb all the income that is coming in.

The fellow is now pulling the incredible. And the incredible is, is trying to spend money you don't got. And it can be done in this society, to show you how clever the society is. They're always willing for you to spend money you don't have. So you have to safeguard that, and we are ourselves and we are solvent, and we do exist and we do still own our souls, and we are not in the pockets of the international bankers, solely because we make everything make its own way. And that is the basic action that; I have heard actually that some members of orgs wonder why I don't pay them better. It will be somebody in Keokuk or Cococomo, see? Why I don't pay them better. I don't know, I'm not even in charge of their board of directors.

36.) AN ORGAIZATION TENDS TO SPEND A BIT MORE THAN IT MAKES. This is sort of a "rule" on this planet, I haven't bothered to find out why, but it's a sort of a "counter-rule" to good sense!

The answer to the question of how they aren't; see they're asking the wrong question. The answer to the question is, why don't they wear their hat and do their job in a quantity so that eventually the org will get more money, and they can be paid more? See, elementary. The answer to the question is right on their skull.

37.) This "rule" is never violated on this planet. So the Org Officer's job IS TO VIOLATE IT.

Now this is then the ecology that economic, dog eat dog framework, or dogs eat cats and cats eat rats or something, the ecology if this universe in which we are dealing. And the ecology of the universe is that staff members who produce get paid, HASs that put an establishment there that is hatted and trained to function and so forth, has a heavy income potential, and a production officer who is able to spot production and get the production out of that line, and who is able to persuade consumption, persuade those people he has in PR, promotion, distribution, wherever he has. If he can persuade consumption to occur as he raises his production, why he is all set. And people will just get paid more and more money, and the next thing you know a staff member is declasse who doesn't drive up in a Rolls Royce. But you have to think in that way in order to bring about that result.

38.) Now the Product Officer gets the "BIG IDEA". What is that? Well, anyone can get one, the reg, the fileclerk, the guy on the assembly line. It's usually an idea of how to get more CONSUMPTION of your products.

Now in view of the fact that we aren't aiming for Rolls Royces, but we have an entirely different target, therefore it goes into the field of volume and quality. Viability will pretty well take care of itself, if your volume and quality is adequate. So your first point that you always; now let me give you a letter reg sequence here. This is for an HAS, what would he be persuaded to do? He could instant hat letter reges. That's going to give you volume. He mini hats them, that gives you some quality. He really hats them, that gives you viability. The first one is volume. And you as a manager always demand first and foremost volume as your first demand. And then when you've got your volume you demand as your second action, quality of the volume. And then your third action you've got to calculate and so forth, as viability.

39.) All the Product Officer's Big Ideas MUST apply to Consumption. (There can be other kinds of ideas in an org - like how to do it faster, better, or cheaper - but these are for the O/O.) The P/O ideas are for MORE consumption of products or more services delivered.

Now if you don't calculate it somewhat backwards, and figure out what your viability prediction is, you also will have an awful time of it. But right now we have an organizational runaway pattern that is fantastic. It's AOLA, and in just a few successive weeks they have a vaulting height. Their peaks, although they sink from the peaks, the peaks on those weeks give you a curve that says within about seven or eight weeks something on the order of about fifty thousand, within two or three months it says something like about eighty thousand, and certainly within five months it will be hitting a hundred thousand. I wonder what the third mate at AOLA is doing, what he's thinking, what he's worrying about? He doesn't think it's any part of his hat. And, if he doesn't wear that as his hat and take that predicted vaulting, it tells you that the organization reached its make/break point, as far as staff members were concerned, certainly at about forty thousand. And that put that whole staff under considerable strain at about that, because they didn't have quite all of those posts covered, and they didn't have this and they didn't have that, and they really had to get down and sweat to keep the lines running and to keep their quality up. Well that would be a breakdown of the HAS.

40.) The "Big Idea" leads to VOLUME INCREASE which brings VIABILITY.

So it tells you that at AOLA, within five months they have to have double their staff, double the trained auditors they have, double the space they have, and look, it takes months to get people recruited, trained and so forth. Who is sweating on it? And I'll tell you at this moment there isn't anybody worrying about it but me. Do you see what the prediction is?

41.) A "big idea" can also be gotten about a promo piece which gets people to KEEP IT rather than throw it away. That increases IT'S consumption so is a valid step toward more production.

So, that is what an HAS has to do, he has to think in terms of. And there isn't any HAS thinking in those terms. Actually there's been no hat written in these terms, because this is your product/org officer system, but this is the hat so there's no condemnation of that. But that is the terms of that, because he has to furnish the establishment. And if he has to furnish the establishment, the wrong time to furnish the establishment is after it's hit. Three times what the organization can possibly handle, and when it's hit that, to do the organization and establishing that you should have done five months ago. Oh god, this behind hand action is pretty horrible.

42.) How do we increase the consumption of this product? That is the key question which is answered by the BIG IDEAS.

Now I can tell you right now, we're cracking the roof on Europe. Europe's going to be a run away. We do have a Scandinavian team in training, of four people. That's a Scandinavian team, of four people. Oh. We have got a project going right at this moment that's going to knock the spots off of Europe. All books, courses, we're setting up and we're engineering it one way or the other. We finally found out how the slots drop into place, and how financing, not financing but how we are going to build up to this line. We don't have to worry about the financing, it's just taken care of in a normal course of human events.

43.) When an INCREASE of product starts INJURING the VIABILITY of an org, it must be an UNECONOMICAL product, and now we are talking about HCO - or "How much org?" The EXPANSION is caused by increase of CONSUMPTION which is caused by increase of PRODUCTION on an ECONOMICAL basis. So if it's not economical, the Organization (or Establishment) is at fault.

We're translating into each principle European language, the lot. An OEC, SHSBC, HAS course, books. Only previously it was not translatable because of the fantastic printing cost that it would have involved. The viability factor then did not forgive it. You could have put out a million dollars translating and publishing books and that sort of thing. It would have been fabulous.

44.) It is NOT the purpose of HCO to put as much organization there as the organization makes. That would be using all your income to increase Establishment (and none for more production) so soon insolvency would rear it's ugly head.

Somebody reaches in his pocket and does this. No, you have to wait for an idea. And think up an idea of how you can do this. Tapes, site translation, like they do at the United Nations. I got the idea last February. It's taken us a while to get us underway here.

45.) I would say that in the beginning, 50% should go toward Establishment, and as one grows, 33%, and on further volume & expansion, 25%. (The COST of the Establishment is one - quarter of the income of the Establishment is what I mean.)

Site translation. A site translator can hear the thing in his ear and, when he's really trained, spit it out in the other language. So, it's just going right over onto tapes. Then we can copy the, most tapes, and we can sell tapes. And we make it mandatory for every one of those orgs to buy a complete new set of all of their tapes, every three months. They'll wear them out. We get their promotion projects and so forth going, they're all on tapes. We don't have to translate anything on paper. And so on. We're gearing up and alerting Scandinavian orgs right now in the Swedish area, "Start figuring out how you're going to get your tape recorders, kids. And what you're going to be doing." There will be other projects to graduate them into it. And all of a sudden in their midst, why they will have HAS and other materials, and they'll all be in Swedish. Same thing's going to happen in France, same thing will happen in Germany, and so on. We've busted the language barrier. It's always been a worry about how we were going to do this. Alright, we do it.

46.) The COST of the Establishment should NEVER BE 100% or anywhere near it and certainly never 225% like governments do. (They get into hugs debts and put a heavy burden on the taxpayers.)

Now the only other thing we've got to worry about is how do we get a multilingual LRH comm who is a site translator, can take the dispatches of that organization and translate them on tape, or send it on through for his administrative act. Probably be nobody in the organization speaks any English at all. Dianoutex!

47.) So HCO's job is to furnish an Establishment, the cost of which is initially no more than 50% of the income.

And when we get it into Russian, that's it. Probably we'll put it in Lithuanian, Polish, borderline. So, we're hitting into a boom in this in Russia. Russia's booming on the subject. They're fumbling all around trying to figure out what the psyche is all about. They find out that that's a legitimate sphere of research the government isn't controlling. So into the middle of this boom we simply release Russian Scientology.

48.) It's HCO's job to say how much org is put there by the above costing - not Treasury Div.

So anyhow, we've been trying to figure out how to, how to penetrate that zone and area. Now the only reason you're not making any penetration in some areas is because no materials are there. Nobody has totally translated what we're doing into what we are doing. We're putting out knowledge, and with that knowledge, and with the actions which that knowledge has you can get gain, production, case change, ability and that sort of thing. But the basic of it is knowledge. And when you get it right down to it and do an analysis of the thing, why here is a product called knowledge. And the consumption of that knowledge is guaranteed.

49.) Treasury's tone scale only runs from "total neglect" to "grumble", so they are NOT the ones to do it! (Joke)

But look, you have to have the bulletins, you have to have the tapes, you have to have the course supervisor who says, "And you read this bulletin now." And then see that the student reads that bulletin now. That'd be something new. And who doesn't assign him a condition of enemy because he doped off midway to, but goes over and asks him what is misunderstood.

50.) There are two kind of people you DON'T wand anywhere near the top management line or product or Establishment line in an org. And they are ACCOUNTANTS and LAWYERS. NEVER let them establish management policy.

Alright, what kind of organizational structure does that make? What is the establishment structure? Did you notice that I included the OEC? It would be fatal not to put the OEC in with it.

51.) Accountants only deal with money owing & collected, bills owed & paid and putting some reserves aside. FINANCIAL PLANNING TELLS THEM WHAT TO DO. And that is the heads of Divisions, or Management staff.

Now I can tell you something else that's fatal. You put in a fragment of something, and it'll boom and collapse. So if you put in a fragment of what your org could be exporting with knowledge, it will boom and it will collapse. If you put in a fragment of your product; if I weren't talking to you now about the responsibilities of establishing establishment, I know it seems very rambling when I talk to you about this because you say, "The HAS has nothing to do with finance." And boy, he doesn't. He can spend you poor, boy. "Well we just, we've got these sixty staff members. I don't know why we're; we got 'em, we got the staff members. No auditors amongst them. Don't have course supervisors, ha ha. No hats. Um, we got establishment, there's sixty staff members." Sixty unhatted people would behave like about sixty enemies, man. To each other, they'd be at each other's throats in no time. So he doesn't have a sixty man staff, he has a sixty man mob. So he doesn't have an establishment. Yes, he has a great deal to do with this sort of thing, so somebody's got to take responsibility for the establishment, and I've elected him it.

52.) Each production branch of an org should have the status of a Div. Head in FP. The Tech/Admin ratio at FP should be the same as for the org. This helps to balance the costing for Production and Establishment.

Now if the org officer takes responsibility for the establishment across the line, he will cease to help the product officer. And you know very well that if he ceases to help the product officer, the product officer will start falling on his head. So the wrong division of duties, obviously, is the org officer taking responsibility for the establishment. The right division of duties would be for the HAS to take responsibilities for the establishment, and get one there that functioned. And get the people hatted and checked out.

53.) Administration is important but production is VITAL, so the Ad Council or FP body should be balanced so the production areas don't get overwhelmed by Admin and get no money to maintain and increase production.

The wrong action for an org officer would be to turn around to an HAS and say, "Give me three staff members at once, because I have got to beef up the empty, fast flowing posts of...", and for the HAS to pick off people off of other fast flowing posts and give them to the org officer. That's nuts.

54.) If you swing the pendulum the OTHER WAY and ONLY let the workers or producers say where the money goes, you get - COMMUNISM, and it doesn't work economically and is unproductive.

The HAS would have to look around and find where he had some people. And if he looks around and finds he hasn't got any spare people, he's one of these poor sods that's just standing in a bread line, clear at the end, with only a gallon of coffee and a half a loaf of bread to give out to a hundred men. He's poor. We ought to give him special clothes, you know with ragged cuffs and...

55.) But if you let the pendulum swing totally toward the Admin side, you get - CAPITALISM, and it doesn't work either as it produces incredible inflations and debts - although there may be some products lying around from the bankrupt companies.

If you turned around to treasury, and you had to run a mission or something of the sort, and you said to treasury, "We need two hundred and fifty dollars in order to pay the expenses of this."

56.) So there must be a Balance between these two extremes.

And treasury said, "I'm sorry, don't have any money, because we didn't make any provision for this. And all our money's in the bank, and there isn't any way to do it," they'd say he isn't doing his job. Well look at the HAS, look at the HAS. Resources. What are the realities?" "Now let me give you a little piece of stuff which emerged out of socialism. There's a few bits in socialism which are sound think. The most of it is balderdash. But this is very sound think. "The wealth of the world are the real things in the world. And that is wealth. And money is only a substitute for wealth, and is not itself wealth." And that is true.

57.) Capitalism - extreme - is NOT EVEN NEAR production. It's a system where a guy with bucks (dollars) lives off the interest, loans the rest and forecloses on the borrowers and sells the company for more "bucks".

Money is only valid to the degree that it can substitute for actual wealth. Money is only of any use to the degree that it can purchase things of value. Value is established by things that are wanted. Value is established by wantedness. You can then fluxuate value by making scarcities and demands and so forth, but it is basically wantedness.

58.) So if you put an accountant in charge of an org, he will only think about "bucks", not products.

Kensian philosophy, which he tried to say was economics, is valid, unless you put it in the field of economics. It is valid in the field of production, it's not valid in the field of money. And I think he must have gotten a couple of things crossed, but as far as production is concerned, you also have to create want. What you are selling is absolutely priceless. What we're selling here on Flag, I think you will agree, is priceless. There isn't any possible price could be placed on it. So it's price is what can be received for it. Not what is it worth, but what can be received for it, greater or lesser. So pricing is based totally really not on value but what can be received for it. And that value is totally how much it is wanted. And out of a very, very close knowledge of those, and once you get all of these factors disentangled, and all added up in your skull, you can establish how much establishment the HAS can put there. Has nothing whatsoever to do with any firm factor of, "Well, I'm an HAS, I will now put up an org board. And this org should be manned with fifty people, and we will now put some down the line, and we will put the people, there's blank spaces on this org board. And we'll put the people in those blank spaces, and so forth." No, right thing to do is to put up the org board, and then post it to the degree that it is required to back up production. And you build it up.

59.) To the degree Treasury doesn't collect the outstanding monies owed, they neglect their duty, and force economy on the org.

Now you'll find that command lines of the org board will go absolutely mad if you don't build in from the top, so obviously the first production man that you put on is in charge of everything, and does the production. You've got one auditor. He obviously is in charge of all auditing while he is doing all the auditing, and he is obviously the production man for all auditing. So it's built from the top to that degree. But then, when there's more auditing, why it must be because there's more demand for auditing. So want has been created about auditing, and that is basically done by the circulation of books. Books always run out in front of the organization. The stats of an organization are actually almost monitored by the degree that the knowledge has been circulated. They are a direct coordination. It's actually not even by the degree of sales talk put out, it's stats of an organization are proportional to the amount of knowledge circulated by the organization.

60.) Also, however, you can't have a "runaway" org which has no financial "checks and balances" in it. (To keep it from spending more than it makes.)

So the HAS builds, according to the stats he can build by. If he builds an organization at the cost of fifty percent of the income of the organization, he's really doing great. A rich HAS is one who has reserves, resources.

61.) I can run an org that way because I have a feeling and sense of the volumes of production and income. It may seem uncontrolled at times because I buy things without going thru FP. But the test of the pudding is the stat of Org Reserves. Any org I'm running accumulates reserves at a hell of a rate. They run out of Banks to put them in.

Now the wealth of the world are actualities. An HAS is wealthy to the degree that he has trained staff members, that he has trained staff members in reserve. "Special products is being asked to please find work for five fully trained auditors we are not using at this moment on the production line." How would you like to hear a remark like that? Wouldn't that be remarkable? But that could be a statement which is made by the HAS. "I got five auditors, I don't want to assign them into the administrative lines. Haven't you got some kind of a project where they can go out and audit ARC breaks or something? Do something? Or can't you think up something, or something?"

62.) I keep a "computer overview" of the production and cash flows of an org. And I turn down unreal Establishment projects and encourage delivery and production projects for expansion.

Now you can run it the other way too. "Look, I want to have here a fifty(c)five man organization, and we've only got a thirty man organization. And at the present moment we can only afford a thirty man organization. Can't we increase production, or demand, or something in some way, so that we can increase our numbers organizationally so that we do get up into a zone where we are running where we have a few reserves, instead of just asking me to pull musical chairs every day, any day of the week? That would be a very comfortable position, so please can't we get the income up, huh?"

I noticed when we were collecting stats last week, I've got it here. Where is this stat here? Yeah, oh yeah, hm, yeah. Letters out, letters out dropped. "Yes I know, but we're trying to get quality in." Ooh! First you get in volume and then you get in quality, and then you will have viability.

63.) I don't consider an org can AFFORD ANYTHING until it has a couple YEARS of reserves built up to cover its ENTIRE ESTABLISHMENT OUTLAY.

Now he's dealing with some interesting coins. How many auditing hours can the organization furnish? How many instructor minutes can the organization furnish? How many student hours can the organization furnish? How many public courses per unit per person can the organization furnish? And that would be a resources survey of an HAS. How many hours, how many hours. Well that's monitored by how many auditing rooms, how many auditors, how many this, how many that and so forth.

64.) Auditing Rooms, Training Space, Staff Service (if not expensive) are projects I consider more important than any others, until the place is really viable and booming.

So, an HAS should know the resources of his organization. He should know its actual wealth. That he has fair resources or additional resources depends upon his knowledge of the existing resources. Never saw such a silly thing in my life as a set of graphs come in here one day. An organization had about ten auditors who were auditing six hours a week each. Oh, who's kidding? There must have been somebody in that area that was just throwing the gold coins of that organization right over the side.

65.) When I've got that couple of years of reserves, I know I'm working at a bare minimum and I start to get loose with the money. (Not the reserves though, the NEWLY made income.)

Boy, he was just throwing them into the sewer just as fast as he could pick them up and throw them away. Six auditors, count 'em up. How many auditing hours should six auditors furnish? That's a hundred and fifty auditing hours. Or six auditors at twenty-five hours a week. Very well done auditing hours too. Resources.

66.) I've seen accountants look with horror (but hidden) at some of my projects to increase consumption but in the end we've gotten from it many more thousands than we put in.

This organization can furnish that, these auditing hours are worth this much, unless we're selling by packages. So we ought to be selling by packages, we shouldn't be selling by hours because it's too expensive, and it appears too expensive to the public to sell these auditing hours in this fashion, so we probably should sell by packages and so forth. So therefore the package selling, and so on and so on and so on.

67.) "What consumption can be brought about?" is one of the first thoughts of a production man. Otherwise he will run out of space to put his products.

But nevertheless, the coins, the gold coins which that organization is spending and has to spend are auditing hours. And if they're not spent this week, they can't be spent, ever again. Funny money. It's real wild money. If you don't spend it you haven't got it. How many student hours can this organization deliver? Hours of students on course. Alright, there's only room for twenty students in this organization, if you jam them in with a shoe horn. Now each student is going to spend eight hours a day on class. So each student is worth eight hours, and they're going to be twenty students, so you can furnish what? In a day, how many student hours. Those are your coins.

68.) He doesn't care how many products he makes, as long as they don't sit there. They must be consumed or utilized.

Now do you understand why I say the HAS is very poor if he does not have resources? Those are his resources. Supposing he's got a hundred and sixty staff members, and he has as organizational production coins, twenty-five. Twenty-five auditing hours. Supposing he has one instructor for seven courses. Now that's instructor minutes per course. Now you subtract that down to instructor minutes per potential student. So he's got one course supervisor, and he's got one auditor, and he has a hundred and sixty staff members. Does that sound crazy to you? Well I exaggerated a bit so that it sounds real crazy. The organization'd be broke in no time. Do you see that? Uh! There's nothing to deliver. How the hell could he deliver anything?

69.) EXAMPLE: Tells story of Edsel Ford who produced a BIG new car that DIDN'T sell. He should have read Henry Ford's notes of "America on Wheels" a policy that was for small, cheap, economical transportation. Because, just at that time, America was needing a small car so brought foreign cars and Ford lost a lot of business.

70.) He should have built one, run it on the street and ask people if they wanted it - an elementary survey or pilot project. He missed the main chance by not doing a market survey to find out what the public WOULD buy.

71.) So you should always have a "Special Programs Section" for pilot projects.

72.) This section will pilot these new products to see if people will consume them and what the interest is, etc. Then you can always drop it or change it without costing your org millions.

73.) The "Celebrity Centers", for instance, were being run by Diana and Yvonne in Special Programs under Div 6 Aide (Diana) and it was booming. I suddenly woke up to the fact it was not under the main Management Bureaux Control Line, so we are getting it put there. So if a pilot is SUCCESSFUL you should remember to then organize it into the main org line.

74.) All new types of expansions are PILOTED, otherwise you go broke.

75.) So the "Big Idea", if costly, or not sure about it, should be piloted 1st, then checked up on to see how it did - in Special Programs.

76.) But most "Big Ideas" are banal (simple) - they are just based on how to get more people into the org (in bigger volume).

77.) You probably think of policy and the org being a "rigid" structure. Well, it is, but big ideas AREN'T.

78.) So if the "big idea" works, the ESTABLISHMENT for it must be provided by the HAS. (HCO Area Sec.)

79.) (The reason orgs APPEAR "rigid" is that they were formed by experience with establishing EARLIER "big ideas" - like Scientology & Dianetics training and auditing. And these have proven to be the workable way at this time to keep it expanding. WBR)

80.) The HAS must keep the cost figure of the Establishment BELOW the income figure - no more than 50%.

81.) Ethics is how you hold the EDGES, The Ethics Officer is the "God of the Edges". Ref. Vol O PL on "Direct a channel toward attainment, put something on it, KEEP THE EDGES FIRM, while pushing it along the channel".

82.) People try to use Ethics to "monitor" behaviour. How nutty! Who cares abut behaviour? (It's only intentions and actions that go against the PURPOSE THAT Ethics cares about.)

83.) Interpersonal (social) relations are only "good" in the presence of SUCCESSFUL PRODUCTION. So what you want to do is INCREASE PRODUCTION, (thus MORALE goes up!).

84.) The HAS determines the size, type, and kind of Establishment that can be afforded.

85.) This may also have to do with LOGISTICS (transport, supply, and movement of goods & personnel).

86.) Sometimes the HAS is running BELOW that which can be afforded and that is a false economy - especially if done on HCO itself.

87.) How can HCO be "undermanned"? This is nuts. It assaults my reality. Because HCO RECRUITS and ASSIGNS personnel!

88.) It's like "bragging" about not doing your job and trying to get me to handle it for you! That's HCO's method of "bragging" about not doing their job "We don't have enough people in HCO".

89.) The IRREDUCTIBLE MINIMUM of the HAS's job is a manned and operating HCO! THEN maybe you can get them to put the REST of the org there!

90.) How does HCO put the org there? Well, it's in charge of ORG BOARDS, HATTING, PERSONNEL, COMM, ETHICS - all the things needed - the TERMINALS, COMM LINES, AND FUNCTIONS. (Control of Matter, Energy, Space, Life, Thought).

91.) But if you know that and it still isn't putting the org there, you have missed one point - the ORDERS ISSUANCE SECTION. This is what it uses to build, hold, control, man, and maintain the org. (Control of Time)

92.) This has the Orders of the Day and Time Machine.

93.) If you see no Establishment Orders in the OOD's or in the TM, then you know NOBODY is establishing the place and soon it won't exist.

94.) How MUCH org he can build is determined by financial VIABILITY.

95.) If Dept 1 has a "think" of "we don't wand people", it's worthless.

96.) Did you ever see the cartoon of the little fellow sitting in a box saying "I hate everybody"? Well, you DON'T wand a Dept 1 (Personnel) like that!

97.) A Dept 1 must be willing to take anyone on, although they have to shove half of them out thru Dept 3 (Ethics). (many are called, few are chosen)

98.) The HAS is the BUILDER of the Org (Product 1 - The Establishment).

99.) If it ISN'T built YET, it's Prod 1. If it WAS built & CRUMBLES, it's Prod 3.

100.) You say, "he isn't in control of the actual Building & Space of the Org". Oh - YES HE IS - via his Orders issuance Section and Time Machine.

101.) I could build quite an org from HCO, and have. The only limiting factor is the Viability in regard to the income. (as mentioned before).

102.) If it was brand new and young, I might "fudge" over into 75%,but quickly get it back to 50% and I would be ashamed of myself if after a while it cost any more than 25%. (Of the income).

103.) But even if that happened, as HCO I would look to production divisions and Product Officer and get them hatted so they COULD afford the Establishment.

104.) Do you now see the why behind the low GI divided by staff in orgs? It ISN'T that orgs are overmanned. It's that they are not hatted and there is a lack of Production Orientation.

105.) So when someone says "They don't pay us well." ask - "Who is THEY?" You are looking at "they" when you are looking at the staff of an org.

106.) You can't pay a staff 20 Pounds a week when he only makes 15 Pounds a week for the org!

107.) It even works this way in a moneyless society. If a village doesn't produce MORE than 4 or 5 such villages can eat, it will e a village of starving, poor, famine-faced peasants.

108.) This has been TRUE for 1000's of years, on THIS or ANY OTHER PLANET.

109.) It must cause the suppressives a lot of problems when in America, for instance, a person can now raise enough to feed 47 people. In the past, he could only raise enough to feed 4 or 5.

110.) So the suppressive governments continue to ship the MONEY overseas, not the products. If they do ship products they do it for free! How crazy can you get? (There is no exchange and no viability in it. Only inflation and strain on the producers.)

111.) It's very simple. You can not pay a worker more than he makes.

112.) I wonder, when I see these kids in the US buying things with poppa's money, how long it will be before it all crashes. They are like a novice on a high wire - it's only a matter of time before they fall to the sawdust.

113.) And I have no sympathy for the people who don't produce and keep crying for money. The "poor, underpriviliged" worker now has a paradies in Russia and they can't produce enough shoes to keep the "snowniks" out.

114.) If you are going to go around in a body on this planet, you might as well produce enough to keep it comfortable and well -fed at least!