I’d call my friend Willy Chaplin a “character” if it weren’t subtly demeaning.
That wouldn’t be appropriate for a guy who, in addition to “getting” the Web before most of the rest of us (“The thirteen commandments of the World Wide Web,” Keep the Joint Running, 6/9/2008), has been at one time or another in his life a weapons designer, spy, programmer (if you enjoy backgammon, his on-line version is a must), commune-founding hippy, consensual bigamist, fugitive, jailbird, parent and grandparent.
Also an autobiographer, and an honest one at that. If you grew up after the ’60s were over and are curious, or if you enjoy reading about unique lives, Hick is worth your time, so long as your sensibilities aren’t overly delicate — Willy leaves nothing out and doesn’t restrict himself to businesslike language.
Hick won’t make you a better CIO. On the other hand, it’s sure to broaden your horizons more than reading yet another book by yet another retired CEO.
The People’s Tycoon: Henry Ford and the American Century, (Steven Watts, 2006), on the other hand, has a lot that’s directly relevant.
Ford was a brilliant innovator, marketer and self-promoter. He was also a ruthless businessman and unerringly self-serving. He betrayed every investor who ever helped him and was outspoken in his belief that all financiers are economic parasites. Initially an admirer of working stiffs, paying employees radically high wages, he later hired thugs to intimidate them and brutalize union organizers.
He invented what we now call “Lean” and in doing so demonstrated its hidden hazard, loss of flexibility: Introducing the Model A cost $250 million (more than $3 billion adjusted for inflation), plus six months of lost production, to reconfigure factories that had been perfectly optimized to start with iron ore and finish with Model Ts.
Ford exemplified a trait common among successful business leaders — a sense of infallibility in all things. Profoundly ignorant outside his domain and seriously bigoted besides, he bought a newspaper to publicize his strongly held opinions about history, economics, foreign policy, the Jewish threat and the moral hazards of adopting any part of black culture.
Ford’s life demonstrates both the importance and danger of confidence. He invented the idea of building automobiles for average people, ignoring all skeptics and steamrolling all opposition. It made him enormously rich.
But his confidence meant no opposing voices were tolerated: Long after GM’s multiple models and annual model releases had given it industry leadership, Ford fired or marginalized any executive who dared suggest he replace the Tin Lizzie.
Executive ego is one interpretation of how Ford’s success turned into its near demise. For another, read Adam Hartung’s Create Marketplace Disruption: How to Stay Ahead of the Competition (2008), also his blog, http://www.thephoenixprinciple.com/blog/. Hartung would have diagnosed Ford’s problem as “Lock in.”
Hartung divides the “lifecycle river” of typical businesses into five stages: Wellspring, where the business “finds something that floats”; Rapids, where growth and innovation are fast and the business “Locks In” to a “Success Formula”; Flats, where growth slows and the marketplace stabilizes, but lock-in prevents a return to the Rapids; Swamp, where the Success Formula has failed, business leaders continue to do what they know how to do (they’re Locked Into it) and the result is to get completely stuck; and Whirlpool, where the marketplace sucks what little remains into oblivion.
And, he provides recent examples of all of the above, along with illustrations of the corporate behavior that ensured the eventual demise of a variety of companies whose leaders let themselves slide into the Flats and beyond without ever recognizing the problem.
It’s a thought-provoking book, and I mean that literally.
Hartung’s diagnosis of how companies paint themselves into corners, and why they then insist the corners are wonderful places to be, is compelling.
His prescription is less convincing. That he has few examples of companies that successfully “stayed in the Rapids” is understandable — few companies have managed the trick. He has no way of knowing the failure rate of companies that have tried his formula for ongoing success … the Phoenix Principle as he calls it … and failed in the attempt, either.
So the successes are anecdotes rather than data, his cure is at this stage hypothetical, it’s unclear whether there are alternatives, and if there are it’s unclear how to determine which fit which circumstances best. They’re questions I expect to ponder for quite awhile.
As I said, thought provoking. I recommend it.
Hartng’s prescription is less convincing because it seems risky, seems like many companies will fail in the attempt. The fallacy in that thinking is that doing nothing is also risky, in fact, there is no safe course that guarantees continued success. Few companies have a lifespan of more than a few decades no matter how well run. The only way to last in the long run is to demolish and rebuild periodically.
Unless of course that CEO is Robert Townsend, and the book is Up the Organization: How to Stop the Corporation from Stifling People and Strangling Profits, ISBN 978-0-7879-8775-6.
I bought a case of them when it finally came back into print and give a copy to every manager I come across. It’s a bit dated, but if you keep in mind what the world of 1970 was like, it’s pure gold.
My favorite chapter (most chapters are shorter than the typical KJR column, BTW) is “Institution, On Not Becoming an”.
Henry Ford’s development of a standardized production process may have pointed in the direction that eventually led to lean production systems (understood as the renamed Toyota Production System), but he in no way invented it. In fact, much of what he put in place (and that was copied by GM and Chrysler) is what has made lean implementation so difficult in the U.S. auto industry–none of the Big Three have even remotely been successful at it (or even legitimately attempted it). Even Ford’s current status as the only one of the Three to not take bailout funds came as the result of a fortuitously-timed financial maneuver that gave it a larger cash reserve, not any fundamentally “lean” business practice or significant marketplace success.
“American publisher Norman Bodek travelled to Japan, and published the books of Taiichi Ohno and Shigeo Shingo in English. While there, he discovered that most of these productivity gurus had Henry Ford’s book on their desk. Today and Tomorrow had fallen out of print in English, but the Japanese version was thriving. Not only that, but Ohno’s book Toyota Production System clearly names Ford’s book as the basis upon which Toyota built their success.
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I’ll stick with what I said–Ford pointed, Toyota developed, Ford (with the rest of the U.S. auto industry) did not follow Toyota’s direction, taking instead the evolutionary path of the dodo. Consequently, there is little (if any) true “lean” in Detroit. The incumbent (until now?) culture simply won’t allow lean production to be implemented.
It will be interesting to see if either post-bankruptcy GM or Chrysler or post-sale Saturn (or any other sold-off GM division) will take the opportunity of a fresh start to pursue the culture change that would be necessary to begin competing with the Japanese and Korean on the lean production front. The necessary “crisis of survival” is certainly in place, and now that the poison pill of the old union contracts has finally been coughed up (at least, I hope for their sakes it has been), maybe, just maybe, they can finally move forward.
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