dispatches from the new world of work

Questionable Assertions:
Let's Take a Second Look

Comments on my post on In Search of Excellence and the limits to management "research" were heartwarming—thanks! One, however, was so off base that I felt it necessary to reply. Some of the misconceptions, I fear, are widespread:

Comment: "Suppose we had done both—apply Japanese style management (invented by an American by the way) and also still had our IBM's, HP, J&J's etc. I think In Search of is partly responsible for the downfall of manufacturing because it became uncool."

TP/me: (1) Wrong book; In Search was almost all manufacturers—it was Liberation Management, in 1992, that focused on services—and I wouldn't change a word, or at least not many. (2) Manufacturing is hardly dead in the U.S.; that is hogwash; it's microchips and software and biotech and medical devices, not so much autos; mfg as a share of GDP has been pretty much steady, or no more than a tick down, for years in the U.S.—it just doesn't take many people to make things anymore (that's called productivity improvement, the #1 engine of economic growth). (3) Every major economy in the world, even Germany, is a "service economy." Period. (4) Remember that the "service" part includes "services added" to manufacturing—consider the likes of GE Aircraft Engines, GE Power Systems, GE Medical Devices—over half the revenues of these outfits comes from "services added," such as life-cycle service packages for customers. (5) Last time I heard, IBM-J&J-HP were all three very alive and very well—e.g., HP just became the first $100-billion computer company in the world! (6) The Japanese economy has been in or near the tank for a decade-and-a-half now; not clear they're a great role model; among other things, Japan doesn't generate many entrepreneurs (which is crippling at a time of tech change), and they've had to "offshore" a ton of manufacturing as their wages soared—a good thing. (7) Fact is, we did indeed re-import many if not all the "Japanese techniques," such as TQM and Continuous Improvement—and our car companies' problem is not manufacturing quality, which is by and large at parity with the Japanese, Koreans, etc.; the problem is mostly high wages and benefits, which ordinarily would be called a good thing (e.g., improving workers' well-being); and by the way, Japanese auto companies' sales are as much in the tank as ours—for God's sake, even Toyota is reorganizing.

Back to you ...

Tom Peters posted this on 04/15/09.

Comments

Was that comment posted by Ron Gettlefinger?

Posted by Jim Outland at April 15, 2009 2:45 PM

Great assessment. Great data and case examples. Tom Peters always bucks up everyone's spirits and gets the energy flowing again. Tom, we need you to consult to GM. You probably have!

Posted by Jacoline Loewen at April 15, 2009 3:29 PM

" ... our car companies' problem is not manufacturing quality, which is by and large at parity with the Japanese, Koreans, etc.; ..."
Really?

" ... the problem is mostly high wages and benefits,..."
Whose?

Ciaran McCabe

Posted by Ciaran McCabe at April 15, 2009 3:33 PM

For manufacturing to become uncool, it must have been cool in the first place. I'm not sure this was ever the case.

Without wishing to disparage some excellent people, and the best ones have been awe-inspiringly good, I have to say that a lot of the Production Managers or Manufacturing Managers I've met or worked with over the years haven't exactly been from the top drawer. Decent, honest, hard-working, well-intentioned: yes. But to be frank, complacent, "we've always done it this way," "It was good enough for grandad" and in post via buggins-turn as well. The factory was NOT the place many B-school grads or high-flying management trainees went - or if they did, not many stayed.

What the Excellence and TQM movement did wasn't to make manufacturing uncool but to open our eyes to The Toyota Way, Lean, JIT, kanban and a host of other tools that painfully exposed our (in my experience European but I suspect also American) weaknesses. And these were things that are difficult to implement because they had become The Japanese Way, i.e. they were an ingrained part of their culture. Combine the scale of the problem and the expense in the West, and not many relished the fight.

If anything made manufacturing uncool (or, as it was never cool, more uncool) it was the exhortations to "Stick to the knitting," out-source anything that isn't a core competence "move up the value chain." I wonder how many of those companies now feel they threw the baby out with the bathwater?

Finally, I'm reminded of the story about the western company that ordered some stuff from Japan. The contract stipulated that the failure rate would be x%. The Japanese manufacturer sent all the order and then put x% in a separate box with a message to the effect, "We don't know why you want some failed units but here they are."

Posted by Mark JF at April 15, 2009 3:52 PM

We just had proof right here in the Opelika/Auburn, AL area yesterday of part of what Tom is saying. After being in operation for over forty years, the Opelika Michelin/Uniroyal/Goodrich tire manufacturing plant was announced (yesterday) to be shutting down operations completely by October. Approximately 1,000 jobs ending. What WAS to be a nice, paid Easter holiday for plant employees turned out to be a day of being called-in for meetings for the announcement. I bring this up because my parents made a living from that plant for around 30 years (long since retired, though) and it seems that it was no longer economically feasible to keep making tires here.

Round, rubber, tires. With the exception of the guy that sells them to you, mounts and balances them, and fixes the occasional flat, there is really not much add-on service value to a tire. We buy them and pretty much take them for granted as disposable items. No doubt the decline in new car sales was a factor, as this plant was (at least at one time) a major GM new tire supplier.

An interesting observation, and I'll let you all figure out the significance for yourself... Michelin N.A. took the Uniroyal/Goodrich operations under its wing back in the 80's or so. But despite the fact that Michelin owns everything and runs the show, there was a conspicuous lack of the Michelin name in the media surrounding these announcements yesterday. Everything was "Goodrich" or "Uniroyal/Goodrich." Leads one to question whether the press releases, etc. were carefully written to minimize mention of the Michelin name. You have to wonder: would that have been different if they had been doing press releases on landing a huge contract or other positive news. Perhaps it was a coincidence, but I couldn't help but notice.

Posted by Dan Gunter at April 15, 2009 4:12 PM

"Great assessment. Great data and case examples."

Agreed!

Posted by Judith Ellis at April 16, 2009 6:20 AM

I feel low-cost anything is just a temporary thing. When you want to last for a long time, you got to be trying, agile and cool. An IBM or GE rarely produces the cheapest product. Low cost economies like China and India are also getting expensive these days. Atleast the margins are shrinking!

Posted by Vijay at April 16, 2009 7:16 AM

Vijay, Amen; the world's #1 exporter is Germany--driven by high-end middlesized companies (Mittelstand).

Posted by tom peters at April 16, 2009 7:49 AM

"Some of the misconceptions, I fear, are widespread:"

To clarify - one of the reasons In Search of was written was in response to what the Japanese had done to Auto manufaturing in this country - I think 'In Search of" has something to do with the current state of the U.S. auto industry - its unintened message was do what we do well and ignore the rest -
I've seen TP writing things on this blog that went something like "thirty years ago, people put in 8 hours and when the whisle went off at the end of the day, they left the plant and tossed a few down at the local bar"

That's the spirit of what had been written here before by TP.

BTW - exactly how is the job of a business guru
measurable? Do they do 'before TP' and after 'TP' assesments of business success (before 'TP' presented and after TP presented)?

Posted by dan at April 16, 2009 10:35 AM

I have -- on MULTIPLE occasions, in print, audio, video, and even in person -- heard Tom say in no uncertain terms "I don't have all the answers." I think that's part of why I respect him as an individual. I don't always agree with everything he says. I don't necessarily think HE does sometimes. I've heard him make numerous comments on what he perceives as the shortcomings of "In Search of Excellence." But he motivates us to think. He challenges us to make our work, our products, our services, even ourselves better than before. I don't recall ever hearing the man speak without obvious passion in his voice and demeanor. I don't think it's so important that he be right 100% of the time. What matters to me is that he gets everyone's creative juices flowing and makes people say "By God, I'm going to do SOMETHING... it may turn out wrong, but I'm NOT going to just sit back and suffer."

I suppose if Tom actually believed he knew all the answers and was right 100% of the time, he would not have enabled comments/discussions on his blog posts. There would be no need, would there?

Posted by Dan Gunter at April 16, 2009 6:30 PM

Dear Tom,

You have really taken me by surprise: I have always thought that economic value is mainly created through people producing something of worth to society.

However, in your today's Daily Quote you are stating that "We're in an age where economic value is created through intellectual capital. Through creativity. Through spunk. Through spark. Through individuality."

A week earlier you have stated that "manufacturing is hardly dead in the U.S." and cite examples in microchips, biotech and medical devices. How come that the U.S. is "enjoying" such huge trade and budget deficits? The highly-praised services industry is hardly making up for this (if you do not have good products to service...) and it is not sustainable in respect of the (partly and temporarily) outsized zero-value-adding financial services industry.

I have just finished reading the revealing and insightful book on the "Gift Puritan Gift" written by Kenneth and William Hopper which has the sub-title "Reclaiming the American Dream amidst Global Financial Chaos". The authors list the four abiding aspects of Puritanism which infused the managerial culture established by the descendents of those early settlers as being:

1) the purpose of life was to establish the Kingdom of Heaven on Earth; 2) an aptitude for mechanical skills; 3) a moral outlook that subordinates the interest of the individual to the group; and, 4) an ability to gather, galvanize and marshal financial, material and human resources to a single purpose at whatever scale.

More briefly put: Rectitude, Pragmatism, Teamwork and Leadership. Throughout the authors warn that as America increasingly distances itself from these core values, which underlay its traditional commercial and economic success, it puts its own future prosperity and security at risk.

Yet, you still stress the overruling importance of intellectual capital and individuality, which has been there is abundance when I think of Enron, the financial industry and the likes... .

May I ask you about your personal opinion of the Hopper's statements and claims?

Best regards, Andreas

Posted by Andreas at April 21, 2009 6:29 AM

Having received the quote early this morning, it was the last thing that I thought of before nodding off. I thought today's quote was absolutely brilliant and most encouraging. For me, the quote emphasizes the reality that ideas come from everywhere and that anybody can implement them and add to our economic system. This is capitalism. This is what millions of entrepreneurs do everyday of the week. There is no business without intellectual stimuli, creativity, spunk, spark and individuality. This age in particular seems to favor these; it's like we've entered a brave new world with regards to innovation and the Internet. The beauty of this is that ideas can be implemented broadly and sustained based on their vigor and ability to meet needs and desires. Also, there need not be an extremely expensive cost to do business initially. These are all beautiful things.

generic viagra no prescription Regarding individuality, a great percentage of entrepreneurs in the US are sole proprietors; this is individualism, though contact with the public via the Internet or face to face is not. All business is an exchange of some sort, services or products. Business has always needed the things that TP highlights but with the Internet they are readily recognized. I have not read the book that Andreas mentions, but the Puritans laid a foundation of ethics that has been transgressed by Wall Street (perhaps the Fed and credit agencies too, even Congress with repeated scandals and dubious campaign financing.) But there are probably more ethical businesspersons in the US that abide by a rule of ethics than those who do not.

With Enron I wonder about the difference between ideas and schemes and the rule of law and regulation that govern these. viagra to buy in new york

female viagra canadian Posted by Judith Ellis at April 21, 2009 8:17 AM