WHEN THE RATIONAL & IRRATIONAL MARRY, WE HAVE THE FAMILY OF BUSINESS!

WHEN THE RATIONAL & IRRATIONAL MEET & MARRY, WE HAVE THE FAMILY OF BUSINESS

James R. Fisher, Jr., Ph.D.
© August 2007

“There is a foolish corner even in the brain of the sage.”

Aristotle

Yesterday, I was television channel hopping when I came across a pithy panel of profundity discussing the nature of the rational and irrational. The only man on the panel I recognized was Edward de Bono of lateral and parallel thinking fame. I am somewhat of a devotee to his ideas.

The panel discussed the nature of deductive and inductive reasoning, of heuristic and algorithmic mechanisms, the size of the brain, the nature of perception and its limitations, and of course, how science will augment man’s mental deficiencies in a future of computer nirvana

Edward de Bono proved the exception to this forecast. He sees man escaping the net of his delimiting capacities by thinking differently on purpose.

Perhaps so. But in the meantime it would appear we will remain stuck in the hubris of seeing man as a thing to be defined and then controlled with the precision of virtual reality. It is the nature of the business psyche.

Panic, we see, pervades possibilities when there is no escape from the grid of this mindset. The fact that it is everywhere every day makes it unremarkable as push comes to shove, and panic becomes the “crisis management” practice of the moment.

Most recently, the automotive industry of the United States has profiled this panic. For the first time in automotive history, American car manufacturers own less than fifty percent of the American automotive market.

Band-Aids have been applied without changing this hemorrhaging. This has included putting family members in charge of the business; producing imitations of foreign competitors’ product lines; merging with foreign automakers; renegotiating contracts with union workers who have lost their appetite for battle; and even bringing foreign automakers to head American automotive companies, always, however, to no avail. The bleeding would not stop.

The American automotive industry reveals the best and worst in the relationship of workers to their employers.

Henry Ford created the working model of this industry in accordance with the scientific management scheme of Frederick Winslow Taylor, who believed workers were to be treated as things to be managed, not as thinking men and women to be led.

Henry Ford created the $5 dollar eight-hour working day when most workers made only $1 for ten hours of work in most industries. He also created a pension program before there was such a thing as Social Security.

He did this out of self-interests, establishing a ready-made market for his Model-A and Model-T Ford. No one is more responsible for creating the working middle class.

Ford didn’t believe in magnanimity, but in the pragmatics. In a way, his organization model was an extension of feudalism only in a benign rendition of it.

Uncannily, this model was repeated by other car manufacturers and became in hierarchical terms an imitation of the Roman Church, and in operational terms an imitation of the military. Nearly a century later, it has become the predominant model of American industry across the board. The Austrian Peter Drucker reified it into a corporate model.

This model is failing today, has failed, and will continue to fail because it is not a working model consistent with the times, the people, the circumstances, and, indeed, the nature of international commerce.

The automotive industry has the distinction of being a bellwether to what is bound to happen to the Wal-Marts and other giants of the time, despite the perspicacity of their computer inventories and just-in-time logistics.

People have been left out of the equation and now only people can make the difference.

It is apparent that this reality is not going to sink in any time soon. Struggling Ford Motor Company late last year hired a new CEO from outside the automotive industry to rescue the company from its bleeding to death.

Ford named Alan Mulally, former Boeing Company executive, as its president and chief executive officer last September. Boeing is riding high at the moment eclipsing Air Bus with burgeoning orders for its new 787.

Not long before that breakthrough, Boeing looked as if it, too, would tank.

Now, a private equity firm, Cerberus Capital Management LP, has rescued Chrysler, finally separating it from its unhappy German marriage with Daimler-Chrysler.

Chrysler, too, has named an outsider to the automotive industry to bring it back to life. Bob Nardelli, who by reputation has given greed a new name, and who fought for more and more pay at Home Depot, which he headed, took a nose dive on the Big Board on his watch. He promises now to accelerate downsizing and to engage in massive restructuring. Translated: more of the same.

The United Auto Workers Union, created in the 1930s, and made and managed in the image and likeness of the industry it serves, has often chosen its battles unwisely, striking when it should stay the course, and accepting reduction in hours and pay when it should stand its ground.

I have observed the culture of this industry and its characteristic American spirit. The brains of auto making are not in the ivory tower, but on the line. This culture has a language, value and belief system that is indigenous to its work with subtle nuances that can be misread, misunderstood and miscalculated from another perspective.

Traditional workers in this culture have been content to be well-paid serfs in a benign feudal system, but no longer.

Mullaly and Nardelli are moving into a lion’s den in which the appetite to devour them is not unlike that experienced by John Sculley of Pepsi fame. Sculley was handpicked by Steven Jobs to run Apple. He then proceeded, largely because he failed to understand or relate successfully to the workers in their culture, to grind Apple Computer into the ground. Only the return of Jobs rescued Apple, and brought it back to its current health and prominence.

It wasn’t that Steven Jobs was such a genius. He was one of them. Consequently, he benefited from the serendipity of being comfortable in eclectic chaos. Here creativity flourishes, which is fundamental to success in this industry.

Benign feudalism wouldn’t work here because it has little respect for the genius of communication, relying instead on intimidation. Eclectic chaos allows ideas buried in the minds of the workers to surface and flourish unimpeded by directives, proclamations, patronizing procedures, or the regal authority of performance appraisals.

The automotive industry is failing because a long time ago it attempted to bribe workers into productivity with entitlement schemes, which were not earned, not tied to productivity, but were welfare packages that implied “we own you because you depend on us for your comfort and security.”

This never worked too well, but it worked a lot better with a less well-educated, less well-informed, and less self-reliant workforce.

Nardelli plans to accelerate the cutting of 13,000 hourly and salaried jobs at Chrysler. Imagine what would happen if 100,000 Chrysler workers chose not to show up for work. Look what happened when scores of pilots of North West Air Lines called in sick recently: hundreds of flights were canceled across the nation.

One day, sooner or later, the broad based fact will come home to rouse: i.e., that CEOs are paid employees and perhaps of less consequence than workers on the job. This is apparent because cutting employees, restructuring jobs, creating a more attractive balance sheet is accounting, not leadership, and in no instances in my memory has it sustained growth.

It lacks imagination, as college football once did, resembling rugby, until Knute Rockne used the forward pass to change the game and the sport forever.

That was leadership. So, today, no one in football gets more attention than the quarterback, not the coach, not the owner, not the stockholders, but that leader on the field, who is supported by a cadre of folks that determines whether he will succeed or fail.

As I claim in A Look Back To See Ahead (2007), we are stuck in the pathology of normalcy where the rational and irrational are joined in an unhappy marriage. This is our Berlin Wall that may surprise us when it comes tumbling down.

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For more information on Dr. Fisher and his books, check with http://www.authorhouse.com/, http://www.amazon.com/, or his website, http://www.fisherofideas.com/.