THE QUANDARY OF PLENTY, AND THE PLENTY WHO ARE IN A QUANDARY!

THE QUANDARY OF PLENTY, AND THE PLENTY WHO ARE IN A QUANDARY

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

QUESTION:

Jim,

Another question before I dash out to lunch: how do we solve the overpaid CEO problem? I don't think we can pass laws to limit income -- or the world of sports would probably be the first place to start, at least as far as public opinion would dictate. Do we add our voices to the din of outrage? Methinks we'd be ignored by boards that are themselves composed of CEOs from other companies. Do we offer a model that enlightened companies can adopt if we show them some benefit in doing so? Do we "merely" celebrate those few companies that don't participate in this inflationary contest? (That's not "mere" at all; I think that step alone could do some good).

I'll bet you've already thought of something. Can't wait to read it!

Ted

ANSWER:

Ted

Yes, I have thought of this problem, and have looked at it in the ways that follow. My mind is not convinced that anyone with six zeros after a numeral or two is of a mind to do anything enlightening or otherwise to change the status quo.

I see the problem longitudinally as a natural progression that started innocently and collegially but unwittingly poisoned its roots and became damaged goods along the way. CEOs and other senior managers now survive in the cocoon of that denial and assumed safety.

It is of course not safe at all, and like everything else, will lose its perch and fade into history, but I sense not before it remains Faustian for some time.

I don't mean to be vague but wish to prepare you for what I hope is not too cumbersome an explanation.

Jim

* * * * * * * * * * *

WHAT WAS RIGHT BEFORE ABOUT SENIOR MANAGEMENT

There was a time when senior management self-managed itself with dignity and frugality.

That time was the late 1930s or the end of the Great Depression, through the late 1950s, when the euphoria of WWII was still an echo in the mind.

Most companies (compared to today) were small; many were individually owned or in limited partnerships. There were few mega corporations, and they were mostly in retail.

What is especially important to note is that management was integral rather than separate from the function of work. There was no mahogany row. Senior management didn't have personal trainers or make-up artists, or specialists that taught them presentation skills. They winged it, and didn't worry about being politically correct. They were tough but fair, consistent and on target.

They didn't talk in sound bytes but in the jargon and dialect of work. This was not a conscious act; this was the way it was. Affectation had no place in the business, as making an impression had not yet an audience.

Managers and workers were on the same page getting off on the same dime. If you were to use these words to describe work, you would sound to their ears like an alien.

Personhood had not yet raised its ugly head, as the common good was understood as the unifying force. The focus was in doing not describing; into dealing with what was wrong not who was wrong. Schedules had to be met, and they had no time or interest in pointing fingers but in putting the situation right.

My evidence?

"In the Shadow of the Courthouse" (2003), I take the reader into the mind of a young boy who would scoot down behind the living room sofa, and hide, so that he could listen to his aunts and uncles talk about their work during WWII.

They worked in such places as the Garment Factory that made mosquito nets for North Africa, Central Steel & Tube that made containers for machine guns, Collis & Company that made metal shelving and racks for submarines and destroyers, Chicago & North Western Railroad that moved troops across the country, Schick Army Hospital that took care of the wounded from the South Pacific, and on and on.

His relatives talked about their work with pride -- many of his aunts were "Rosie the Riveter" -- and of their bosses as partners.

They would mention with respect the long hours their bosses worked, and how kind and generous they were to them as colleagues. The focus for all was on the job at hand, taking care of business. Work was gratifying because it was important; self-gratification never came up.

Bosses worked beside workers, listened to their ideas on how things could get done better and more efficiently, and generally put such ideas into practice. Everyone saw themselves as part of a unit, not separate from, or below or above it.

If you are a history buff, and have read about the collapse of the German war machine in World War II, you will find that that didn't happen here, not in small town or metropolitan America.

Germany lost, if you can believe its own historians, because of mismanagement and slave labor, whereas the United States won at home as well as on the battlefield because this was management's finest hour.

American management rose in a chorus of one voice. It became the greatest war machine in military history. The late David Halberstam documents this incredible feat in a little book called, "The Next Century" (1991).

WHAT WENT WRONG WITH AMERICAN MANAGEMENT?

In all my reading on this subject, I've failed to see any attention given to the exhaustion of the captains of industry after the war. Imagine the letdown when a workweek was reduced from 80 to 40 hours.

I knew of cases in my hometown, which was a factory town on the Mississippi, and a perfect place to support the war, where owners of these small industries had severe mental and physical health problems after the war.

I sense that they were worn out physically and mentally, emotionally and spiritually. It must have been like having the bends coming up from the deep too fast.

Owners and managers had been working twelve hour days, seven-days a week for four years without vacations or holidays.

Then peace came, and everyone across the globe wanted to buy American. So, selfless pursuit of a higher purpose by those in the war machine now became a kind of affluence never dreamed of. No one was paid very well during the war. That was all about to change now.

New companies came in; some owners sold their operations becoming employees of the new firms, while others never found purpose again.

To this day -- and I think that is one reason for the success of my book -- there is a mania for nostalgia and for that perfect day when everyone was hitting on all cylinders and moving in happy cadence to the same drum roll.

It has also occurred to me that American management that sacrificed so much, and gave so much, and endured so much, during that great war, but were never given the credit it deserved for its role in managing the war, became miffed and a little passive aggressive.

Over the years, I've interviewed hundreds of supervisors, managers, owners and executives from this period, citizens who didn't fight on the battlefield but fought another war on the frontlines of production, who gave me that impression. It would come in the manner of an apology for not having been in the military when I would remind them that they were.

I've never seen a banner or a banquet for these warriors, and probably never will.

It always surprises the person who has never been a CEO or a senior manager when I remind them that these people are persons, too, and should be given the same courtesy and respect that they expect. "What if I yelled that at you?" I said to one person who shouted, "Liar, liar, liar," as his general manager rode by. "Your words hurt him as much as they would hurt you," I added.

There is nothing wrong with differing with another person, whatever his station, but we should differ politely and frequently and directly when we feel we have cause. It is so easy to forget we are all flesh and blood, bone and muscle, sinew and adipose tissue. We are all somebody.

One of the amazing things I've experienced is that life has treated me so well that people seem to believe I don't need reassurance, don't need the same caring and concern they do. It is as if people think when you reach a certain intellectual or affluent level that you cease to have the same demands that they do, when of course you do. In fact the sensitivity of the person that has been passionately involved in life and career is most likely more acute, making that person more not less vulnerable to the ravages of criticism and ill treatment.

Never forget the high brow has a lot of low brow in him; the sophisticated person who takes barbs from all sides, and is expected not to react, has a breaking point the same as any low brow, only he may hide it longer, or may show it in ways not directly apparent, but more consequential in such expressions as debilitating health.

WHEN THE RUBBER HITS THE ROAD AND THE BRAKES ARE ON

The 1960s came and everything started to unravel.

We had a president that looked pretty, spoke pretty, but had his own demons to deal with, and who got us into Vietnam, but was never held responsible for it because he lived in the myth of Camelot, and then was assassinated before that war became truly ugly.

The next president wasn't pretty, didn't speak pretty, and had his own demons but they were mainly contempt for Camelot with which his every action was compared. He escalated Vietnam to the point that more than 600,000 American troops were there; the Civil Rights Movement at home was gaining strength; and he convinced himself that America was so resourceful that it could maintain guns in Vietnam and butter at home in a series of social welfare initiatives that found the United States with its foot to the floor on the accelerator and brake at once going nowhere.

The United States disengaged in shame from Vietnam, having lost the war, with 55,000 Americans dead on its battlefields.

Not only was the president blamed for this defeat, but the generals in the Pentagon and in the field. Then too, senior management that had been taken for granted in WWII was now openly criticized for its failure to keep workers from strikes and lockouts, students from storming the dorms and the administrative buildings on college campuses, churchgoers from failing to take control of their families, citizens from rioting in the cities.

Divorce, adultery, illicit sex relations, and promiscuity were all on the rise. America was coming apart at the seams. And it didn't get any better with the 1968 presidential campaign and summer Olympics in Mexico City. There was a cultural breakdown and American society was in chaos.

Then when it was thought it couldn't get any worse, it did. Japan, Inc. and South East Asia started to make major inroads into American manufacturing markets: automobiles, electronics, electrical fixtures, electrical appliances, and steel smelting.

I was a young executive during this period and I felt the panic in my own company, and experienced it when I dealt with other companies.

What worked before wasn't working anymore. Rather than entertain questions as to why, and change, a new kind of cynicism developed. Like all cynicisms it contain a kind of manageable innocence and naiveté at first.

Creeping into enterprise was a new sense of command & control, and that was to do what is necessary to make things look good on one's CEO watch. Don't worry about tomorrow, let tomorrow take care of itself. Look out for yourself because nobody else will. If you have to engage change, make sure it is only cosmetic.

Senior management found many ways to do what was legal but not necessarily ethical such as taking finders fees when divisions merged; or accepting elaborate gifts from suppliers in the form of exotic trips or dinners or tickets to sporting events.

Once the focus moved from doing to getting, as innocent and legal as the getting might be, it soon became a pattern, and then progressed to a set of tactics, and finally, became a broad strategy often in collusion with the board of directors.

In my career, I have seen the complex organization go from an organic work-centered enterprise with workers and senior management committed to the same goals, to a multilayered fragmented hierarchical desperate assembly of mixed messages and mixed disciplines with everyone in charge so that no one is.

Once the pattern and then the tactics and finally the strategy become set, it takes on a life of its own, and those that enter this mahogany row as the freshest faces see nothing wrong with the process as it is what they expected, and why they have worked so hard to climb the pyramid to experience its amoral status.

WHAT TO DO ABOUT IT

It might seem facetious to say, but perhaps the best course is to do nothing. As it turns out, nothing has its own momentum and directional velocity. Nothing is building incrementally to something, and what that something will look like when it comes to fruition is still open to question.

I feel like a spectator thinking about this, sitting in the stands looking at all these handsome highly qualified young people, who are given entry level jobs at anywhere from $40,000 to $100,000, depending on their specialty skills, and expected like Henry Ford did a century ago to behave as safe hires.

They are being indoctrinated into becoming willing soldiers of enterprise: obedient, polite, submissive, passive, and docile, while CEOs and senior managers take home suitcases full of cash, while announcing the company is going through belt-tightening.

Yes, CEOs and senior managers have gotten greedy. As stated in the opening, greed has crawled not rushed to its present prominence. Money means a lot to some, but to the majority it is still pride that pulls them out of bed in the morning to do battle every day. Greed is ancillary not fundamental to their construction.

These willing soldiers of enterprise may not understand this, or the fact that they are now expendable. Corporate raiders are always ready to buy a company's assets, give the CEO and senior managers a sweetheart deal, then break up the business, and sell off the pieces at a handsome return on investment.

It is all perfectly legal, if not ethical, and these handsome highly qualified young people have been complicit in the conspiracy by their naiveté and silence.

So, my wonder is when will these professionals wake up and say, "Hell, no, I won't go!" When will they storm the Bastille?

They have the power but only want the perks not the responsibilities of power and senior management knows that.

It all started a century ago when Henry Ford bribed his workers into doing his bidding, and it will go on as long as these new professionals behave as these workers did a century ago.

My prediction is that we will have a revolution when these professionals cannot pay off their student loans after five years of working.

Think of it! When the individual return on the investment is not paying off, something will have to give.

Am I trying to be an alarmist? No, it just stands to reason nobody gives up anything until they have to, and the rhetoric hasn't touched CEOs, as they keep filling up their trunks and carrying their loot off to the bank. So, stay tuned.

Be always well,

Jim

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Dr. Fisher's latest book is "A Look Back To See Ahead" (AuthorHouse 2007). This is a discussion that emanates from a question from a colleague in a think tank, The Naples Institute, to which they both belong.