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 Management Crisis?
What do you consider, when you have to make a difficult decision? You'll probably check off the possible negative results, which is the right thing to do. However, for one moment now, do me the favour and consider the
positive results, like the bank robber on his way to a job. He's thinking of spending the money, and not about a long term in prison.
E.g., you play lotto, you're certain that if you don't win this weekend, you'll still carry on playing. However, what if you do win? Who will you tell about it? Who's going to beg you for money afterwards? Can you distinguish
between real and false friends? After taking an extensive holiday, will you still go back to your job? What if you're sitting in your dream car and suddenly realise that you have no more dreams?
About now you'll be asking yourself (or me), what this has to do with the subject. One of the largest German motor companies found themselves in a situation like this a good 20 years ago. They were the market leaders in
the upper-class motor car range and had taken care of most of their competitors in the utility vehicle spectrum. Almost all their divisions were churning out profits. How does one continue under these conditions?
An industrial undertaking is not a bank. Do you then spread the profits out among the shareholders? In that case, the share-prices rise and the greed becomes even bigger. Could you spread it out amongst the
employees? What would the employers association of Baden-Württemburg have to say about that? One thing is sure, a chairman of the board with an engineers brain like Werner Breitschwerdt are a thing of the past.
Visionaries are what is now needed.
Indeed they are coming, or they are they are already there. Ezard Reuter, who it's said, apparently has the necessary amount of obsession for this position. The concern should grow, over and above the technological side,
to make itself independent from one section in the event of a crisis, synergic effects should have a mutual stimulation on all the other sections.
With these journalistic accessories, Daimler-Benz bought it's way into aviation. They first moved into MAN, and then bought AEG as well. In the case of their contracts with the Dornier- heirs, apparently the Daimler-Benz
bosses were ripped off (a pretty picture). Apparently, the additional purchase of the ailing Fokker-works by Reuters successor Schremmp, was also the cause for great celebrations. Excursions into the railway technology
(ABB) and software development (Cap Gemini) are only casually mentioned.
After completion, and partial development of the additional purchases, a loss was pronounced of at least one third of the groups value, the economist Ekehard Wenger described it as "the greatest destruction of capital that
had ever taken place in peace-time Germany". Reuter referred the accusation of, among other things, imprudent negotiations onto his financial director, Gerhard Liener.
This was the beginning of considerable disruptions amongst the board of directors, there were further indiscetions and also a suicide. The results of all this have, to this day, not yet been settled. Particularly, because the
successor, Schremp, topped it all by going into a merger with Mitsubishi and Chrysler and described the company as a global concern. After the top man, Zetsche, broke away, at the cost of great privations, from Chrysler,
the economic crisis of 2008 broke out.
Indeed, what does all this mean?, certainly, a great deal of money, which was urgently needed for future motor vehicle development, has been destroyed. However, would a manager in 1987, have had success with the
demand to invest billions in the development of more efficient batteries? To make sure that we understand each other, this is not a plea for a "carte blanche" for miserable negotiation practices. However, is the
management sometimes not the pusher but rather the one being pushed? Have you ever seen a circus horse who does nothing? How long do you think it can keep it's place in the arena?
The problems already arise at the beginning of an industrial undertaking. Just imagine, a piece of technology with a wide range of uses is invented. The inventor himself does not, as a rule, have the necessary capital to
set up a gigantic production facility. Those who supply the financing, want to quickly see profits, i.e. they want a part of their money back, and in the end, hopefully even more than they put in.
The partners of Carl Benz considered the development of the tricycle as a partial destruction of the company profits, they would have preffered to carry on selling two-stroke engines until the end of time. What we're saying,
is that, in this case, the innovative technicians and the conservative financiers simply did not see eye to eye. On the other hand, after 1900, Benz himself stood in the way of his own company by misjudging the development
of high-performance cars.
Carl Benz and also August Horch grounded rival firms, which were competition for their own companies. Gottlieb Daimler was edged out and only brought back again because of insufficient sales and through the
ultimatum set by other financiers. Nonetheless, no prosperous cooperation arose from this. He died shortly afterwards. At which stage is obstinacy called for, and when does it become damaging?
The most far-reaching example is probably that of Henry Ford, he founded, all in all, three companies with other partners, of which only the last was successful. This however, only properly, after he had driven off his
partners and them paid out. It became the largest car manufacrurer in the world at that time, was also however, nearly bankrupt, through the stubbornness of sticking to only one model.
Politics always demands democracy and maintains, that communism has died out. At the moment, in the crisis, the most successful, and also the most autocratic country is China (over 1700 executions carried out this
year!). Which is then the better way, should decicions be made by a group or by an individual?
There is one good example, of how group decisions are not always a guarantee of good quality. Jürgen E. Schrempp went to South Africa for Daimler Benz for10 years, the last 1,5 as chairman. It was the era of apartheit,
and this was the cause of vehement discussions.
A great number of foreign companies had already left South Africa. Mercedes suffered considerable losses. Schrempp reported to the board of directors and nobody today doubts that the board would have followed his
judgement anyhow. Thus, Mercedes stayed, but it was, in principle, the decision of an individual.
Is the family dynasty then indeed better? In large companies only to a small extent, have a look at Ford and Fiat. Interestingly enough, the fairly successful change over in both companies, was from grandfather to grandson.
In mid-size operations it still seems to succeed only with very old dynasties. With the partial disintegration of solidarity in the family, newer companies seem to suffer more break-ups.
Today actually, companies still take good precautions against bad upstarts. Instead of looking inside their heads when hiring them, they are tested for many long years. They must prove themselves abroad and in the most
varying positions. Jürgen E. Schrempp is still proud of the fact, that at the peak of his career, he could assemble a truck engine from what he learned in his apprenticeship. Thus, due to the required, varied abilities that
can't really be the problem.
What do you think, is the manager more lazy than the average citizen? Having reached his target, after suppressing several opponents, and knowing exactly where he wants to be? Can someone be obsessed with
laziness and take others down as well, or put them under pressure? Are earnings of several millions a fair board-member salary, or the confirmation of an enormous ego-trip.
This is where we should begin, not by limiting the salaries of the managers by legal intervention. What we need, is a different group-awareness-culture. Indeed, the board of directors are the ones who have the say when it
comes to deciding on this type of salary. This is where the applicant for a position can be won as an ally. If the board is wide-awake and not corrupt, it can avoid being saddled with a self-obsessed chairman.
Unfortunately, the most reasonable economic leaders rise to the occasion more often during a crisis. Spontaneously, I have to think of Alfred P. Sloan, who was previously, and from 1923 onwards, president of General
Motors, who turned the company, from the randomly purchased parts of GM by William Durant, into an effective concern.
By the way, he never achieved this by acting like a commanding officer, but through infinite, thorough preparation, a great deal of careful monitoring and meetings, where sharp minds found themselves being heard and
were not being schackled for fear of them being possible competitors. A good chairman can also be recognised by his ability to promote the right people.
Do we now have someone to blame, namely the enterprise culture and their commitees? No, not all together. Indeed, the mixture found in the board is important. Listen to several opera singers all singing at the same
time, then listen to a good choir. Of course the choir is better, because, in this case, it is important not to pick out out the individual voices.
Where do we actually learn nowadays, to purposefully push forward, and on the other hand, listen to what is said, and to take the time to gather our thoughts? At school, taking in both sides, or only the first one which is
presented? In the family? Should we once again demand, as some are doing lately, 'economy' as a subject?
As if that would change anything, just because we include it in the curriculum. Is there actually, enough scientific foundation for the handling of such questions? What's happened to psychology? For sure, advertising
advises us very well and they have, presumably, a great amount of undeniable research results.
They know exactly where products should be placed, so that children can really annoy their parents. However, do they also teach us to be able to assert ourselves as a group, also then, when their members are considered
to be more experienced than oneself? Advertising psychology rather makes us more stupid, but are the psychologists in the colleges, which we finance, doing enough to counteract this?
Have you heard about the behaviourists latest toy? The computer tomograph. One lets the test person (in a very small space) play various little games, at the same time observing which brain hemisphere exerts itself
more. Do you know what I think of researchers, who first look at their machines, then determine their research object?
If you ask me, a complete infrastructure is missing here. We no longer learn how to handle our freedom.The more freedom one has, the more one wanders aimlessly through life. Should one finally find an ideology, or one
single purpose in life, one holds on to it like a drowning man onto a life bouy. The schools partially try to counteract it, but their efforts are mostly in vain.
Basically, the managers (and by the way, also our children) are a reflection of ourselves. There have been aimless times before, do you know how they end? A 'saviour' comes along with his message, and shows us, with
an iron hand, which way to go … 12/09
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