A lot of people might read the latest from Jack Welch and conclude that he is starting to get it; that he is starting to understand that success is about culture and people. They might think that the old Jack – the one that pitted managers against each other like so many gladiators; ‘Neutron Jack’ who slew all the people but left that factories standing; 70-70-70 Jack who wanted the work GE people did not only out of the company but out of the country to where people would work for next to nothing – is gone and a new kinder gentler Jack has emerged.
He said, “If traditional M.B.A.s are missing anything, they miss a lot of the human equation about building teams, about being generous managers who love to see their people succeed, who love to give their people raises and promotions.” Sounds nice, doesn’t it?
The problem is that unless Jack is calling for a complete overhaul of accounting – Lean Accounting rather than the labor centric, head count myopic accounting that has been the MBA bible for nearly a hundred years – his high fallutin’ talk about generosity and the desire to see people succeed is just more Sloanesque nonsense.
You see, the CEO can want the VP’s to get raises and promotions, and the VP’s can want the directors to succeed, and the directors can want the managers to thrive, but it gets a little more difficult for the managers who want the supervisors to prosper; and unless the organization is driven to see the front line, hourly folks succeed and get raises and promotions the whole thing has to break down somewhere. The whole thing is connected and there has to be a separation somewhere for old school accounting and Jack’s lofty talk to co-exist.
Where it breaks down is simple. Back in the 1920’s Alfred Sloan said, “Is it the 220,000 workers on payrolls? For me the essential ingredient – the heart if you please – of our organization is a group of not more than 10,000 workers whose skill in management, engineering and science as well as special crafts make possible the work in which all others are engaged.”
He said the production worker “accepts the hazards of poor times”. That “attempts to improve the economic status of our people” are “nothing more than wishful thinking”. He believed that factory folks ought to do better at saving their money for the layoffs that would inevitably come.
Where the line is drawn, where the chain of folks deserving of generosity, raises and promotions breaks with Welch, is where it always has been drawn and has to be drawn when one uses GAAP accounting to manage the business – exactly where Sloan drew it. Management is supreme and the folks adding value are on their own.
Jack Welch is hardly an enlightened, reformed manager who now sees the Toyota principle of respect for humanity. He is simply a product of 1920’s failed management who strayed and abused the management elite … but is now back on the reservation