In a recent post I teed off on a guy named Schwartz for citing the movie, Silkwood, as an example of corporate decadence. In the comments to that post, Kathleen Fasanella took full responsibility for sending me Schwartz’ book in the first place, but added that he did make a few good points. She is absolutely right. She did send it to me – sent me two copies, in fact, probably anticipating that I would try to duck out of the reading assignment by claiming that the dog ate the book – and Schwartz does make a couple of very important points. The book is so thoroughly drenched in psycho-babble that it is almost unintelligible and it is certainly not for the faint of heart. However, beneath the sympathy for Meryl Streep’s plight and adulation for Sigmund Freud, there are a few nuggets of gold.
The book is called Narcissistic Process and Corporate Decay – The Theory of the Organizational Ideal, and the author is Howard S. Schwartz from Oakland University in Michigan. What he actually does is to provide logical explanations for some of the nonsense all of us have experienced working for big companies. He touches on why the most blatant ‘yes men’, ‘boot lickers’ and ‘brown nosers’ get ahead no matter how obvious their lack of talent may be. He puts flesh to what is often described as ‘politics’.
In Rebirth of American Industry I wrote about the practice at a men’s clothing store in Cincinnati to wait until the P&G annual report came out to do their annual buying. The people in charge knew that all of the thousands of junior managers at P&G would rush out to buy either blue or white shirts, and plaid or pinstripe suits, depending on what the senior guys wore. They knew that being out of uniform could hinder their career. Schwartz explains this sort of foolishness.
The book was written way back in 1990 and what gives it credibility is the accuracy with which Schwartz predicted the demise of General Motors. "… the ideas that the organization needed in order to have avoided its present hopeless state may have been on the scene a long time ago. But the individuals who had them might have been passed over for promotion because they were not ‘team players’, or perhaps they were made to feel uncomfortable because they did not fit in, or maybe they were scapegoated whenever the organization need a victim. Indeed, ironically, the very ideas that were needed might have been laughed at or ignored because they ‘were not the way we do things around here’."
He makes the point that senior management egos cause them to live in a dream world in which they and the company are perfect, and failure is always the fault of some external force or some incompetent lower in the organization. Finance reigns supreme because finance lives in a world where everything and anything that is mathematically possible is viewed as actually possible; while operations people live in reality where lots and lots of very real constraints limit possibilities. As a result, the finance people support the senior management illusion of grandeur, while operations people are seen as naysayers and defeatists.
He attributes NASA’a tragic Challenger fiasco to organizational malfunction. In NASA, as with many organizations, only positive attitudes and commitment to meet stated organizational goals is tolerated. The defects in the O-Rings were widely known among lower level engineers and the supplier, but the message that the Challenger was not technically sound and should not take off on schedule was not one anyone wanted to carry up the chain of command. The bearer of such bad news would be seen as somebody who did not have the "right stuff" and NASA’s cultural ‘can-do’ attitude.
An important point I believe he fails to bring up is the competitive culture traditional organizations breed – and it is not healthy competition to be better than another company in the same market, but internal competition between employees to for the next promotion. I can easily picture a bunch of GM production managers sitting around the table with their boss who has no understanding of or interest in lean manufacturing and believes that improvement can only come from making production folks work harder; or a bunch of NASA engineers sitting around the table with their boss who has committed to the organization that the Challenger is technically sound and that it will launch on schedule. The person who stands up and tells the boss that he is flat out wrong might as well do as he heads for the door because he has just put himself out of the running for the next promotion.
In every vertical organization the boss has his values, priorities and his agenda. He demands that his staff support that agenda. That is their job – to make his vision a reality. There is little room in most organizations for someone who is concerned about how that agenda might affect other departments, or how the customer might want a different agenda. Theirs is not to reason why …
Schwartz does not have all of the answers, or even know all of the problems, and a lot of what he writes is way over the top; but he does make a couple of very good arguments against the traditional pyramid, vertical, functional organization. What I find especially disturbing about the whole matter is that Schwartz made good points about organizational structures and behavior in 1990 that are still valid in 2006. The entire Human Resources profession has apparently been out to lunch during that entire time.
Some say that one of Toyota’s pillars is ‘Respect for People’. Maybe it is and maybe it isn’t, but there is no debating that they approach people and organizational structure in a completely different manner, so where is the Human Resource profession on this? Why haven’t they delved into lean organizations, lean employee compensation, and creation of multi-skilled workers and multi-skilled managers? As much as I get after the accounting community, the 2006 Lean Accounting Summit is getting lose to being sold out. When is there going to be a sold out Lean Human Resources Summit? Or even two or three HR guys getting together over a couple of beers to talk about it? From what I can see, the HR crowd is so steeped in agonizing over health care benefits, keeping up on anti-discrimination laws and working on how to steal good engineers from each other to get around to thinking about human resources.
… and by the way, for all of you folks over on the psychology blogs who are up in arms about my criticizing Schwartz for using the movie Silkwood as an example of corporate decay, you’re going to have to roll up your sleeves and work harder than that. Your best shots have been cream puffs compared to the hailstorm I am usually under from Detroit and the MRP crowd. I work in manufacturing where brutal reality reigns supreme; and I have got a couple of pretty clever Asian bloggers who stay up nights thinking of more creative ways to insult me in in more languages. Even the economists have wittier and sharper tongues than you guys.