Perhaps I was a bit harsh a few weeks back when I was critical of the Ivy Leaguers running just about every aspect of the global economy into the ground, but I am beginning to think that it is possible for people to get so educated, so intelligent and and to have their noses ground so deep into theories so complicated as to be out of reach to the rest of us mortals that they lose track of common sense.
The big 5 running the economy these days – the new gang in charge of General Motors - is a very well educated crowd: Tim Geither is the Treasury Secretary and a Dartmouth and Johns Hopkins man; Larry Summers is the Director of the White House's National Economic Council and a Harvard man through and through; Peter Orszag is the Director of Management and Budget and a summa cum laude Princeton guy; Jared Bernstein is the Veep's Economic Adviser and a Columbia grad; and finally Austan Dean Goolsbee who is the chief economist of the President's Economic Recovery Advisory Board and a Yale and MIT guy – an Alfred P. Sloan Fellow, for that matter.
Now when these boys get together, perhaps they are making the whole thing way too complicated. Perhaps they should start scheduling the meetings in the White House parking lot and maybe, just maybe, a light bulb might click on over one of their egg-heads. It might occur to them to set all of their brilliant theories of the nuances of post-Keynsian flat earth yada yada yada aside for a few minutes and think about how to straighten out the auto business by starting with their own cars.
If they still cannot connect the dots - if it is just too elusive and complicated for them to grasp the logic - they could reconvene in the parking lot of of the Lucky Strike Bowling Alley just seven blocks east of the White House at the corner of 7th and G. Sooner or later one of the good ol' boys there will ask, "Hey – how come you guys are all drivin' them Japanese cars instead of American?" That might just spur the common sense juices in their thick Ivy League skulls.
You see, Mr Geithner drives to work in a 2008 Acura. Summers rolls in behind the wheel of an old Mazda Protege. Orzag tools around D.C in a 2008 Honda Odyssey. Bernstein also drives a Honda Odyssey. And Mr. Goolsbee motors to work in a Toyota Highlander. 5 economic policy wizards - 5 Japanese car owners. Think they would notice a common thread?
It might just cause them to wonder why, in fact, all of them are driving Japanese cars, which might lead them to agree that they are better values than the GM products they have put themselves in charge of.
That might just cause them to wonder what the Japanese car companies are doing differently.
In turn, that might just lead them to want to read a book or two on the subject, which would lead them to the idea of lean manufacturing. My book would not be appropriate for them because it is written in Manufacturing. But they might be able to handle The Machine That Changed The World, if they take it slowly. After all, Jim Womack is a bi-lingual MIT guy who speaks both Manufacturing and Academia
Which might get them to tell all of their Ivy League buddies to quit trying to reinvent the wheel – literally. The answer to American manufacturing competitiveness, in general, and GM in particular, has already been invented.
And then they might get to thinking about what the government can start doing to encourage lean manufacturing instead of being its greatest obstacle.
Seems simple enough to me. Think the brain trust in Washington can figure it out?
Two words come to mind, EDUCATED DERELICTS.
Your post is timely and, I believe, indemic of today’s economic state in America. We have a bunch of well edcuated people professing knowledge and I would postulate are guessing.
To become competitive we certainly need to apply lean theories and concept into our businesses. That is only half the story. The people who matter (employees) need to become partners in this journey. For decades they have been ignored and asked to just come to work like the walking dead and do as they are told.
The day has come when we need to begin healing the open wound of mistrust. Today we need to realize that the smart people are those closest to the process at their job and engage not only their hands but their mind and eventually their hearts. Let’s call it “Servant Partnerships.”
When the high and mighty leadership brigade realizes they are not the end all be all to success, then we will being to move better, faster, and together toward innovation and success.
Matt F. says
I’m going to have to play Devil’s Advocate here. I’m not religious though, so do I have to be the “Nothing” Advocate? Anyway….
Your premise that these 5 individuals are “too smart” to effectively restructure GM is a bit far fetched. I’m all about implementing lean into companies, I’ve done a lot of work on it within the company I work for. But to think that lean is the only answer is a bit naive.
Lean Manufacturing is a great tool IF the company knows how to use it effectively. Comparing Toyota to GM and finding the gaps GM needs to succeed is the main purpose of this. We aren’t at Kaizen yet. GM needs to first get its act together and to create a business plan that makes everyone happy. That includes employees, management, shareholders and customers.
The root of GM’s problem goes WAY beyond what I believe lean can do. The mindset of the company from all angles has to be completely reorganized. They have been living in a dream world and they are just waking up groggy. Creating a structure that can work is a good start. Adding lean tools after you have the structure would be the best bet.
Introducing lean to the company at their most fragile time would be a shell shock, and most employees would not be able to handle the transition. Their structure created this “complacent” mindset, look out for yourself and who are just like you and don’t care about anything else.
Tim Geither isn’t a manufacturing guy, but he picks up on stuff very quickly. His team is very good at understanding a process and creating a plan that will work for the companies standpoint. I believe in a long range plant lean could work for GM just like it has Toyota.
At this moment though, GM needs a defibrillator cause they are about to die. The diet and exercise, lean principles, will not save them at this point. After the defibrillator has worked and GM have recovered, lean principles should be used in order to ensure efficiency and sustainability.
Bill Waddell says
Assuming that lean is about tools to be applied within the standard management structure is the mistake most companies – notably GM – make.
Lean is a fundamentally different way of managing the business. The tools are simply the visible part. The management at GM hasn’t been able to get their minds around that. They still think like you do.
To get results like Toyota, everyone in management has to go through a gut-wrenching total transforation in their thinking and job description.
The boys at the helm of Obama economic policy need to figure that out or whatever they do with GM will fail.
Bill Waddell says
what is the basis for your statement Gether’s “team is very good at understanding a process and creating a plan that will work for the companies standpoint”?
I have seen no evidence that any of these guys are anything but a bunch of theory wonks.
Matt F. says
Yes, lean is a different way to look at business. The mindset, concepts and tools related to lean have helped many companies create a culture that insures long term improvements and constantly attacking waste.
Lean isn’t just tools, I agree. But it is a “tool” that is used to eliminate waste and add value. Concepts such as Six Sigma, Theory of Constraints as well as Lean all are related methodologies. Tools are instruments that give us the means to accomplish a goal, lean’s goal is to reduce waste and improve processes that are value-added.
My comment “Adding lean tools after you have the structure would be the best bet” was not to say using lean from the start isn’t a viable solution. My own experience has shown me that implementing lean cold turkey within a company does not have positive results IF the company is struggling. It would be worse for a company that is at the brink of bankruptcy. A new business plan for GM is a good start. Once they have a structure down lean can then take over. Guess my analogy was unclear. :/
I also agree with you that there needs to be a transformation in how management operates. As I stated in my first post, there needs to be a complete reorganization of how the company operates in all levels of the company, not just management. Management might be the root cause, but many of those causes were created by expectations of the unions and workers. Its all intertwined.
And yes, Geithner and his team aren’t “manufacturing gurus”, but they all have an understanding of how processes work in terms of a financial setting. Geithner himself was treasury undersecretary for the bailouts of Brazil, Mexico, Indonesia, South Korea and Thailand in the 1990’s. He understands economics, markets and he even has a Master’s in International Economics and East Asian Studies. He has even lived in East Africa, India, Thailand, China, and Japan. This shows me that he has insight within the culture and business mindset of those areas.
Does that mean he knows lean? Probably not, but he has experienced how those specific countries work in terms of business. Just wishful thinking, but his team might take concepts from those countries to apply it to GM. If one of those concepts is lean well then good times.
Adam Zak says
Short response to the question with which you end your delightful article: “NO.”
Mark Graban says
I’m with Bill, what’s the evidence to back up this statement about the worldly Mr. Geithner?
“And yes, Geithner and his team aren’t “manufacturing gurus”, but they all have an understanding of how processes work in terms of a financial setting.”
Yeah, we can see how good finance people are at understanding system dynamics and processes, given the state of global finance.
That’s like telling a disbarred lawyer that they would probably understand medicine.
"Appalachian American" says
I guess I would disagree with Matt F.
I believe that Taichi Ono said something to the effect that companies don’t implement lean in good times. Living off of the fat of a peak in the economic cycle is just what many of these East Coast elitists enjoy. They’ve been bleeding this country for not just decades, but centuries now.
Toyota implemented lean at a time that is very comparable to GM’s current situation. They had a bit of luck with some military contracts, but were basically destitute in 1951.
To think a group of people who know very little about manufacturing and know quite a bit about the area that destroyed GM, i.e., Finance, MBO, creating shareholder value, or whatever you want to call it are going to “fix” GM and Chrysler is delusional. All they will do is divide up what’s left and let a gaggle of lawyers extract their fees from the whole process. They will likely follow their donor’s wishes and also try to take care of the UAW as best as they can. These groups incapable of growing the pie as Shingo often explained. What the “elitist’s” are good at is “Greed”, getting a bigger piece of the pie from society than the other parties.
America has been led astray by these people and we have run up a multi-trillion dollar tab listening to this bunch.
America can get back on track by doing what Japan did after the war. Focus upon creating systems that are robust (error proofed) and that continually create higher levels of value for the customer and society. Create systems like Ken Iverson did at Nucor Steel, ones that take care of the people that actually work in and improve the systems that create value.
America’s obsession with taking care of the CEO’s at the top or the Finance people, and the shareholders is bass ackwards. They have so heavily infiltrated America’s boardrooms that their methods have become the norm. It’s a form of intellectual nepotism. These people just buy their BMW’s and then go about continuing the economic destruction.
It’s the same group who has been exporting America’s manufacturing overseas for years and then buying their BMW’s off of the fat margins from selling that stuff to the Home Depots of America.
Its gonna take a whole lot of work to right Americas ship. That’s the kind of commitment the East Coast elitist’s concentrating on their “bottom lines” and shareholder value are unlikely to put forth.
Toyota knows that focusing on the wrong things (the kind of things the East Coast Elitist’s like) only leads to low profits and ruin. There are many American industries that have been led to their ruin by the finance crowd.
All the bunch in Washington, Wall Street, and the East coast are going to do now is figure out how to divide the pie. As Shigeo Shingo has said, it’s not about dividing the pie, but making it bigger over time so that all of the stake holders can have a bigger piece.
Ken Iverson at Nucor Steel was particularly critical of the “Wall Street” crowd, and Ono, like Ford was very hostile toward the so called bankers. Warren Buffett has a pretty good grasp concerning the abilities of this crowd as well. He’s been profiting from their “short term” follies for decades now.
It’s time to throw this elitist crowd into the dust bin of history where they belong.
America needs to produce excellent products and services again. This needs to happen at all levels, private industry, federal government, state government, local government, and everywhere in between.