When I read the Amazon article cited in Kevin’s post yesterday I was reminded of Henry Ford’s ‘Peace Ship’ debacle. The disconnect between Ford’s genius in automobiles and manufacturing and the sheer stupidity – the incredible naivety – of the Peace Ship venture is hard to reconcile. For those who don’t know about it, the ‘Peace Ship’ was a silly venture Ford financed and played a part in to bring about an end to World War I. How little he knew about politics, international economics, and foreign history and cultures was embarrassing. The same can be said of Amazon.
How the leadership of the company can be so brilliant at, well at being Amazon, and so incredibly ignorant of fundamental operations management is nearly impossible to understand. Just for the record, the 1920’s style management they apparently deploy in Campbellsville is not an anomaly. NPR, the LA Times and the Chicago Tribune took them to task for the very same issues at their operation in the Lehigh Valley last Fall.
Kevin pointed out the comparisons to Apple. The incongruence of technical genius and neanderthal operations management is certainly a characteristic of both companies. I have been troubled most, however, by Steve Jobs reply to Barack Obama’s question about what it would take to bring Apple manufacturing back to the United States. Said Jobs quite bluntly, “Those jobs aren’t coming back.” Period. No room for error in his opinion. No possibility of anything other than his view being the right view. There is no questioning Job’s technical genius, but the siege under which Apple manufacturing is under in China, the spiraling costs of Chinese manufacturing, and the increasing flow of manufacturers leaving China and returning to the United States indicates he was way out of his element and not nearly knowledgeable enough about manufacturing to have spoken to anyone – let alone the President of the United States – with such unjustified arrogance.
I wonder what it is that leads people to assume demonstrated genius in one field makes them anything more than average in another. Whatever it is, it took hold of Henry Ford, Steve Jobs and apparently the folks running Amazon. You see it in entertainment superstars who make fools of themselves lecturing about the environment – think Ted Danson (on the strength of his fine arts degree) declaring in 1988 that the planet had only ten years of life left; and making a laughing stock of himself in the process. Or Robert Redford whose privileged Southern California youth and the year and a half studying art before he was kicked out of the University of Colorado led him to believe he is an expert on the complex historical, economic and social aspects of the native Americans, prepared to educate the rest of America.
On a more common local scale, that same self-delusion strikes a whole lot of business leaders – folks who became CEO on the strength of a brilliant career in finance or marketing assuming that makes them beyond learning anything about manufacturing or engineering.
The most important thing for anyone to know is what they don’t know – to know when they are outside of their element – when the time comes to stop lecturing and start listening. It would seem, however, that the more successful one is in any area, the harder it is to acknowledge ignorance in other areas.
And so we have Amazon and Apple – companies with brilliant products and innovative business models – running the sort of operations that formed grist for Charles Dickens and Upton Sinclair. How can that possibly be reconciled?
“’Leadership’” has been the subject of an extraordinary amount of dogmatically stated nonsense. Some, it is true, has been communicated by observers who have had no experience themselves in directing the activities of others; but much of it has come from men of ample experience, often of established reputations as leaders.”
The Nature of Leadership,
Chester Barnard, 1940
Robert Hawkins says
Bill, you have hit the nail right on the head. Does anyone remember the Peter Principle? People tend to rise to their own level of incompetence. Some of the best examples of this are those that are technically savvy starting a company and trying to run the whole thing with no knowledge about anything but design. In my years in the Silicon Valley I watched upcoming companies fail one after the other because some genius would not let go of the reins.
By the way, there have been several articles lately about the large number of companies bringing product manufacturing either back in house of at least back to a US vendor. So much for Outsourcing as a fix-all for a companies financial problems. To allow products to be made and/or shipped from locations simply because it is cheaper, where people are treated worse than animals is a sad commentary on the morales of management.
I may be wrong but I understood Job’s comments to be related to skills infrastructure, that there aren’t enough support workers per engineer. I’m not certain it is entirely honest to deprecate what Job’s said when we demonstrably lack skilled workers or even, young people interested in acquiring those skills. It is a huge crisis!
There are quite a few apparel manufacturers I am working with who are trying to repatriate product development and production. Both strategies are undermined by lack of needed skills. Not only have companies themselves lost a lot of institutional knowledge but the trade itself has been hollowed out; people who knew valuable stuff were pushed out by demand for lower paid data entry workers. Now we need the more highly skilled tradesman but they’re retired, lost hope or gone into other work. Or -they don’t want to relocate or acquire skills (mostly computing) that partially contributed to them getting them pushed out in the first place.
The issue we have today is that with institutional knowledge in tatters, there is little left to rebuild it. It is less a matter of the Dunning-Kruger effect than it is that with offshoring production, people have not been exposed to competency levels to use as standards of comparison.
kevin earnest says
I cannot state how many times I have read posts similar to this and said to myself “how can this be?” My clients are smaller organizations (<200 employees, <$500M). And they are all private. And many have won "Best Places to Work" awards, some multiple times. I'm sure there are pockets of ignorance and stupidity out there, but evidently I'm living in a cocoon where business owners "get it", where organizations are focused on providing value-adding products and services, and where employees feel trusted and respected. Perhaps more business owners and executives should aspire to the principles laid down by Elliott Jaques in his Requisite Organization.
Karen Wilhelm says
Similarly, beliefs and opinions of celebrities like movie, TV, and music stars are given the same credence as those of economists and historians — or more! Why should I care who one of these guys is voting for?
Bill Waddell says
No doubt there are lots of obstacles to re-energizing American manufacturing, and worker skills are among them. If that is, in fact, the beig issue, then the correct, respectful, intelligent answer to Obama’s question regarding what it would take to bring the Apple jobs back was, “Mr. President, we need to solve a huge problem with worker and engineering skills and availability”. Instead Obama got the arrogant, no way, no how answer. Leads me to think Jobs didn’t understand the issues nearly as well as you do.