Car Guys vs. Bean Counters - Bob Lutz [93]
Only students of surpassing intelligence could understand it all (“Whatever happened to just setting a budget and figuring out how many better widgets we need?”) and only a very few could actually contribute to advancing the art of “business as a science.” They were the A-students, the sought-after cream of the crop, able to pour out a never-ending stream of phrases like, “We’ll need to get the data, analyze it at a granular level, prepare a set of possible alternative approaches, weigh them against probable future scenarios, and then stress-test each for the downside ramifications.” Who wouldn’t want to hire men and women who could produce such verbal pearls at will?
Thus, the American business sector went into the IQ accumulation business. If you’re not brilliant, don’t have an MBA, and didn’t graduate with at least a 3.5 GPA, we’re not interested, thank you.
For the better part of my career, I have seen what these bright, analytical, dispassionate, data-driven geniuses have done to our country’s industry and commerce. Through a relentless pursuit of “winning strategies” and elaborate “Missions, Values, and Goals” statements—which, incidentally, consume vast amounts of non-value added time—these modern MBA graduates reject the obvious as being “simplistic,” and believe that elaborate alternative scenario planning and “test wells” will provide a better (if not logical) answer.
Read any business school case study (as I have, by the score), and you’ll find reams of data in the form of words and tables. Somewhere in that thicket of information lies the key to renewed financial success: “Grant easier credit terms.” “Reduce the complexity of the product assortment.” “Close a plant.” “Consolidate freight into car load lots.” “Stop selling in Canada due to low margins.” It’s useful, and they’re good exercises. But here is the fatal flaw: the customer is never discussed. She is taken for granted. Continued sales volume is simply assumed, no matter how much “optimization for margin improvement” is done!
Why does a celebrated American hospitality school call the course “Food Chemistry,” when Europeans call it “Gastronomy”? Why did GM produce generations of automobiles that met all internal targets yet fell wide of the mark in sales? Why are America’s most prestigious hotel chains, the ones renowned for superior food and service, foreign-owned? Why do most of us prefer to fly the Pacific on Singapore Airlines or JAL, and the Atlantic on Lufthansa or SwissAir, as opposed to Delta or American Airlines? Why did the eccentric, disruptive, and incorrigibly right-brained Steve Jobs (who, I am sure, is totally perplexed by phrases like “a probabilistic, resource-optimized potential future product portfolio”) have to come back to save Apple after those who ousted him, boasting that “Apple would now be run soundly, by business professionals,” promptly ran it full-speed into the ground? Why did Sir Richard Branson, with no higher education at all, succeed so brilliantly in both the airline and music businesses? The simple answer is: they have a blissful lack of awareness of the analytical science of business. Uninfected by the MBA virus, they simply strive to offer a better product, one that delights the customer. They control costs, of course. And they tolerate a necessary level of bureaucracy. It’s essential. But the focus is on the product or service . . . thus, the customer. American business needs to throw the intellectuals out and get back to business!
While I was vice chairman of GM, I had the opportunity to visit a nationally celebrated engineering college from which GM often recruited graduates. I was invited to speak to the student body, did so, and later visited with the dean.There was something he needed to get off his chest: “You know,” he said, “GM is missing out on some of our very best students