What the Dog Saw [151]
The Navy had plenty of talent at the top, in other words. What it didn’t have was the right kind of organization. As Eliot A. Cohen, a scholar of military strategy at Johns Hopkins, writes in his brilliant book Military Misfortunes in the Atlantic:
To wage the antisubmarine war well, analysts had to bring together fragments of information, direction-finding fixes, visual sightings, decrypts, and the “flaming datum” of a U-boat attack — for use by a commander to coordinate the efforts of warships, aircraft, and convoy commanders. Such synthesis had to occur in near “real time” — within hours, even minutes in some cases.
The British excelled at the task because they had a centralized operational system. The controllers moved the British ships around the Atlantic like chess pieces, in order to outsmart U-boat “wolf packs.” By contrast, Admiral King believed strongly in a decentralized management structure: he held that managers should never tell their subordinates “how as well as what to ‘do.’ ” In today’s jargon, we would say he was a believer in “loose-tight” management, of the kind celebrated by the McKinsey consultants Thomas J. Peters and Robert H. Waterman in their 1982 bestseller, In Search of Excellence. But “loose-tight” doesn’t help you find U-boats. Throughout most of 1942, the Navy kept trying to act smart by relying on technical know-how, and stubbornly refused to take operational lessons from the British. The Navy also lacked the organizational structure necessary to apply the technical knowledge it did have to the field. Only when the Navy set up the Tenth Fleet — a single unit to coordinate all antisubmarine warfare in the Atlantic — did the situation change. In the year and a half before the Tenth Fleet was formed, in May of 1943, the Navy sank thirty-six U-boats. In the six months afterward, it sank seventy-five. “The creation of the Tenth Fleet did not bring more talented individuals into the field of ASW” — antisubmarine warfare — “than had previous organizations,” Cohen writes. “What Tenth Fleet did allow, by virtue of its organization and mandate, was for these individuals to become far more effective than previously.” The talent myth assumes that people make organizations smart. More often than not, it’s the other way around.
5.
There is ample evidence of this principle among America’s most successful companies. Southwest Airlines hires very few MBAs, pays its managers modestly, and gives raises according to seniority, not “rank and yank.” Yet it is by far the most successful of all United States airlines, because it has created a vastly more efficient organization than its competitors have. At Southwest, the time it takes to get a plane that has just landed ready for takeoff — a key index of productivity — is, on average, twenty minutes, and requires a ground crew of four, and two people at the gate. (At United Airlines, by contrast, turnaround time is closer to thirty-five minutes, and requires a ground crew of twelve, and three agents at the gate.)
In the case of the giant retailer Wal-Mart, one of the most critical periods in its history came in 1976, when Sam Walton “unretired,” pushing out his handpicked successor, Ron Mayer. Mayer was just over forty. He was ambitious. He was charismatic. He was, in the words of one Walton biographer, “the boy-genius financial officer.” But Walton was convinced that Mayer was, as people at McKinsey would say, “differentiating and affirming” in the corporate suite, in defiance of Wal-Mart’s inclusive culture. Mayer left, and Wal-Mart survived. After all, Wal-Mart is an organization, not an all-star team. Walton brought in David Glass, late of the Army and Southern Missouri State University, as CEO; the company is now ranked No. 1 on the Fortune 500 list.
Procter & Gamble doesn’t have a