Unsuccessful Executives In Automotive Manufacturing

Woodruff lmberman

E very bookstore is crammed with texts describing

what makes an effective manufacturing executive. Daily newspapers carry syndicated columns written by gifted and eloquent swamis and yoghis fatu- ously presuming to instruct the world on the methods and behavior of successful business executives.

Having served for years as head of a man- agement consultant firm, I can speak from inti- mate association and experience with manufac- turing executives in the automotive industry. I can attest that unsuccessful executives exist in many companies, but few people mark their characteristics or behavior. Even today, with the scientific passion so familiar in the world, it is not easy to identify unsuccessful executives before they do much damage. To that business I here- with address myself briefly. I call attention to four factors characteristic of unsuccessful executives:

l disregard or disrespect for subordinates; l inability to grasp the “Big Picture”; l competitive jockeying to outdo colleagues; l the disposition to resist change and post-

pone-always postpone-any innovation.

DISREGARDING SUBORDINATES

A multi-plant company manufactured power cylinder systems and compo- nents for the automotive, small engine,

heavy duty, and compressor industries. One of its employees, an able technical project leader, was promoted to manager of an outlying plant where pistons, rings, pins, and liners were produced.

Upon assuming his new job, he decided to impress the home office by exhibiting some ar-

resting originality: He would cut labor costs and boost productivity simultaneously. His initial tar- gets were seniority in overtime and “call-out” time-expensive areas for the firm. Without con- ferring with union or employees, the new plant manager made changes in both.

Before this move, overtime had been offered to employees according to seniority. However, the plant manager decided to use only the fastest workers on overtime, regardless of seniority-not entirely an implausible contention. The union contract said nothing on the subject. But some workers were women with family obligations. Soon, three women (excellent machine opera- tors) were disciplined for refusing overtime. In- dignation followed, and grievances were filed. In the meantime, productivity in the plant declined somewhat.

The “call-out” problem was handled similarly. A maintenance employee called out to work outside his regularly scheduled hours was paid a minimum of four hours’ regular pay, or one and one half times his regular rate for time worked- whichever was greater. When the emergency job was done, the employee went home to rest for his regular shift. Sometimes, he worked only one hour but received four hours’ pay.

The new plant manager unilaterally changed the call-out policy without conferring with main- tenance employees or the union. Under the new rule, whenever a worker was called out for an emergency job, he would be given a second and perhaps a third job to fill out the four hours. The manager felt that if the company was paying for four hours’ work (by God!), the company should receive four hours’ work. This seemed to have a certain disconcerting but inescapable plausibility. The union objected vociferously.

The net result was that the plant began to have difficulty calling out emergency mainte- nance workers. When the plant phoned, wives would say their husbands were not at home. An

Business Horizons / March-April 1997

emergency job that was not done because of one such employee absence resulted in a one-day shutdown of an entire department.

Finally, the work force put up their dukes and went on strike at contract time. Reporters interviewed several strikers and their spouses, and the news stories indicated that the turmoil was due almost entirely to the manager’s arbitrary actions. Behind that, of course, was his great disdain for employee opinions, which under- mined his effort to achieve work force coopera- tion on cost containment. Disrespect for subordi- nate employees is often a sign of unsuccessful executives in manufacturing.

Another Example

After losing an NLRB election to an independent (company) union, a manager of a plant that pro- duced anti-lock brake modules for commercial vehicles negotiated a two-year “sweetheart” con- tract with a group of local friendly employees. In his first contract year, however, he had little pa- tience for employee comments about the need for more fans in some areas, the scarcity of soap in washrooms, poor choice of food in the vend- ing machines, disregard of seniority in choosing workers for overtime or promotions, complaints about harsh supervision, and so on. This bub- bling on the surface led to a bombardment of grievances. The plant manager forced arbitration eight times over such grievances-and won six. In his second year, he had six arbitration cases over similar issues, and won all of them.

The manager, however, had overlooked the point that the arbitration process produces deci- sions, but it cannot resolve intangible human problems. Life is more than mere syllogisms. Filled

to the throttle with frustration, the independent union, no longer docile, revolted and affiliated with Steelworkers International. The Steelworkers demanded new terms that the plant manager declared unacceptable, and a three-week strike ensued. Thereafter, productivity on brake compo- nents took a melancholy turn, and shipping schedules showed an equal decline.

Despite pompous syllogisms and sonorous phrases in annual reports about the work force being the major asset of a company, some execu- tives really believe that the factory is chiefly peopled with marionettes. A labor contract, they believe, is nothing more than an agreement to purchase a certain amount of labor service at a certain price-not much different from a contract to purchase fluorescent displays, or wire binders, or ten tons of coal. Such executives are unable to sense that failing to grasp the intangible differ- ence will earn the company endless ill will. They order things to be done, rather than motivating anyone to do them.

Employee attitude surveys that turn up de- rogatory views about management are disre- garded. Group interviews and employee audits that indicate employee dissatisfaction with equip- ment, supervision, working environment, and company policies are all discounted as mere “gripes,” unworthy of serious management re- spect. Many employee comments are basically constructive and point to opportunities for im- provements in productivity, quality, and cost sav- ings. But such executives fail to grasp this. They disregard the need to be considerate or to listen.

THE BIG PICTUBE

T

here is no evidence that one must be a genius or have excessive book learning to be a good automotive manufacturing

executive. An MBA education does not guarantee success in any industry, despite the common delusion. As Harvard’s Professor J. Sterling Livingston has expressed with no sociological eye-rolling, “Academic ability does not assure that an individual will be able to learn what he needs to know to build a career in fields that involve such broad matters as leading, changing, developing, or working with people” (1971).

Professor Livingston was not clamoring about all the technical, marketing, or financial details drilled into MBAs. He was talking about general functions that all executives must be able to carry out-planning, directing, controlling, evaluating, and so on-and the ability to relate them to the “Big Picture. ” Unsuccessful executives often do not see the Big Picture. They are incurable par- ticularists. They cling to details.

Many executives have been promoted be- cause of their attention to detail. Consider a qual-

Unsuccessful Executives In Automotive Manufacturing

ity inspector in a company pro- ducing metal-formed compo- nents for engine, transmission, axle, and suspension systems in the auto industry. His job was to ensure that the products inter- operated properly for maximum efficiency. He had to worry about quality documentation, maintain a formal gauge calibration system to ensure that the products were accurate, see that stock was color-coded properly as to type of material, inspect packaging, and much more.

Promoted to quality man- ager, he took over responsibility for supervising four departments and reported to the manufactur- ing vice president. But in this position, the ability to assign details to subordinates (without looking over their shoulders) and devote time and thought to broader issues of achieving zero

defect levels throughout the facility did not come easily to this “detail man.” He could not resist focusing on the minutiae of daily production, or instructing individual employees on the “right way” to produce this or that part. He left little time for consideration of major policies that might motivate employees to produce more carefully, cut down the defect and rework levels, and still maintain productivity.

In a second example, a manager of a plant that produced components such as car radios, alternators, and actuators was promoted to cor- porate headquarters as division vice president in charge of six plants. Now, such a new job means opening one’s mind to new definitions of the business, creating a new sense of purpose, and making a visible commitment to improve. A pro- motion may also entail turning some sacred cows out to pasture-shaking the staff out of its leth- argy and perhaps fostering new, unconventional ways of thinking. This may even require a new vocabulary: changing from “business as usual” and “We’ve always done it that way” into “How can we do it better?” It may require implementing a rigorous effort to translate dreams into bottom- line results instead of concentrating on endless minutiae.

This executive never made the transition from the details of managing a plant to the broader horizons of the Big Picture. His disposition was to act as a lone rider out on the range, bossing his own herd, still thinking of solitary heroic measures, tight controls, and individual glory. After three years, he was finally relieved of his job-“reengineered” because of acute dissension

in the executive ranks of his division as well as lamentable financial results.

While many people talk about the “Peter Principle,” few understand what accounts for the phenomenon of promoting executives beyond their psychological bent. This incapacity to adjust to broader and broader horizons has undermined a good number of executives. Detail-minded executives do well in the purchasing department, or the billing department, or the controller’s of- fice, where attention to detail is prized, but not where acquaintance with the Big Picture is re- quired.

COLLEGIALJ3.Y

I n striving to achieve their goals, how well do middle-level manufacturing executives get along with fellow managers? Are they

highly competitive, jockeying to outdo others? Or are they congenial, forming close friendships with associates? Do they play corporate politics with cliques? Are their opinions candid? How do they respond to criticisms or differences?

Executives with comparable responsibilities are competitors for promotion, salary hikes, and higher management perks. In most firms, com- petitors for a higher position observe a code of fair play. Some, however, compete viciously. These types are more than just personally deplor- able, for cooperation becomes impossible and company or plant effectiveness drops.

In handling specific technical assignments or running a specialized department, middle-level executives often develop competitive attitudes toward others and, in a friendly way, may often overemphasize the value of their own group, department, or plant’s function. However, when competition turns into bitter feuding, it can be- come an acute problem, especially if the respon- sibilities of rival executives are broadened in a restructuring.

Likely to be unsuccessful, if promoted, are those executives who may be technically brilliant but who are unfriendly with rivals and have poor relations with colleagues, often lacking basic courtesy. They are incapable of adjusting their

Business Horizons / Mad-April 1997

opinions, or calmly accepting that their views may be modified or even overruled. They resent all this as a reflection on their ability-hence, calling for revenge. It is as if they were trained in ferocity from infancy. No unified management team can result from such individual behavior.

The notion that the executive on top is a lone wolf is a romantic aberration. If able and experienced, an executive is in constant touch with other executives and staff, making decisions in conjunction with other executives. His most difficult chore is making choices among the rec- ommendations offered to him.

In a company producing diesel truck en- gines, the vice president of manufacturing and the vice president of engineering were bitter rivals. With the appointment of a new CEO from outside came the news that a downsizing pro- gram-including combining manufacturing and engineering into one vice presidency-were in the works. Consequently, each of the two men maneuvered to position himself as the survivor.

When the OEM customer demanded lower cost and lighter weight for the new engine, both VI% began lobbing acrimonious memos at each other-with copies to the new president-about how to reduce the machining costs of certain components versus expensive engineering design changes that would reduce weight. The vice president of finance was dragged into the fray when the manufacturing vice president hotly demanded an activities-based costing estimate of the expense of the design changes recommended by the vice president of engineering. The latter, in turn, hotly defended the need of those changes, which allegedly would create a wider market for the new engine.

Unwisely, the bewildered new CEO left the situation alone until the major OEM customer showed signs of seeking another supplier. A management meeting to consider the threat de- generated into a shouting match between the two vice presidential rivals-a controversy that di- vided the management group into rival camps and left no clear plan to cope with the threatened serious loss of business.

The CEO finally took action. He engaged a search firm to find new vice presidents of manu- facturing and engineering, giving each of the old VPs a hearty handshake and a sickly severance package for their efforts.

FEAR OF CHANGE

0 f all the hallmarks of unsuccessful au- tomotive executives, the tendency to resist change and postpone innovation

or even experimentation is the most common and dangerous characteristic. It is a sort of dis- ease of the spirit.

Unsuccessful Executives In Automotive Manufacturing

The Tooting Company (not its real name> manufactured common auto brakes consisting of drums, discs, calipers, and rotors. A few years ago, anti-lock brakes were introduced. Consisting of mechanical assemblies joined with electronic controls and sensors, anti-lock brakes not only stop cars, but provide traction control, suspen- sion control, and so on. In recent years, the Big Three began producing cars with lighter suspen- sion materials, affecting the dynamics of braking systems.

For Tooting to add lightweight anti-lock brakes meant shifting to or adding cell manufac- turing. This would require new manufacturing techniques, new equipment, and a hefty financial investment.

What to do? The vice president of manufacturing argued vociferously that foundation brakes would con- tinue to be the basic mechanism, and that anti-lock brakes were only a fad that would not last. The president and others on the management group were not so sure, but the manufacturing VP adamantly insisted on a delay in any decision. “Wait another year or two, and we’ll see the anti-lock brake fade,” he said. “Why plunge into this new invest- ment? We’re doing fine with the foundation brakes. Let’s stick to ba- sics.”

Soon the anti-locks began mak- ing their way onto cars and trucks at a brisk pace. The manufacturing VP still urged delay. “We’re doing very well with foundation brakes,” he insisted. “Let the others waste their resources on anti-locks. We know our business and we can’t lose by sticking to basics.”

But the market for foundation brakes began to shrink and Tooting saw its annual sales vol- ume dwindle to about half. In response to a mar- keting study (by outside consultants), the presi- dent finally overhauled the company and added anti-lock brake capability, scrambling to catch up with competitors who had made the transition in previous years and carved out large niches in Detroit. Tooting is still limping far behind its pre- vious sales and revenue volume.

Executives are faced with decisions every day. Most of them are minor, but occasionally a major one has to be made, often in concert with other executives. Those who fear change tend to resist making such decisions at all:

l Should we try to remove the acids, toxic solvents, and polluting water rinses from our circuit board manufacturing? (“Why change if we can get by with what we have?“)

l Should we invest in a better flat-top belt conveyor for handling our materials and scrap?

(“Let’s wait and see how we come out this fiscal year.“)

l Should we improve the maintenance pro- cedures on our punch press tooling? (“Why change? Let’s see how things work out the rest of this year.“)

l Should we go into a gainsharing program that will boost our productivity and quality out- put? (“Our mid-managers are too busy with meet- ing IS0 9000 now. Let’s wait until next year, or maybe the year after.“)

Invariably, such executives are always seized with qualms, reluctant to reach a firm decision even if all possible facts are exhibited. To avoid a conclusion, they will continue to discuss the proposal, reconsider the obvious, spout hollow phrases and stereotyped formulas, see what Harry has to say when he comes back from an out-of- town trip, talk some more rather than do any- thing, or, at worst, predict endless apocalypses if the action takes place 120~. They are perpetual procrastination machines.

Talk is often regarded by some executives as a form of action, so continuing to talk about a decision is regarded as doing something con- structive. To continue talking requires no change in behavior, no adjustment of routine, no up- heaval of standard procedure, no risk to anyone’s status. It outlaws courage and even curiosity. That suits the unsuccessful executive, because the gravamen of his objection is that change is peril- ous; flirting with new ideas may lead to unfore- seen consequences, and anyway, adding a new program at this time is too burdensome. To wit- ness such a performance is an engrossing, in- structive, and highly amusing instance of special pleading.

This strong embrace of the existing order, the persistent urge to postpone any innovation, the tendency of talk instead of acting, often drags other executives along. In time, it could produce the slow competitive death of the company. Though no unsuccessful executive seems to ex-

hibit all the undesirable traits described in this article, the tendency to postpone action on change or innovation-the desire to talk instead of act-seems to be characteristic of eue?y unsuc- cessful manager. It is almost like a common de- nominator of unsuccess.

T

he four undesirable traits profiled here can be detected in junior and middle executives by their reactions and com-

ments in realistic situations. The good qualities of these men and women are many, and there is no disposition here to question them. Such execu- tives are not really inept or incompetent. Usually they have risen to some management status by effort and performance. But their progress is illusory What they need is to be guided into the proper executive slot to suit their talents and avoid being promoted into positions in which they cannot function in the best interests of the company. 0

References

J. Sterling Livingston, “Myths Of The Well-Educated Manager,” Harvard Business Kevieut, January-February 1971, pp. 41-52.

Woodruff Imberman, “Gainsharing: A Lemon Or Lem- onade?” Business Horizons, ~nu~~-F~b~~~ 1996. pp. 36-40.

Woodruff lmberman is the president of lmberman and DeForest, a management consulting firm headquartered in Evanston, Illinois. Complimentary copies of his Business Horizons article cited may be obtained by faxing him at 847-733-0074.

Uuhiness Horizons I March-April 1997