A few things our generals could learn from Alfred Sloan’s history of General Motors
For the most part, I do not believe that the military should imitate business. The differences are too big, especially the risks: In wartime you risk lives, while in business you generally risk filing for bankruptcy. Hence the inclination in business to go for the 51 percent solution, which I think is generally too dangerous ...
For the most part, I do not believe that the military should imitate business. The differences are too big, especially the risks: In wartime you risk lives, while in business you generally risk filing for bankruptcy. Hence the inclination in business to go for the 51 percent solution, which I think is generally too dangerous in military operations.
That said, there are some parallels that illuminate situations. For example, Alfred Sloan, in his autobiographical history My Years With General Motors, which I just finished, makes a sharp distinction between what General Motors did every day and what it sold. What it did was cut and bend metal. What it sold was not basic transportation (from the mid-1920s on, he said, that was the job of the used car market, and so not his business), but instead a form of more expensive transportation — a new car that offered style, speed, and comfort. This is the departure point in strategy: Figuring out you who are.
One thing that struck me reading it is that Flint and Detroit in the 1910s were a lot like Silicon Valley in the 1980s, with Sloan hanging out on weekends with Walter Chrysler, Charles Nash, and the like.
Sloan placed an enormous emphasis on running the company with centralized policy and de-centralized execution. This strikes me as another way of saying "mission orders." It is a lot harder than it looks. Much of the book depicts how he went about implementing this. The line guys had genuine power, the staff guys only the power to make recommendations.
As part of that, he developed the sense of a corporate need for what military people call "doctrine." In explaining the structure he devised for General Motors, he writes, "The Operations committee was not a policy-making body but a forum for the discussion of policy or of need for policy. . . . In a large enterprise some means is necessary to bring about a common understanding." That’s a good layman’s explanation of doctrine, in a military sense.
Details also matter, and understanding your process. One of the biggest problems in the automobile industry is managing inventory, even now. It used to be that one of the slow points in moving inventory was waiting an average of three weeks for paint and varnish to dry and cure. It also took up a lot of real estate. Du Pont (a major investor in GM) invented a new lacquer process that allowed a car to be finished in one eight-hour shift.
Finally, the book reminds me of war in that it consists of long boring sections interrupted by points of brilliance.
Two WWII bonus facts: I didn’t know that the tail fins of Cadillacs and other automobiles of the 1950s were directly inspired by the P-38. Nor did I know that the price of a GM-made .50 caliber machine gun fell from $689 on Dec. 7, 1941, to a low of $169 in the fall of 1944. (As production numbers were cut after that, the price rose $5.) So I guess that the better we were doing, the cheaper the .50 cal usually was.