Tuesday, April 10, 2007

Educating the Destruction of American Business

Customers no longer are crucial to the American commercial contract. That’s more than proven by automated telephone systems, impossibly repeating how important you are as a customer as you are simultaneously left on hold, captive to unending message tapes of the additional services available while this particular one is withheld.

I Squeeze, Therefore I Am is the mantra of corporate leadership according to the Harvard Business School.
Customers no longer are crucial to the American commercial contract. That’s more than proven by automated telephone systems, impossibly repeating how important you are as a customer as you are simultaneously left on hold, captive to unending message tapes of the additional services available while this particular one is withheld.
Llbean L.L.Bean may be the final commercial resting place of care given to a customer. Call them at 3am, any morning of the week and you will be treated to a fresh human voice that is actually interested in what you have to say, be it an order, a complaint, or merely a question about a product. You won’t get a canned ‘have a nice day’ at the end, either. What you will get is a voice within which you can actually hear the smile, an authentic Mainer, proud to represent the company and thanking you for calling.
Harvardbusgrads Elsewhere, in environments less rudimentary than the state of Maine, executives who make decisions about the picking up of phones are compensated almost entirely on stock performance. Yet the forces that increase market price are ripping out the seams of the company fabric, without regard to the cut of the cloth. They are taught this and they learn well.
Squeeze.
Close down, renegotiate, strip, because in closing, renegotiating and stripping away assets, there is no Jacob Marley in the modern business class, no Ghost of Greatness Past come to haunt.
Wall Street outrageously rewards CEOs who creep the dusty, creaking hallways of what is left of American manufacturing. His (and less often, her) guttering candle throws a shortsighted light, unable to shine beyond upcoming quarterly results. Quarterly results loom constantly, like a congressman’s need of election funds.
My old daddy told me, “if you want to see time fly, sign a 90-day note.”
Easteregg_2Trash research and development programs to lighten the load and give the wings more lift. Bring on new-hires at low wages; the cost of inexperience won’t show for five or six quarters. Spin-off supporting divisions; a stolen car is worth more as the sum of its parts than its curb value. Every chop-shop operator knows that.
Having thrown out the egg, the typical Harvard MBA grad boasts about the color of the shell.
Jackpalance One wonders about the sanity of these operators until their business-school acquired sensibilities are understood. They are not owners. They are hired-guns, equal parts Jack Palance and Jack Welch. They move from town to town through the Wild West of today’s business environment, collecting notches on pistol-handles. Flinty-eyed and uncaring, they reward themselves, raking in chips and the taking the pleasures of whatever dance hall girl the town can provide.
Then they’re gone. Off to their next professional killing. These are lonely men and yet town after town laid its wealth and reputation at their feet. Detroit, Cleveland, Pittsburgh, Chicago, Gary--smokestack cities of America’s great industrial days--the lucky ones gentrified into service corridors, the less lucky still bombed-out and in ruins.
We celebrate these killers who move on, as if they were rock stars.
(Wikipedia) When asked about the problem of excessive CEO pay, Welch has stated that such allegations are "outrageous" and has vehemently opposed proposed SEC reforms affecting executive compensation. Countering the public uproar over excessive executive pay (including backdating stock options, golden parachutes for nonperformance, extravagant retirement packages, etc.), Welch stated that CEO compensation should continue to be dictated by the "free market," without interference from government or other outside agencies.
Meanwhile, Japan has come to sweep what is left of our auto industry into the dustbin of history.
Blastfurnace Steel is made elsewhere than America, in countries that have neither iron-ore nor coal. Laughably, the corporate rock stars tell us it’s all because American wages are too high and we believe them, swallowing the lie. Wages are not high enough, it’s value that we have pissed away, allowing ourselves to become technologically decrepit.
Rather than deal with that solvable flaw, the MBAs found it easier and way more profitable to sell us down the river. That river was not the Mississippi, but the Ganges and the Yangtze.
At the close of World War II, our industrial base was all but worn out and badly behind innovations of the day. But it was standing. Virtually alone in the world, we had factories to churn out the cars and tooth paste, radios and shoes the world hungered for. We thought we had the world by the tail. We were the best—invincible. The future belonged to us.
We had mistaken being the only game in town for being the best game in town.
With Marshall Plan funds, we retooled Japan and re-industrialized Germany in one of world history’s most unselfish and productive gestures. It was, without doubt, the right decision. What we failed to cure, was our own sickness, because the symptoms were masked by prosperity. Success was based not upon typical American standards of ingenuity, but the short-term circumstance of being the only store open.
We failed to invest. When the shoe business went to Italy, we were not shaken. America was more important than shoes. As the initial Hondas trickled into the country, we laughed at these small cars built for small people. Daddy’s two-door Cadillac was nineteen feet long. Steel made in Japan? Who were they kidding with their electric furnaces? The ‘German miracle’ was much the result of allies packing off what remained of Germany’s post-war industrial base and then hurriedly reinventing it. German imports? Yeah, a camera or two. Those Germans make great cameras.
We stumble all over our faith when we believe America’s industrial decline is wage-based. For over fifty years we had our attention elsewhere. We busied ourselves with cold war and military spending, the offshoots of which are responsible for most of our inventiveness in a new industrial age. But the manufacturing went elsewhere.
Jackwelch Waving goodbye, the new business tycoon found ways to profit from ships sailing elsewhere. Just as seasoned investors make money from markets moving down as well as up, the neoCEO profited from selling off the parts of a once vibrant American industry.
Jack Welch became an icon for taking GE from manufacturing into a multinational technology and services conglomerate. That’s a long way from Thomas Edison’s forerunner to the modern GE, but then Henry Ford would hardly recognize what has been done to his company either. The two were old camping buddies and one can only speculate over what they might say, toasting a marshmallow today.
Harvardbusessay The fifty year slide is reversible. America can again become the home to the world's manufactured product. But the genius that reawakens us an industrial giant will never come out of Harvard and their destructive business school.
It will come from men like Edison and Ford and there still are such men.
When it comes, we’ll stop our down-waged flipping of hamburgers and get back to the business that has always been an American trademark--making stuff and enjoying the prime wages that come from making stuff.
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