Wallowing in the Mud

Columns From: 1/27/2011 Automotive Design & Production, , Editor-in-Chief from Gardner Business Media, Inc.

"On the flight home I asked myself, 'How could such truly talented people allow them-selves to get into such a morass?'"—Louis V.

"On the flight home I asked myself, 'How could such truly talented people allow them-selves to get into such a morass?'"—Louis V. Gerstner, Jr., Who Says Elephants Can't Dance?

The flight in question occurred during Gerstner's first month on the job as IBM's new CEO. What he discovered was that while a company can have talented and competent employees, they can readily get in trouble. They can allow themselves to become distracted.
"Morass" is a good word. It describes the sense of slogging stuckness of people, people who would otherwise be making progress. But for whatever reason, forward motion is impeded and it is all people can do to lift their legs and walk in place so as not to sink entirely.
I recently had a conversation with a Japanese engineering executive who is with an admired OEM. He had spent many years working in the United States. He had had opportunities to work closely with engineers from one of the U.S.-based OEMs. And during the course of the conversation, he told me that invariably the American engineers with whom he worked were as good as any engineers in the world. Sometimes, better. So, one would imagine that the vehicle manufacturing company in question would be at least as good as the best. In some cases, the company's products are first-rate. But those products are the exceptions, not the rules. What is the issue? Probably the organizational morass. Talent can get you only so far when there are people who seem to have no other function in an organization than to shovel the mud and make sure that it's gooey. When these people are at a mid to low level within an organization, they are generally not more than the proverbial pain in the posterior. But when they are higher up—and let's face it, there are plenty of managers and executives in businesses large and small who are more interested in preserving a no-longer-existing status quo than in actual change—the magnitude of the morass is thoroughly daunting.
Gerstner talks about many of the develop-ments that made money for the likes of Oracle, Sun, Cisco, and other companies—developments that were created in IBM's labs, developments that were not appropriately exploited by IBM. Why? One reason he cites is that bringing those discoveries to market would have a consequence of cannibalizing existing products. In other words, the new developments could have decreased the sales of existing products. Consider this situation: the researchers and developers were doing their jobs; those people who were in charge of existing products were doing their jobs, by making sure they had the most propitious environment. But there was a huge disconnect. And so I think about the auto industry, again. I think about how there tends to be a turf mentality, a case where it seems more important to protect existing investments than in truly pursuing completely new products. Too risky to do otherwise, right? Perhaps. But what is the risk of not taking the chance?
Gerstner was an outsider who brought IBM back from the brink. In previous positions at American Express and R.J. Reynolds he had been an IBM customer. As a result, he was aware of things that needed to be done to be more customer-centric. In the auto industry, leadership that isn't of the industry tends to be derided. How many people running companies actually understand the needs of those who are buying and using their products? How many have gone to the pump lately and recognized the hit in the pocketbook that high gas prices cause? How many are well well-intentioned, active people who are comfortable in an environment that is otherwise known as a "morass"?