Rude Awakening

"The book was amazingly prescient. It was written 20 years ago and yet it effectively predicted the bankruptcy of General Motors, which occurred last year. Its author, Maryann Keller, describes how the rule of the ‘number crunchers’ took root in the 1960s, which almost destroyed the company then and there. To understand what is meant by the expression ‘number cruncher’ you have to go back half a century to our golden age of management. As young men (there were few women) rose up the ladder of promotion in the companies of those days, they would not only learn the ‘craft’ of management ‘on the job’ from more senior colleagues, they would also absorb ‘domain knowledge’ about their company’s business. As a result, banks were run by people who knew an awful lot about banking, engineering companies by people who knew a lot about engineering, and so forth. And they all knew a lot about management. Starting in the late 1960s, however, a new concept appeared on the corporate scene: namely, that management was a ‘profession’ like medicine, dentistry or the law, and that people should acquire a business degree at a college if they wanted to practise it. It was no longer deemed necessary for executives to learn the ‘craft of management’ as they rose through the ranks or, for that matter, to acquire and make use of ‘domain knowledge’. The outcome has been managerial incompetence on a scale inconceivable in earlier generations and extending over much of society. Yes indeed – America faces formidable problems of all kinds at the present time, as does the entire developed world. However, it possesses an amazing resilience that exceeds that of most other countries. Lots of ‘green shoots’ have already sprouted there – just look at some recent appointments to senior positions! For example at General Electric, the admirable Jeff Immelt (who launched the concept of ‘domain knowledge’) has replaced the dreadful Jack Welch, who perhaps more than anyone else, was responsible for the collapse in US corporate culture after 1970. I am an optimist about the human race and I am even more of an optimist about America."