UNIT 9

TEXT

In this world constant changes are a fact of life. How to act in this changing world, then, presents a real challenge for executives of big businesses today. The leader of a big company shoulders great responsibilities. Naturally, he wants to be absolutely sure he is doing the right thing. But does it follow that he should never take a chance, that he can afford to delay action until he obtains all the information he needs? A good manager draws on the wisdom of committees. But can committees replace individuals? In the selection, the author, a successful businessman himself, expounds his views on these questions, throwing light on mature management.

The Key to Management
by Lee Iacocca

If had to sum up in one word the qualities that make a good manager, I'd say that it all comes to decisiveness. You can use the fanciest computers in the world and you can gather all the charts and numbers, but in the end you have to bring all your information together, set up a timetable, and act.
And I don't mean act rashly. In the press, I'm sometimes described as a flamboyant leader and a hip-shooter, a kind of fly-by-the-seat-of-the-pants operator. I may occasionally give that impression, but if that image were really true. I could never have been successful in this business.
Actually, my management style has always been pretty conservative. Wherever I've taken risks, it's been after satisfying myself that the research and the market studies supported my instincts. I may act on my intuition -- but only if my hunches are supported by the facts.
Too many managers let themselves get weighed down in their decision-making, especially those with too much education. I once said to Philip Caldwell, who became the top man at Ford after I left: "The trouble with you, Phil, is that you want to Harvard, where they taught you not to take any action until you've got all the facts. You've got ninety-five percent of them, but it's going to take you another six months to get that last five percent. And by the time you do, your facts will be out of date because the market has already changed. That's what life is all about -- timing."
A good business leader can't operate that way. It's perfectly natural to want the facts and to hold out for the research that guarantees a particular program will work. After all, if you're about to spend $300 million on a new product, you want to be absolutely sure you're on the right track.
That's fine in theory, but real life just doesn't work that way. Obviously, you're responsible for gathering as many relevant facts and projections as you possibly can. But at some point you've got to take that leap of fait. First, because even the right decision is wrong if it's made too late. Second, because in most cases there's no such thing as certainty. There are times when even the best manager is like the little boy with the big dog waiting to see where the dog wants to go so he can take him there.
What constitutes enough information for the decision-maker? It's impossible to put a number on it, but clearly when you move ahead with only 50 percent of the facts the odds are stacked against you. If that's the case, you had better be very lucky -- or else come up with some terrific hunches. There are times when that kind of gamble is called for, but it's certainly no way to run a railroad.
At the same time, you'll never know 100 percent of what you need. Like many industries these days, the car business is constantly changing. For us in Detroit, the great challenge is always to figure out what's going to appeal to customers three years down the road. I'm writing these words in 1984, and we're already planning our models for 1987 and 1988. Somehow I have to try to predict what's going to sell three and four years from now, even though I can't say with any certainty what the public will want next month.
When you don't have all the facts, you sometimes have to draw on your experience. Whenever I read in a newspaper that Lee Iacocca likes to shoot from the hip, I say to myself: "Well, maybe he's been shooting for so long that by this time he has a pretty good idea of how to hit the target."
To a certain extent, I've always operated by gut feeling. I like to be in the trenches. I was never one of those guys who could just sit around and strategize endlessly.
But there's a new breed of businessmen, mostly people with M. B. A.' S, who are wary of intuitive decisions. In part, they're right. Normally, intuition is not a good enough basis for making a move. But many of these guys go to the opposite extreme. They seem to think that every business problem can be structured and reduced to a case study. That may be true in school, but in business there has to be somebody around who will say: "Okay, folks, it's time. Be ready to go in one hour." When I read historical accounts of Word War II and D-Day, I'm always struck by the same thought: Eisenhower almost blew it because he kept vacillating. But finally he said: "No matter what the weather looks like, we have to go ahead now. Waiting any longer could be even more dangerous. So let's move it!"
The same lesson applies to corporate life. There will always be those who will want to take an extra month or two to do further research on the shape of the roof on a new car. While that research may be helpful, it can wreak havoc on your production plans. After a certain point, when most of the relevant facts are in, you find yourself at the mercy of the law of diminishing returns.
That's why a certain amount of risk-taking is essential. I realize it's not for everybody. There are some people who won't leave home in the morning without an umbrella even if the sun is shining. Unfortunately, the world doesn't always wait for you try to anticipate your losses. Sometimes you just have to take a chance -- and correct your mistakes as you go along.
Back in the 1960s and through most of the 1970s, these things didn't matter as much as they do now. In those days the car industry was like a golden goose. We were making money almost without trying. But today, few businesses can afford the luxury of slow decision-making, whether it involves a guy who's in the wrong job or the planning of a whole new line of cars five years down the road.
Despite what the textbooks say, most important decisions in corporate life are made by individuals, not by committees. My policy has always been to be democratic all the way to the point of decision. Then I become the ruthless commander. "Okay, I've heard everybody," I say. "Now here's what we're going to do."
You always need committees, because that's where people share their knowledge and intentions. But when committees replace individuals -- and Ford these days has more committees than General Motors -- then productivity begins to decline.
To sun up: nothing stands still in this world. I like to go duck hunting, where constant movement and change and facts of life. You can aim at a duck and get it in your sights, but the duck is always moving. In order to hit the duck, you have to move your gun. But a committee faced with a major decision can't always move as quickly as the events it's trying to respond to. By the time the committee is ready to shoot, the duck has flown away.