prof.  management

 

 When Professional Management Fails

I spent 17 years with General Electric during the 1950's and 1960's.  During that time General Electric's management "religion" was "Professional Management": the notion that management was, in itself, a skill that could be taught and applied to any type of business.  A great deal has been written and published on this subject and I cannot claim to be a scholar here.  However, the two parts of General Electric with which I was associated (nuclear power and computers) were not typical of the rest of GE and perhaps allowed me to develop a perspective on professional management which may be different from much of what has been written by others.

Specifically, the two businesses in which I worked were both new businesses to General Electric and were both new and rapidly changing fields.  This led to some events which were ludicrous and/or tragic.  Here are two examples of what really happened:

Early in the nuclear power business, as GE built up its Atomic Power Equipment Department, there was a need for a Manager of Engineering.  The individual they chose was a successful Manager of Engineering from the GE Welding Department!  Fortunately, he was a good individual, without any illusions about what he knew about nuclear power.  But he was severely limited in his ability to fulfill his role because of that lack of specific knowledge of the business.

Another, sadder, example was Vern Cooper, one of GE's brightest young stars who came (I believe) out of the GE small applicance business, who was transferred into the Computer Department as Manager of Marketing.  Vern was a wonderful guy and worked mightily in a very difficult situation (GE's computer business is a whole subject itself) and who eventually was replaced and returned to some other part of GE.  I was told that a few years later he committed suicide -- I don't know if that was in any way related to his experience at the Computer Department, but I cannot help feeling that it was.  Here was a bright, personable guy, destined for great things, who bent his pick in a difficult situation which was beyond what his specific field of experience could support.

And yet, General Electric was a highly successful company at that time. (I have been disconnected from GE for so many years that I don't know if any of what I have to say still applies to that company.  But the general thoughts are certainly still valid.)  So how could I reconcile the lack of visionary management and the crushing misuse of key talent that I observed first hand with the obvious success of the company as a whole?  I did, finally, find a way.

In a typical business, how does a newly arrived manager operate?  First and foremost, he (or she) models his behavior upon that of his predecessor.  This assumes that the predecessor's situation was not a disaster.  This provides continuity and gives time for the new manager to learn about the field of his new business and to see how to apply his generalized management skills.  With time and experience the new manager can then begin to tweak things to try and improve operations and profitability.  If the business is reasonably stable this mode of operation works fine, and I have no argument with the notion of professional management in this case..

But what happens in a new and/or rapidly changing business? Modeling one's behavior on that of the preceding manager doesn't work  -- the organization/field/market/technology is changing too rapidly, so, without specific knowledge and real understanding of the nature of the field involved, the new manager is lost.  Certainly the computer business was one of those.  Professional management simply doesn't enable managers to be successful in such fields.  And, in those days, GE had difficulty entering entirely new fields such as computers at least partly for these reasons, in my opinion.

Now the specific counter-example of jet engines is raised as one of GE's successes during this same time.  But that part of GE had little to do with the philosophy of professional management.  It was run by a bullet-headed German named Gerhard Neumann who ran his organization dictatorially and with real insight into the field in which the business participated.  He was a real leader in his field and could understand the rapidly changing environment into which GE was plunging.

So my take on Professional Management is simply:

If you are in a business that is stable or sufficiently slowly changing, the skills of professional management apply and will allow you to be successful.

If you are in a business which is rapidly changing, for any reason, then specific knowledge and understanding of that business are essential to success.

Now I have to say that I am out of date on this subject and whether what I have learned has any relevance today to either management or General Electric or any other organizaton, I don't know.  But something tells me that the overall lesson here is universal and will still be useful.

As a final comment on GE, it persevered in nuclear power because it was afraid not to be in the business -- it was too close to GE's mainstream heavy utility equipment businesses, such as turbines and generators.  GE left the computer business because it was afraid to be in the business -- it competed too much with too many of its existing customers.  Having decided to get out, GE was wise enough to get out of computers early.