Editor's Note: The following article originally appeared in the March 1984 issue of Implement & Tractor.
Dr. Eugene E. Jennings, a widely known and quoted professor of business administration at Michigan State University, gave a talk titled “Industry Revival — Why We have to Step Back to Go Forward.” Essentially, here’s what he was saying:
In the 1960s and 1970s, when we were having unprecedented growth, American Industry threw away the motherhood of seasoning. But we are going back now to this basic, and the 1980s will eventually be judged as having launched one of the most creative ages of American management.
Said Jennings: “American managers don’t know the meaning of seasoning! It means that if you make a mistake, you must stick around and clean it up. Example: Texas Instruments’ board of directors voted not to fire the management that had made mistakes; rather they told management to get the problem straightened out. If we are going to have entrepreneurs, we have to have risk-taking.
“In the 1960s,” said Jennings, “the guy who failed was either fired or sent to the corner — given problems that don’t need solutions. It was in the ‘sixties that the American economy grew so fast it outgrew management, and violated the motherhood of seasoning. Our managers move too fast away from their mistakes and went to the top without muck on their faces, without having to clean up their mistakes. It was then that we lost our tolerance for failure.”
Part of the returning of the seasoning concept to management, he noted, is that an executive must be given the right amount of challenge, which is not compatible with moving him around and upward too rapidly. “The faster they rise,” he observed “the harder they fall.”
Today, he said, six years in a job is more like it. “He has a chance to learn the ‘back nine’ of management. Age and experience are going to count again, as they once did!”
Jennings cited two other challenges that are developing in American corporate management, both in connection with the return of seasoning: gleaning and resizing.
“In gleaning,” said Jennings, “we work in upgrading the weaker managers, which allows us to avoid the star system. You see, a good team of average managers can beat a house of all-stars. And since the weaker managers have the most potential to grow, the rewards can be greater.”
Jennings said that resizing is not merely reducing a company in scale to a smaller replica of what existed before. “There was a 10-year period in which the pyramid shape of companies was transformed into that of a light bulb. We were growing staffs at an alarming rate; staffs were very heavy in relation to line people. It’s the readjustment that’s not taking place, getting that pyramid shape back."
Resizing is two things — increasing the span of control and the technical-managerial mix, Jennings explained. “Managers were getting so that they only had one or two persons reporting to them. The resizing process gives the manager more people to deal with directly. The president of General Electric, for example, has a 12-person span of control.”
The right mix of technical and managerial depth is also important, he said. It has become apparent that mangers must know the technical side (which includes knowing the markets as well as technology itself). “Lee Iococca is a manger who knows the product and knows where to find the people who can get the job done.”
Another aspect of these basic changes in management emphasis, as cited by Jennings, is long-term measurement of job performance. “Six years in a job is not too long,” he said. “That provides time for a manager to make mistakes and clean them up, and it’s thus appropriate to base his bonus on six years of performance, not just one or two.”
“In the 1960s,” asserted Jennings, “we looked down our noses at the idea of leadership. That was Boy Scout talk. But leadership is really dealing with change — it’s taking companies, or countries, into unexpected areas where they must deal with new things. The manager only takes us where we are expected to go.
“Harry Truman was a maximum leader. He took us to two ideas with irreversible consequences — the Marshall Plan and the Breton Woods monetary agreement. He didn’t devise these plans, but he had the vision to see how they were vital to the preservation of our values.”
Jennings noted that a real leader knows that values are more important than objectives. “At Sears,” he commented, “everybody from the first-level manager to the chairman of the board knew Sears values, they knew what they believed in. What does the company stand for?”
After Jennings’ presentation, a panel of three FIEI officials discussed the topic: David D. Koentopf (Steiger Tractor), president of the Farm Equipment Division; Mervyn Manning (Ford Tractor) FIEI vice chairman; and Howard Brenneman (Hesston), FIEI vice chairman.
Koentopf: “I’ve had to learn these lessons the hard way. You mention the technical managerial mix. We also need to do a better job of getting to know our customers and our competitors.”
Manning: “It seems to me that the Japanese do the things we’ve forgotten. How did we come off the track?”
Jennings: “We knew product design. We knew marketing strategy. We knew how to make quality reasonable. But in the 1960s, the customer had all this money to throw at us, and we began using quality as a chance to raise the price.”
Brenneman: “How can we be sure we’re building these maximum leaders?”
Jennings: “I don’t know if you can build them. Maybe you can spot the ones with vision, however. And when you find it, don’t kill it — nurture it.”
From the floor: “Where did the business schools go wrong?”
Jennings: “We didn’t go wrong in teaching strategic planning for finance or marketing. Analytical orientation is not wrong. But you can’t teach creativity. One of the problems is that our teachers never got their feet wet in the real world, until lately.”
Other Comments by Gene Jennings
“We made faulty use of our MBAs in the 1960s and 1970s. We judged them by their results and not by the means used to attain them. We looked at what was being accomplished and didn’t ask ourselves at what cost these were achieved …
“Changing the basic values of a company is a 10-year job …
“I don’t respect a board that ipso facto tosses out a guy who screws up; after a time, maybe, but not without a chance for repairing the mistake …
“I also don’t respect guys who bump into a tough boss and immediately turn and run, rather than working it through …”