Uncle Karl, we hardly knew ye.

I got a chance recently to get through Collins’ Built to Last, and have some ambivalence about it. On the one hand, the technique of analyzing “visionary” companies in the context of a control comparison company is a fantastic idea. The role that passion plays in accomplishment really stood out, as well as the all-important role of setting up circumstances for people to do their best work rather than simply demanding it warms my heart as a follower of Deming. It saddens me to see what has happened to several of his stars since 1994 when it was written: Hewlett-Packard the innovator ate a low-cost volume manufacturer in a move guaranteed to destroy the ideology that made them successful (I now understand why the board was fit to be tied,) IBM sold off its most iconic division to the Chinese and is wondering what it wants to be when it grows up, and then there’s Merck. Poor Merck. What happened? Is the whole Vioxx thing a witch hunt, or did they sell out the glorious “patient first at all costs” philosophy that made them what they are? I’d believe either at this point. Not to be outdone, BOTH Ford and their comparison GM hitched their . . . make that welded their . . . wagons to the high-margin SUV (how IS that pronounced?) market, and will reap the wages of sin with $3 gasoline.

My ambivalence comes from the tone, which is just so – twentieth century. There’s an assumption of scale and size and insularity that just seems uncomfortable in the lean, decentralized, (no, I refuse to say “flat”,) telecommuting current age. I would just love to see how things would be rewritten if Microsoft got thrown into the equation, not to even mention Google, or Enron for that matter.

The one Demingesque thing I continue to take away is that it’s all about the people. Are people happy? Motivated? Incorporated into the profit structure of the company? [see competition below] One must take care of one’s people. Even the prophet of capitalism understood that humans are not necessarily “resources” that can be strip-mined:

In the progress of the division of labour, the employment of the far greater
part of those who live by labour, that is, of the great body of the people,
comes to be confined to a few very simple operations, frequently one or
two. But the understandings of the greater part of men are necessarily
formed by their ordinary employments. The man whose whole life is spent in
performing a few simple operations, of which the effects too are, perhaps,
always the same, or very nearly the same, has no occasion to exert his
understanding, or to exercise his invention in finding out expedients for
removing difficulties which never occur. He naturally loses, therefore,
the habit of such exertion, and generally becomes as stupid and ignorant as it
is possible for a human creature to become. The torpor of his mind renders
him, not only incapable of relishing of bearing a part in any rational
conversation, but of conceiving any generous, noble, or tender sentiment, and
consequently of forming any just judgment concerning many even of the ordinary
duties of private life. Adam Smith, Wealth of Nations, 1776 (p734)

Well, that’s the philosophy. Now to hire the staff . . . . . . . .