Chapter 29: The Clash of Old and New Ideas
Since McNamara and others came to the company, the phone calls in Walter's office have not stopped. The head of the company www.biquge.info's department kept calling, complaining that the "student dolls" were affecting their normal work, and they pestered everyone to ask for some numbers that they could not have provided. The older generation of company executives, who grew up on the factory front, were naturally suspicious and resistant to the Harvard students.
According to the management philosophy of McNamara's "blue-blooded elite", facts can be measured, and things that cannot be measured are not facts, but just a phenomenon. Everything has to have data, and every question has to have a number as an answer. The belief in data and facts is engraved in the bones of these modern business management scholars. The older generation of company executives, on the other hand, have little higher education, and they are familiar with front-line workers and front-line business processes, but they are at a loss to turn the familiar work into abstract charts and figures.
Even as one of the few academics at the top of the company, Fred, a mathematics graduate at Columbia University, was skeptical of McNamara's approach. "They actually demanded that all the documents submitted be accompanied by figures and charts." Fred complained to Walter on the phone, "Can't they be literate, they can only read numbers!" ”
John had foresight of these situations. He knew that the management reform would trigger a backlash from the existing management. However, on this issue, as the leader of the company, he should not express his position too early, so he avoided it early, and in fact, he did not go to the office at all in the past two days. But the complaints of the company's executives reached his ears through various channels.
Inside, John is more in tune with McNamara's management philosophy. The modern business management education he received in his previous life made him accustomed to making decisions based on detailed survey data, rather than on previous experience and subjective assumptions. At present, FedEx does not have financial control, budgeting, production schedule, organizational charts, cost and pricing studies, economic analysis and competitiveness surveys, which constitute the basic elements of a modern enterprise management system, and does not have various data and information as the basis for decision-making, and he himself is very uncomfortable. That's why he invited McNamara to change the current situation of the company's "patting his head" to make decisions.
But not everything can be measured in numbers, and John is well aware of the dangers of data-only theory. After all, the world they live in is made up of flesh-and-blood living people, not a bunch of completely rational and cold data. Later, McNamara made such a mistake when he was US Secretary of Defense. During the Vietnam War, he used the 'systems analysis method' to make judgments about the war through data analysis. "If a village has a fence of a certain length around it, is guarded by militia, and the village chief has not been killed by the Viet Cong in the past three weeks, he will list the village as a 'safe' village." As a result, the results of various systematic analyses suggest that the Americans are winning the war, which is not the case.
So, John wasn't going to give McNamara too much support right now. The older generation of company managers is not useless, on the contrary, they are the foundation of the company's operation. John needed to be careful to maintain the balance of power between the old and the new, allowing them to gradually accept each other's strengths and adjust their own thinking. Reform is not a revolution, it has to be done slowly, and overnight it will only exacerbate the contradictions and make things worse.
The management revolution initiated by McNamara, characterized by data analysis, market orientation, and an emphasis on efficiency and management control, is destined to be a long-term process. Two months later, Harvard's team submitted a preliminary report on corporate governance reform, but John did not fully adopt it, but ran a pilot in Los Angeles, California.
There, they expanded the functions of the Comptroller to include planning, forecasting, and quantitative analysis, established standards for evaluating business unit performance and monitoring business unit operations, and redefined the functions of the finance department from traditional areas such as auditing, accounting, and cash management to one that continuously evaluates the company's costs, prices, and profits, the efficiency of distribution and services, and the financial analysis of long-term planning and major capital investments.
When the effects of this management reform were first revealed a year later, all the company management was shocked. The Los Angeles branch has reduced operating costs by one-third and doubled its transportation efficiency. Eventually, at the company's board meeting, McNamara convinced all the company's top executives with a detailed comparison of data. The new management approach began to be implemented throughout the company, and McNamara became the director of the company's newly created Systems Analysis Office.
Of course, this is all after 1939. In February 1938, McNamara was busy with a group of Harvard students at the company measuring data from "the average time it takes to get a load out of a storage center" to "the average loss per 100 kilometers of freight per ton of cargo." John himself, on the other hand, is caught in another "clash of old and new ideas".
The two sides in this "clash of old and new ideas" are father and son Henry Ford and Edsel Ford. John was just unlucky enough to get into the pond. A year ago, after John's "Ford Plan" collapsed due to Bennett's obstruction and the Detroit auto workers' strike, he was cut off from Edsel for a long time. However, after FedEx's fame grew, Edsel once again took the initiative to find John and wanted to renew his relationship.
Because the market for private business is still too small at this stage, John has no intention of tearing his face for this bit of mosquito meat and the United States Postal Service. Therefore, FedEx has always implemented the CRM customer management model, and strives to establish a stable strategic cooperative relationship with large enterprises. The effect is very good, and the company's business is growing very quickly.
And, there is a hidden benefit to this practice. Driven by the future globalized market, these big companies will sooner or later move out of the United States. At that time, under the effect of the interest binding chain, the implementation of FedEx's globalization strategy will be easier. Because these multinational corporations are like a flagship, and in its "combined fleet", of course, there is no desire for dilapidated "sailing ships".
This was the case with the previous shipping giant Maersk Group, which formed stable global agreements with multinational companies such as IKEA, Nike, Adidas, and Michelin tires. Wherever these companies operate, Maersk Logistics can extend its business. For example, IKEA's logistics tasks for more than 2,000 suppliers, 164 stores, and more than 10,000 furniture materials in 29 countries around the world are contracted by Maersk.
After seeing the effect of FedEx's cooperation with Westinghouse Electric and Chrysler Motors, Edsel Ford was moved again. Taking advantage of the fact that Henry Ford Sr. was busy building new branches in Europe and had no time to be distracted, Ford Motor Company once again reached a cooperation agreement with FedEx. But Bennett jumped out again. He also moved back from Europe to Henry Ford Sr., and vetoed the resolution that had already been passed by the board of directors.
According to insiders, Henry Ford Sr. scolded Edsel in front of all the company's top executives, accusing him of betraying the company's interests, betraying Ford's proud "Jung factory model", and resolutely not allowing him to hand over the company's transportation lifeline to outsiders.
John couldn't afford to complain about Henry Ford Sr.'s old production philosophy of "planting rubber trees, mining ore, and rolling off the assembly line, all striving to be done in the Jung factory". What age is it that the "self-sufficient" small-scale peasant economy is still engaged in, and I don't look at the current 93 days a year in Ford's own transportation department, which is engaged in strikes and labor disputes, and how inefficient it is.
What annoyed John even more was that the elder Henry also repeatedly criticized John and his FedEx company in public. "This old immortal anti-Semite, what are you doing when your father and son have a conflict, and it involves me." But after all, the old Henry is over 70 years old, even if he is scolded by him pointing his nose to his face, what can he do as a junior John. In case the old man is angry, he is still in the circle.
But then again, John is now more sympathetic to Edsel. Henry Ford Sr. was not only a power-hungry man, but also a staunch anti-Semite. The newspaper Debao Independent, which he founded in his hometown after his retirement, has been promoting the "Jewish threat." Recently, he has been in a hot fight with the Nazis, and not long ago opened an assembly plant in Berlin to supply trucks to the German Army. For this, he was awarded the Grand Cross of the German Order of Merit, the highest medal awarded by Nazi Germany to foreigners. Hitler even wrote a congratulatory letter himself, in recognition of his "pioneering work in making the automobile a mass commodity."
John now understands why during World War II, Edsel worked so desperately to produce car and aircraft engines for the U.S. military, and finally exhausted himself to death. If you don't work so hard, Ford may be seized and confiscated by Congress. This is all the bane planted by old Henry, and he really can't afford to be hurt by having such a pit son's father.
After being so angry that he didn't eat well for a few days, John decided to fight back. Although there is no way to take the old Henry for the time being, it is also good to take the hateful Bennett to vent his anger. It's only fitting that this kind of thing should be left to Melvin, and I believe that Edsel will also support him in teaching this old rascal a profound lesson.