The need for collaboration will mean accepting sanity in salaries and perks…Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.
Mitt Romney on the Big Three Bailout
Whatever you think of Mitt Romney as a politician, you have to give the guy his props as a businessman. His quote above pinpoints the essence of corporate America’s biggest problem. It boils down to arrogance, greed and a feeling of entitlement at the top of America’s organizations, certainly in the case of the incredible shrinking Big Three.
Japanese business leaders would agree.
Years ago, a Japanese manager working in the automotive industry told me that before he was assigned to his company’s U.S. subsidiary, he accepted without question the notion that Americans believed in equality. He said he expected Japanese coworkers to be rank conscious because the hierarchy is so ingrained in Japanese culture. But his experiences in corporate America quickly led him to conclude, “American managers are more elitist than even we Japanese!”
His conclusion was spot on. Consider these contrasting behavioral tendencies practiced by leaders in Japan versus U.S. manufacturing companies:
- Most American managers began their careers at a desk and many consider production-line work beneath them; Japanese managers in the same industry all started on the production line and for this reason have a high level of empathy toward and respect for the production line worker.
- American managers do the bulk of their work at a desk; Japanese managers spend more time on the factory floor supporting production and even work on the production line when necessary.
- American executives are rewarded for achieving cost-cutting targets that almost always involve downsizing; Japanese executives view lay-offs as a failure and loss of face by leadership, and employ it only as a last resort option; when lay-offs are unavoidable, the Japanese president accepts responsibility, and in many instances resigns.
- Many American managers wear neckties to distinguish themselves from the laborers, have private offices, and park in reserved spaces near the front door; Japanese leaders wear the same uniforms as production-line workers, sit in open offices and fight for the same parking spaces regardless of rank.
- When a line-worker in a U.S. manufacturer passes a defect to the customer, the American supervisor often employs punitive measures; faced with the same situation, the Japanese supervisor takes responsibility for developing a process that failed, then requests the operator’s cooperation in developing an improved process that prevents repeat of the same error.
To this list we can add that executives of the major Japanese automotive companies don’t fly around in private corporate jets-even when their companies are wildly profitable. Yes, the bigwigs at the elite Japanese automakers fly commercial like the rest of us. (There may be exceptions, but I’ve never heard of it.)
The common thread here is obvious: American management behavior not only lacks a healthy grounding in humility, it is downright elitist.
This highlights a big-time value contradiction in American culture. On the one hand, Americans embrace the tenet that all men are created equal. On the other hand, the American workplace is a competitive meritocracy where anyone willing to work hard and learn is free to climb the socio-economic ladder. That’s the theory, anyway.
Outside of work Americans are “equal”. But step into the workplace and status symbols abound—like who wears the necktie, who punches the clock, who eats in the executive cafeteria, and who gets to ride around in the company’s private jet—all constant reminders of each employee’s position within the hierarchy. To hide the elitist elephant in the room, American corporate culture allows employees to address each other by first name—regardless of rank—thereby creating an atmosphere of equality that everyone knows is bogus.
So why on earth would “equality loving” Americans pay more attention to the hierarchy than their rank-conscious Japanese counterparts?
The key driver is the implicit cultural assumption mentioned above–that the American corporation is a hierarchy based on merit. The logic goes like this: those at the top of the hierarchy “earned” and therefore “deserve” the entitlements. And if they don’t get them, then they’ll just find another company willing to pay market value for their services. This logic apparently applies even when these so-called “high-powered leaders” aren’t producing results.
Isn’t it ironic? Americans, who profess to cherish equality, battle the same demons of elitism that haunt the Japanese? Japanese elitism happens to have roots in a social hierarchy where merit is less important than age and experience; America’s version is an outgrowth of a hyper-competitive meritocracy.
Business leaders in Japan’s best companies acknowledge the threat elitism poses to morale, and have found surprisingly effective ways to counter it. In contrast, American business leaders are in denial (at least publicly). The result? Elitism continues to run rampant at the upper echelons of corporate America.
The Big Three executives have been trying for years to create “lean” cultures in their organizations, but just can’t seem to figure out where they’re falling short. Here’s a hint: how about taking a cue from leaders of Japanese competitors who work hard at staying humble?
If leaders of our domestic automakers could do just one thing to address their dire circumstances, it should be to squash elitism in the ranks. Starting with themselves. The alternative is to continue blatantly disrespecting the most important and valuable assets they have: the hard-working employees who actually create value for the organization.
Call me old fashioned, but what better way to keep leaders humble than by asking them to set an example for the people they are supposed to be leading? Coming from a blue-collar family certainly colors my view of the world. (Dad was a pipefitter.) But I think my personal disdain for elitism also reflects the values of mainstream America. If it didn’t, why would Americans be so outraged about the Big Three fat cats flying to Washington on private jets to ask for OUR tax dollars to bail them out?
Again, it’s not that the Japanese aren’t prone to the same elitist tendencies. But the best Japanese companies have found effective ways to offset these tendencies by demanding of their leaders, practices that keep all employees humble—like requiring all employees to start careers on the factory floor regardless of rank, sharing a common uniform, eating in the same cafeteria, and requiring all employees to fly commercial.
The challenge for corporate America then, is finding culturally compatible strategies that counter these destructive elitist tendencies, and in the process connect their organizations to the power of humility.
Humility alone won’t solve the deep structural problems that the domestic automakers face today, but it won’t hurt either. If there is any certainty in any of this, it is that for the Big Three to survive and prosper, cultural change must happen, and it has to start at the top. It’s high time for corporate America’s business leaders–for all of us–to give humility a chance.
The real tragedy is that the rank-and-file employees of the Big Three will suffer the most, too much of it caused by the arrogance and incompetence of their leaders. The poor employees are the real victims here.
A strong dose of humility for leaders of the Big Three would go a long way in bringing about the kind of long-term change needed to turn things around. What better way to humble them, than by denying a taxpayer financed handout–at least until they sell the private jets, cut their exorbitant executive salaries, and restructure their organizations to be truly competitive.
Yes, Mr. Romney has my vote on this one: bailing out the Big Three will only encourage their leaders to continue their wasteful, ineffective ways. Denying the automakers’ request for a bailout is just what the doctor ordered. Unfortunately, I don’t think it’s gonna happen. If I’m right, we can kiss that twenty-five seventeen billion dollars goodbye. Forever.
Sadly, all this is out of our control. The rest of corporate America can start focusing on areas well within its control. In future posts we will discuss realistic and systematic ways for an American organization with the right values to create a humble, reflective culture that embraces the true spirit of lean thinking.