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East of Broken Bow | I got to hear Lee Iacocca speak years ago. He spoke of too much middle management that really didn't know what the company did, what it was supposed to do, or even what the vision for the future was. He talks about an entire floor in the Chrylser building full of middle managers. When asked what they did, or what their title was, their answers used up a lot of words but didn't really say anything. So, what Iacocca did was give everyone on that floor a vacation. The reason behind this was to see exactly what they did or did not do (kind of like when your wife threatens to stop doing housework for a week so you'd be aware of all she does). Long story short, it turns out that no one missed what those people did, so he let them go to no detriment to the company.
I would say one common thing that kills once great companies (and other entities like cities) is getting too top-heavy in management to where you can't react to changes in circumstances, spending money on too many middlemen who don't do much, and not watching expenses which leads to money being spent on black holes that have little to no actual benefit. The money flowed out, but with no accountability (sound familiar??)
An excerpt from Iacocca's memoirs
https://mumabusinessreview.org/2024/MBR-08-12-165-171-Sayyadi-Iacocc...
Within two months of my presence at Chrysler,
something like an avalanche hit me. It seems that
the company’s cash cow (a Boston Consulting Group
term from the matrix of Star product, Dogs, and
Cash Cow products) had hit the bottom of the pot.
Little by little, I realized that Chrysler basically has
no systems to control the financial flow. Worst of all,
no one knew much about financial planning and
there were no answers to even the simplest finan
cial questions. After I was elected as the chairman
of the board of directors, I slowly evaluated each
position of the board member. Of course, Chrys
ler’s problems were not limited to senior managers.
People in all ranks were intimidated and isolated.
All the managers knew that I had gone to Chrys
ler to shake the house, so everyone was afraid that
the goal would come true. They were right. With
in three years, I had to fire 33 out of 35 executives
(Iacocca, 2008).
It was not enough; incompetence is a cancer that
draws attention to the problems and not the solu
tions. As Frederic Winslow Taylor put it at the turn
of the 19th century, soldiering is real and right in
your own backyard. The incompetent manager hides
behind the team’s weakness. | |
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Cutting cost
