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The essential problem with most business management is exactly how you said it. When there is a visionary at the top level who has a deep grasp of what is involved in a company's products, knows how to make them, and understands where the strengths are and what needs to be improved, a company will continue to change, grow and prosper.
When the bean counters take over, they're always a few beats behind, and as you say, don't have the knowledge they need to keep innovation going.
That's why some of the top engineering colleges now require students to spend as much time in the tool shop as the classroom, getting their hands dirty actually building what they first design. The fact is there is a place for the biz school grads, the salesmen, the engineers, and all the rest. But they all have to have equal weight inside their company to keep it competitive, and each section has to have it's own skills. The best Boards of Directors should all have a similar mix of specialists to keep a company strong. And the guy at the top needs to know how every product made works and what goes into it.
Steve Jobs wasn't always a good visionary, but he was a good enough visionary. His lead team took his ideas and made them real, and didn't have to account to anyone but him. The Apple biz school graduates could take care of the rest.
Jobs was no genius; all he really had was a profound knowledge of his products and a deep understanding of how people interact with complex machines. he also had another great strength, a keen set of design aesthetics. Jobs innately understood a handsome machine will always find a market.
When there is a visionary at the top level who has a deep grasp of what is involved in a company's products, knows how to make them, and understands where the strengths are and what needs to be improved, a company will continue to change, grow and prosper.
When the bean counters take over, they're always a few beats behind, and as you say, don't have the knowledge they need to keep innovation going.
Microsoft. Once Steve Ballmer (a bean counter) took over, then innovation died. Microsoft phone, Surface, Vista ... and screwy and useless boxes that replace useful icons on the Desktop. Ballmer even foolishly demanded a keyboard on Microsoft phone because he could not understand what the boys in Surface development group knew. Apple understood it. Steve Jobs was not fixated on obsolete concepts like a business school graduate is.
Microsoft was once great because it had "a visionary at the top level". Balmer so screwed up that Bill Gates now spends 30% of his time back in Microsoft trying to fix it.
Every company needs a good bean counter. But he should never be promoted beyond CFO. A CFO who becomes a CEO will destroy innovation often using the enemy of innovation - cost controls.
Radio Shack is only another example of what everyone should have known decades ago. They could not find one engineer who said it was safe to launch Challenger. Not even one. So bean counter management murdered seven astronauts. It was no accident. They could not find even one engineer who said it was safe to launch.
Fiorina in the HP/Comapq merger meeting had no idea what employees were saying. She insisted that being #1 or #2 in an industry meant higher profits. Wrong. Innovation means higher profits and then becoming #1 or #2. But she only understood what business school teach - ie economy of scale.
This is the best example of what Jack Welch did to GE. If it wasn't #1 or #2 in their respective industry, he sold it off. That is how he pared GE from 400k to 300k employees in the space of 6 years or less.
Oh yeah, he was loved by the stockholders at the time, but long term he did more damage than the people at GE still don't understand.
Wow, not one person in their corporate leadership has any electronic background. They all came from retail like Walgreens, JC Penney's, Sporting goods stores, etc.
I have stopped in at the local RS looking for PL-259 coax terminals. They either had none in the drawer, or they had 2. I asked for an SO-239. The gal didn't even know what it was!
For Amateur Radio operators and CBers, the stores are now just "The Shack". There is no "Radio" any more, hasn't been for years. while they might have a few low-end CB antennas, and 1 or 2 radios, they have NO ham gear at all, other than some 50 ohm coax and (maybe) a 10 meter or 2 meter antenna.
It is really quite sad to see a business lose its way like that.
In my work I use 50 ohm coax a lot. It has been a long time since I found any 50 ohm coax at a Radio Shack. They have lots of 75 ohm for TV use.
Radio Shack stocked my fridge and paid the rent when I was in undergrad, and after knowing I would never need a retail job ever again, I somehow ended up in RS again for three months while waiting for grad school.
When I worked there in the early 1990s, it was clear that the Shack had made some business blunders, like trying to compete as a computer manufacturer. But I suppose they were no more error prone in their judgment than any other major company typically would be -- at least not then.
By the time I briefly rejoined them again a decade later, however, it was clear then they were dead in the water. They had managers quitting every two or three months. It got to the point where the employees - many of them new and part-time like myself - ended up running the stores themselves. And when they finally got around to hiring someone, it was usually a jerk who was getting their first taste of management and usually didn't have the maturity or the EQ to manage people.
Once Radio Shack was no longer the specialty gadgets store, it suddenly found itself without an identity. They had the slogan "You've got questions, we've got answers" but that was complete nonsense. At one time, that was actually very true -- they really were more knowledgeable than their competition. But they started gutting wages to compete on price. They focused less on their strengths, which was product knowledge and service and played right into the hands of their competitors. Problem was, they were in no position to compete. Radio Shack got squeezed by big box stores like Wal-Mart or others that could keep high inventory and purchase costs low.
I'm sure that it probably crossed someone's mind that they were not going to win wars against Wal-Mart or even Best Buy, but their organizational culture wasn't the transformative type. They were, like so many companies that fail, convinced that what made them successful in the past is what would carry them into the future.
This is the best example of what Jack Welch did to GE.
Jack Welsh also preyed on other MBAs who had no idea how the work gets done. Bradshaw of RCA was cost controlling. Rules were created that said nobody could transfer within the company. Deals were made with other nearby companies that they and RCA would not poach the other's employees. All this to keep engineers salaries down. I know one software engineer who had to quit RCA for two weeks in order to be hired into another RCA facility as a new employee.
RCA created a video disk by ignoring the superior equivalent called a video recorder (Sony's BetaMax). RCA made tiny cameras for the space shuttle. Same cameras could have been marketed as video recorders or for portable cameras in studios. But executives in RCA were from business schools. Therefore could not see solutions available for new markets. RCA was even making CMOS uProcessors long before Intel was. But cost controls said they had to make that COSMOS uProcessor profitable before they could spend money on software development system. RCA was making LCD when computer video monitors had just replaced teletypes for computer interfaces. But that operation was starved for capital until the Raritan operatoin could make LCD products profitably. Early LCD products were video displays and day/night rear view mirrors for cars.
Bradshaw used spread sheets. He had no idea of RCA's value or of the so many stifled innovations. He also had many companies such as Hertz and Banquet Foods purchased on another outright MBA lie called diversification.
Jack Welsh made a tiny offer for RCA. Bradshaw was offered a $multi-million bonus if he made the deal. So Bradshaw sold RCA to GE. After all, business schools all but teach the purpose of a company is to enrich top management.
Jack Welsh then sold off many irrelevant pieces of RCA. He made so much money that GE got the NBC TV/radio/studios/network for free. An MBA Bradshaw, doing what bean counters do, enriched top management. And had no idea what his company was really worth had he encouraged innovation instead of cost controls. Even the stockholders got scammed. Even the stockholders did not understand why their stock prices were so low. Even the Sarnoff labs that once created so many world wide innovation (including color television and the first transistorized TVs) were sold off for peanuts. All in the name of another obvious myth: the purpose of a company is profits - for top management.
Jack Welsh also preyed on other MBAs who had no idea how the work gets done. Bradshaw of RCA was cost controlling....
It's spelled Welch, as in welching on a promise or a bet. More fitting using it the way he spells it himself.
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