In The Driver’s Seat

A BETTER IDEA: REDEFINING THE WAY AMERICANS WORK By Donald E. Petersen and John Hillkirk, Houghton Mifflin, 274 pp., $22.95.The [...]

April 1 1992 by Lawrence G. Blackmon

A BETTER IDEA: REDEFINING THE WAY AMERICANS WORK By Donald E. Petersen and John Hillkirk, Houghton Mifflin, 274 pp., $22.95.

The reader may take his choice whether this is a how-to or a how-we-did-it book. Either way it is probably more of a self-portrait of Donald Petersen than he intended. There seems to be a death wish by CEOs who have presided over successful resuscitations of their companies only to retire, write about their experiences, and then watch their successors take nosedives.

Petersen assumed the presidency of Ford Motor Company in 1980, the chairmanship and CEO spot in 1985, and took early retirement in 1990. During that 1980-90 period, Ford came alive. Quality, cost, and market share improvement restored profitability. It must have been an especially delightful feeling for him that his phenomenal success followed so closely on the heels of the exit of Iacocca from Ford and that he outperformed Roger Smith at GM. Four out of the five years between 1986 and 1990, Ford’s earnings exceeded those of GM. He was the recipient of all kinds of justly deserved recognition from the business press, including Chief Executive, which recognized him as the Chief Executive of the Year in 1989.

And then Petersen seems to have been tempted by the devil-the book devil, that is. The truth of the matter is that his book does not make for scintillating reading. It is loaded to the gunwales with cliches. However, it does provide a detailed account of the transformation Petersen implemented at Ford.

Until the 1980s, the managements of most big outfits shared a common characteristic: arrogance. There is an old aphorism that could have been applied equally to them, namely, “You can always tell a Harvard man, but you can’t tell him much.” Their very size encouraged the belief that everybody and everything must yield before them. The auto companies’ managements, Ford included, embodied this rather disagreeable trait, despite the fact that they paid lip service to the idea of participative management.

Thus it is small wonder that Petersen had his work cut out for him. The relationship of dealer to manufacturer was so unequal that it is no wonder that quality as desired by the customer was not understood as it should have been. The relationship of hourly employees to a powerful management was inevitably adversarial. The vendor to the corporation was at the mercy of the purchasing function. What Petersen had going for him in 1980 was that performance was so lousy that Ford was like a cherry tree ripe for picking… and he picked.

It is almost painful to read the story of the adoption of statistical process control at Ford. Among the supply companies to Ford, large and small, were many who had for a very long time been employing statistical process control, and I mean real statistical process control. Petersen realized that his methods wouldn’t work at Ford unless the top executives were committed to making quality improvement their preeminent concern.

He also makes much of the improvement of relations with the top Ford union leadership, starting with Don Ephlin, particularly in gaining support for the introduction of participative management. When he observes that “it’s more difficult to maintain rapport at the plant level of the union,” I suspect more than a modest understatement. Petersen is well aware that industrial union leaders are elected, and the management that neglects that fact is in for surprises, particularly at the plant level.

There’s a curious paradox present in Petersen’s story. Here is a corporate leader who achieved a remarkable degree of success that he ascribes to having “redefined the way Americans work.” The heart of his redefinition is participative management, incorporating all of the notions of statistical process control. And he is right as far as that goes.

But I think the paradox and the rest of the story is contained in a few of his remarks: “People ask me all the time, ‘What’s the first step for all of this?’ As you can see from what we did at Ford, the main thing is just to get started.” I don’t know Petersen from a hill of beans, but I will bet my last dollar that his outstanding characteristic was that he got things done. You can get rid of layers of management and form all the organizational circles and matrices you want, and there still must be a Don Petersen in a top position, getting things started and getting things done.

Lawrence G. Blackmon is former CEO and president of Microdot, a CT-based supplier of connecting devices and ingot molds to Ford-as well as GM and Chrysler-during its transformation in the 1980s.