Adventures of a Bystander – Peter Ferdinand Drucker

The Professional: Alfred Sloan

While I did my study at GM, Dreystadt-against the advice of GM’s top management-bid on the nastiest defense job around, the production of a high-precision item (I believe it was a new bombsight, and the first one to use electronics). Everybody knew that the work demanded highly skilled mechanics. There was then absolutely no labor available in Detroit, let alone highly skilled mechanics. “It’s got to be done,” Dreystadt said; “and if we at Cadillac can’t do it, who can?” The only labor to be found in Detroit were superannuated Negro prostitutes. To everybody’s horror Nick Dreystadt hired some 2,000 of them. “But hire their madams too,” he said. “They know how to manage the women.” Very few of the women could read and the job required following long instructions. “We don’t have time to teach them to read,” said Nick, “and few would learn to anyhow.” So he went to the workbench and himself machined a dozen of the bombsights. When he knew how to do it, he had a movie camera take a film of the process. He mounted the film frames separately on a projector and synchronized them with a flow diagram in which a red light went on to show the operator what she had already done, a green light for what she had to do next, and a yellow light to show what to make sure of before taking the next step. By now this is standard procedure for a great many assembly processes; it was Dreystadt who invented it. Within a few weeks these unskilled illiterates were turning out better work and in larger quantity than highly skilled machinists had done before. Throughout GM, and indeed Detroit, Cadillac’s “red-light district” provoked a good deal of ribald comment. But Dreystadt quickly stopped it. “These women,” he said, “are my fellow workers and yours. They do a good job and respect their work. Whatever their past, they are entitled to the same respect as anyone of our associates.” The union asked him to promise that the women would go as soon as replacements could be found; the Automobile Workers Union of those days was led, especially on the local level, largely by male white Fundamentalist Southerners, who did not even want white women as fellow workers, let alone Negro prostitutes. Dreystadt knew very well that he would have to layoff most of the women after the war when the veterans returned and demanded their old jobs back. But though derided as a “nigger-lover” and a “whoremonger,” he tried hard to get union agreement to save at least a few of the jobs the women held. “For the first time in their lives,” he said, “these poor wretches are paid decently, work in decent conditions, and have some rights. And for the first time they have some dignity and self-respect. It’s our duty to save them from being again rejected and despised.” When the war came to an end and the women had to be discharged, many tried to commit suicide and quite a few succeeded. Nick Dreystadt sat in his office with his head in his hands, almost in tears. “God forgive me,” he said, “I have failed these poor souls.”
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Once the committee spent hours discussing the work and assignment of a position way down the line-as I remember it, the position of master mechanic in a small accessory division. As we went out, I turned to him and said, “Mr. Sloan, how can you afford to spend four hours on a minor job like this?” “This corporation pays me a pretty good salary,” he said, “for making the important decisions, and for making them right. You tell me what more important decision there is than that about the management people who do the job. Some of us up here at the fourteenth floor may be very bright; but if that master mechanic in Dayton is the wrong man, our decisions might as well be written on water. He converts them into performance. And as for taking a lot of time, that’s horse apples” (his strongest and favorite epithet). “How many divisions do we have, Mr. Drucker?” Before I could answer this rhetorical question, he had whipped out his famous “little black book” and said, “Forty-seven. And how many decisions on people did we have to make last year?” I didn’t know. “It was one hundred forty-three,” he said, consulting his book, “or three per division, despite all the people who went off to wartime service. If we didn’t spend four hours on placing a man and placing him right, we’d spend four hundred hours on cleaning up after our mistake-and that time I wouldn’t have.

“I know,” he continued, “you think I should be a good judge of people. Believe me, there’s no such person. There are only people who make people decisions right, and that means slowly, and people who make people decisions wrong and then repent at leisure. We do make fewer mistakes, not because we’re good judges of people but because we’re conscientious. And, ” he emphasized, “the first rule is an old one: ‘Never let a man nominate his own successor; then you get a carbon copy and they’re always weak.'” “What about your own succession, Mr. Sloan?” I asked. It had been publicly announced that he would step down from the chief executive office with the ending of the war. “I asked the executive committee of the board to make that decision,” he said. “I did not tell them whom I would recommend, although they wanted to know. I told them that I would tell them were they to pick someone whom I thought unqualified. They didn’t pick the man I would have picked (it was generally assumed he had favored Albert Bradley rather than Charlie Wilson, whom he thought “a little erratic”); but they picked a man whom I cannot object to-and they’ll turn out to have been right. The decision,” he concluded, “about people is the only truly crucial one. You think and everybody thinks that a company can have ‘better’ people; that’s horse apples. All it can do is place people right-and then it’ll have performance.

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