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Great book for those interested in US business history, and how it all went wrong
7

Great book for those interested in US business history, and how it all went wrong

Great book for those interested in US business history, and how it all went wrong

4
(OP)
Hi folks

I'll start by saying that I am in no way affiliated with the authors/producers of this book. One of my uncles is a (now retired) engineer and avid book fan, and told me this was an absolute must read for me being a young engineer.

The book is called "THE PURITAN GIFT" and traces the roots of american managerial culture throughout the three centuries since the puritan migration started in the 1600's to what it is today.

The authors are two British brothers now well into their 80's, Will Hopper who is an investment banker in london and Kenneth Hopper an industrial engineer who worked at proctor and gamble and created their just-in-time production control method in the 1950's.

Both brothers contend that the puritans had a specific moral outlook that shaped american business and led to its meteoric rise. The fundamental mission that puritans lived by was, however conceived, to create the kingdom of heaven on earth. Using this as the guiding principle the puritans focused on these principles to get there
1. A moral outlook that subordinated the interests of the individual to those of the group
2. An aptitude for the exercise of mechanical skills, which followed a profound respect for engineers and technologists
3. An ability to galvanize and marshal financial, material and human resources to a single purpose on massive, or a lesser scale

This made america the greatest nation the world had ever seen. The americans then transplanted this "gift" during the american occupation of japan post WW2. Under the allied command general macarthur ordered a team of american engineering managers, homer sarasohn, frank polkinghorn and W Edwards Deming (some of you will have heard of deming before) to rebuild the country and teach the japanese American managerial practice, which they then took and enjoyed their own post war miracle and whose quality products became the envy of the world.

In the 1970's, however, the american business landscape changed with the rise of the "business school". With it came the notion that management is a profession, a theoretical practice that could be applied to anything. They are scathing of the what the business school and its poster child degree, the MBA, has done to american industry and their arguments eloquent yet profound. They argue that companies are best run when they are run by engineers, or whatever domain that company may be in, it is best run by people who have requisite technical ability. They call this the craft of management, which will hopper talks about in this short clip http://www.youtube.com/watch?v=nn3Jv6UWH6g

Anyhow, what was meant to be a short run down has turned into a full synopsis! The book was awarded top ten business books of the year in 2008 by financial times (who subsequently called it top ten business book of the decade) and praised by many top business folks. Ironically, harvard business review praised it despite being viewed in a negative light in the book. I found it an absolutely fascinating book, and felt compelled to recommend it to other Engineers out there, hence this thread. Easy read and lots of stuff regarding the profession.

Cheers
Sam

http://www.amazon.com/Puritan-Gift-Reclaiming-Amer...

RE: Great book for those interested in US business history, and how it all went wrong

Amen

RE: Great book for those interested in US business history, and how it all went wrong

Amen from over here too.

Thank you Sam. I'm buying.

Best to you,

Goober Dave

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RE: Great book for those interested in US business history, and how it all went wrong

Quote:

frank polkinghorn and W Edwards Deming (some of you will have heard of deming before) to rebuild the country and teach the japanese American managerial practice,
When I was in engineering school back in the first half of the 90s, I took several business classes. In every class the managerial model of empowering the employee and developing an atmosphere where employees take pride in their work and responsibility for producing a quality product was stressed and Demming's model was frequently pointed to as an example. The concept was that high wages and high profits were obtainable in an environment of high quality and high productivity.

I would also have to say tat just about every private company I worked for since graduating did just the opposite. I can also say that the only one that I worked for that exists today still failed in several of its product lines.

RE: Great book for those interested in US business history, and how it all went wrong

I'm right there with you, Noway2.

Best to you,

Goober Dave

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RE: Great book for those interested in US business history, and how it all went wrong

The company I work for pays table scraps ($20/hr) for engineers, and we are doing just fine (on paper, perhaps with accounting tricks). Mega-bonuses for the management at the expense of the workers, I'm sure.
It doesn't matter if it's sustainable - when the company goes under or is bought out, the managers will have made their millions running it into the ground. The only people screwed are the grunts who are out of a job.

RE: Great book for those interested in US business history, and how it all went wrong

It's PC to dump on MBAs these days, but "They argue that companies are best run when they are run by engineers" strikes me as simply a mindless logic inversion. We all know of examples where a particular engineer should never be allowed anywhere near a decision to be made, and I've personally experienced lots of engineers that ran their businesses into the ground, all with nary an MBA in sight.

Not everyone is suited to be an engineer, and not every engineer is suited to be a manager or CEO.

TTFN
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RE: Great book for those interested in US business history, and how it all went wrong

IRstuff - Sorry, that was lazy cynicism on my part

In the book the authors never blindly state that engineers are simply better and MBA's are bad. In fact they cite a few examples of where engineers have been ruinous as well. They more so attack the notion that managers are just that, managers, and they needn't have any knowledge of the companys products, just general knowledge of "what a business is supposed to do" and what numbers to look at. It would be nonsensical to say that all MBA's should be fired and only engineers allowed run companies. In fact engineers would fail all the same if a company is poorly structured and a toxic culture thrives . The central theme is that its how companies are structured like an inverted pyramid, such that they are run "top-down" rather than "bottom-up". The abiding framework of bottom up is that responsibility should be thrown down to the lowest level capable and willing to accept it and that management is better when it is "participatory" rather than authoritarian. I'll cite a paragraph in the book where I think the author's put it best.


"How was bottom-up to be achieved? The answer is best conveyed in metaphorical terms. Imagine an automobile with dual controls. The manager sits at one set and his subordinate at the other. The manager has the final responsibility for deciding where the car is going and by what route but, since he trusts his assistant, he shuts his eyes and reflects on other matters while the other person drives. However, if a change of plan is required, the manager can take over the controls at the drop of a hat . More usually, he will simply offer advice - and his advice will be heeded because he is respected for what he is and knows. The informal structure does not in any sense supersede or replace the formal one; they co-exist and feed on each other. At the heart of the system lies mutual trust."


RE: Great book for those interested in US business history, and how it all went wrong

I am NOT defending the MBA legions here.

Quote (IRstuff)

We all know of examples where a particular engineer should never be allowed anywhere near a decision to be made, and I've personally experienced lots of engineers that ran their businesses into the ground, all with nary an MBA in sight.

Agreed. But you can swap the terms "engineer" and "MBA" in that thought too. You can also substitute butcher, baker, tinker, tailor, etc...

People run businesses, not titles or degrees. One of those degrees (starts with M, ends with A, and has a B in the middle) does seem to attract the run-it-into-the-ground or loot-it-and-shoot-it types.

Best to you,

Goober Dave

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RE: Great book for those interested in US business history, and how it all went wrong

Quote:

One of those degrees (starts with M, ends with A, and has a B in the middle) does seem to attract the run-it-into-the-ground or loot-it-and-shoot-it types.
I have to wonder if they are actually putting what they're learning in school into actual practice, which would be contrary to my experience in business education, or if some other cultural factor is at play?

To me it seems that over the last 30 years or so, there has been a fundamental change in how the majority of business operates in that the focus is almost exclusively on the short term. I believe that Dell and the rise of Asus is a prime example of how this thinking can go awry. Asus used to be a component supplier for Dell and in the short run it made economic sense for Dell to 'offshore' more and more of the production to Asus. Finally, Asus went to the end customer and said, "Hey, were making the entire machine, why not buy it from us instead at a lower price?" It almost put Dell out of the business and they've since had to adapt their focus, e.g. Dell-Sonicwall.

A few years ago, I left private industry and left manufacturing and joined an organization that thinks and acts very long term. The difference is striking in terms of operational philosophy.

RE: Great book for those interested in US business history, and how it all went wrong

Noway, what industry did you migrate to? That long term outlook sounds very appealing.

Maui

www.EngineeringMetallurgy.com

RE: Great book for those interested in US business history, and how it all went wrong

I'll just say that the notion that fitting any sort of paradigm on running a business into a pithy phrase like "bottom-up" is equally, and overly, simplistic. Running any endeavor by committee is counterproductive and often even more disastrous than a top-down approach. There is a reason that humans evolved governance over the millenia, from patriarchies, to tribes, to towns, etc. Managers exist for a reason. While I disagree with the Zenger-Miller notion from the 80's that managers can perform without any knowledge or understanding of the technology, I also reject the notion that a bottom-up approach is more valid. Neither is; like particle-wave duality, business must run with both top-down and bottom-up properly balanced and working toward a corporate goal.

TTFN
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RE: Great book for those interested in US business history, and how it all went wrong

Yes, it does sound interesting to think long-term.

1. Private equity firms are looking to flip the company within 4 to 5 years (usually). There is no long-term for them, especially in those last two years of ownership, in which their level of income growth is the primary factor in how much they get at selling time. Cut expenses by $1.00, get $10 more in capital gains.

2. Publicly-traded company executives try to make sure their stock price stays up an does not dip. Hiring new folks or purchasing new equipment to fuel growth over the next 10 years will put a ding in this quarter's profit. Stock owners will bail out. Solution? Leave the long-term plan alone, it'll probably change within the year anyway. Any short-term dip in profits will scare off the stockholders, and that's bad if you're a senior executive. It's safer if the executives play Minesweeper all day. Better job security.

Best to you,

Goober Dave

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RE: Great book for those interested in US business history, and how it all went wrong

(OP)

Quote (IRstuff)

I'll just say that the notion that fitting any sort of paradigm on running a business into a pithy phrase like "bottom-up" is equally, and overly, simplistic. Running any endeavor by committee is counterproductive and often even more disastrous than a top-down approach.

Obviously, that is one item I cherry picked, the book delves far deeper into all the facets of organizational structure and how each works with each other. Your claim that it is akin to "running by committee" seems bizarre, but maybe you should just give it a read to get a better context of what they're talking about.

I also don't think the they are in the business of selling fads and buzzwords, as they openly criticize many in the book.

RE: Great book for those interested in US business history, and how it all went wrong

Quote:

Noway, what industry did you migrate to? That long term outlook sounds very appealing.
I am currently in the utility industry, working for a university in the Chilled Water (A/C and process cooling) department. The work load is a combination of short term and long term goals. In the short run there are maintenance projects and seasonal production variations. Over the long haul, the focus is on providing service as efficiently as possible and working with our customers (facilities and energy management) to improve their utilization and on ways to invest capital on equipment with cost returns over several years.

RE: Great book for those interested in US business history, and how it all went wrong

Are you located in the research triangle near Chapel Hill?

Maui

www.EngineeringMetallurgy.com

RE: Great book for those interested in US business history, and how it all went wrong

Quote:

Are you located in the research triangle near Chapel Hill?
Chapel Hill, UNC Energy Services.

RE: Great book for those interested in US business history, and how it all went wrong

Next you can try "Augustines Laws", by Norman Augustine. He breaks down just about every precept of modern management into little pieces then jumps on them with facts. It's very funny, too.

STF

RE: Great book for those interested in US business history, and how it all went wrong

I recommend The People's Tycoon: Henry Ford and the American Century. This is not a management book. It is an examination of a guy who generally did things right. It is a good comparison with modern companies, including Ford.

Read up on Beretta. The company has been run by the same family since 1526. I think that a big problem with British and American companies is that the founders have problems passing their technical expertise down past the first generation.

--
JHG

RE: Great book for those interested in US business history, and how it all went wrong

Finally, I found the other book I wanted to recommend.

The Management Myth, by Matthew Stewart. Try Googling the title. Stewart wrote a summary for Atlantic magazine.

Stewart was finishing his doctorate degree on nineteenth century German philosophy, when he realized that he needed a job. He applied to some management consulting firms, and the rest is an excellent read.

--
JHG

RE: Great book for those interested in US business history, and how it all went wrong

In an audio book on cold war Russian invasion of Afghanistan I was listening to, the author described the mandatory political education sessions Russian officers had to attend.

In as much as their political education was dominated by a particular economic model, working back, it made me wonder how much a US business/economics education is in fact a political education.

A lot of business education seems to really be about learning to think IN THE BOX, while claiming to do otherwise.

In theory, there is no difference between theory and practice; experience suggests that in practice, there is.

RE: Great book for those interested in US business history, and how it all went wrong

kontiki99,

Read up on the anti-communist witch hunt in the USA in the early fifties. A belief in the superiority of capitalism was considered to be patriotic and ideologically necessary by a lot of people.

--
JHG

RE: Great book for those interested in US business history, and how it all went wrong

This was also the timeframe during which the words "under God" was added to the 'Pledge of Allegiance to the Flag', something which had been resisted by the author of the pledge, an ordained Baptist minister, who's position had always been that he NEVER set-out to pen a 'national prayer', and he continued to reject any and all attempts to make changes to his original text while he was still alive. However, several years after his death, the Knights of Columbus mounted a nationwide campaign to do just that, convert the once purely sectarian pledge into a 'national prayer'. Their argument was that it was needed to ferret-out Communists and Communist sympathizers who had infiltrated our society. The idea was that when the newly reworded pledge was now recited in schools and before public meetings, all that a patriotic citizen need do was listen carefully for whomever did NOT actually utter the words "under God" while the rest of the people were reciting the pledge. After all, everyone knew that Communists were atheists and so this was the perfect mechanism to spot them since they would, out of some brainwashed adherence to their Marxist principles, avoid at all costs making any public utterance which supported the notion that there was a God.

Yes, America really endured a period where arguments like this were given credence, all in the name of patriotism and the belief that the American way of life, which of course included "brainwashed adherence to capitalist principles", was superior to that found in most of the world at large.

John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:

To an Engineer, the glass is twice as big as it needs to be.

RE: Great book for those interested in US business history, and how it all went wrong

3
"Every nation seems to have its set of forbidden possibilities, which its citizenry and adherents
must not at any cost be permitted to think seriously about. In the Soviet Union these include
capitalism, God, and the surrender of national sovereignty; in the United States, socialism,
atheism, and the surrender of national sovereignty." (Carl Sagan, from Cosmos)

RE: Great book for those interested in US business history, and how it all went wrong

"...Yes, America really endured a period where arguments like this were given credence..."

Still ongoing...

STF

RE: Great book for those interested in US business history, and how it all went wrong

I thought the use of past tense was a little odd as well...

Communism --> Terrorism
Vietnam --> Iraq/Afghanistan
McCarthyism --> Islamophobia
Un-American Activities Committee --> Patriot Act/NSA

But this is off-topic, sorry, just couldn't help expanding on SparWeb's point.

RE: Great book for those interested in US business history, and how it all went wrong

(OP)
Thanks sparweb and drawoh, I'll have to check those out when I can get the time

Augustines laws looks like a laugh

Naïve twenty something Engineer. Occasional cigar enthusiast, poor comedian

Regards
Sam
Brisbane, Australia

RE: Great book for those interested in US business history, and how it all went wrong

Hope you like it!
I had to give back the copy I'd borrowed - but still thinking about it many months after reading it.
Especially liked the "forecasts" he was able to make, such as the inevitable consequence of increasing equipment costs and shrinking budgets to buy equipment... project far enough into the future and the entire US air force will consist of one aircraft flown by the AF from Monday to Thursday, and the Navy gets it on the weekends!

STF

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