Monday, June 08, 2009

Business Worst Practices

Does this sound familiar?
Now no one should be surprised that a service that suffered 40 years of nearly nonstop decline has arrived in its present condition. The signs were apparent for years even to the casual observer. Journalists, analysts, consultants, and, yes, even insiders with the temerity to buck the system pointed out that the Navy's shipbuilding program was flawed and that the service was playing itself to an inevitable endgame. It had too many Admirals demanding new design and specification changes, buzz-phrase laden trendy ideas-of-the-day, and executive attention to changing an image scarred by past problems with candor. It couldn't sell the handiwork of its outsize network of defense contractors and consultants. Unrealistic and unsustainable contracts made an affordable fleet all but impossible.

Why couldn't The Pentagon, Congress, and the CNO's Staff see what was coming? Blame a combination of hubris, myopia, and short-term thinking. During my 10 years of covering the Navy, I heard plenty of explanations from Navy insiders of why its business model couldn't be dismantled: It's too expensive to fight congress and industry lobbyists, so we shouldn't even try.
Apologies to David Welsh, but all I did was change a few descriptive nouns from his article in Der Spiegel on GM, A View from the Back Seat.

This is an exceptionally good article to help not just understand what happened to GM, but to get some insight into the myopia and tunnel vision that those at the top of very large and complex organizations can find themselves in. If you don't have the right people with the right vision - you find yourself painted in a corner that traditional ideas simply are not going to fix.
It is also an interesting look into common problems. In the article you will hear a few things like "group think," "retiree pensions and health care," and "underinvesting" that will have you nodd'n your nogg'n in understanding.

We all know that like GM, the Navy has some very good, very smart people trying their best to set priorities as they see them to fix a very hard problem. In that light, this should strike a chord,
What was frustratingly absent was the will among management and labor leaders to see what was coming and embrace real change before it was too late.
It isn't enough to have good and smart - you need good and smart combined with correct ideas and will to engage the sharp pointy things and ignore the distractions and the seduction of the short term feel good.

There reaches the point though that even if you have the right guys in the right places, without top cover and an overarching strategy that is feasible - you still find yourself sinking.
When former Chrysler star Lutz emerged from retirement in September 2001 to join the company as vice-chairman, it was common industry wisdom that GM's cars and trucks suffered from the corners that were cut on GM's product decisions by bean counters and manufacturing gurus.
Blame Wagoner if you want. But he inherited many of these problems and was making some of the right moves before he was fired. He couldn't get the company and those who depended on it to make enough sacrifices to get the job done. However, even an outsider like Bob Nardelli, a lauded cost-cutter who came to Chrysler after turns at General Electric and Home Depot, found few options in Detroit.
Here is a question; is there a parallel between the path of the USN over the last two decades and that of GM of the last four?

If the Navy version of the corporate bankruptcy is the final chapter of a story that leads to catastrophic loss at sea such as
The Battle of Midway or The Battle of Tsushima, then we can all agree that we are not yet at the final chapter.

Like GM in 2004 though, are we in the penultimate chapter, or are we still early on enough in the book to fix the cancer that is growing apace? Hard question.

One selfish note, if you did not catch the bold part of the first quote - I think that overlaps most of the "what use are bloggers" ven diagram. Methinks.

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