Business Needs Plant Managers in Management
One of the problems for American industry as it girds against foreign competition is that those who are getting to the top rung of management often don’t know much about making the product.
Top executives may have passed through production as part of a job rotation designed to prepare them for promotion, “but they rotated through it damn fast,” says Harold Stieglitz, a management expert for the Conference Board, a New York business research organization.
There’s no assurance, of course, that a manufacturing expert would be able to manage a major company any better than, say, a marketing specialist, a financial wizard or a lawyer. In fact, in an atmosphere of hostile takeovers and huge corporate debt, the former plant manager might well be out of his league.
The question, however, is whether looking around for businesses to buy is the appropriate activity for many companies at the moment, or whether the real need is for them to get back to the basics of turning out products cheaper and better. If that’s so, then too little of the right kind of business discipline may be represented in the front office.
Because of size and the complexity of their bureaucracy, most companies have a tough time getting a plant manager into the top job, Stieglitz observes. In many cases, the job is just too far down the ladder for such a manager to expect to move that many steps up.
It’s also not considered the ideal path to the top by those in contention to be No. 1.
Korn/Ferry International, a major executive recruiting firm, in a soon-to-be-published joint study with the UCLA Graduate School of Management, asked the five executives in jobs just below the chief executive officer at 500 of the biggest companies what type of prior management background helped the most to win the coveted CEO’s seat. More than a third mentioned marketing and sales and another 25% mentioned finance. Only 4.6% said it was manufacturing or production.
Professionals Isolated
Years ago as a reporter in the Midwest, I remember many a plant tour conducted by a CEO I’d just interviewed. The problem today is that the front office usually isn’t located near the plant. In fact, many diversified companies today are run by a group of professionals somewhat isolated from the actual operations. It is a form of absentee management that forces a lot of paper work on lower-level managers who might in simpler days have kept their bosses informed in person.
Korn/Ferry Chairman Lester Korn is concerned that limited advancement open to those who pursue a career in factory management will leave the nation far short of talent in the future. “Looking five years ahead, there will be a need for corporate heads to have a strong manufacturing background,” he says. “Very few major corporations have the know-how on production and manufacturing that they need in the board room and the front office.”
Moreover, he adds, few of these people are being groomed for top jobs.
Salary incentives are lacking as well. Only 28% of this year’s graduating class at the Harvard Business School went into manufacturing jobs, with a median salary of about $42,000. More than 40% went into consulting or investment banking, commanding a median salary of more than $50,000.
To a large extent, the problem goes back to a basic management philosophy that developed as American firms moved rapidly into diverse fields. It was a philosophy that dismissed the notion that specific knowledge of a particular business was essential for a manager to succeed. Instead, good management was supposedly readily transferable from one field to another.
Business schools and the rise in importance of advanced management degrees have helped to foster this idea. James Fallows, writing in the December issue of the Atlantic Monthly, contends that business training is “all wrapped up in mathematical models and such ideas as can be boiled down to numbers.”
This is unfortunate, because the battle many U.S. industries are losing to foreign competitors is being waged not just in the sales or accounting office but on the factory floor.
