VIEWPOINTS : H. Ross Perot on Restoring Nation’s Edge : Replace Stifling Corporate Bureaucracy, Rebuild Basic Industries

T he following are excerpts from a transcript of a talk given last Monday by H. Ross Perot to the Economic Club of Detroit. Perot, 56, the Texas billionaire who founded Electronic Data Systems in 1962, was ousted earlier this month as chairman of the computer services company and as a director of General Motors, which now owns EDS.

EDS’ Philosophy

My first message is: Listen, listen, listen to the people who do the work. If you can have two-way communications, that’s wonderful. But my experience over the years has been, as long as I hear from the folks who are doing the work, we’re growing and making money. And if they don’t hear from me, everything works out pretty well. But if I start sending stuff down to them, and I don’t hear from them, I get in trouble in a hurry.

Many of our great ideas came from people too young, too inexperienced to have an idea of that quality. But they had it. So you’ve got to listen to all of them. AT EDS, there’s only one class of person: a full partner.

At EDS, we encourage people not to look up to one another, because it stifles communication.

If I find anybody looking down on anybody else, we fire him. Because that really hurts the team effort in the company. You never hear the words management and labor used in EDS. Those things separate people.

There are no job descriptions in EDS. There are no work rules.

Had a guy come in not too long ago, (and he said), “Ross, I just got to have a work rule.” I said, “OK, use your initiative. Use your initiative. Do whatever it takes to win, as long as it’s honest and ethical.” We tolerate no politics in the company. We want people who want to move ahead, based on what they contribute and not at the expense of others. We have a philosophy in EDS (that) if you can manage inventory, you can manage things. But you must lead people if you hope to tap their full potential.

Let me give you some examples.

If I work for you, are you wiser to have me enjoy my work or hate my work? There are guys all over American industry who spent 30 years eating dirt, (and then they finally get) a position of responsibility.

And they see their role in life is to make everybody who works for them eat dirt. You’re going to be able to win and have the best products in the world in that environment? Absolutely not.

Are you wiser to have me work for you or with you? The answer is obvious. Are you going to get the best out of me unless you have my trust and respect?

The answer is obvious. How do you get (trust and respect)? You earn it every day. You could have earned it for 20 years, and you can lose it in a moment.

We believe in strong, simply stated philosophies that can be communicated and understood by thousands.

What is EDS? Every EDSer can answer this. EDS is the finest computer services company in the world. . . .

What is an EDSer? An EDSer is a person who goes anywhere any time, 24 hours a day, seven days a week, to make sure that EDS is the finest computer services company in the world and that nobody beats us in competition.

Need for Basic Industries

And now we’ve got this funny phenomenon. (People are saying), “Gee, why don’t we get rid of all of our basic industries and go to a service economy?”

Now the thing that just breaks my heart is that the best and brightest out of Asia are learning skills that will create jobs.

Our best and brightest all want to be Wall Street bankers. Consultants. And other things that contribute little to the real worth of this country and contribute very little to creating jobs. . . .

We cannot give up our basic industries. This is a joke. Who are all these consultants going to sell their services to? . . . . They’re going to sell to one another. . . Let’s get more fundamental than that.

Whether we like it or not, the odds are there will be wars in the future.

Now, just try to imagine our country fighting a war without . . . having its own steel-making capacity. Its own electronic capacity.

Is there any question in your mind . . . (about) whether or not we could have won World War II without converting these car plants?

Absolutely not. . . No problem, we’ll get all that stuff from Japan?

How would you like to be the captain of a ship carrying steel across the Pacific with satellites watching you every minute of every way?

It’s just a question of where they want to sink you, folks. I mean this is the goofiest idea in the world.

For our country to be anything like the country our parents gave us, we absolutely must keep our basic industries. And we can.

So the service economy concept is a mirage.

How did we get in this mess? At the end of World War I, we were the supplier to the world.

Today, many of our business leaders grew up in an era where there was little competition. The world has changed dramatically in the last few years.

Now, many of us who grew up in this era complain that the playing field is not level.

Folks, I’m going to tell you the playing field is never level. . . . Too many of us grew up in a world where we owned the bat, the ball, the stadium, both teams and the lights.

The evidence is all around us today that the American people are still really good.

I’ve seen it again and again and again in my public activities. The best example I can give you today is when I went into EDS to look for a team of people to risk their lives.

Now that’s a whole different thing from volunteering for the United Way. Risk their lives to rescue two of their friends. I’ve never done that before.

I wondered if anybody would go. I hoped that one out of five might volunteer.

People (often ask), “What’s the greatest thrill of your life?” Well, next to the births of my children, this is it. Every single person I talked with volunteered.

Now all of these men were veterans from Vietnam. Many of them had been wounded. They knew that going into something like this was not travel, education and adventure.

And it was a darn good way to get hurt and get hurt bad. . . .

With good luck, you wind up in a Turkish jail. With bad luck . . . you wind up getting shot in Iran.

Either way is a bad deal. Every single person volunteered. You know the story.

There were a handful of Americans under the leadership of a very skilled man who pulled off an incredible act, and I think demonstrated one more time that ordinary Americans are still capable of extraordinary achievement.

It is up to us, the business leaders, to recover the industrial leadership.

(Editor’s Note: In 1979, Perot helped mastermind a mission by retired Army Col. Arthur D. (Bull) Simmons that successfully rescued EDS employees from an Iranian prison.)