My Years with General Motors
by Alfred P. Sloan, Jr.
Recommended for: Change agents who are trying to understand the traditional corporate mindset.
This book is regarded as a must-read for management. It was a best seller when it was published in 1964. Peter Drucker recommended it as a must-read for his students and for managers.
For 50 years, GM was a worldwide powerhouse–the largest automotive company in the world. Success breeds a lot of copy cats and GM’s organizational structure, strategy, and attitudes served as a model for many different types of industries. Many of its principles still hold sway today in corporate America.
Drucker described the book as enjoyable reading. I found it to be 21 hours of uninspiring, soul-sucking verbosity. Still, if you are a change agent for a more progressive style of management, this book may give you insight into how the traditional corporate mind thinks and how many organizations are still organized.
Sloan’s purpose of the book was to establish a new profession, the manager, and to spell out exactly how to do it. Sloan himself would be the exemplar of the professional manager.
It lays out the corporate strategy for GM in detail. Yeah. Its tedium. Marketing strategy, corporate organization, production schedules, pricing, financial controls (he talked about this a lot. He considers it key in GM’s success), acquisitions, research and innovations, ROI, decision-making structures, handling dealerships (which are franchises–I never knew that), forecasting sales, reporting and communication, talent acquisition (especially at the leadership level), company expansion, personnel matters, and lessons learned (he has a LOT of lessons learned. Good for him). It made me appreciate more what all a CEO has on his mind and their capacity to handle it all.
Sloan spends almost a whole chapter discussing unions. You can tell by his tone that this is a sore spot for him. Drucker had criticized him for how he handled them. I wonder what Sloan would have thought about what happened at NUMMI.
He also spent a whole chapter on GM’s bonus plans, which rewards individual contribution. He spent a lot of time defending it, I assume because plenty criticized it including Drucker. Sloan said to abolish it or severely alter it after 45 years could destroy the spirit of GM’s management and he credited the bonus plan for much of the company’s success.
I was disappointed, though perhaps not surprised, that Sloan didn’t talk about operational excellence nor how GM got workers up to speed during the war years (he glossed over it as being a challenge and adjusted production expectations).
Good take aways:
- Sloan talks about how people want variety and choice and your company must be able to provide this.
- He says an organization must be adaptable. He gave the example of Ford and the Model T (I wonder what he would have said about the company’s turn-of-the-century struggles and eventual 2009 bail-out).
- He warned against building a company to support a genius (he implied this was what Ford did). I wonder what he would think of Bill Gates, Steve Jobs, Mark Zuckerberg, Jeff Bezos, and Elon Musk?
Insights into the roots of traditional management attitudes:
- Decisions should be made by capable and rational men coming together. Their focus should be focused on benefiting the shareholders.
- Increased efficiency does not flow from the increased effectiveness of the workers, but from more efficient management and investment in labor saving devices.
Despite its tedium, the book included some interesting parts on the early history of the automotive industry. Sloan spends a lot of time discussing GM’s early competition with Ford. GM simply could not take on the Model T (GM acquired Chevy to compete). Eventually, though, the company’s strategy of “a car for every purse and every purpose” took hold and left Ford in the dust. I was also interested in how GM began to emphasize styling. The classic tail fins of the 50s were inspired by fighter jets!
Walter Friedman with the Harvard Business Review wrote an article surmising My Years with a fifty year perspective in 2014. It can be found here. I recommend it.