Car Guys vs Bean Counters - The Battle for the Soul of the American Business - Book Report/Review Example

Operation management in car guys vs. bean counters The book “Car Guys vs. Bean Counters: The Battle for the Soul of the American Business”, is a piece by Bob Lutz who is former vice chairman of General Motors. To those who know Lutz, he is the ultimate car guy, which is ultimately the reason he was handed vice chairmanship of General Motors. Evidence of this can be seen in the introduction part into the book where he talks about Bill Mitchell and Harley Earl who ran GM with uncompromising abandon building cars that became the ultimate symbol of America’s finest hour. The book is built around the deficiencies that General Motors ailed from resulting into filing for bankruptcy by the company. While some of the views that he expresses in the book are at best wild, some remain true and the reason for the failure of General Motors. What are some of the factors explained in the book as effective or ineffective? One of the practices which Lutz, in his book, detests is the six sigma belt method. Six sigma is the measure of how much a given process or product deviates from perfection. It can also be used to detect whether a process or product has zero defects. It is used as the basis of a quality improvement program. It is a system used as a basis for producing, processing and standardizing work. Lutz (2011) faults the six sigma belt trend since it wasn’t a creative process rather one which was aimed at producing products with the least defects. A product with the least defect does not always translate to a perfect product. In mass production standardization of work was implemented in all sections of the factory even those which would not benefit from it. One such area of the factory is the creative section. Design sections of any factory cannot be standardized as doing so would provide uninspired work. Design requires freedom and spontaneity. The process flowchart of typical creative work should only have time limits and not task descriptors.They are tasks which require flexibility, adaptability and initiative and standardizing such sections results in a robot mentality where everyone is on auto pilot. The reasoning behind this is that if it works for the automated sections of the factory, then it ought to work for all sections (Garling, 2013). The book expresses the reality that following processes that do not yield results absolve those partaking in the processes of any wrongdoing. The Collaborative Product Design (CPD) practiced at General Motors set its emphasis on meeting performance specification and not on manufacturing exceptional products. The processes talked about create defects in a queue which result into tarnishing of the whole product. Bean counters is a term coiled out of people who nitpick over small things in a bid to save costs or increase revenues. It is used as a definitive word for the company’s executives who aspired to increase volume and become the number one luxury brand among automobiles. Doing so, Lutz (2011) noted, creates a saturation of the models in the market. This reduces their resale values and destroys their exclusivity image of the iconic brand. Bob notes that this was the deficiency with General Motors executives. Compromising on quality for volume while it seems logical, is bad for the long run(Garling, 2013). Lutz notes in the book that it is better to build high profit margin luxury cars that take longer to complete and sell than being the best in the world at selling low-hour vehicles that ultimately result in losses. Recent studies show that consumers’ conceptual map has changed profoundly in the past decade. For example, while there was high emphasis on high fuel consumption cars in the past, currently it is all about mass production of automobiles with great design that leave minute carbon footprints. What Lutz (2011) rooted for was a culture of customer centric and innovational engineering hard coded into the company’s DNA. He noted that the culture of excellence was mainly focused on cost reduction and led to such poor results as the whole bodied plastic Saturn line. He stated that there was exaggerated respect for top executives. Anything they said, he says, was an infallible gospel. There thus arose a tendency to stifle debate and put off decisions until they became irrelevant and it was too late. On setting the company back on its road to recovery, his fist task he writes, was to free the design team from the manufacturing and engineering factions. This gave them more room to be free(Garling, 2013). Bean counters mentioned in the book’s title refer to the age of accounting, law and order that became the way of General Motors. This was a shift away from the design and product oriented way of conducting business that was practiced before resulting into a worldly renowned company. During this time, design is written to have become a link in the mass production process. It stopped being a benchmark for high quality work in the production process. The replacement of a “car guy” at the helm of the company with a “bean counter” is said to have been a significant moment in the turn of fortunes for the company. The book, describes the company after that as a volcano continually spewing forth mediocrity upon mediocrity. This produced goods that showed low tolerances but whose quality was poor. Lutz (2011) claims that this caused the company to be too predictable resulting in damaging of its ability to compete and conquer. Another form of bean counters described by Lutz (2011) in the book is in the form of media and parties such as Corporate Average Fuel Economy (CAFÉ). He states that increases in taxation of fuel and fuel commodities caused consumers to think that their purchases would lead to future consequences. This, he state, would have provided a natural incentive for them to turn it down a notch in their purchases. For example, opting for six cylinder cars instead of eight or twelve cylinder ones. However, a point of criticism for the book and the author is that it fails to take blame for lack of initiative and prediction of fuel trends and provide engineer competent solutions to them. A trend which the author also fails to acknowledge are the environmental impacts that high fuel consumption vehicles have on the environment. He fails to state explicitly that GM should have reverse engineered solutions to engines which left a smaller carbon footprint. Instead, the government is unfairly awarded the brunt in its lack of courage and foresight in place of GM. The portions of the book dedicated to descriptions of turning the company’s fortunes are both engaging and extremely interesting (Garling, 2013). The extent to which General Motors had fallen into the rabbit hole of bean countering was profoundly alarming. A Failure mode and effects analysis (FMEA) by the author points to the misalignment of the company’s intrinsic values with consumers’ conceptual map. This is unlike companies such as Mercedes in Germany which displays user centered design, usability and computer aided design (CAD) where appropriate. Highly successful companies are defined in the auto industry today by the innovations that they bring to the market. These companies provide the basis for benchmarking by other companies in a bid to duplicate success. Such companies place emphasis on batch production as compared to mass production of vehicles. Bach production is opted for since it provides highly customized products in the production line as compared to mass production which does away with personalization of products. Mass production employs continuous production of products in an infinite queue. Goods are constantly being manufactured regardless of market conditions. A popular employer of this tactic as highlighted by the book is Toyota(Garling, 2013). The author of the book also notes that one big failure committed by General Motors was the lack of vertical integration of parts into the production queue. The goods being fed into the production line were external to the company. Therefore, this ensured that parts were low on level of customization offering the company little control over their manufacturing process. This parts were thus unreliable ensuring that they did not serve their purpose for the period of time that they were intended. Due to Lutz’s radical campaign on returning the company to its core purpose, it is now well on its way to complete recovery. The level of change can be seen with models of vehicles such as Chevrolet Equinox, Buick LaCrosse, Cadillac CTS and the Chevrolet Volt. Lutz (2011)focuses on diminishing the power of money crunching, penny pinching “bean counters” in the design for manufacture and general production process of the vehicles. The author believes that finance executives should mainly be concerned with the financial aspect of the company. His recovery plan revolved on the fact that the company had given much control of the company to MBA-type people who were not concerned with the vehicles that the company produced. The author’s sentiment is that a shoemaker’s business should be ran by a shoemaker while software firms should be ran by software people. For example a software company ran by people from the vehicle industry would be a flawed system. They would not fully understand the process of engineering that software experts undertake in the software industry. The same concepts applied to the automotive industry. The book describes a company mired in politics, procedures and policy. By the time a car came to completion and was released to the market, it was bound to fail because of compromises, over-thinking and delayed to a point that it was bland, obsolete and flawed. Adding insult to injury, no one got fired nor demoted for these failures. It therefore, became a repetitive trend that came to be identified with the company after several years in effect(Garling, 2013). All in all, Lutz the writer, like Lutz the reformist, is very much a salesman and what he sells best is a “car guy” nostalgia that causes a reader to critique the management styles that were used then. He is also a guy whose work should be taken with a grain of salt. Hopefully, future generations who engage in his work can learn from the struggle that he frames, but with the recognition that his struggle, like many before and after him, is not eternal. References Garling, I. (2013). Hangover wisdom, 100 thoughts on "car guys vs. bean counters: The Battle for the Soul of American Business. S.l.: Book On Demand. Lutz, B. (2011). Car Guys vs. Bean Counters The Battle for the Soul of American Business. S.l.: Penguin Group US. Read More