To this day, My Years with General Motors remains the definitive text on how, in the early 1920s, Sloan solved the problem of how to organize a giant corporation by decentralizing manufacturing and, at the same time, centralizing corporate policy and financial controls. With this stroke of genius he laid the groundwork for an organizational model that dominated American industry for more than half a century. More important, he advanced a managerial mind-set — and set of values — that has pervaded the world of big business over the four decades following World War II.
Up the Humanist
It wasn’t until 1970 that a successful corporate leader would write a bestseller that offered a philosophy of management contrary to Sloan’s. That iconoclast was Robert Townsend, whose Up the Organization: How to Stop the Corporation from Stifling People and Strangling Profits turned Sloan upside down by advocating “the human side of enterprise,” a concept put forward in 1960 by the scholar Douglas McGregor. Townsend also embraced Peter Drucker’s dictum that effectiveness was a more appropriate managerial metric than efficiency. Although Townsend gave due credit to McGregor and Drucker, more remarkable than the granting of generous acknowledgments was the fact that here, at last, was a CEO who wrote his own book.
Bob Townsend (confession: he was my mentor) was also the funniest CEO who ever made big bucks in big business; at least, he wrote the funniest executive memoir (“Reorganizing should be undergone about as often as major surgery. And should be as well planned and as swiftly executed.”). It was Townsend who, in the 1960s, made Avis “Try Harder,” and in the book he distills the essence of that corporate transformation to help other executives stop their corporations “from stifling people and strangling profits.”
Prior to Townsend, Fortune 500 companies had been headed by Sloan clones in gray flannel suits or would-be Harold Geneens steeped in finance, strategy, and dictatorial habits. Townsend’s greatest accomplishment was to turn the focus of executive attention away from administration and toward leadership.
The publishing world actually was surprised when Townsend’s easy-to-digest bits of advice were accepted as a breath of fresh air by young leaders of that time who were persuaded by his argument that it makes sense for leaders to treat their people the way they would want
to be treated themselves. Moreover, Townsend’s mocking of bureaucracy struck a positive chord, particularly because, when it came to bashing it, he practiced what he preached: “Fire the PR Department,” he wrote, famously, and ditto the law, purchasing, personnel, and other staffs headed by “VPs of.” And at Avis he did!
The New Leadership
To Bob Townsend, a leader is one who manifests vision, integrity, and courage in a consistent pattern of behavior that inspires trust, motivation, and responsibility on the part of followers, who, in turn, become leaders themselves. And that’s the kind of leader he was. Over the following decades, it became clear that Townsend had been the first of a new breed of corporate leaders: men and women who evaluated the success of their leadership not only in terms of efficiency, but also by humanistic metrics. These new leaders considered themselves successful when they were developing their followers, and their measure was the extent to which those followers were becoming leaders themselves.
The most personal statement of this new philosophy was made by the former CEO of Herman Miller, Max DePree, in 1989. His contribution to our knowledge about corporate leadership was his insight that CEOs have a responsibility to develop other leaders in their organizations. In his remarkable little book Leadership Is an Art, DePree argues that one can’t accurately assess the quality of leaders by looking right at them; instead, one must examine the behavior of their followers: