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Posted by on Jul 21, 2011 in Economy, TG Roundup

Product Driven vs. ‘Driven’ Driven Economy

 

 

Yes, it is not a typo that you see ‘Driven Driven’ in the title. What is the ailment of the current economy and the effect of it on millions of people all around the world? We can understand if the economy gets impacted if there are natural calamities like the Tsunami/earthquake in Japan but if it is and the future of us and and our kids is getting bamboozled by many self-proclaimed smart alecs the so called ‘management creed’! You know what I am talking about. It is the impact of MBAs taking over and leading this economy has imperiled the very fabric and structure of ‘market oriented’ economy. Perhaps the term ‘market oriented’ has lent some kind of false notion how the economy works.  Let’s examine what could have gone wrong.

Why was some study course like MBA was invented? It is probably because when a company or business grew to a much larger extent it needed someone to oversee the redundancies and possible loop holes in the way business is being conducted and to minimize them and hence maximize the efficiency and productivity in the firm or business that is expanding. The nature of this work probably provided unique opportunity to the individuals doing this to demonstrate huge benefits to the company or business and it kind of glorified the persons job and hence his paycheck. And this led to make the jobs more ‘charming’ and started attracting the many incredibly talented and smart people towards this profession. In the process people took their eyes off the center piece of any business or company, the PRODUCT and the people who work hard to innovate it, prototype it, productize it, test it and improve it. The people who do this everyday are treated like they are ants working on a molehill and the grasshoppers overseeing them are from a field who entirely lack in the technical knowhow how this is being done but to make sure the ants get replaced or moved around to try to maximize productivity! But what happens if the grasshoppers are kind of outnumbering ants, the molehill will crumble. That is what happening with our economy now!

I am not dissing MBAs or the management styles or practices here as they are specific to the company needs but it is the steering power of companies getting into their hands who probably will not have the best idea about the product as the engineer who was designing and fabricating it!

Here is a piece of the article by Rana Foroohar in TIME magazine which illustrates what I am saying (this article has spurred me to get this on teluglobe actually!)

“Bob Lutz, the former Vice Chairman of General Motors, is the most famous also-ran in the auto business. In the course of his 47-year rampage through the industry, he’s been within swiping range of the brass ring at Ford, BMW, Chrysler and, most recently, GM, but he’s never landed the top gig. It’s because he “made the cars too well,” he says. It might also have something to do with the fact that Maximum Bob, who could double as a character on Mad Men, is less an éminence grise than a pithy self-promoter who has a tendency to go off corporate message. That said, his new book, Car Guys vs. Bean Counters: The Battle for the Soul of American Business, has a message worth hearing. To get the U.S. economy growing again, Lutz says, we need to fire the M.B.A.s and let engineers run the show.

Lutz’s main argument is that companies, shareholders and consumers are best served by product-driven executives. In his book, Lutz wisecracks his way through the 1960s design- and technology-led glory days at GM to the late-1970s takeover by gangs of M.B.A.s. Executives, once largely developed from engineering, began emerging from finance. The results ranged from the sobering (managers signing off on inferior products because customers “had no choice”) to the hilarious (Cadillac ashtrays that wouldn’t open because of corporate mandates that they be designed to function at -40°F). It’s pretty easy to imagine Car Guy Lutz removing his mirrored shades and shouting to the cowering line manager, “Well, customers in North Dakota will be happy. Too bad nobody else will!”

full article here:

http://www.time.com/time/magazine/article/0,9171,2081930,00.html

 

2 Comments

  1. Over simplification in the article, but good article.

    • Yes, guru garu. 🙂 This already posted! my ‘management’ here at work is driving me crazy so couldn’t snatch enough time to do that. next time I’ll be more elaborate.

      thank you
      –ramana