Wednesday, June 10, 2009

"I Don't Know Anything About Cars"

Thus spake Edward Whitacre, the newly named CEO of General Motors. As the tone of the remark suggests, Whitacre does not think it is very important for the CEO of GM to know about cars: "A business is a business and I think I can learn about cars." Link here.

Let's say you were on a hiring committee interviewing prospective candidates for an important executive position. How would you respond to someone who was touting his complete ignorance of the nuts and bolts of your business?

Of course, Whitacre has extensive experience in telecommunications. He was a successful CEO at ATT. How exactly does this qualify him to be CEO of General Motors?

This raises an important question, one that informs hiring decisions: Does experience count? Or better, is experience fungible?

Take Alan Mulally, widely praised CEO of Ford. Mulally did not grow up in the automobile industry. He came to Ford from Boeing. But Boeing is involved in transportation and manufacturing.

Clearly,the skills Mulally acquired at Boeing were fungible to his job at Ford.

Of course, some people believe fervently that experience is less important than ideas. They believe that if you are smart enough you can pick up the experience on the fly.

We just elected a president who had nothing that resembled executive experience. We have a Secretary of State who had only the most limited experience with foreign policy.

Apparently, the American people decided that being intelligent and/or eloquent were sufficient requirements for high public office.

Welcome to the world of philosopher-kings. (Nowadays they are called Czars.) In that world the person who put in the time and effort to acquire practical knowledge is considered to be inferior to those who spend their time thinking.

Philosopher-kings used to be known as "the best and the brightest." They are academics, journalists, itinerant intellectuals, and government officials.

They usually have stellar academic credentials coupled with limited real-world experience. And they naturally want high IQ to count for more than the everyday grind-it-out work where people get their hands dirty.

Nowadays the nation is debating the question of whether or not government officials and other very intelligent people should be running private businesses, like banks and automobile companies.

Traditionally, people have argued that bureaucrats do not have a vested interest in the success or failure of the businesses they are managing. Thus, they have a lesser interest in their success.

We should add that government officials who lack practical experience are more likely to impose impractical solutions on unreal problems.

When great thinkers get involved in something other than thinking, they often lose focus and concentration. Not because their heads remain in the clouds, but because they tend to micromanage and become mired in detail.

After all, people who believe in the superiority of their own minds tend to look down on everyone else's minds. Unfortunately, the condescension breeds distrust, and distrust engenders low morale.

All of which to say that Edward Whitacre is facing a daunting challenge.

Addendum: See also this post.

1 comment:

Anonymous said...

Re "Nowadays the nation is debating the question of whether or not government officials and other very intelligent people should be running private businesses, like banks and automobile companies", I have to disagree. We're not *debating* anything; rather, seismic shifts in American domestic and foreign policy are being imposed upon the country from high on above.

We're not debating what's happening because the media is doing what it always does: hiding or downplaying the Democrat Party's agenda and actions.

The Democrat Party and the MSM don't do debate. They simply tell us, "and that's the way it is", and that is the end of it.