Managing in Motown

Talk to residents of Detroit these days and they’ll tell you that the city feels numb, as only a one-industry town with an industry in peril can. In this edition of Drucker Apps, you’ll find tools that will help you understand why General Motors is in such a mess, how it fell behind its biggest competitor, and what the ailing giant can do to get back on its feet. These insights—at once timely and timeless—are based on the ideas and ideals of the late Peter F. Drucker, the father of modern management.

The dire consequences of consistency

“It was not so much my specific suggestions for changes that upset the GM executives but my suggesting that policies must be considered as temporary and subject to obsolescence.”— Peter F. Drucker, Concept of the Corporation

• The root of GM’s problems.Read more here.
• What Drucker would have said about bailing out the auto makers. Read Rick Wartzman’s BusinessWeek column here.

The failings of the patch kit

“The first reaction of an organization whose theory is becoming obsolete is almost always a defensive one…The next reaction is an attempt to patch, as GM did in the early 1980s…But patching never works.”— Peter F. Drucker, On the Profession of Management

• What assumptions should the auto industry reconsider?Read more here.
• Hear Douglas West, former senior vice president of Toyota North America, explain why it took GM so long to fail.

Can the Toyota juggernaut be stopped?

“Around 1960, the automobile industry all of a sudden became a ‘global’ industry…The Japanese, who had remained the most insular and had barely exported their cars, decided to become world exporters.”— Peter F. Drucker, Innovation and Entrepreneurship

• How the Japanese went from a fiasco to fantastic success. Read more here.
• Could Toyota end up like GM? Hear Dan Neil, Pulitzer Prize-winning automotive columnist for the Los Angeles Times, discuss why he thinks that’s likely.

What the old guard can teach the new

“Sloan’s work as the designer and architect of management…surely was a foundation for America’s economic leadership…and for the major lesson the Japanese learned from us and used to become a great economic power themselves.”— Peter F. Drucker in the foreword to Sloan’s My Years with General Motors

• The wise ways of Alfred Sloan. Click here to read more.
• Why GM’s past may be the key to its future. Read Rick Wartzman’s BusinessWeek column here.
• Watch Peter Drucker describe how Sloan would throw a wrench into things.

Peter F. Drucker’s foreword to My Years at General Motors by Alfred P. Sloan (Doubleday Currency, 1963) reprinted by permission of the Peter F. Drucker Literary Trust. Copyright ©1990 by Peter F. Drucker.