Executivitis

James Rippy



I am amazed at the business news I hear and read each day. The Internet, newspapers, magazines, and television news brings us stories of new restructuring plans, downsizing, mega- mergers, changes in pension plans, and the fact that good jobs are being eliminated. It appears this is the only way we know to keep the stock prices up and the shareholders happy. What ever happened to the old fashioned way of making money? What happened to improving shareholder value by focusing on growing the existing business by providing high quality products at good prices with superior customer service? Are restructuring, merging, downsizing, eliminating jobs and tinkering with pension funds the only way to make money and increase shareholder value today?

Something is seriously wrong in our country today when we reward and even applaud the elimination of hundreds of thousands of decent jobs that pay good wages and benefits. These are the same jobs that will allow families to survive, educate their children, and share in the "American Dream" we were raised to believe in.

Our organizations are suffering from a disease today that if not addressed quickly will fast become an epidemic. This disease has permeated the upper levels of management in a substantial number of companies and organizations. I searched for a proper name or label for this disease and finally came up with Executivitis. This is a name my colleagues and I used jokingly over the years to describe the behavior of a certain type of manager. You will recognize this type of manager when you read some of the symptoms of this disease.

I have spent forty years in management doing a lot of different things. I started as a management trainee on the midnight shift in a factory. Fourteen moves and a dozen of line and staff jobs later I retired. I have been responsible for large plants, once did a stint as Vice-President of special capital projects with a charter to spend $650 million dollars, and finished up the past five years as Senior Vice President, with responsibility for manufacturing, quality, research and development, logistics and transportation. I was also responsible for original equipment sales, a $300 million-dollar business unit with profit and loss accountability. In addition to these responsibilities, I was Chairman of a large joint venture with two Japanese companies. I was fortunate to have a super career, travel the world, and be paid well. One of the standard greetings among some of my close colleagues was, "Did you ever dream that you would be paid so well to have so much fun". I can never remember a day that I was not anxious to get to work. In fact, I was famous for arriving at 5 a.m. every morning. But in the last four to five years I have become personally convinced that our system is flawed, and rewards only a few for the efforts of many.

My point of view did not change overnight. I did not receive a message in my sleep or get struck by a bolt of lightning from above. I gradually began to see that our present direction in leadership is not working for the benefit of all those who make a contribution to their company or organization.

Business has changed over the last 20 years. Think about all the "flavor of the month" fads we have been exposed to. We have been downsized, rightsized, optimized, re-engineered, kaizened, and at least a dozen more programs named with clever buzzwords. We use these words to convince the shareholders, the media, stock analysts, and even our own employees that we know what we are doing. What is really happening is that we are trading higher paying jobs for service industry jobs that pay much lower wages. We continue to export the better paying good jobs to low wage countries. Countries like the new Czech Republic, Slovakia, Poland, and Russia. The wages in these countries are 10% to 25% of the wages in Germany and the USA.

How can we maintain the standard of living that has been the envy of the free world without "making things"? Look at the history of jobs lost in automotive, steel, textiles, electronics, shoes, clothing, and others. We have seen entire industries shut down and hundreds of plants close during the last twenty years.

Market shares of giants like General Motors, Kodak, US Steel, as well as many smaller companies have declined dramatically. For example, the tire industry is almost totally owned by foreign parents today.

The Italians, French, Germans, and Japanese own Armstrong, Uniroyal, Goodrich, Firestone, Mohawk, and General Tire today. Goodyear and Cooper are the only major domestic tire companies left. They are the only ones still listed on the New York stock exchange.

We have entire generations that will not remember how successful we have been in the past. How many people working today can remember when the U S government viewed General Motors as too large and accused them of stifling competition. Of course GM was close to 50 percent market share and had double digit profits back then.

Rarely a day goes by without major companies announcing plans to eliminate thousands of jobs in the future. These include companies like Ford Motor Company, General Motors, Goodyear, IBM, Xerox, Intel, and Motorola. . There are hundreds more and the list not only includes old-line companies, but many former "darlings" of Wall Street.

News about restructuring and layoffs usually causes lots of Wall Street swooning and a run up in the share price under the banner of becoming more competitive. This is really a farce considering that some of these companies restructure every few years with pretty dismal results.

What is "Executivitis"? How does it start? How can we prevent? How to cure, or at least slow down the progression? This disease is found at all levels of management. The damage to the person afflicted is minuscule compared to the damage created in the lives and well being of those working for an afflicted patient. Much of the job loss in this country is the result of Executivitis in the leadership ranks of companies and organizations.