"History is a wonderful thing, if only it was true"

Friday, June 17, 2011

Lutz vs the MBA's

Just like economics is not a "science" maybe business isn't either

Make delightful products, and or deliver delightful service and your company will work.

Beguile with quality not baffle with BS

"Lutz reckons that his experience is not just applicable to the automotive industry, but to business generally.
"Shoemakers should be run by shoe guys and software firms by software guys and supermarkets by supermarket guys. With the advice and support of their bean counters, absolutely, but with the final word going to those who live and breathe the customer experience. Passion and drive for excellence will win over the computer-like dispassionate, analysis-driven philosophy every time," Lutz said."

Columnists | Lutz says business theorists hurt auto industry more than UAW | The Detroit News:

"For the better part of my career, I have seen what these bright, analytical, dispassionate, data-driven geniuses have done to our country's industry and commerce. Through a relentless pursuit of 'winning strategies' and elaborate 'missions, values and goals' statements - which incidentally, consume vast amounts of non-value-added time - these modern MBA graduates reject the obvious as being 'simplistic' and believe that elaborate alternative scenario planning and 'test wells' will provide a better (if not logical) answer," he says.
'Throw the intellectuals out'
"(Successful entrepreneurs like Steve Jobs of Apple and Britain's Sir Richard Branson) have a blissful lack of awareness of the analytical science of business. Uninfected by the MBA virus, they simply strive to offer a better product, one that delights the customer. They control costs, of course. And they tolerate a necessary level of bureaucracy. It's essential. But the focus is on the product or service ... thus the customer. American business needs to throw the intellectuals out and get back to business!"


This book is about what happened to America’s competitiveness, and why. Most of the examples and observations are from the automobile sector, for the simple reason that that’s what I know best, and I was a participant in the decades-long decline of General Motors. But the creeping malignancy that transformed the once all-powerful, world-dominating American economy from one that produced and exported to one that trades and imports is now common to all or most sectors.
It really boils down to a matter of focus, priorities, and business philosophy. Leaders who are predominantly motivated by financial reward, who bake that reward into the business plan and then manipulate all other variables to “hit that number,” will usually not hit the number, or, if they do, then only once. But the enterprise that is focused on excellence and on providing superior value will see revenue materialize and grow, and will be rewarded with good profit. Is profit an integral part of the business equation and a God-given right, no matter how compromised the product or service? Or is the financial result an unpredictable reward, bestowed upon the business by satisfied customers?
To some restaurant owners, people booking reservations weeks in advance is a sign that “we did something wrong.” Perhaps the food is too good . . . best to back off a bit on the quality of the meat and produce. Ease off on the butter! We’ll reduce cost, improve margins! And the customers, presumably, will keep coming, right?
But to other owners, the excess demand is a sign of success, of the formula working, of customers appreciating the value of their efforts. In this case, profit can be increased by selective higher pricing to keep the waiting times reasonable while gaining a premium reputation. Want to guess which restaurant will be in business longer, and be more successful?

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