“Day by day Volkswagen… appears less like a public company, and more like a complex oligarchy.” That’s how The Economist began a critique of the German carmaker’s flawed corporate governance – in December 2005.
Not much has changed since, as the latest developments in Wolfsburg suggest. In spite of periodic protests about governance, Ferdinand Piëch, VW’s chairman, has reinforced his hold over the group and is expected to seek another five-year term in the chair. The latest news is that his wife, Ursula, will stand for nomination to the board. This may be, as the FT wrote on Sunday, part of “a fairly well-established tradition of spouses taking up powerful positions at German companies”, citing the board positions held by Friede Springer at Axel Springer, and Liz Mohn, at Bertelsmann. But to anybody outside this tradition of family-controlled companies, it looks distinctly odd. As Dow Jones pointed out in its account, “there are no reports…. that would suggest she has any high-profile corporate management experience“. Read more
General Electric’s thinking on leadership has shifted, according to an article in Wednesday’s Wall Street Journal: from breadth to depth. The WSJ writes:
[GE] for decades had made a rigorously applied but generic management tool kit central to its identity. Like all companies, GE wants some of both traits in its leaders, but the balance has tipped toward expertise.
I’m doubtful that the shift is quite as earth-shaking as the WSJ implies. Expertise is one of several attributes GE has long sought in its leaders, along with External Focus, Clear Thinking, Imagination & Courage, and Inclusiveness. In his 2010 letter to shareholders, chief executive Jeff Immelt added some new ones – including the eccentric-sounding goal that its leaders should be “humble listeners”. It already adds up to a pretty demanding checklist, as I wrote at the time. Read more
The pun proved irresistible. “Mystery Ends, Mistry Begins”, ran the headline in India’s Economic Times on the appointment last week of Cyrus Mistry to succeed Ratan Tata at the head of the eponymous tea-to-steel holding company. If the succession was a mystery, it looked to have a pretty feeble final twist. Read more
I think most obituaries of Robert Galvin – who helped take Motorola from a family firm to a $11bn leader in mobile phones – understate his contribution to management practice, for he was, at the very least, the godfather of Six Sigma.
The omission is understandable. Six Sigma – which focuses managers obsessively on improving quality and eliminating defects – was the process improvement technique of choice for large companies in the 1990s, but it seems to have faded from public view recently. I spent a day at General Electric’s Crotonville leadership development centre in September and I didn’t hear Six Sigma mentioned once. Yet 15 years ago, when Jack Welch was in his pomp, the air would have been thick with boasts about how many “black belt” leaders of Six Sigma initiatives GE had bred. Read more
It’s a cruel coincidence that the latest death knell for Saab comes within days of the latest extension of car guy Bob Lutz’s lease on life.
On Thursday, a Swedish court rejected the carmaker’s attempt to seek protection from its creditors, pushing a decision on potential insolvency into the hands of suppliers and employees awaiting payment for materials and labour. Saab is appealing, but the obituaries for the group – now selling well under 100,000 units annually – are already being written. Read more
Having spent the past couple of weeks in Hong Kong and the Pearl River Delta, I found the obituaries for Keith Tantlinger, the engineering brain behind the shipping container, poignant.
I took a stroll along the Pearl River in Guangzhou on Wednesday, nearby the ports from which vast amounts of electronics and textiles are shipped via containers to the rest of the world. It was a reminder of how much Mr Tantlinger’s little-known invention in the mid-1950s revolutionised the transport industry.
As recorded in Marc Levinson’s book The Box, Mr Tantlinger was asked by his boss, the maverick entrepreneur Malcolm McLean, to make practical the idea of storing goods in box containers rather than in break-bulk ships which had to be loaded and unloaded at each port. Read more
Who would not want Brunello Cucinelli to succeed in his quest to produce luxury cashmere sweaters in the Umbrian hills while paying his local workforce a premium wage and offering them a three-course daily lunch?
Rachel Sanderson’s interview with Italy’s “King of Cashmere” is a great insight into how one manufacturer is trying to preserve artisinal traditions rather than outsourcing the production of his eponymous knitwear to China or Bangladesh.
It will be encouraging if he can continue with his idyllic-sounding approach to design and manufacturing – helped by the fact that he can sell the resulting products to investment bankers and others for luxury prices – while listing a third of his company on the Milan stock exchange. Read more
The ill-tempered struggle in Washington over raising the federal debt limit is enough to make anyone gloomy about the future of the US. Clive Crook, my FT colleague, rightly contrasts the stasis among politicians with the “unrivalled energy and ambition” of US workers. Read more