A few people now start to laugh. So the man on the stage stops and points at them.

Date: 2015-10-07; view: 1211.

INTRODUCTION

'I know nothing. In this world we all know nothing. Zero. And do you know why? It's because the business world is changing too quickly.'...

'Why are you laughing? General Motors was the biggest company in the world. It was probably a hundred times bigger than your company. And its managers were probably a hundred times better too. But their problem was that they thought they knew it all and, really, they knew nothing. And that is my message today.'

The people who are watching this man are all very successful businessmen and businesswomen. So why are they watching a man who knows nothing? Why do they listen to his insults? The answer is because the man is a management guru.

'Guru' is an Indian word for a religious teacher. A guru is a person who thinks deeply about life. In India, they are admired and loved by society because they are wise and full of ideas. But in the USA and Europe, the word has a slightly different meaning. It is a word that often describes people who write and talk about business and management. These gurus are not trying to answer questions like, 'How can we live in peace?' and 'What is the meaning of life?' Instead, they ask, 'How can I make more profit?' and 'Why don't people work harder?'

In recent years, the ideas of the management gurus have had a big effect not just on business, but also on politics, schools, hospitals and everyday life styles.

This book introduces six management gurus whose thinking has created the modern business world, even though they might say they know nothing!

Chapter 1 Welcome to the Machine Frederick Taylor

In his film of 1936,Modern Times, Charlie Chaplin shows business life as a kind of bad dream. The film is set in a huge factory where people are simply parts of a machine. The workers are not allowed to talk and they are not expected to think. Their jobs are boring and their lives are ruled by the clock. Every action is measured by managers in white coats. Above them all, there is the figure of the boss. He's the man who owns everything, controls everything and sees everything. He even gives orders to workers while they're in the company's washrooms!

According to Chaplin, this was the terrible world that had been created by the ideas of Frederick Taylor. Today, Taylor is remembered as the father of scientific management. He has almost certainly had a bigger effect on business than any other thinker. His methods were copied by businessmen like Henry Ford in the USA and political leaders like Lenin in Russia. Even now, many companies are still managed according to his ideas.

But there has always been one big problem with Frederick Taylor and his ideas. He never really understood people. In his business life, he was never a very successful manager because he was always arguing with his workers. In his private life he often behaved in a very strange way.

In fact, in his later years, he met one of his old bosses, Charles Harrah, at the entrance to a hotel.

'How are you?' asked Taylor.

'Oh, very well,' said Harrah, 'I'm making millions and millions of dollars. In fact, I'm planning to build a hospital for mad people.'

'Oh really?' said Taylor.

'Yes, really,' said Harrah, 'and I'm saving a whole floor of it for you.'

Frederick Taylor never intended to go into management. His family was one of the richest in Philadelphia and his parents had great hopes for him. The Taylors lived in a large house with servants. They took expensive holidays in Europe and by the age of sixteen, young Fred had learnt both French and German. It seemed he was certain to live the life of a rich gentleman.

At school, Fred was an excellent student and a fine sportsman, who loved tennis. When the USA's top university, Harvard, accepted him as a law student, it seemed that his future was decided. But Frederick Taylor had one big problem; he always tried too hard at everything. To pass Harvard's entrance examination, he had studied night and day and had read too many books. Soon after Harvard accepted him, he found that he had a serious problem with his eyes.

He was very worried and said to his parents, 'If I have problems with my eyes now, what will they be like after several more years of hard study?'

His parents tried to make him feel better.

'They'll get better, Fred,' they told him. 'You just need some rest.'

But rest was something that Taylor never wanted. He didn't wait for his eyes to improve; instead, he changed the direction of his life completely. His parents were shocked when he told them about his plans.

'How can you do this,' they asked him, 'after the education that you've had?'

But Taylor knew what he wanted.

'I've decided to take a job as an ordinary worker in one of our local factories.'

Taylor had always hated working with his hands, but for the next four years, he learnt to cut metal and to operate machines. His colleagues were rough men from the poor parts of Pittsburgh. They were surprised to find this young gentleman in their factory and wondered why he was there. Taylor was clearly very different from them. He was a religious young man and he didn't like the way they drank alcohol or smoked tobacco. But his colleagues were friendly to Taylor and he was soon surprising other members of his family with the bad language that he had learnt at his workplace.

But Taylor was not a great success at the factory, and when his training was finished; his boss told him that there was no future for him there. At the age of twenty-two, Taylor found that he was unemployed. What could he do? He didn't want to ask for help from his rich friends and he didn't want to use his family money to make a new start. Instead, once again, he chose the most difficult direction. He took a job as an ordinary worker at another Pittsburgh factory - the Midvale Steel Works.

Midvale was a group of five or six old buildings in the dirtiest part of the city. Thick black smoke poured from its chimneys into the sky. The workers were rougher than at his last job and the bosses were tougher. But Taylor knew that he could succeed.

His experience over the past few years had made him interested in machines. When Midvale's owner, William Sellars, asked some of the workers for their opinion of his plans for a new machine, Taylor saw a great opportunity. He took Sellars' plans home and studied them carefully. He immediately noticed a few problems and over the next few days, he worked late into the night to find some solutions to them.

At the start of the next week, he knocked on William Sellars' door.

'What do you want?' shouted Sellars, when he saw the young worker.

'I want to talk to you about your plans for the new machine,' said Taylor. 'I've found one or two problems, I'm afraid, sir.'

'Oh, have you?' said Sellars.

'Yes, sir,' said Taylor. 'I hope you don't mind, but I've drawn some of my own ideas. I think they'll solve the problem.'

'Give them to me,' ordered Sellars.

Nervously, Taylor gave him his papers. They were the product of several nights of long, hard work.

'Taylor,' said Sellars. 'I believe that I asked you for your opinion of the new machine. Is that right?'

'Yes, sir,' said Taylor.

'And when I ask for your opinion,' continued Sellars, 'I expect your opinion. I do not expect your ideas.'

Sellars turned away for a moment and threw Taylor's papers on to the fire in the corner of the room.

'Do you understand?' asked Sellars.

'Yes, sir,' said Taylor, as his ideas disappeared in smoke up the office chimney.

The bosses at Midvale were certainly tough with Taylor, but they could also see that he was too intelligent to stay in the same job for long. After a few months, they asked him to become the manager of a small group of workers. Taylor was excited. He thought that the workers at Midvale were lazy and he was sure that he could make them work harder.

The workers were immediately worried by him.

'You don't expect us to work harder or produce more, do you?' they asked.

'Of course, I do,' he replied. 'But don't worry; I've got a few ideas to help you. We're going to start to work scientifically.'

For the next three years at Midvale, Taylor and his workers were at war.

Taylor believed he could find the best possible way of doing every job in the factory. So he studied each worker's job until he had found a way of doing it more quickly. Then he taught the new way of working to one of the workers in his team. Taylor was a good teacher and the worker was soon working more quickly than before. Unfortunately, the other members of the team didn't like it. They felt that it made the rest of them look bad. Before long, Taylor found that every member of his team was working at the same slow speed as before. This made him very angry.

'You're here to work!' he shouted at the men. 'If you work harder, the company will make more money. If the company makes more money, you'll make more money. When you work harder, it helps everyone. Don't you understand?'

But the workers didn't understand and Taylor had to try tougher methods. Now, when he taught a worker a new way of working, he made it completely clear that the worker had to work more quickly. If he didn't work more quickly, Taylor sacked him.

But, of course, each time a worker was sacked; it made the situation even worse. And it wasn't long before the workers took more serious action. They started breaking the factory's machines. Taylor's bosses were frightened and they asked him to solve the problem immediately. His solution was simple. Each time a machine was damaged, the workers had to pay for it.

The damage to the machines soon stopped, but Taylor's methods didn't. On one occasion, he noticed a very small mark on one of the workers' machines.

'You'll pay for this,' he said to the worker who operated it.

'But I didn't do it,' said the worker. 'That mark has always been there.'

'Don't give me excuses,' said Taylor. 'You'll pay for it.'

The workers in Taylor's team started to produce more, but his attitude was causing serious problems and his friends started worrying.

'I don't think it's safe for you to walk home at night alone,' said one of his colleagues. 'People are saying that some of the workers are planning to shoot you.'

Frederick Taylor laughed.

'Let them try,' he said.

Although the Midvale workers weren't happy with his methods, Taylor was becoming more and more interested in scientific solutions to problems. His eyes were now better and so he decided to return to his studies. But this time he didn't want to study law at Harvard; instead, he wanted to become an engineer. He started a course at the Stevens Institute of Technology, a local university. The course was hard and it meant that Taylor had to study for three or four hours in the evening after a long working day at Midvale.

As Taylor learnt more about his subject, he thought of ways of using engineering ideas in other areas of life. One of these was tennis.

Because Taylor's family was so religious, he wasn't allowed to work on Sundays. But they didn't mind if he played tennis. So every Sunday, Taylor and his friend, Clarence Clark, practised tennis for hours and hours and hours. In 1881, they decided to enter the US national tennis competition — the event that is now called the US Open. Taylor knew that he and his friend were good players, but he wanted to prepare for the competition in a modern, scientific way.

Taylor realized that a good tennis player needed to be fit. But how could he get fit, when he spent so much time working and studying? Taylor's solution was simply to reduce his amount of sleep. So, after finishing his studies just after midnight every day, Taylor put on his running shoes and ran for several kilometers through the dark empty streets of Philadelphia. At first, the local police often stopped him and asked him questions. But soon they just shook their heads and said, 'It's that strange young Mr. Taylor again.'

Taylor also thought hard about the tennis equipment that he was using. He was sure that he could find a way of improving it. During their Sunday practice-games, Taylor and Clark tested several new ideas.

When they arrived at the national tennis competition, people were immediately interested in them. One of the other players pointed at the unusual thing in Taylor's hand.

'You're not going to play tennis with that, are you?' he asked.

'Of course,' replied Taylor. 'Why not?'

'But it looks like a spoon,' said the young man. Everybody laughed.

'Just wait and see,' said Taylor calmly.

By the end of the competition, the laughing had stopped. Although their equipment was strange, Taylor and Clark didn't lose a game and became winners of the US national tennis competition of 1881.

Back at the Midvale Steel Works, the bosses were starting to notice young Frederick Taylor. They admired his energy and his tough attitude to the workers. They also liked his ideas for new tools and machines. Certainly, nobody threw his plans on the fire any more! Soon after he finished his course in engineering in 1883, Taylor was made Midvale's Chief Engineering Officer. In just six years he had gone from the job of an ordinary worker to become one of the company's top managers.

People outside Midvale were also beginning to hear about Frederick Taylor. In 1890, he was asked to become General Manager of the Manufacturing Investment Company, a business that owned a number of paper factories. Taylor was very pleased. It was a better job and it paid more money. More importantly, it also gave him more opportunities to test his ideas about engineering and management.

But the Manufacturing Investment Company was not really ready for Taylor's ideas and he was soon having problems with both the bosses and the workers.

The owners of the company were worried about the large amounts of money that he started to spend on new machines and new equipment.

'The business can't afford this,' they told him. 'We need to make the money before we can spend it.'

But, as always, Taylor had a scientific reason for the spending.

'Each worker,' he explained, 'is worth $3,000. So if a machine can replace a worker and it costs less than $3,000, it makes perfect economic sense to buy it.'

But the owners of the company didn't agree.

The workers at the company's factories were also soon angry with Taylor. To make the company's factories safer, Taylor told some of the workers that they had to work behind bars.

'You must understand,' explained Taylor, 'that this is in your interests. I want you to be safe at work.'

But the workers didn't see things like that.

'We can't work behind bars,' they complained. 'What does he think we are? Animals? It's like working in a zoo.'

Taylor felt that everyone was criticizing him and he became more and more unhappy in his job. To make things worse, the company was not making a lot of money. Everyone agreed that Taylor had lots of ideas, but did they work? The answer seemed to be, 'No'.

Taylor didn't know what to do. Should he stay or should he go? In the end, he didn't have to make a decision.

In 1893, the US economy hit some serious problems. Suddenly, nobody had any money. People stopped buying things. The value of the US dollar dropped like a stone. It was clear that the Manufacturing Investment Company could never be a success. Taylor had to leave and find a future somewhere else.

The next few years were difficult for him. Although he tried very hard, he couldn't find a regular job. Instead, he sold advice about engineering and management to a number of companies in the north-east of the USA. It was a job that allowed Taylor to see how other companies operated. The more he saw, the more ideas he had. Now, he just needed a chance to test them.

His opportunity came in 1898 when he was offered a job as manager of the Bethlehem Steel Works. Taylor couldn't wait to start work. For his first test, he chose the simplest of all the jobs in the factory. This was the job of moving pieces of iron from one place to another. For weeks, Taylor and his assistants studied the workers. They found out the best way to pick up a piece of iron. They used watches to find out how quickly a worker could carry a piece of iron over a certain distance. They also decided how much rest a worker needed in order to work as hard as possible. They tried to answer the question: what happens if we manage a human being in the same way that we operate a machine?

When their study was finished, Taylor sat down with his assistants and explained his findings.

'According to our study,' said Taylor, 'a good worker can move between forty-seven and forty-eight tons of iron a day.'

'But that's strange,' said one of the assistants. 'At the moment they only move twelve tons a day.'

'Exactly,' said Taylor. 'Isn't it great? We have a chance to show everyone that scientific management really produces results.'

'But how will we make these people work in our new way?' asked another assistant.

'No problem,' said Taylor. 'The harder they work, the more they'll earn. The company will be happy and the worker will be happy. No one can lose!'

Next they needed a worker to test the results of the study. Taylor's assistants now knew all the workers very well and they immediately suggested a young man called Schmidt. He was big and strong and he had a young family, so it was certain that he needed more money.

At the factory one day, Taylor called Schmidt to him.

'Schmidt,' said Taylor. 'Are you an expensive man or a cheap man?'

Schmidt looked at him and thought hard.

'What do you mean?' he asked.

'Oh, really, Mr. Schmidt,' said Taylor, 'it's not a very difficult question. Let me say it another way. Would you prefer to earn $1.15 an hour or $1.85?'

Schmidt still seemed uncertain, so Taylor continued, 'I think, Mr. Schmidt that you'd prefer to earn $1.85. Everyone prefers to earn more for their time. It's a law of human nature.'

'Maybe,' agreed Schmidt.

'Excellent,' said Taylor. 'Now, if you want to earn $1.85, you must do exactly as I tell you. When I tell you to pick up a piece of iron, you pick it up. When I tell you to walk, you walk. And when I tell you to rest, you rest. Do you agree?'

The other workers were shaking their heads.

'Don't listen to him,' they called to their colleague. But Schmidt was already thinking of the extra money.

'OK,' he said. 'I'll do it.'

Schmidt did exactly as he was told and he was soon moving 60 per cent more iron every day. The extra money that he earned made a big difference to his life. The other workers didn't like Taylor's ideas, but they also didn't like the fact that Schmidt was earning much more money than them. One by one, they agreed to use Taylor's new method of working.

But many of the workers found that they couldn't earn as much as Schmidt, simply because they weren't as strong as him. In fact, seven out of eight workers couldn't work as hard as Taylor asked. Taylor saw only one solution; they had to leave.

Some of the other managers at the company started to worry.

'Are you sure your new method is fair?' they asked him.

'Of course, it is,' replied Taylor. 'These men do an honest day's work for an honest day's pay. Of course, it's sad that some people have to leave. But one of the most important things about good management is finding the right man for the right job.'

Taylor soon started to organize the work of the rest of the factory in the same way. First, he watched the workers and measured the speed of every move they made. Then he decided on the quickest way of doing each job and taught that method to the workers. Finally, he chose the best workers for every job and told the others to find work somewhere else. Again, the results were excellent.

But Taylor's attitude was making him more and more enemies at Bethlehem. The workers liked earning more money, but they hated Taylor's methods. The company's owners weren't sure of him, especially because he was again spending large amounts of money on new equipment. In May 1901, he was sacked. Although Taylor was only forty-five, it was the last manager's job that he had in his life.

Taylor had had enough of business. But at least he had shown that his idea of scientific management could work. He went back to his house in the country and wrote pieces for magazines and newspapers that explained his ideas. He travelled round the country and gave talks to groups of businessmen and engineers. Slowly, more and more people became interested in the idea of scientific management.

Then, in 1910, Taylor suddenly became famous. The US government was having a meeting about the different costs of train and sea travel. The railway companies said they needed more money from taxes. The ship owners said that they didn't. To support their argument, the ship owners explained that the railway companies wouldn't need the money if they improved their management. To explain their point they asked some managers to talk about a man called Frederick Taylor and a new idea called scientific management.

'If the railways introduce this idea,' one manager told the US government, 'they will save a million dollars a day.'

Another manager said that scientific management could cut costs and increase workers' pay by 100 per cent.

The next day, Taylor's name and a description of his ideas were in all the newspapers. Everybody in the US business world was talking about scientific management.

In fact, the time was just right for Taylor's ideas. In the early 1900s in Detroit, another engineer, called Henry Ford, had started a new business that made cars. At that time, cars were very expensive and were only owned by the richest people in the world. But Ford believed that it was possible to sell cars at a price that ordinary people could afford. He simply needed to reduce the cost of making them. To do this, he decided to make just one kind of car in just one color - the famous black Model T Ford. At his factory, he also started making Model Ts in a new way. His method was to move the car along a line while workers added pieces to it. The workers' jobs were very boring, because they just did the same thing again and again and again, all day long. But Ford wasn't worried about that; for him workers were just another part of the machine. He once said, 'When I want a pair of hands, why do I get a human being as well?'

The Ford Motor Company was very successful. Its factory in Detroit produced a new car every forty seconds, and the price of a new Ford car soon fell below $300. As a result, millions of people bought Ford cars and Henry Ford became the richest man in the world.

Of course, everybody wanted to know the secrets of his success. When they heard about Frederick Taylor, many believed that he could give them the answers they wanted. The ideas of Ford and Taylor were very similar. Both Ford and Taylor believed that workers didn't want or need to have responsibility. Without their managers, workers were nothing. It was the manager's job to find the best workers and to teach them to work in the best possible way. It didn't matter if the workers were unhappy. They were paid an honest day's pay for an honest day's work and it was their job simply to obey.

These were the ideas that Taylor wrote about in his book of 1911,The Principles of Scientific Management. It was a huge success. When he gave a talk in New York City some time later, it was attended by 69,000 people!

Managers who followed Taylor's ideas were famous for their watches. They all wanted people to work as quickly as possible, so they needed their watches to measure the workers' speed. Taylor, too, loved watches and carried an expensive Swiss one with him wherever he went. In 1917, when he was taken into hospital because of an illness, the doctors and nurses soon noticed that Taylor always wound his watch at exactly the same time every day. Then early one morning, a nurse heard a sound from Taylor's room at four o'clock in the morning.

How strange,' she thought. 'Mr. Taylor usually has such regular habits. Why is he winding his watch so early in the day?'

In fact, it was Taylor's last action. When the nurse looked into the room just an hour later, she found that Taylor was dead. In a way it seemed right that this was the final action of the man who had made so many others servants of the clock.

In the years after his death, the ideas of Frederick Taylor spread around the world. His books were translated into many different languages. Factories from California to Siberia were organized according to his methods. Machines came first and people came second. Managers learnt to control and workers were taught to obey. The boss's word was law.

But today, many people question Frederick Taylor's scientific management. Does it really produce the best results? Do managers always know best? Is it true that people only work for money? Is it true that they don't want responsibility?

But although his ideas are often questioned, it's certain that there are many businesses in the world today that still haven't forgotten the lessons of Frederick Taylor.