Wall Street Ignores a US Business Sage ans Loses It’s Soul

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• 17 October 2011, 01:49

  Sorry, formatting issues that I was unaware of. The arrival SHOULD look like this:

  Wall Street Ignores a US Business Sage and Loses It’s Soul 

  The "official" beginning of "The Great Recession" was December of 2007. As I recall: Wall Street’s Stocks (and my father’s retirement account) shed about 40 percent of it’s value in a short period of time. From December 2007 to July of 2010 more than eight million Americans were laid off.

  I found a couple of lists that I thought were of particular interest for this article. The first list includes the worst offenders among the Wall Street titans for layoffs. The second list includes a number of companies that went out of business in the new millennium. Don’t get hung up on the lists because the real point of this editorial will be found beyond.

  Layoff list:
  General Motors -107,357, Citigroup -73,056, Hewlett-Packard -47,540, Circuit City -41,495, Merrill Lynch -40,650, Verizon Wireless -39,000, Pfizer -31,771, Merck & Co. -24,400, Lehman Brothers -23,340
  (The investment bank went out of business. Everyone lost their jobs), Caterpillar -23,024, JPMorgan Chase -22,852, Starbucks -21,316, AT&T -18,401, Alcoa -17,655, Dow Chemical -17,530, DuPont -17,000, Berkshire Hathaway -16,900
  (While I applaud Warren Buffett, for requesting a tax hike for his income bracket, it is horrifying that he laid off nearly 17,000 people), Ford Motor -15,912, KB Toys -15,100, United States Postal Service -15,000, DHL Express USA -14,900, Sprint Nextel -14,500, Sun Microsystems -14,000, Boeing -13,715, Chrysler -13,672

  A number of notable corporations went out of business in the new millennium. A few that I recognize are:
  The Equitable Life Assurance Society, Capital Artists, Converse, Enron, Montgomery Ward, Polaroid, Schwinn Bicycle Company, Sunbeam Products, TWA, Napster, Bethlehem Steel, Spiegel, Tower Records, CompUSA, Bennigan’s, Countrywide, Frontier Airlines, IndyMac Bank, Lehman Brothers, Lenox, Lillian Vernon, Linens ’n Things, Madoff Investment Securities (Ponzi schemes have limited, VERY limited "security"), Mervyns, Olan Mills, Pilgrim’s Pride, The Sharper Image, Vivitar, Woolworths Group, Crabtree & Evelyn, Denver Newspaper Agency, Extended Stay Hotels, Reader’s Digest Association, Trump Entertainment Resorts, Waterford Wedgwood, Air America Radio, Blockbuster, Hollywood Video, Borders and Ultimate Electronics. 

  Every time that I have met someone, with an MBA, I asked them what they thought of the work of business scholar Dr. W. Edwards Deming (initially a Bell Labs Statistician). To a person, and this is more than "a few," they looked puzzled. They did not readily recall the name. These are people who studied, (what?), BUSINESS. Now the real fault, for this blatant level of ignorance, lies with institutions and instructors. The fact that Dr. Deming is one of the most renowned intellects, in the sphere of instruction on the quintessential business/total quality model, was apparently completely missed by American Academics. It was also, unfortunately, missed by the US corporate world.

  It may seem odd to be bringing awareness of Deming to readers who may be part of #OccupyWallStreet, or others who are just curious about the movement, but I assure you that there is a profound point in doing just that - Wall Street missed Dr. Demings message and it has cost them their souls.

  Dr. Deming created a series of 14 points with which to manage a corporation. We need look no further than his first point to begin to understand just how badly the "Fortune 500" have fucked up. His first point is:

  "Create constancy of purpose toward improvement of product and service, with the aim to become competitive and stay in business, and to provide jobs."

  Simple enough I suppose. But when you look at the two lists above you see that those Wall Street Titans are reduced to midgets by this point or, worse, erased completely.

  Deming did not say "provide more jobs in _insert foreign country here_" - he said "provide more jobs." Nor did Dr. Deming say "provide more jobs ’when the economy is good’." Deming said, "provide more jobs." You would have to read "Out of the Crisis" (Deming -500+ pages of fine print with one picture) to know this part: Deming puts all responsibility for the welfare of the company, it’s shareholders, and it’s employees squarely on the shoulders of leadership. No excuses - period.

  Bad economy? No excuse. Labor costs or supplies "too high?" No excuse. Competitors? No excuse. You see, Deming understood the old Bible Quote: "The people perish without a vision." We might adapt it here to read: Corporations perish without visionaries. Just ask Apple after it let Steve Jobs go. 

  This was just too much for fat-and-lazy corporate America. As long as theirs was "the only game in town," went their thinking, "fuck it." Well the Japanese liked what Dr. Deming had to say. And guess where America’s first real competition came from. I wonder what GM, Ford, and Chrysler (all on the list above) think of Toyota/Lexus now? But Deming’s point is that the problem is not competition, in fact he says that it’s not even "monopolies" (which can be quite okay if they are looking out for the best interest of their customers), the only real problem is a lack of leadership (and visionaries).

  You cannot be competitive if you don’t have enough vision to market the fax machine (US companies shunned their own invention because "nobody would want one") or the mouse driven PC (a Xerox invention - that they were sure no one would want - co-opted by a couple of cats named Wozniak and Jobs).

  When US corporations turned to layoffs, instead of adopting the philosophy to "Create constancy of purpose toward improvement of product and service, with the aim to become competitive and stay in business, and to provide jobs," they shot their own foot off. When shareholders wanted a better bottom line, instead of thinking about the long term health of the object company of their investment, they shot their own foot off. (One Xerox CEO cut costs every year for about a decade. The numbers looked good every year - until his last one - when shareholders woke up to the fact that there was practically no company left). 

  Wall Street ignored the wisest sage in business. Few US corporations are competitive with stated goals of staying in business and providing American jobs. You see, when you forsake a business prophet like Deming, for profits, you end up with plastic in baby formula, oil in the ocean, dead men in mines, cars and on oil rigs. You pollute the Earth, cut jobs, and create toxic/dangerous work environments. You destroy the Earth, the lives of workers and the world’s economy. 

  Fuck ’em.

  [Note: Paul Hawken is an inspiration to this writter as well. Anyone who is interested in what business SHOULD look like would do well to study Deming and Hawken]

• 17 October 2011, 20:24, by Brad Blanton

  Excellent article! You might say that you and Deming and Paul Hawken are finally being heard by all us #Occupy protestors and your words are being broadcast via our human microphone system. Thanks! Brad Blanton

  • 18 October 2011, 10:35, by Timbre Wolf

    Thank you! Your book, Radical Honesty, is GREAT btw.

• 18 October 2011, 19:24, by H.M. Gaugau

  Once again AWESOME!!! Since I’ve just started my own business I printed this article to hang in my office to read every day! Not that my little business can create many jobs but at least it has created 2. One for me and one for my partner. Who knows, when it grows hopefully we’ll be able to expand and create those other jobs.

  At 70 years of age, it’s a little bit scary starting all over again, but what the heck? I’ve got the time, the knowledge, and the energy (most of the time) so I’m goin’ for it!

  Keep up your great bylines and I’ll keep reading and printing them.

• 23 October 2011, 05:24, by johnnyDanger

  Great article. I do agree that when retirement accounts like IRAs, described as "safe investments" and receiving deferred tax status (gov. support!) and hugely popular collapsed, a pivotal point had been crossed for American History. Not because it happened, but because nobody cared. I mean anybody important to the economy, anyway.

  Corporations are incorporated in a sovereign country, thereby giving them some kind of legitimacy it would seem. Yet they can do business anywhere. It’s not even clear sometimes who has jurisdiction over them. Still, just a fiction.

  Wolf, your Dr. Deming has good ideas, sure. But is there (yet) any requirement that corporations have a conscience, are benevolent? Maybe we relied too much on government to regulate them, and since Reagan regulation has become a bad word, so there you go. The #OccupyWallStreet are possibly on the right path.