What the world has heard about MCI Communication Corp. chairman William G. McGowan is that his dogged pursuit of a piece of the long-distance market eventually broke AT&T Co.'s monopoly of the American telephone industry. What most people forget is that, all the while, he was building and managing a company that now has about 15,000 employees and this year should take in more than $3 billion.
There was nothing preordinated about MCI's political and legal victories, nor its unquestioned dominance among the new players in telecommunications. Credit the toughness and cunning of this son of a railway union official for getting the jump on such giants as ITT Corp. and GTE Sprint (or "Splint," as McGowan loves to call it) in the race for residential and small-business customers. Then just when you thought AT&T would get its revenge by matching MCI's low prices, McGowan signed up IBM Corp. as partner and largest shareholder -- in a single stroke gaining $600 million in capital and equal access to the brave new world of information technologies.
MCI has been McGowan's biggest, but not his only, success. He hustled alligator handbags and helped Hollywood's Mike Todd raise the money for the movie Oklahoma, then made his first million in the mid-1960s with the sale of a small defense contracting firm he had started. The idea for offering private long-distance telephone lines between major cities actually came to somebody else. But it was left to McGowan to sweet-talk Wall Street and rewire official Washington until it interconnected with MCI's ambitious business plan.
This student of Wilkes-Barre, Pa., nuns and Harvard Business School dons has now become an acerbic critic of the American corporation and its most sacred beliefs. He is, above all, a professional iconoclast who still runs his empire with the highly focused energy of the turnaround specialist he once was. His supreme confidence, say associates, is a mixture of public egoism and strongly private Catholic faith. Today, he seems driven less by the desire to change the world or make a larger fortune than by the need to conquer ever more difficult challenges.
McGowan spoke about his experience with management and managers with INC. editors Bo Burlingham and Steven Pearlstein.
INC.: You've taken a company from nothing and, in the span of 18 years, created a new industry and built a company doing almost $3 billion worth of business. How do you account for the fact that you didn't allow the company to outgrow you?
McGOWAN: Besides the fact that there is no accounting for it, I suppose it's because I realized at every point along the way that I didn't need to be the person who had to do any particular thing other than make sure that the focus and direction of the company was clear, and that the forces and people were set in motion to get us where we were going.
I'm naturally a delegator. I guess I realized early in life that, unless you're going to be a violinist or something, your success was probably going to depend on other people -- that's certainly true in business. And if you're going to be in a business of any size, you're going to have to develop the kind of leadership qualities that allow you to attract good people, guide them, encourage them, and ultimately trust them -- and let them go and do their jobs.Oh, sure, you have to take deep breaths occasionally. But mostly you have to trust them.
INC.: One can think of countless CEOs in growing companies who say yes to all that, that they're going to trust people . . .
McGOWAN: . . . And they second-guess them. They say, "I could do better. . . ."
INC.: Or they find out that they really like doing some of the jobs they are delegating, and so don't ever really give them up.
McGOWAN: Look, if you're in a growing business, that comes with a whole bunch of characteristics that you have to face up to. You can't say, "I'm going to take the pieces that I like and not the pieces that I don't like." If you don't like going up and down all the time, don't become an elevator operator. Or, to change the metaphor a bit, if you're happy running a million-dollar delicatessen, then don't naturally assume you want to run a $50-million delicatessen. It's unrelated -- there's no relationship at all except maybe you might buy from the same suppliers. Yet people want to do $50 million a year and run it like it was still a million-dollar delicatessen. And that just won't work.
INC: It takes most people a long time and a couple of failures to come by that wisdom.
McGOWAN: I had an advantage in that before I started MCI, I had a lot of experience, as a management consultant in New York City.My specialty was failing companies, and over the course of four years, I saw a lot of companies in trouble. And typically, they were failing because of the reason you just mentioned -- that the company had gotten to the size beyond the scope or breadth or willingness to accommodate the original owners.
INC.: How did you handle that?
McGOWAN: What I would do was come in and ask what the problem was with the company, and for the most part they all knew -- in fact, I never really ran across anyone who didn't know the answer. Even before I got there, everybody had been telling them exactly what they should do to get the company back on its feet. And if they could have done it, they would have. But they couldn't. So I did it. I would take over and run production, or manufacturing, or marketing, or the financial and administrative end of things -- wherever the problem was. And typically, whatever they were doing in these areas, I did the opposite. If they were on commission, I'd go to salary; if they were on salary, I'd go to commission. If they had automated the business, I'd go back to manual; if it was manual, I'd automate. Because I quickly realized they you had to have a traumatic change in order to break through the deadening, ongoing, day-to-day process that was leading them to failure. And by going through such changes, you quickly got everybody's attention, and were able to reexamine everything legitimately.
INC.: Why hadn't the owners simply tried that themselves?
McGOWAN: They couldn't do it for a number of reasons. One is that it was often a situation in which business and family relationships and friendships were all confused -- they knew deep down that the brother-in-law wasn't able to hack it, but they couldn't fire him. So I'd say to them, "Look, you would never have brought somebody in from your family who was not really excellent, would you?" And they'd say, "No, of course not." And then I'd say, "Good, then they'll have no trouble working elsewhere, will they?"
I also found situations where people had looked at their books and thought they were doing all right only to discover one day that they had outrun their money. And the accountants were somewhat to blame. Small companies, private companies especially, should ignore the accountants' profit-and-loss statements. They are a snare and a trap; they force you after the wrong thing. The only thing that matters is cash flow -- not the cash flows they use today, but the old cash flows that laid out the source and application of funds -- where it's coming from and where it's going and how much is left over. No company has ever gone bankrupt because it has a loss on its P&L.
INC.: By reputation, you have sort of a thing about accountants.
McGOWAN: We had a stockholders' meeting the other day, and I mentioned that I had been looking around and found a company that seemed intriguing. The name of the firm was Laid Back & Cool. And what interested me about them was their motto, which was, "Hey, man, close is enough." Well, we went with Price Waterhouse again, but I'm not sure from an accounting point of view that the guys at Laid Back didn't have a point.
INC.: Getting back to those failing businesses, was there something else that was common to the owners themselves?
McGOWAN: The problem most often was that the owner had not faced up to what business he was really in. What business you're in is what you should do when you walk into the office in the morning. That may not be what the sign says over the door, or what your family or your friends think it is, but that doesn't matter. The trick is to decide what is the thrust of your business at that particular time, and that is the CEO's job.
INC.: How do you mean?
McGOWAN: Take my case. We started out as Microwave Communications, before we changed the name to MCI. And everybody said, "Oh, you're going into microwave communications," but that was not true at all. The business I was going into was raising venture capital, because if I didn't succeed in that one thing, I was a failure, I couldn't do anything. I had calculated that I needed about $5 million, but in those days the most you could ever raise in venture capital was $500,000. So what I decided to do was start a series of regional ventures -- MCI New England, MCI California, and so forth. And I ended up with 17 of them, which some day would be combined together into a national system.
INC.: But at that time these regional companies weren't actually doing anything?
McGOWAN: No, they were all shell corporations. And that was important for succeeding in the next business we got into, which was lobbying the United States government. If we did not succeed in changing the regulatory situation, then all the rest was just show biz. And these local investors were tremendously helpful in that. You see, the Federal Communications Commission at that time was very heavily biased toward localism, largely because of its regulation of the television industry. And so having all these local people was appealing to them. It also allowed me to enlist Democrats and Republicans and all kinds of colorations on my team. And typically, they were successful, important people -- executives from United Artists, Better Homes & Gardens, Holiday Inns, the Fidelity Fund, among them. And they were well connected in Washington, which was where we located the company, so that we could be near our only customer, the Federal Communications Commission.
INC.: The FCC finally gave you the go-ahead to provide long-distance service between certain major cities in 1971. Did you finally get into the telecommunications business then?
McGOWAN: Yes and no. Once we got the approval from the government, it was clear it made no sense to have 17 separate companies, so we decided to merge them upstream and take the whole thing public. We raised $115 million. We raised $33 million from issuing common stock, which was the largest public offering in those days -- this from a company, mind you, that had zero income, a nonoperating business still. And that secured a $64-million line of credit. We also raised about $17 million privately. And for about two and a half years, we were in this business of raising the money and actually building a long-distance telephone network.
INC.: What happened after two and a half years?
McGOWAN: What happened was that AT&T had a change of management, and the new team decided it didn't care what the government was saying, they were going to stop us. And so here we were, going into operation in a major way, opening up one new city every week, installing one new microwave installation every day. And now, all of a sudden, we couldn't reach any agreement with the Bell System to receive any local connection between our terminals and our customers. And without that, we had nothing: we didn't exist. It was like having an airline without access to an airport. It was evident then that somebody on the other side was pretty smart, somebody who saw that if we kept spending money the way we were spending it but not getting any connections, that we would very soon run out of cash. We had to go to court to get the FCC's decision enforced.
So our business shifted once again -- to winning lawsuits and simply surviving. At that time, we were accused of being a law firm with an antenna on the roof. And it was true. Everything that didn't have to do with those two things -- surviving and winning the lawsuit -- we just stopped doing.
INC.: You obviously didn't anticipate that phase.
McGOWAN: No. Nor did I have any idea how long it would last. If you'd told me at that point that it would be 10 years before we would prevail in court and 12 years before the first profit, I would have said it made no sense for anybody to continue at that point -- not the venture capitalists, not the stockholders, certainly not me, personally. People think that it takes a lot of courage to wait out something like that. It wasn't courage -- it was ignorance. I'm not a masochist.
INC.: OK, so a year or two goes by, and you still haven't prevailed in court. And meanwhile, you are laying off people left and right, losing what marketing momentum you had. Did the people who were with you at the time -- did they realize during the 10-year period how tenuous things really were?
McGOWAN: I assume that most of the executives who were in a position to see the larger picture, to see the cash reports, were fully aware. But I certainly did not explain to people publicly that we were not really in the communications business, that we were really in the surviving business. That's not a very good thing to announce.
INC.: Obviously, MCI did survive -- the courts put you back in business. Was it then that you finally were in the telephone business?
McGOWAN: Not really. As I saw it, all we had then was some equipment, a huge legal bill, and the right to provide long-distance telephone service. But the right wasn't ours alone. I assumed at that time that a whole bunch of very large companies would start coming in -- ITT, GTE, and so forth. And so the thrust of our business was to grow -- and grow as fast as we could before these other companies could overwhelm us.
INC.: But they never did.
McGOWAN: They didn't, because they didn't make the commitment. They had so diffused their focus in their organizations that they never gave it the money, or the talent, or the direction it needed. In the big scheme of things, it was not even a secondary business for them. And so we were able to grow to the point where, except for AT&T, we are bigger than all the other long-distance carriers combined.
INC.: And yet this period of grabbing market share came at a cost to MCI. Cost in terms of customers who signed up only to find that, while the rates were lower, the service was -- if our personal experiences are any indication -- just plain lousy.
McGOWAN: Oh, I know. I've heard it before. But you have to remember our situation back then. After winning the legal battle, we were technically bankrupt -- I think our net worth was a negative $40 million; I owed the bank $100 million; we had accumulated losses of maybe $120 million. And in that situation, we had to make hard choices about where to put our resources. We had to run like hell until we achieved a critical mass.
INC.: Your choice was to keep selling as many customers as possible, and let the service slide for a while.
McGOWAN: It's the type of choice that's got to be made all the time out there. Back then, our people were oriented toward sales, and, as anyone knows, a salesman is a salesman is a salesman. But once we had got to the point where we had cleared out the balance sheet, once it was clear the competition was never going to catch up to us, then we could decide that service was more of a priority. And so we said that from then on, customer service would be a separate entity from sales, reporting separately. And I think you'll find that our service is now as good as anyone else's.
INC.: As a manager, you seem to put great value in these rather dramatic changes in direction -- change almost for the sake of change.
McGOWAN: Look, most organizations, left to their own devises, re going to atrophy, to get so institutional, so bureaucratic, that they get to the point where their original reason for existence has been lost, and they stagnate. So you have to have change, and by that I mean dramatic change.
There was an analysis done several years ago -- it was tongue-in-cheek, of course, but essentially correct -- about what was wrong with the U.S. Department of Labor. They took all the money budgeted for personnel and training, for the top management, for light and heat and phones and the guards and the administrative support -- all the normal things that are needed just to open up in the morning -- plus the number of days of vacation and sick leave and the number of breaks allowed during the course of the day, and they finally got to the point where the entire department was fully occupied and the entire budget spent, and they hadn't even begun to do anything for anyone outside the department.
Now I don't know whether that's exactly true or not, but it's true, to some extent, of any business organization. Something happens in Omaha, and you say, "Oh, my heavens," and you write a procedure about how to handle that if it comes up anywhere else in the country, and it becomes gospel. And five years later, everybody in the company is doing that, but nobody remembers why, because it isn't apropos anymore, but it's built in. And so you have to institutionalize change -- to counteract the institutional tendency to inefficiency and stagnation. In fact, I once suggested that the best thing that could happen to American business is that we require every corporation to dissolve after 15 years or something like that. Just break it apart, so that they stop spending their time protecting themselves, their procedures, rather than creating new products and new services.
INC.: In your case, there were lots of outside things that forced changes inside. But not every business is born to such dramatic circumstances. Do you think managers should manufacture "crises" if they don't come along?
McGOWAN: No. It's not a matter of saying, "Well, it's 18 months since we've had a major change, and so we'll just go ahead and do one." But I think there are plenty of occasions in the life of any company that can trigger it. It could be bad news. Or it could be good news. Too often, people don't use success as an occasion for change, for reevaluation.
INC.: What kinds of major changes are most helpful?
McGOWAN: Move the company -- that's always a good one. Or people. At MCI, we have a policy that 40% of the job openings at every level have to be filled from the outside. In a company with reasonable growth, that means you've still got a lot of opportunities for people to move up. But you're also constantly having new blood coming in. First of all, these people just found you where you are, and in order for them to fulfill themselves, they have to make you even more successful than you are already. And they come in and the first thing they say is, "Why are you doing it this way?" That's one reason we don't have any seniority list -- seniority is deadly to an organization, because it somehow implies that the higher up on the list you are, the better or more deserving you are, which is often not the case. We even encourage people to leave the company for a while by allowing them to come back without sacrificing their benefits, their credits for prior service in things like vacations and pensions. We also have no prohibition on one department trying to take away the best people in another department.
INC.: It doesn't sound like yours is the kind of shop in which everyone would be comfortable working.
McGOWAN: I'll tell you a funny story about that. It was at a time when we were sort of strapped, and some of the personnel people were complaining about how hard it was to attract new employees -- that we didn't have this and we didn't have that. And so I said to them, "Look, figure out what is the largest number of people we would need if this business ever really takes off." And so we did some arithmetic and everybody sort of agreed that, pie in the sky, we might some day have 10,000 employees. So I took the 10,000 and I divided it into 100 million people employed, roughly, in the United States, and I said, "OK, that means that out of 10,000 people, all we have to find is one person who can work in this type of company, who doesn't expect the sort of things you might find in most other companies. That can't be too hard a problem, can it?" Well, as it turns out it wasn't. We're now at about 15,000 employees.
INC.: But there's got to be some price you have paid for all this creative turmoil. Turnover, for example.
McGOWAN: My feeling is that if you have lower than a 10% turnover, there is a problem. And if you have higher than, say, 20%, there is a problem. We don't start out with the assumption that our company is for everybody. We are a very individualistically oriented company. We really look for people who are individuals, who aren't seeking a home, who want to be rewarded or damned, depending upon results. We are not a very family-oriented business. A lot of companies now are very into that. We're not. We don't have any of that -- gymnasium, credit union, we don't even have Christmas parties. MCI isn't going to take care of your social and recreational needs, your entertainment. That's not our business.
INC.: With all these individuals doing their thing, with the company almost constantly changing its direction, aren't you going to run the risk of making some rather major mistakes?
McGOWAN: We've made lots of mistakes -- and we continue to make a lot of them today. I don't think anyone has ever been thought less of in our company for making a mistake. We encourage mistakes, in fact. And one of the ways we encourage them is by telling people the least amount we can about their job and how to do it. I've always been convinced that the greatest mistake a company has ever made is to build up over a course of years a written set of procedures and practices. It's just deadly.
Look at AT&T. AT&T has these things in three-ring binders called BSPs -- enough of them so that they could fill this entire room. Bell Systems Practices, they're called. And they grew out of what was the reasonable need to operate a telephone system 24 hours a day, 7 days a week, 365 days a year, all interconnected. You could hardly have people in such a real time system running around deciding to see what would happen if they pulled a switch here and there. So they came up with all these specifications for the system, which were needed. But then the attitude, which was really an engineering attitude, began to permeate the whole organization. And they applied the same approach to everything -- everything. Finance, personnel, everything used BSPs.
So what happened? First of all, young people who really wanted a challenge went in and they looked around and found there was nothing they could decide, because everything had been decided for them. And a lot of good young people would not tolerate that, and AT&T ended up missing out on a lot of talent. They simply left. And for those who stayed, they were trained not to make a decision. So when the time came that they moved up a bit and there really was something to be decided, they were lost, because they had never practiced on small decisions, and they had never made a mistake.So they figured out ways to continue not making decisions, to continue avoiding mistakes: they formed committees. And the committee became a sort of self-protection society.
INC.: Did you see that in AT&T's handling of MCI and its challenge to the Bell System monopoly?
McGOWAN: Well, there's no question they had a very rigid mind-set, and that led to a tactical mistake early on, when we first were trying to go into business. You see, our idea was to call ourselves a Specialized Common Carrier, and we expected to be confined to offering private lines for large customers. But they [AT&T] opposed us on that, opposed us vigorously, and I mean they made a horrible mistake in doing that, because they forced the FCC, and later the Justice Department, to examine the entire long-distance market. They forgot about protecting the business, the stockholders, and wound up trying to protect some principle -- a principle, in my opinion, based fundamentally on arrogance. As a result, instead of the question being what we were entitled to, it became what they were entitled to. And that led to the FCC taking away what AT&T thought were its rights of exclusivity on long distance, on equipment, and the Justice Department finishing up with an antitrust case that forced a breakup of the company.
INC.: If they hadn't made that error, what would have happened?
McGOWAN: If they had left us alone, we would be a $400-million or $500-million business, scratching real hard to raise capital because the margins are so low. We would have a niche market. There would be competition today, but it would not be as widespread, nor would it be in all of the services as it is now. But their internal documents show that they feared that if they ever let anyone else get started, it would be a slippery slope, and so it was important to stop us right from the start.
INC.: Do you agree with that assessment?
McGOWAN: Eventually, much of the deregulation would have happened. But there would have been no breakup of the company if they hadn't compounded their original mistake by violating the antitrust laws. The only way you could have broken up a company like AT&T would have been through the courts. Congress wasn't going to touch it. AT&T was just too strong politically; it had a million employees and they were very active in the political arena. And the FCC certainly didn't have the courage to do it on its own. That left the judiciary, and the only way the courts would have stepped in was if they violated the antitrust laws, which they did -- repeatedly. They were the engineers of their own breakup, that's for sure.
INC.: You have, to put it mildly, a rather negative view of the American corporation. And yet now, especially now that the equal-access period is almost over and most residential telephone customers have chosen a long-distance company, your focus is on selling telecommunication services to the very corporations that you seem to disdain.
McGOWAN: As I said, in business you don't get to pick and choose what you like from what you don't like. By necessity, our sales efforts are directed now at the 1% of American companies that account for about 50% of the revenues in the industry. And in the future, if you look at our advertising, our promotion, you'll see a major change directed toward them. We've had some business with most of these companies in the past because our rates were lower. The communications manager would use us so that when somebody said, "Are we using competitive carriers?" he could say, "Yes, sir, we're saving money." But, typically, it was only 5% of the business -- not so much that his tush was in trouble. These guys have great loyalty to their businesses, but their number one loyalty is to their own tush.
Over the last couple of years, however, the telecommunications function has been shifted over to data processing, and now it's a whole new ball game. We're in a much bigger budget area, with more attention on the chief financial officer, the chief executive officer. And that changes the character of the business a lot. All of a sudden you're talking to the data-processing guy, who really doesn't know very much about AT&T, and he's much more willing to look at various suppliers. Also, that's where the IBM affiliation comes in.
INC.: It took you years to get to this point, the point where you are competing head-to-head with AT&T for customers. For most of the past 20 years, however, your "business" was dealing with politicians and bureaucrats and lawyers and judges -- the sort of thing that, for many businesspeople, would be akin to spending a decade in the fifth ring of hell.
McGOWAN: They happen to be wrong about that. They have an emotional blind spot, which doesn't do them, or their companies, any good. Look, government is a reality of life. Denying it -- getting emotional about it -- is just letting your own personal, political biases influence your business judgment. Politics is a business discipline just like marketing, finance, or engineering. So why get more emotional about politics than you do about finance? The truth of it is that, the way our country has evolved, the decisions of government have a major influence on the way business is conducted. And so you have to be good at handling government in order to grow.
I've noticed, by the way, that people love to hate the government entity that is furthest away from them. In their own city or town, they know their local politicians and their local governments, and they are far less emotional about it, even if they don't always agree with the people in power. But you get to the federal government, and businessmen really love to hate Washington. The truth of it is that Washington is probably the most apolitical city in this country. Because in Washington, politics is business, that's all. They don't get emotional about things, much the same way doctors don't get emotional about your appendix. To them, it's just a profession.
INC.: Many of the people you've had to deal with are regulators -- bureaucrats, to use the pejorative. What's the best way of dealing with them?
McGOWAN: Typically, they are very bright, very young people who have never had any business experience. They don't understand how a business runs, they don't understand capital, capital markets, capital formation. They don't understand the economic implications of the things they do. So, it's just a matter of educating them. If they are lawyers, you bring in lawyers to talk with them. If they're economists, you have economic models done up and have an economist talk to them. You try to explain the realities of your situation, but in their language. And you also make it plain that if they do something that you are convinced is just plain wrong, then you'll appeal it. We have, in fact, spent a lot of time appealing in court, and we've won our fair share. That gives us a lot of credibility in dealing with them the next time around.
INC.: So lawsuits -- legal strategy -- you'd make the point that this is also a business discipline, as distasteful as they may seem to some executives.
INC.: Is this the sort of thing you leave to your lobbyists and your Washington lawyers?
McGOWAN: We always had some of that skill on the inside. And we recognized that, ultimately, the company has to make the key decisions in these areas. To do otherwise would be like saying, "I have a research-and-development department, good engineers, and they develop products and they decide what products I'm going to produce, how much money we'll put into the marketing, what I'm going to charge -- in other words, the future of the company." And you'd say, "What are you, crazy? I mean they may be good engineers, but . . ."
INC.: Lawyers and lobbyists, would they tend to make major decisions for you if you weren't careful?
McGOWAN: No question about it -- if you aren't very explicit and very up front about it. They think people want them to make decisions. And too often, that's the case. How many times have you heard an executive say, "I don't get involved with that. I have a lawyer in Washington that takes care of that." But that's a whole facet of business that somebody is refusing to take responsibility for. That's why you're the damn CEO.
INC.: But do you want to get yourself in the position of always second-guessing the strategy of these high-priced people that you've gone out and retained?
McGOWAN: Look, lawyers have -- with the possible exception of dentists and doctors -- the worst business judgment you're going to find. A businessman is constantly dealing with trade-offs, with alternatives, and he typically has four or five ways to go, each one sacrificing one thing to get another. Lawyers don't think that way. They don't know what you're talking about. Lawyers are advocates, which means they'll fight to the death, or fight till you're bankrupt. With them, it's really all black and white, and they want to win and win as best as they know how. A businessman is constantly asking about the alternatives.
INC.: Give us an example of how that played itself out with you.
McGOWAN: Well, we probably could have raised a lot of money by suing the Bell operating companies during the equal-access period, when customers were deciding which long-distance carrier to choose. The Bell companies were making things very difficult for us and for the customers wo decided to go with us. The lawyers certainly wanted us to sue. But we made a judgment that, frankly, we'd go to AT&T and try to resolve it as best we could, negotiate it -- after all, we're now the second largest customer of the local companies; they need us and we need them. And the problems were not really the fault of their executives, from everything we determined -- it was just a lack of attention, of energy, of commitment. Could we have gone to court? Sure. Could we have won? Probably. But what would have been the return for the energy consumed, the personnel consumed, the management-time consumed, the relationships down the road? On the basis of these sorts of things, we made the judgment that, no, we just wouldn't do it.
INC.: We've been through the law, lobbying, personnel, training, finance, accounting -- a wide range of management issues, and how you approach them. Is there a thread that runs through all this, a McGowan Theory of Management?
McGOWAN: That question reminds me of the joke about three businessmen -- a Frenchman, a Japanese, and an American -- who were caught in the crime of espionage and sentenced to be shot. And when it was time for their executions, they were each allowed to say anything they wanted before they were shot. So the Frenchman goes first, and he says, "Vive la France." The next guy up was the Japanese, and he said, "I want to explain the theory of Japanese management." And the American piped right in, "Pardon me, but do you mind shooting me out of turn?"
I feel a little bit that way about all these management theories people talk about. I don't believe that theire is anything in terms of organization structure, management practices, management theory that you should ever worship as being standard, as they only way to go. I think that you have to be so flexible and willing to try different things, and willing to make mistakes -- and to recognize them for mistakes and change course. We're going through a time compression now in our history, in our economy. And what used to take 10 years to evolve has gone to 5, then 4, 3, 2, 1, and now six months. And so the idea of management as some sort of science, with certain principles from which you never deviate, no longer applies. The only practice that's now constant is the practice of constantly accommodating to change -- and if you're not changing constantly, you're probably not going to be accommodating to the reality of your world. All these theories and management systems that the country has started to worship -- I think they are dangerous.