strategy+business Winter 2013 : Page 87

B E S T B U S I N E S S B O O K S 2 0 13 / L E A D E R S H I P executive of both GM and DuPont. Raskob’s financial prestidigitation helped make du Pont a multibillionaire in today’s dollars—and, through stock speculation, in-sider trading (he shorted GM stock), and prodigious tax avoidance, a billionaire in his own right. Farber, professor of history at Temple University and author of Sloan Rules: Alfred P. Sloan and the Tri-umph of General Motors (University of Chicago Press, 2002), documents how the largely self-educated Raskob quickly rose from the ranks of the petite bourgeoisie (his father was a cigar maker). He became the first Roman Catholic accepted as a peer in U.S. boardrooms, the pro-gressive head of the nation’s anti-Prohibitionists, chair-man of the Democratic National Committee at the time of Franklin Roosevelt’s first presidential nomination, and, in a spectacular volte-face, a leader of the right-wing American Liberty League, which opposed the New Deal and the United States’ entry into World War II. He was Pope Pius XII’s main fund-raiser in the United States, a lifelong pal of New York’s powerful Cardi-nal Spellman, a Knight of Malta, and, along with his 12 children, a regular communicant. At the same time, he was a playboy nonpareil (with a weakness for showgirls, booze, and gambling) and a will-ing abettor of his wife’s cohabita-tion with a man many years her junior. John Raskob seems also to have helped conceal Pierre du Pont’s evident homosexu-ality. Few bios of CFOs have such racy subplots. Still, Farber keeps his main focus on Raskob’s business practices, documenting how he arranged bail-outs for GM (the company has a history of that sort of thing), invented the consumer credit industry (GMAC was his brainchild), designed the first executive stock option plan, and was the first to advocate wide-scale employee stock ownership. In early 1929, Raskob also proposed what might have become a national social se-curity system invested entirely in the stock market (but his timing was embarrassingly bad). Never able to sit still for the quotidian details of management, Raskob preferred to pull strings behind the scenes. He plumped for the appointment of the more temperamentally suited Alfred Sloan to succeed Pierre du Pont at GM’s helm when, for the asking, he could have had the top job himself. In Sloan’s classic My Years with General Motors (Doubleday, 1964), he credits Raskob for introducing the system of financial controls that made it possible for GM to become the world’s largest corporation, invidiously contrasting Ras-kob to Henry Ford, who was dismissed by Sloan as a ge-nius mechanic who couldn’t manage a giant company. Unlike Ford’s company, Sloan sniffed, “General Motors is in the business of making money, not cars.” The Car Guy What led Sloan to depict Raskob as the Great Anti-Ford was the organizational pandemonium created in 1927 when Ford shut down production of the Model T and retooled his factories to assemble the Model A, an event chronicled in Vincent Curcio’s Henry Ford. That totally unplanned, disruptive, and mind-bogglingly expensive transition was prolonged thanks to Ford’s second-guessing and microman-aging of his engineering staff. The retooling took some two years to complete. In comparison, in 1929, GM achieved full production of a new Chevy model in six months. The debacle was, however, in keeping with Ford’s personal mot-to: “We must go ahead without the facts. We will learn as we go along.” As good as his word, Ford (1863–1947) seemed to thrive on disorder, creating chaos whenever and wherever disci-pline reared its ugly head. Ford so abhorred record keep-ing that, on abolishing the company’s accounting de-partment, he told employees to keep cash in a barrel and withdraw whatever amounts were necessary to pay bills. (He kept a million dollars in cash in his office safe.) Yet Ford created the world’s most efficient indus-trial organization, one in which wasteful motion, ef-fort, and activity were eliminated in order to produce a Model T that eventually sold for as little as $260, down from $800 in its first year of production. Between 1907 and 1922, Ford increased annual manufacturing capacity from 8,200 to 2 million cars: What originally had taken skilled craftsmen a week to build by hand was turned out in a matter of hours by assembly-line workers. Ford pioneered the efficient use of raw materi-als, waste elimination, and recycling. The Model A was best books 2013 leadership 87

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