Need to Suspend not Defend

While we know that Wall Street is in New York City, it’s not so obvious that it is in every publically traded company as well.  Wall Street’s influence on the focus of those leading the organization cannot be overlooked.  Wall Street’s impact on executive-level (corporate) decision-making is similar to the impact that thought has on an individual’s decisions—thought is inextricably tied to perception and perception affects understanding.

We assume perception provides unadulterated reality when in fact it is filtered by thought.  What we hold—knowingly or unknowingly—in our mind’s eye acts as a filter to what we perceive and how we interpret data.

Accordingly, Wall Street’s growth imperative influences the focus of attention and perception of corporate decision-makers.  That is to say, a major contributor to ill-fated decision-making was (and is) Wall Street’s short-term (quarter-to-quarter) imperative.  In this system of thought profit is king and cost cutting is queen. It is likely that most executives are unaware of the conditioning that Wall Street’s quarter-to-quarter material growth imperative has upon their perception.

For far too many years the American automakers’ focus of attention was profit, not quality—resisting the efforts of Deming himself.  Of course GM and Ford have improved the quality of their cars, particularly in most recent years, indicating their recent attention to quality.  But whether they’ve truly learned the lesson that Toyota has recently provided, that they must never confuse means and ends remains to be seen. Thus, the question remains can they maintain this attention forever?

Whether GM and Ford will be able to make the gains in quality will require a fundamental shift in the focus of attention among those in authority, whereby the king and queen become quality and the customer, respectively. As explained in Spirit of Quality, a real commitment to quality requires an entirely different mindset throughout a company, especially from those leading from the executive suite.

Bob Lutz, who will retire in the Spring 2010 as Vice Chairman at GM, said he “hopes consumers notice the designs and features of G.M.’s vehicles rather than just their price.”  Further Mr. Lutz said his biggest objective at G.M. was “to establish an absolute, almost passionate focus on product over any short-term financial goals.”

Just like an individual must suspend his/her thoughts to gain a much fuller (and better) understanding, the executives at GM and Ford—at any company for that matter—must suspend those of Wall Street.  If Wall Street maintains its place at the table in both the Boardroom and the executive suite, how likely is it that quality and the customer will become the business of business?

2 thoughts on “Need to Suspend not Defend

  1. Pingback: Ethically Sound Action « For Progress, Not Growth

  2. Pingback: Fiddling as Rome Burns « For Progress, Not Growth

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