F. George McDuffee expostulated:
| It would be interesting to know how much in deductions the
| corporation took on their tax returns over the last 5 or 10 years
| for market research and product R&D. Article in Wed. June 22 WSJ
| discusses shift in consumer priorities for major appliances from
| stolid dependability to flash and glitz, which may help explain
| why the "dependability people" are now in deep do-do.
It's probably worthwhile to take note of the fact that I'm not a
"Maytag Expert" and that I can't provide very much more than firsthand
observations (that may or may not be safe to use as the basis for
generalizations) and inexpert opinion - garnered while working as a
software consultant with their R&D group. Since all of the products
under development of which I had knowledge have been announced and/or
shipped, I'm free to speak openly.
On the R&D side, Maytag has extraordinarily competent engineers and
researchers who're as enthusiastic and eager as any I've ever seen
elsewhere. There aren't many of them - and they seemed much
under-appreciated by their management. My thought was (and remains)
that any of Maytag's competitors could ruin the firm simply by
offering this one engineering group an industry competive wage and
management guaranteed to provide genuine appreciation of past and
future accomplishments. With careful research, a competitor could
simultaneously put Maytag's future in grave jeopardy and greatly
enhance their own prospects for as little as $500K/year. In my mind,
for a Fortune 300 company this is tantamount to gross negligence on
the part of management.
| On the other hand, flash and glitz are only skin deep, and how
| much can it cost and how long can it take to have a design studio
| "re-skin" a washer or drier, and how much can it cost to shoot
| metal flake paint in place of white? As an aside, the American
| people deserve what they get on this one..
Flash and glitz /are/ cheap and easy. Solid dependability and quality
of function are more difficult and generally expensive to achieve - no
surprises here. My task as a consultant was to provide a technical
solution that was expected to drasticly reduce that expense. I
provided the requested solution (which incorporated solutions to the
usual variety of unanticipated side issues) and to the best of my
knowlege, that package was shelved because it required a degree of
interdepartmental cooperation/communication that too many of the
first-line development managers weren't prepared to exercise.
A related issue had to do with more than healthy managerial resistance
to technology more advanced than a motor-driven cycle controller -
even after their horizontal-axis (front loading) Neptune washer had
provided proof positive that micros are here to stay! I was by
definition a "short timer" and that attitude was grindingly
frustrating to me. I don't want to think about how frustrating it has
to be for the R&D folks who're intending to stay with Maytag for the
| In response to another reply, the questions about the likely
| outcomes for senior management were rhetorical, although your
| detailed answers were insightful. This helps explain the
| "shortage" of engineers and the rapidly declining number of
| engineering students. Even the "nerdest" engineer can look
| up/around and see that while they (and the rest of the "product"
| people) are taking it in the shorts big time, management and
| finance are riding off with full boodle bags. While both groups
| will have some time off, for the product people it will be a mad
| scramble for another job so they can keep the house and the car,
| while the management and finance people are resting in Cancun.
| Do you happen to know if the Maytag pension plans are fully
| funded, or is this another "debt bomb" that will be lobbed into
| the PBGC? How about medical care for current retirees? Off
| Maytag and onto the taxpayers through Medicare?
I don't know. Actually, I didn't pay much attention to anything
unrelated to R&D and/or some specific product development. I sat
through (too many) meetings and took notice of what was being said
about the technology and politics involved with getting the
vertical-axis (top loading) Neptune product working and out the door -
and the implementation of a methodology to streamline development of
all future cycle-based "whiteware".
| We need something more than biased B-school case studies. What do
| you think of an economic/financial equivalent to the NTSB that
| would investigate major corporate "crash and burn" cases? These
| could well be a job for Dr. Kavorikan and not a "crash-cart" and
| life-support situation.
| In the aggregate the major loss/damage caused by not only Maytag,
| but also Enron, Tyco, Ford, EMC, Delta, American, etc., etc., is
| a total loss of confidence in the competence and motives of
| management by not only their employees, but the majority of
| stockholders and the American people.
I'd encourage you to make an at least internal distinction between
failures resulting from fundamental dishonesty with intent to
defraud - and failures resulting from stupidity, lack of due
diligence, etc. on the part of fundamentally well-intentioned people.
If I were to choose a single cause for Maytag's failure to thrive
(which would be a huge over-simplification), that cause would be the
selection of a succession of CEO's who lacked the wisdom to define
success and to lead their people in that direction.
Your summary is basically true; but would you really expect that a
government agency /could/ do more than throw good money after bad in
these cases? If so, you're far more optimistic than I'd dare to be.
One final comment. One of my first questions after starting work at
Maytag (and I did ask every single person I worked with) was: "What
does it take to make dirty clothes clean?". What I was after were
things like how much water per pound of clothes during wash and rinse,
how much agitation, how much cleaning agent, etc. with some kind of
mathematical relationships and some numbers. No one knew! I was (and
still am) dumbfounded that no one at Maytag had ever made a serious
effort to define in engineering terms what it takes to make clothes
clean. Think about the implications of that tidbit as you ponder
business failure causes...
DeSoto, Iowa USA