Alfred P. Sloan (1875–1966)

This is one of those books standing tall in my library for years. Content of the book is so revered that it has withstood test of time for me to revert to; initially when I was a novice manager and later as an experienced leader. The book, first published in 1964, about Sloan as an architect of concept of management in first half of 20th century and as a force behind major corporation for America's performance in World War 2. The book is such a solid classic that we, even now in 21st century, resort to the pioneering lessons of last century on how one corporation, led by a man, defined foundation of America's economic leadership in forty years following WW2. We've sure heard about America's motor industry and the golden period but knowledge about how the industry mobilised for record production, how the country's economy flourished and how even Japanese learned lessons and became great economic power themselves is awe inspiring. A behemoth of study, this book is for those who are enthusiastic to know how great corporations are built (Sloan was at GM for 40+ years!). Have guts to imbibe what it takes to build one, the likes of General Motors! This books holds a status of GREAT BUSINESS CLASSIC; if you want to read only one business case, this is an ultimate volume.… (more)

This is so highly rated because Sloan conveys through simple, concise language the solutions to the same problems we have made so complex (not that I know how to simplify them again). He writes it as a story. Credits include Bill Gate's acclaim and my original prompt to read it based on it's inclusion in a list of the top ten business books of all time. Sloan began with an engineering background, some business experience and a successful bearings business. It was bought by GM when the firm was consolidating horizontally and vertically. Sloan was at the front of that early success, from the 20's and into the 60's. To summarize it into one lesson: centralize what is most effective centralized, then let human initiative drive from that common framework. Sloan can be credited with running the first corporation of that size with reason, fair dealing, and a visionary outlook. He foresaw the impact of business trends, war, and technology, and yet he was flexible when the consensus opposed him. He carefully considered their international footprint (and re-entry into Opel when assets were returned after WWII). He brought international talent when the design team needed more new influence. He fits the profile of the Type 5 leader described in "Good to Great" - modest, yet driven (in his words "any personal sacrifice for the cause"). He frequently gives credit to others and only once exhibits the slightest hint of boast in his own capabilities (wondering what would have happened to the French automaker Citroen if he or one of his capable peers had decided to run it). One other management theme: the firm would coordinate more during slow time and in times of expansion or matters of innovation, allow more decentralized control. Sloan divides the auto industry into 3 periods: pre-1908 (class market), 1908 to the mid 1920's (mass market), and beyond that (mass-class market). Four elements drove the transformation into the modern period: installment selling, the used-car trade-in, the closed body, and the annual model (would add improved roads as a driving external factor).… (more)

This book is as good as its reputation. Try and get the first edition, it has photographs which the recent edition with the Drucker preface does not.

How did a giant corporaton and the leading industrial giant, gaining consumer share at a time when cars were not yet a household item, and when competitor Ford's T-model started out with basics and went for the volume market, compete? GM under Sloan learned and changed.
Inventory control, production lines, divisions and devolution of management, yet centralized, the first understanding of the used car trade-in and the role of dealer invetories, and the innovations in inter-departmental finance between the more popular lines, the creation of lines of report in response to certain bad years, the complete accountability to the board of directors, and the totally immersed attention to policy and direction that the CEO gave to the Executive Committee, and the role of estimates from divisions in order to better manage tight time schedules, are all presented in crisp style. Not dry but matter-of-factly. Remember that GM switched completely to military production in the patriotic cause after the U.S. joined WWII. And it had to be poised to return to civilian production.

The book is more than of historic interst. An organism of a giant modern corporation responding to challenge and change must make decisions such as Alfred P. Sloan made.

We may have become modern in many ways, and CEOs may not have to reinvent certain wheels. But can all the captains of industry of today explain their zigging and zagging with the clarity that Mr. Sloan, decades president of GM does?… (more)