Transcript

Roland Christensen had an idea, and that comes from Roethlisberger, and Mayo, and Paul Lawrence, and so on, of saying, “There’s part of what we’ve learned here at the School of thinking of a company as a social system, and we have some problem connecting that with the part of it that’s economic and technical. Let’s try writing a case that says let’s look at the outside environment, then let’s take the company just as economic and technical, with no people. Then let’s take the same company, and it’s just people, and talk about how they get along with each other. And then let’s take the last part of some of the problems that they work on.”

So in doing this, this one was—it was something I’d inherited from the Manufacturing course. We’d started a student project there, so we knew the company, and wrote. But part of what was interesting was the five guys that were running the company had all been in City College in the 1930s. Four out of the five were the people that you think of as rebels against society. The fifth guy was the accountant. So one of them was a scientist, one was a teacher of dance, one was a professor of music, and—I can’t remember. But there were four of them, no business interest or anything, and then they had the accountant. They’d all known each other, and liked each other.

So the question was: how did they get along in this? And the accountant, he had to make sure that the numbers worked out alright, but—and he was officially in the hierarchy the number two guy, but he really wasn’t. And when the founder or president came over here to class to either talk to the MBAs, but especially when he came to talk to the AMPs, he delighted in being able to talk about the fact that this was not run with the sleazy ethics of a business. And in particular, that there was no way they were going to have any connection with advertising. And you’re in a consumer product for high—high fidelity TV. High fidelity audio equipment.

And they were in the lucky position that he’d invented the better mouse trap at this time, so he didn’t have to worry about it. And so he could come over—he said several times to the AMP, you know, “No, we don’t have anything to do with advertising. I look at them as near-prostitutes.” [Laughs] And he would come with his sport coat, and a really loud tie, and this was an expression of values.

Well, the cases were taught for eight, or nine, or ten years, and over that period of time, the suits got better, the ties got more conservative, he got more conservative, was a much wealthier guy. So there was a big—there was a big change. But it was partly to portray the atmosphere of a different set of values inside the company, and have people see that. And that was really Chris’s idea to say, “Let’s see if we can single this out so that you’re thinking about something, and then that’s all we’re talking about today is how this”—so that’s one of your ways of teaching. And as I say it’s—the structuring of the material was designed to emphasize that.

Now we went from that to Midway. And I took only two companies in that first year. The Acoustic Research had fifty people, and the other one had a hundred and fifty. Anybody else would have taken ten. Okay? So this was a huge investment with two companies to try to capture this stuff. I got to know the people, their families, went to their homes, and everything else, so that it was possible to get some sense of this.

The second company was a guy in the candy business. He did not have a better product, he did not have any technological edge. There were—he bought what they call a down-and-out company. And there wasn’t any obvious reason for these guys to stay alive, but this was the marketing genius. And the guy that he really liked was his Marketing Vice President, and they were a tandem. He had a manufacturing guy that he thought was old, and gruff, and professional, and not really—not really hip, but he was very good. And then he hired a new guy to be his finance and control.

So again, we put the first one of these things together. It was the economic aspects of a candy company. And not as much attention to the outside part, because most people knew what candy was. We didn’t have to do a lot of explaining. And the second was an acquisition, where they bought out another company, and fired a lot of people, and merged the two of them. And I got a chance to go watch that. The third one was on the social system just of the five or six executives. And then we had a case on these guys having a meeting. . . .

And I virtually never used a tape recorder. And because of the meeting I decided, “Well, okay. I’ll take a tape recorder.” And I started it, and then I kind of forgot it. And the tape recorder was on for, I don’t know, three hours. It was a meeting. It was very tense. And it was very clear—I didn’t know what was going on, but I could just tell from the conversation that there was a lot of tension between these one, two, three—there were four people at the President’s home on a Saturday morning. . . . .

And so we produced, as one of the cases, an edited version of that meeting. And as I would say that was sort of maybe in March, and by sometime in June, I really knew. But, I mean, the new guy that was finance and control was also somebody who was very uneasy. He was very uneasy with the other two Vice Presidents, and there was a lot of tension between them. So that was part of what we were doing. Chris liked it because the fellow who was CEO had been here in an executive program that he and Abe Zaleznik had been in, and they had very high regard for him.

As I got to know him I spent weekends at his home, I knew his wife, I knew his kids, I just talked to him here. That’s maybe three months, so this is forty years later. I mean, I’ve stayed in touch with him. But he’s—he was a very hard-driving, aggressive, and—it’s hard to avoid the word “manipulative”—guy as the CEO. And so he made this thing go on marketing smarts.

And after we finished the case, which is ’58, ’59—yeah, ’59, the end of the summer in ’59—about five years later, I went back and wrote a sequel, which was after the World’s Fair in New York. And these guys set up a miniature candy plant at the World’s Fair in New York. The president was out there dressed in a white coat and a white hat making candy. The marketing vice president was out there doing this. They had moved into office space in—right next to the Plaza Hotel and to, you know, to Central Park. Where the place that I’d started off with them was really in a junky (part) of Brooklyn. So, I mean, this was the transformation socially of some guys that had big feelings, and this was an important part of it for them. . . . .

So there were a lot of undercurrents in this one, and the company was really owned by the President and his wife, but it was his wife’s money that had helped him buy the company. So there were a lot of things going on.

Well, we tried to get that so people could get some understanding of how much more there is than the formal organization chart, let’s say, in the social system in the firm. . . . .

And they, Chris particularly, wanted to change the teaching material, and get some teaching material that would call attention to the fact even at the top level, you’ve got a social system, just as you had a social system with the guys that were out at the Hawthorne Works. And you don’t ordinarily see it. They don’t ordinarily talk about it.

So let’s spend enough time to where we understand who they are, and how the social system works, including that you have some people that really don’t like each other in it, and that—that came through in the case. And one of the things that came through in the case was that the finance and control guy had had a nervous breakdown, and the president knew that, hired him, and the president thought of himself as kind of a counselor for his vice president of finance and control. Well, that didn’t sit well with the other guys, as you can imagine it wouldn’t.

Well, all of those things are in the case. So you’ve got a level of detail on the social system that’s not ordinarily there.