A Crisis Of Management?

by Jay Deragon on 11/11/2008

First, the $700 billion rescue for the economy was about buying devalued mortgage-backed securities from tottering banks to unclog frozen credit markets. Then it was about using $250 billion of it to buy stakes in banks. The idea was that banks would use the money to start making loans again.

But reports surfaced that bankers might instead use the money to buy other banks, pay dividends, give employees a raise and executives a bonus, or just sit on it. Insurance companies now want a piece; automakers, and others are standing in line.

As the crisis worsens, the government’s reaction keeps changing. Lawmakers in both parties are starting to gripe that the bailout is turning out to be far different from what the Bush administration sold to Congress. In the meantime the common response is to give companies more money.

What Is The Real Problem?

Luciano Passuello writes: Einstein is quoted as having said that if he had one hour to save the world he would spend fifty-five minutes defining the problem and only five minutes finding the solution.

This quote does illustrate an important point: before jumping right into solving a problem, we should step back and invest time and effort to improve our understanding of it. Here are 10 strategies you can use to see problems from many different perspectives and master what is the most important step in problem solving: clearly defining the problem in the first place!

The same managers that led their companies to take high risk which failed are now going to be given money to solve their problems. The problem seems obvious. It isn’t money rather management! And we wonder why the younger generation rejects this kind of thinking.

The automobile industry has known that customers have not been satisfied with the quality of the product they produce. They have known this for over 30 years. Meanwhile their foreign competitors enjoy continued growth and profitability. Why? They manage people, processes and products differently.

Banks, Insurance companies, Retailers etc. all face economic uncertainty as the economy tightens and consumers reduce their spending. The problem that led us to this point is not economics rather management. Management from our government and from private sector made bad decisions, did not pay attention to the data and just assumed everything will be OK.

To keep the current management in charge of any of these issues or companies insures more failures. A management guru named Deming wrote a book titled “Out of The Crisis” in the 1980’s. Maybe it is time for managers to read it again.

What say you?


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