"Management" Book of the Century, circa 2006

Not as extreme as it sounds, as the Century 21 is not yet 6 years of age. But my pick so far: Adams vs. Jefferson: The Tumultuous Election of 1800, by John Ferling.

The story in brief. Washington held the office of President for the first eight post-Constitution years. He was elected unanimously (the electoral college, since there was no consistent popular vote) in 1788, and without much of a challenge in 1792. Adams won the 1796 election, and the “crazy” branch of the Federalists passed some potent, restricting laws—such as the alien & sedition act. Thus the young nation was thoroughly divided, for the first time, as the 1800 election approached.

There were two dramatically different views on trial—of nature, mankind and the nation itself. And the adherents of each thought for sure that the young U.S. would implode if the other “party” (parties were in their bumbling infancy, too) prevailed.

The contest was the one that continues to this day, in the corporate world as well as in the U.S.A. and Iraq. Namely: CENTRALIZATION vs. DECENTRALIZATION.

Leading the “Federalist” side were aggressive candidate Adams and the very controversial Hamilton. On the “Republican” side were reluctant candidate Jefferson and Congressional master Madison.

The Federalists were Centralists. They wanted a strong Federal government and were fearful of true democracy—which they saw as chaotic, especially as the bloody, anarchic French Revolution was in full flower at the time. The Federalists saw the Republicans as supporters of a chaos that would destroy our fragile nation—especially since the 13-year-old Constitution had been written expressly to counter the chaotic decentralization that had impeded the predecessor Continental Congress’ efforts to run and fund the Revolutionary War.

The Republicans believed that the Federalists were bent on establishing a centralized, autocratic derived directly from the elitist British model that we had fought so hard to oust. This was anathema to the Republicans—no matter how precarious the new model’s purchase was at the moment. After all, Adams had once favored addressing the President as “His Excellency”—and made no secret of his belief that only a narrowly chosen-appointed elite of “great men” were fit to govern. The Federalists also favored close ties with Great Britain—which also infuriated the Republicans. While Jefferson and the Republicans were not in favor of ending slavery, they strongly supported a largely classless, significantly more decentralized nation with greater say over affairs going to “the people” (as in White males).

(Interestingly, the Federalists were mostly New Englanders. The Republicans were mostly Southerners.)

The point here at tompeters.com: If you scratch beneath the surface, this is the continuing-continuous struggle that marks corporate governance and corporate strategy.

At the highest “strategic” level, it’s the decentralized GE or Johnson & Johnson model vs. the centralized Microsoft or Wal*Mart model. (E.g., per me, Microsoft is strangling on bureaucratic, centralized, project teams—and fundamental innovation is a thing of the distant past.) At the “lower” level, it’s the empowered Southwest or Whole Foods human resources model vs. the relatively unempowered Verizon or GM approach. (The debate is also, obviously, front & center in the Middle East where Mr. Bush is pushing democratization and the likes of Saudi Arabia are desperately trying to hold on to autocratic, hyper-centralized rule.) At another level in the corporate world, it’s the “strategy”-fanatics (centralists, as I see it) vs. the “Let a thousand flowers bloom” decentralist fanatics.

(To explain via that trusty if somewhat flawed GE example: GE has tough, centralized fiscal controls, no doubt. But the head of the Energy group or the Medical group is God with de facto total responsibility for his Realm—”Fairfield/Welch/Immelt made me do it” is no excuse for poor performance. When you look at Immelt’s approach today, you see, I’d contend, a “philosophy,” not a “strategy.” He wants large-scale innovation, and has defined some systems for directing more resources toward innovation; but it’s the business heads who take it the “last 99 yards,” figuring out what to do with wide latitude other than the generic “Innovate, big—and hurry.” In terms of GE-derivatives, Bob Nardelli is centralizing the hell out of Home Depot—results remain to be seen. In a related saga, some of the reason for Carly Fiorina’s precipitous departure from HP was perceived “centralist tendencies;” oddly, her successor Mark Hurd is successfully implementing most of Fiorina’s strategy—courtesy a newly decentralized approach to execution.)

All in all, from the U.S. in 1800 and the Supreme Court in 2000 or 2006 to the Middle East to GE and CitiGroup and Wal*Mart, this most fundamental battle rages and will rage eternally. GM’s legendary CEO Alfred Sloan, though most famous for his decentralization-divisionalization effort, once famously said, in effect, “It’s always about decentralization vs. centralization”; that is, you decentralize for a while and eventually the lack of control bites you; then you tighten the centralist bonds, and eventually you strangle necessary innovation—but you never “win” “get it right” “for good.” [Note 1—This titanic struggle between centralizing and decentralizing and organization effectiveness holds about as much for 25-person project teams as for enterprises and governments.] [Note 2—Fact is, it’s not as simple as Sloan suggests; centralist or decentralist tendencies/”cultures” more or less emerge at birth—and are devilishly difficult to adjust.]

The point of the title of the Post and thus the anointment of the Adams-Jefferson book is that it is the clearest snapshot-recitation of this raging war over the distribution of power, the nature of man and the effectiveness of enterprises that I’ve ever read. The author also manages to keep the tension high, Clancy-like even. Though I know my history, at this point, two-thirds of the way through the book, I’m not sure whether Jefferson, following an apparent, paper-thin electoral victory, will be allowed to take office as the terrified “centralists” (Federalists, remember) struggle, somewhat akin to 2000, to retain their hold on, even then, the presidency and Principal Seat of Power. In a future Post, I’ll tell you how it comes out …

(Attached is a somewhat relevant Special Presentation on “The Origins of Sustainable Entrepreneurship.”)

Tom Peters posted this on July 25, 2006, in Strategies.
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