It applies in any business. Shoemakers should be run by shoe guys, and software firms by software guys, and supermarkets by supermarket guys. With the advice and support of their bean counters, absolutely, but with the final word going to those who live and breathe the customer experience. Passion and drive for excellence will win over the computer-like, dispassionate, analysis-driven philosophy every time.
Bob Lutz
Shoemakers should be run by shoe guys
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I wouldn’t put too much trust (these days) in Mt Lutz’s wit and wisdom;
https://en.m.wikipedia.org/wiki/Bob_Lutz_(businessman)
The one business you would expect him to understand is autos, right?
Well…
—-
From 2018:
“Tesla CEO Elon Musk is a nice guy who doesn’t know how to run a car company, Bob Lutz, former vice chairman of General Motors, told CNBC on Tuesday.
“They will never make money on the Model 3 because the cost is way too high. He’s got 9,000 people in that assembly plant producing less than 150,000 cars a year. The whole thing just doesn’t compute. It’s an automobile company that is headed for the graveyard,” he said on “Closing Bell.”
—-
The reason Tesla only had 9000 employees? Because they had and have hordes of robots. And because their cars are assembled out of giant stampings from a “GIGAPRESS”which eliminates 370 parts from the body.
150,000 cars in 2018? Today they’re at a million cars a year despite supply chain constraints and growing by over 80% from 2020.
Oh, and the company headed for the grave?
Valued at a Trillion Dollars, more than all the auto companies Lyrz ever worked for, combined.
Musk wasn’t a car guy when he bought into Tesla and he still wasn’t a car guy when he took iver.
And, strictly speaking, he still isn’t a car guy.
He does know engineering. And software. And robotics.
But he does know how to run a business and he has a vision, and he knows how to hire smart engineers. He sems to be working better for Tesla than the car folk running GM, FORD, STELLANTIS, BMW, HONDA, TOYOTA, VW, BENZ, et al.
Just the way Tesla managed their supply chain over the pandemic without having to stop production for lack of parts, going from 150,00 in 2018 to 365,232 in 2019 to 509,737 in 2020 to 930,422 in 2021 suggests that not being a car guy hasn’t hampered his running a car company. 😀
(And Musk is a very hands on CEO on all his companies. It’s murder on his relationships but the companies seem to benefit from his skills.)
Speaking of competence limits, though, Musk’s ability to foster an environment of respect for individual employees is at least in question — whether it was Musk personally or just his selection of techbros to run the place. It takes a lot to get a state attorney general to sue a major employer and source of tax revenue for fostering an environment of pervasive discrimination/hostile work environment. Whether or not all of the procedural niceties, standards of proof, etc. are ultimately fulfilled by the lawsuit, unless there is substantial evidence that “it’s all lies” there is at least a competence question raised.
Bluntly, I am shocked — shocked, I say — to find indications that the tech community is at best oblivious to the working conditions of the people who actually produce the saleable commercial products embodying the tech advances. Because I know them (I’d show my soldering scars from building an Altair-5000 but that’s TMI; I’ll just say “AWACS aircraft maintenance officer for both Block 1 and Block 3 aircraft” and leave it there). Application to the publishing industry is left as an exercise for the student, who will be dealing with a culture of secrecy that is the envy of counterintelligence agencies worldwide.
Oh, Musk could be an angel and he’d still be a target of governjent aparatchicks, tax revenues be darned. Now add in that he has Aspergers, is monomaniacal, and his companies are, like most tech companies, non-union…
(Biden has a big money shower planned to encourage EV adoption? Big dog and pony show for the press. Who gets invited? GM, Ford, who sell almost no cars. Every US car exec except the guys selling 70% of the EVs. No UAW presence, though.)
Musk moved his corporate HQs out of California and will almost certainly soon close down the two factories there in favor of the much bigger ones in Texas and others in Nevada, Berlin, Shanghai, and India, UK, Brazil, and possibly Tennessee to follow.
He’s fighting with California government types?
Hah.
It’s just par for the course.
You saw how he kept his California factory open through the worst of the pandemic, fighting the bureacrats all the way, right?
The only reason he has anything there is because Tesla started in the abandoned GM/Toyota car factory.
No shock, really.
Guys don’t get to his level by being politically correct. Or rolling over and playing dead for bureaucrats, least of all him. Especially on “diversity issues”.
Musk is extreme, even among tech executives.
He is what he is and he’ll fight to the end and pay whatever fine it takes or shut the factory down.
I’m betting the latter.
When he was looking to open his first battery manufacturing GIGAFACTORY in LA and the project was running slow, he took it to Nevada. His newer car plants now build batteries on-site.
In Germany, when the Bureaucrats were slowing down the construction of GigaBerlin to cater to activists, he downscaled the factory job promises and threatened to take the whole thing to the UK. Suddenly, everything was back on schedule but the downgrade stays. He might reconsider later. But he’s for now scouting locations in Cornwall:
https://www.express.co.uk/news/science/1556884/musk-tesla-factory-uk-cornish-lithium-stores-found-factory-gigafactory
In California when his rocket engine factory expansion faced red tape, he dropped the project and moved the jobs to “boondocks” Texas.
He doesn’t suffer fools. Period.
More Musk nuggets:
1- In Texas SpaceX faces a lawsuit for refusing to hire non-citizens over federal ITAR [22 CFR 120-130. He’ll win that one.
2- During FAA public hearings one of the more “popular” complaints that hiring thousands of employees in the Brownsville region was “gentrifying” one of the poorest cities in Texas.
3- One of the sexual discrimination lawsuits against SpaceX is from an intern who kept offering unsolicited ideas to high level execs that went unimplemented. Want to lay odds on that one?
4- SpaceX has a blanket policy of doing annual performance reviews and blanket firing the lowest 10% scorers. Common in the tech world but usually it’s the bottom 5%. Bezos’ Blue Origin didn’t use to do thatbbut after spending $20B and getting tired of eating SpaceX dust, they’re adjusting. It concentrates employee minds terribly..
5- On the flip side, Tesla and SpaceX offer survivors stock options. Which has gone from ~$60 in Jan 2019 to over $900 in 2022. Standard tech startup practice. SpaceX is valued at $100B today. Projected to hit $1T by 2025.
The tech world is different and Musk is extreme even in that world, mostly because he wants to at least die on Mars and he’s not sanguine on today’s society surviving long enough for him to get there (~2050).
Make no mistake, he doesn’t try to conform, ahd doesn’t care if they try to destroy him.
His mission is literally win or die trying. 50/50 odds on that.
(Last night’s live dog and pony show had extreme security in the afternoon, likely sweeping for bombs and snipers.)
During FAA public hearings one of the more “popular” complaints that hiring thousands of employees in the Brownsville region was “gentrifying” one of the poorest cities in Texas.
This is one of my favorite complaints.
Lots of residents are delighted to sell to the new comers. They take the money, run, and never look back.
But, what about the poor who were renting? They go to work for the new company. Any group of thousands of employees has lots of people at all levels of skill.
But, then why are those people complaining. Because that’s what they do.
I think it’s because they are afraid he’ll succeed.
Again.
And change the world.
Again.
And force them to adapt.
Again.
Nobody should have that much power over *them*.
Especially somebody who wasn’t born to the “right” people and didn’t go to the “right” schools and studied a (gasp!) *vocational* career!
How dare he start with nothing and no connections, and build up five increasingly larger businesses without failing even once!
Besides, he’s not right in the head–Aspergers!–and he brags about it!
Worst of all, he has six children!
(Lousy husband but reportedly a good father.)
And he’s educating them to be like him! More techies!
White, cis, male, and successful.
That’s not supposed to happen.
He must be destroyed.
That, and he’s a not-especially-woke white South African. That probably plays a role in the antipathy.
Less snark required?
Try this:
https://www.youtube.com/watch?v=un9FY6G5UEo
One production Starship (circa 2023) should out-launch the entire world. At $1M per 100m ton launch instead of SpaceX’s already lowball $50m for 16T.
Disruption to entrenched players.
Tesla is already doing it to cars and energy storage (their little “sideline”).
Worse, he did it using a set of values that is being condemned by many activists. Hard work, punctuality, accuracy, getting the right answer, individualism, objectivity, the nuclear family, progress, respect for authority, delayed gratification, etc.
Don’t forget iterative design, test to destruction, “the best part is no part”, non-union… 😉
And Gwynne Shotwell, his secret weapon.
https://en.wikipedia.org/wiki/Gwynne_Shotwell
Just as much an outlier.
And just for fun…
MOUNTAIN VIEW, Calif. — SpaceX is prepared to shift testing of its Starship next-generation launch vehicle from Texas to Florida if there are extended delays in an ongoing environmental review, company founder and chief executive Elon Musk said Feb. 10.
https://spacenews.com/spacex-considers-shifting-starship-testing-to-florida/
…And moving out into international waters by November if the FAA rescinds the Florida permits.
Beyond that he has offers in hand to move his operations to Papua or Russia. Or pretty much anywhere he wants. Australia would be a fit.
The best managers plan ahead and Shotwell has had SpaceX working on the floating spaceports (2 to start with) since 2020.
OK, then, here’s a disturbing question to which I am not sure there is an answer:
Who are the “book guys” who “should” be in charge in publishing?
The only ones who “live and breathe the customer experience” are either the “serious readers” or “bookstore clerks.”
Nobody who has anything to do with either fulfillment or getting orders in the first place is doing anything unique to books.
Editors don’t create in the same way that cobblers make shoes; they don’t go from true raw material.
Putting authors in charge? Bwahahahahahahahahahahahaha! My evil plan to cause the universe to fall apart in utter chaos has succeeded!
Bean counters, though… they’re right out. Rightfully so.
Thus, the real problem is determining who the real “book guys” are. I don’t have an answer (except that it’s not the sales-and-marketing dorks). And if you think it’s bad in books, try applying this to the music industry…
In short, Mr Lutz’s well-considered screed for fungible goods doesn’t apply well to anything that isn’t purely about fungibles. So long as “But the latest comic-book-hero saga is not a like-for-like replacement for a fish-out-of-water romcom,” it won’t matter whether we’re talking about books, pop music, or film.
There are also matters of vision and competence.
Competence, because just because somebody understands a product doesn’t mean they know how to best run a companym Or at all. Many businesses don’t scale well and what works at one level will implode the business once it gets beyond a certain size. Founder’s Disease: https://businessnewswales.com/founders-disease-and-growing-your-business/#:~:text=Many%20also%20fail%20to%20create%20a%20balanced%20management,to%20the%20needs%20of%20organisation%20as%20it%20grows.
One of the least appreciated reasons for Apple and Microsoft massive growth through 40+ years is that both companies brought in excellent professional managers very early in their existence. Microsoft, in particular, brought in talent fron far afield: Proctor and Gamble. They called it “putting adults in charge”. (Considering Gates’ antics at the time it was *really* necessary. 😀 )
Vision is even tricker because the OP assumes a static, invariant world where what worked for grandpappy will work forever. The “shoemaker” who sticks to shoes might miss the gradual shift of business to alternatives until they become irrelevant. Often all they see is steady growth until the market hits a tipping point, followed by a stampede.
Examples abound, but among the most notable recent ones are the Japanese TV makers who failed correctly read the global shift to flat displays:
– Sony thought resolution was all that mattered and bet on the technologies they knew: CRTs and rear projection systems
– Panasonic thought Plasma’s nominally superior contrast and viewing angles would shield them from competition for LCDs who couldn’t match them and relied instead on lower prices and larger display sizes. They quickly disovered that consumers were willing to put up with “good enough” if the size and price was right.
– SHARP thought that their superior specs, like color gamut would let them charge a premium. It didn’t , as LCD TVs became commodities.
Even today we see the same phenomenon at play in autos as companies as diverse as Toyota, BMW, and Honda fight rear guard actions against battery electric transports by sticking to the technology they know and truly master –combustion–in the face of a decade long ramp up of the support infrastructure to displace internal combustion engines with an entirely different technology. (Honda is trying to apply their mastery of combustion to the space launch business, BMW want s the world simply switch hydrocarbon combustion to hydrogen gas combustion, even though there is zero infrastructure in place for ahydrogen transporation industry.)
Speaking of space launches, the one time leaders in low cost launch services–France, Russia, and China–are only now taking the first baby steps away from throwaway boosters, 30 years after NASA proved reusable rockets were a viable technology and five years after SpaceX proved them commercially viable and used the tech to undercut even the Old Space players by 50%. They hope to be in ten years where SpaceX is today, while SpaceX is looking to obsolete their own system this very year and *their* upstart competitors hope to do so in 3-5 years, way before the old space players even figure out how to do what NASA knew 30 years ago.
Finally, and looking at the creative industries, video and gaming multinationals are facing ongoing disruption in their business models as subscription long tail economies are wrecking havoc on the old school film makers and gaming platforms. Sony for one has spent the last two years trying to reverse their decades old policies and remain relevant without copying the subscription service model that looks to relegate them to a small niche of a giant global market. As in ebook readers 15 years ago, they zigged when they should have zagged.
“Sticking to the knitting” is often a losing proposition, especially in tech and creative industries.
Understanding the product is useful.
Understanding customers is essential.
But understanding the changes in the market and *the world beyond* is life and death.
Business in the 21st century is a Red Queen’s Race. If you don’t obsolete your product in a timely fashion, your competition will.
You’re too young, Felix. Consider the West Side Story of the 70s — the war between Beta and VHS. And, come to think of it, both of those companies haven’t learned anything because they’ve had Problems with the flat-screen TV…
Of course, it could be worse. We could be arguing about Laserdisc. Or CP/M versus DOS. Or AT&T versus BSD. At least we don’t have to go back to the sixteenth century and argue about fraktur versus roman type…
I didn’t want to date myself. :p
The saga and romcom can definitely be close substitures in the set of “Something to pass the time on a five hour flight.”
Wow has that common-sense ship ever sailed in the medical profession, where any major medical decision is made by the bean counters of the insurance industry.
It would be great fun to watch the doctors decide how to come up with the money the insurance company needs to pay what the doctors charge.
Of coures, you’re right. God forbid the insurance companies should draw on the billions of dollars they are paid by patients every year, and simply pay for procedures that (1) the insurance companies previously agreed are covered and (2) the doctors believe are necessary.
This wasn’t a doctor requesting approval for a frivolous test. I was at first denied a new pacemaker/defibrillator by insurance company bean counters. I needed it because the 7-year battery on my old one ran out at almost 8 years.
My doctor finally was forced to do an exploratory surgery, the result of which was him placing a stent I didn’t really need (thereby costing the insurance company even more money) so the bean counters would then approve the new pacemaker.
I should add that most doctors don’t make as much money as some seem to believe they do. Many attorneys make much more for scrambling or unscrambling language, and almost all sports figures, who make their living playing one child’s game or another, make far more money than doctors make.
I’m in favor of attorneys making money too, H.
Tsk, tsk.
No love for engineer finances? 😉
Yes, so am I, PG. I didn’t mean to imply otherwise. Nothing wrong with being skilled at unscrambling language that was written to confuse in the first place. I’m also happy for you that someone from a completely different industry doesn’t get to choose who is or is not worthy of your representation or counsel.
That said, despite the current egocentric fear of Oh-my-god! Look! It’s WORDS! that the media would have us believe is sweeping the nation, if some other industry decided you were not allowed to clean up a contract or draw on your hard-earned skills in other ways, that would have practically no chance of leading to the physical death of your would-be client.
I’m discussing the general issue. Your personal situation is something on which I have no standing to comment. Hope things work out well.
Every day, the insurance companies draw on the billions they are paid by patients. That’s where the medical payments come from. The bean counters do indeed keep track of those billions. But, they are not the ones who make policy on what specific patients and procedures should be reimbursed.
Those who do make the decisions definitely rely on the accuracy of the information provided by the bean counters, and they definitely include both doctors and lawyers.
Thanks, Elliot 123. It did work out well. Otherwise I wouldn’t be such an annoyance. (grin)
I submit that this subtopic, which I started inadvertently, is in no way a general issue. Every request for a necessary medical procedure comes down to a very personal situation for the patient or the patient’s loved ones and often even for the doctor, and not always because he needs a new boat.
Now, is every procedure necessary? Probably not. And I’m sure that’s what the insurance companies rightly want to decide.
But any procedure that 1) cannot be listed under the heading of “Elective” and 2) the lack of which would almost certainly lead to the patient’s death, should probably be rubber-stamped. (Shrug.)
In a reasonable world it would.
But we don’t live in a reasonable world.
Regular reminders of it are useful.