Post-War Executive Talent
INDUSTRY'S MOST IMPORTANT PROBLEM IS MARKETING
By THOMAS B. McCABE, President, Scott Paper Company, Chester, Pa.
Delivered at the Management Education Conference conducted by The Society for the Advancement of Management in cooperation with the Wharton School of Finance and Commerce, October 15, 1943
Vital Speeches of the Day, Vol. X, pp. 190-192.
THIS subject is one of keen interest among my associates. I have found it far easier to apply the thoughts in connection with it to a specific business than to industry generally, or to schools of business administration. Therefore, speaking for the specific company with which I am connected, I will address you as I would the staff there with the hope that what I say will provoke some discussion.
It is obvious that our first and paramount job is to win the war. With this knowledge is a growing consciousness that we must win "a better world to live in"; otherwise, the supreme sacrifice of our men will be in vain, for unless it is a victory which enables us to establish such a world we will have won the present and lost the future.
Our forefathers won the right to live as free men, but we must win the right of free men to work. A job for everybody and everybody in a job has resulted in an industrial miracle in our war production program, and it can help us win the peace.
We must prepare for peace by encouraging government, labor, business, educational, religious and other groups behind the front line to seek ways and means of attaining this goal.
Sound planning by the government is equally important as it must provide the internal framework as well as the proper administration of such a framework to permit the smooth functioning of the competitive private enterprise system.' Externally, the government must develop relationships with other countries which will offer maximum opportunity to maintain postwar world peace. We have learned by bitter experience that our domestic peace and prosperity depend upon peaceful and prosperous conditions in other parts of the world.
The government has called large numbers of our industrial leaders to Washington to serve in the war program. These men, like Stettinius, Nelson, Wilson, Batt, Knudsen, Harriman, and scores of others, have displayed outstanding ability as public servants and have assisted in bringing industry closer to government and government closer to industry. These men will be of inestimable value in assisting with plans to create a better environment in the post-war period.
It is reasonable to expect a short period of readjustment following the war, but there need be no major business slump. Certainly this war is not being fought to restore the "good old days" when we had idle men, idle money, idle plants and idle 1 opportunities.
What are we going to do about the millions of soldiers returning to peacetime pursuits, eager to work? Matured by their experiences, possessing new and broader viewpoints, they will constitute a vigorous social force with which to reckon. Here is a job which challenges all the abilities, ingenuity and resources of American business and other groups. Upon our success in meeting this unprecedented challenge may depend the survival of a dynamic free society in this nation. We dare not underestimate the staggering proportions of this assignment nor the consequences of failure.
We know that to provide maximum employment, the plants of this country will have to be kept open and busy. That means there must be necessary work for them to do, filling the needs and wants of the people of America as well as those of a war-torn world. Sumner Slichter has estimated that, if the war continues until the middle of 1944, the deferred demand of the American public will be 25 billion dollars, and that, if the war continues until the middle of 1945, it will be 50 billion. Unless the government imposes much higher taxes than at present the people of America will have tremendous purchasing power ready and waiting when the war ends. Naturally, the first question we ask is, where does our business fit into this picture? What can we do in our individual enterprise to prepare for the problems which will inevitably face us after the war?
Based on past experience we can estimate the number of people we should reasonably employ during the post-war period in order to contribute our share toward a higher level of national employment.
Marketing Is Important
We can develop plans for the production and, more important, the marketing of a sufficient quantity of merchandise to keep these people employed.
In our company we regard the work of such vital importance that we have assigned it to a Director of Post-War Planning and he, in conjunction with a staff of executives, is working out the program.
It is obvious that industry's most important problem is marketing. We have mastered mass production, but we have not built up peacetime mass consumption to take the output of our industrial machine running at top speed. The solving, of this problem will go far in solving the post-war problem of providing jobs.
The whole distribution system has been seriously and dangerously paralyzed. What we call "markets" have been sacrificed to a large degree to war needs. It will take tremendous sums of money invested in research and sales work and, especially, consumer advertising to repair the damage to markets and distribution.
But it must be done, done wisely and systematically, if we are to utilize the impetus of the first great spending wave after war to carry on through the years.
Now that we know our problem and have defined our objective, we can think of the executive talent required.
It is obvious that sales executive staffs will have to be improved and enlarged, and that the chief official in charge of marketing will of necessity have to be a much broader gauged man than ever before. Marketing research should become as important as chemical or physical research and the right executives should be found to make it so. Isn't this a field for further exploration by the universities?
Advertising, one of the most powerful forces in merchandising, has never been subjected to what we term the scientific approach, except in a very timid and halting manner. Starch is doing an excellent job in measuring the effectiveness of copy. But I mean getting down to the roots and studying causes. It might be said that advertising is to merchandising what electricity is to production. Think of the great men of science, the electrical wizards and the research laboratories, who are studying electricity. Where would we be in this war without electricity? The prospects of electronics in the post-war period are positively thrilling. But what do we hear about post-war advertising? What great universities, laboratories and wizards are studying merchandising, especially advertising, to the same extent as electricity? And, why not?
Executive Qualities Needed
In order to attain mass consumption we must drastically alter our old concepts of marketing and production, especially those which in practice tended to limit production and create artificially high prices. Unless we change our thinking, there seems to be very little hope of ever employing all the potentialities of our huge production machine, operating at full time. Otherwise I can see no way of preventing mass unemployment. The executive leadership for carrying out such a program must be bold, courageous and resourceful. They must have minds that are open to the economic forces around them. Above all, they must have judgment.
What qualities are we looking for in a potential sales executive ? We think it is imperative that he have an exceptionally high grade of intelligence, but he need not necessarily be scholastic. He should have a wide background of knowledge and experience sufficient to attain standards of value against which to check day to day problems. Since the sales executive deals primarily with people, it is important that his human qualities be highly developed, and that he be a leader in all that the word implies. Above all, he must have vision. I have paraphrased the biblical text to read, "Where the sales manager has no vision the business perishes."
All good executives should recognize the vital necessity of giving the business continuity of leadership, and be willing constantly to introduce young men of great potential strength into the business and to bring in outside executives if necessary to supplement their training and experience and, especially, the qualities and attributes whi h they lack. Dr. Waldo Fisher says, Add to that the ability (1) to break a problem into its elements, lift out the basic factors involved, formulate the principle to be applied in handling the program and delegate it to others, (2) to energize his associates to carry out the desired objectives and you will have an executive.
The knowledge of when to insert and withdraw men from certain positions constitutes the highest order of leadership. The degree of fairness with which this is done will largely determine the esprit de corps of the organization.
Sources of Leadership
I have been asked the following question, "From what sources may executives be secured in the post-war period?" As I see it, there will be four principal sources:
1. Each business has a considerable portion of its men in the armed services. From the parent organization of my company it is almost 30 per cent, and of this group one-fourth are officers. We expect that a number of our future executives will be drawn from this source. From personal contacts and correspondence with many of these men I have observed a very rapid development in their qualities of leadership. Many of them are gaining a type of administrative experience in a short period of time that we could not possibly give them here. For example, one of our very young salesmen came to see me a few weeks ago and I was amazed to see that he is already a Major and is on the Headquarters Staff in one of the Corps areas. He is now only twenty-six years of age. I would say certainly that he is very promising executive material for the post-war period. "The University of Hard Knocks," especially if it is war, is an expensive and dangerous way to obtain experience, but it does develop men.
2. The men in business on the home front have had to grapple with some of the toughest problems of their careers, especially in manufacturing and general administration.
Almost every conceivable difficulty has arisen, including labor turnover, absenteeism, lack of materials and a multitude of government rules and regulations. The solving of these unusual problems has made them more resourceful, taught them that the word "impossible" belonged to the pre-war era, and has compressed into a short period of time the managerial experience of a lifetime. From these resourceful men we should also secure a number of our post-war executives. Our policy is to make promotions whenever possible from the ranks.
3. If history repeats itself, there will be available a large number of high type executives temporarily out of employment and available due to the transition from war to peacetime production. From this group we will be interested primarily in men with technical backgrounds, as for example, physics, chemistry, engineering, etc., as well as men with research experience, who will be willing to accept junior executive positions to start. Only rarely do we bring in a Senior executive from the outside.
4. We expect to continue our very successful policy of the past of recruiting from the schools and colleges as many outstanding graduates as we can assimilate and placing them in the various functions of the business. The most promising of this group we rotate from function to function and place them in small groups for special training. For several years they have been one of our very best sources of junior executive material.
In normal times our Personnel Manager covers a wide range of colleges and universities in search for the special types he has in mind. If he is looking for engineers and desires to have one or more potential executives in the group he will try to select them from different colleges and different sections of the country. In this way we gain the
advantage of many different points of view and various individual approaches to the problems. High scholastic standing is a more important quality in engineers, accountants and research executives than in sales, personnel or factory operating executives. The former operate a little more with facts, figures, test-tubes and slide rules, while the latter deal primarily with people. In choosing executives from either group, we will gladly accept those with average scholarship if the "human qualities" have been highly developed. Primarily, we are looking for the exceptional type man with broad human understanding, a thirst for general knowledge, ability to write intelligent and interesting reports, and, finally, demonstrated ability to talk well and influence others. Unless he has these characteristics he is not the best executive material.
The four sources I have mentioned will offer industry the widest range of executive talent that it has ever enjoyed. Both the men in service and men on the home front will at the end of hostilities constitute the largest combined group of practically trained men that this country has ever seen. The sudden impact of these men presents several problems for industry and for educational institutions. Many businesses will have a surplus of potential executives,—those presently on the home front plus the returning service men.
Many of the returning service men present interesting problems, as for example, the accountant, or salesman, or factory worker, who by sheer ability has advanced to be a Captain or Major in the Army. Will we place him in his former modest position when he returns? Generally speaking, I think not, because he will have developed qualities of leadership to a far greater extent than he could have here. He has also gained a breadth of knowledge and experience which we could not give him. It would seem that many men like this will offer excellent potential executive material. But can we absorb all of them? That is the big question.
If we cannot, how will this affect recruiting from the educational institutions? Should industry and the educational institutions get together to discuss a program covering:
1. Placement of graduates for the first year or two of post-war.
2. Graduate study for the surplus of potential executive material, drawing some from ex-service men and some from the home front.
3. Types of curriculum to best prepare the undergraduate and graduate students for executive positions in industry.
I recommend strongly a series of conferences on these subjects. I am sure that industry needs your assistance, and I think you will need industry's assistance even more because your graduates will be faced with terrific competition for placement in the post-war transition period.
I have assisted, in a modest way, with a plan of vocational guidance which was instituted some years ago in one of our Eastern colleges. (The plan as initiated was under the direction of a member of the College Administration, appointed for the specific purpose of assisting students with their vocational problems.) I believe it is desirable for college men who expect to enter industry to be exposed in some form to industry during their undergraduate days. By exposure I mean the opportunity for the student to fill a position during vacation periods in a factory, office or even a retail store, and, by actual contact with selling, advertising, accounting or plant operations, to become acquainted with the job and thus determine if it has an appeal. If he does this two or three times during his college career he will have the opportunity of comparing the appealing merits of one vocation with another, and at the same time become more familiar with the problems of industry and the professions. My observation has been that where students have this experience they go back to their college with a much better understanding of the significance of their college work.
I do not wish to convey the impression that this program opposes the purely cultural forms of education or works against those colleges where the emphasis is placed on the liberal arts. Certainly, society and industry need more men of broad, cultural background. My impression is that we have brought as many men into the business from the liberal arts colleges as any other. What I wish to emphasize is that, if the student intends to enter industry upon graduation, irrespective of his college or course of study, he should be formulating his plan of entrance while he is in college. Such a program, I believe, will develop more potential executives for the post-war period.
I have a vital interest in your job and believe that your institutions and industry should be brought closer together for their mutual benefit. We from industry often have a closed mind toward economic problems. Your minds are much more objective. You are better able to see many sides of a subject. You have made rich contributions to the American way of life, which we are waging war to preserve.
In the April 1943 Bulletin of the American Association of University Professors, was a caption, "Teachers keep the Faith!" It was the reprint of a letter from a man in the Air Service. I will read only this portion: "The teacher is a dedicated man. This world of ours will be saved or lost by the history of its education. It is my belief that the teacher, the professor is the world's most important person today. If he fails, all else fails. If he surrenders his integrity, his faith, his duty, we soldiers have worked in vain, and man shall have died in vain. To those teachers who maintain their spirit, who hold proudly to their positions, goes my salute. Do not fail; or else we fail."