Credit: Wikinomics.com
(Concluded from Part 1.)
Sometimes even failing in the chase paid off. Dealmaker Samuel J. Heyman “never bagged his prey, but he pulled down about $500 million in profits from his investments,” reported Business Week. We would be “hard put to find a dealmaker whose instincts were so beautifully in sync with the quick-buck mentality” of the times. (6)
The business environment is dog-eat-dog, “a cutthroat marketplace,” (37) in which “we’d all kill for [profitable] savings.” (38) Businessmen are warned: “He who hesitates is lunch.” (39)
Scenarios are replayed in which readers are warned who is eating whose lunch: “Competition from the likes of Hewlett-Packard and Co. was eating CalComp’s lunch,” offered Electronic Business. (40) A senator fumes: “While the White House is debating ideology, other countries are eating our lunch.” (41) Quipped a phone company ad: “In the 90s, let’s do lunch may have a slightly different meaning.” (42)
When metaphors of slugging it out or pouncing on prey did not get business’s message across, the business process was compared to war. Said one “super-banker” of another: “We don’t meet, we have battles.” Here is Business Week‘s account of that “meeting.”
“Bennett A. Brown … the chairman of Citizens & Southern Corp. rejected a hostile takeover bid from NCNB Corp…. Even though [NCNB chairman Hugh L.] McColl [Jr.] told Brown that he had launched his missiles, the brash, acquisitive McColl backed off with uncharacteristic meekness.” (43)
Explained Business Week: “Every day around the world, corporations do battle.” (44) Among the trade warriors, “Japan is the force to beat.” (45) Public attention was focused on the Japanese as “the world’s most feared global competitor.” (46) First American and later European corporations were reported to be “running scared. The reason: They fear an onslaught of competition, especially from the Japanese.” It is left to a British union official to remind us of the fate of the weaker trade rival: “Everyone realizes only the fittest will survive.” (47)
The U.S. electronics industry is “pinned down in the trenches of an economic battle, according to our troops in the R&D labs and engineering workplaces of America. And right now, the battle is going nowhere.” (48) The U.S. semiconductor industry has been “driven to its knees by Japanese targeting of the industry.” (49)
Credit: content.time.com
“Having softened up the U.S. semiconductor industry by sapping its profits with low-ball pricing, Japan’s electronics giants are moving in for the kill. That’s the alarmist view of the proposed takeover of Fairchild Semiconductor Corp. by Fujitsu Ltd.” (50)
The American press watched for any sign of winning and leapt on it.
“At first glance, it would appear to be sweet revenge on the Japanese corporate titans that have been beating up on their North American and European counterparts. … More Japanese companies fell off the [Business Week Global 1000] list than those of any other country.” (51)
Domestically and internationally, said small-business author Jay Conrad Levinson, “it’s a marketplace out there. In order to survive, let alone thrive and prosper, you’ve got to be a guerilla.” For the “guerilla marketing attack,” he offered “strategies, tactics, and weapons for winning big profits.” (52) Levinson took Business Darwinism to its logical extremes and showed the doctrine’s ultimate direction. According to him, business competitors were our enemies.
“You are surrounded. All around you are enemies vying for the same bounty. They’re out to get your customers and your prospects, the good and honest people who ought to be buying what you’re selling. These enemies are disguised as owners of small and medium-sized businesses.
“These enemies thrive on competition. They’re out to get you and get you good. … Your enemies mean business, your business, your profits.” (53)
The businessman with the most powerful arsenal will win: “Your bank account will brim with profits in direct proportion to how your marketing arsenal brims with these weapons.” (54)
Levinson supplies business with the marketing weapons to take to war: “[These] fundamentals for winning the battle for healthy, honest, and growing profits … will serve you well on your way to the battlefield.” (55)
Daily the skirmish reports and body counts roll in from feature wars, price wars, standards wars, PC wars, cola wars, and semiconductor wars. Said the executive VP of an industrial research firm: “We’re seeing the industry move in such a way that these two big forces are going to be really fighting it out. … The battle will take place on the fronts of ‘audio, video, voice CD-ROM, stereo, mass storage’.” (56)
The corporation was represemted as being engaged in a “do-or-die marketing battle to win over increasingly sophisticated and demanding customers.” (57) The fate to be avoided is “unconditionally surrendering the … market” to the enemy (58) while the highest grace lay in emerging dominant. U.S. News & World Report observed: “Merely being competitive is not enough in today’s global markets. Rather, [a firm’s] long-term success will depend upon [its] domination of markets.” (59)
Said Peter Cohen in The Gospel According to the Harvard Business School:
“Tomorrow is the future. We trained our business leaders to successfully wage its battles.
“World War III is going to be fought on the shelves of your neighborhood shopping center, and the Harvard Business School is a sneak preview of it. How its generals are prepared. The weapons and tactics they learn to use. How, fighting against each other, against humiliation and delusions of grandeur, they run each other down, yet somehow, desperately at times, seek to maintain at least the appearance of friendship. (60)
“This is an account of [the] education [of a class of 94 MBA students] to become lords over a new kind of army in a new kind of warfare, ready to take over from the military who have perfected their technology to the point where its use is guaranteed to leave nothing worth using it for. But since men will continue to be ambitious; since they will still want to be, they don’t know what, except different, they will go on fighting for those things of which there aren’t enough to go around — money, love, land, praise, power and perquisites.” (61)
“Epic tales are told around the campfire. Not all the participants are happy with the process.
“At the Vick School of Applied Merchandising: It was a gladiators’ school we were in. Selling may be no less competitive now, but in the Vick program, strife was honored far more openly than today’s climate would permit. Combat was the ideal – combat with the dealer, combat with the ‘chiseling competitors,’ and combat with each other. There was some talk about the ‘team,’ but it was highly abstract. Our success depended entirely on beating our fellow students, and while we got along when we met for occasional sales meetings the camaraderie was quite extracurricular.
“Slowly, as our sales-to-calls ratios crept up, we gained in rapacity. Somewhere along the line, by accident or skill, each of us finally manipulated a person into doing what we wanted him to do. Innocence was lost.” (62)
The author also questioned the satisfaction that predatory competition brought its new entrants: “The Harvard Business School’s blind faith in competition alienates its students from one another, driving them to the destructive selfishness, the rugged individualism that, for too long, has been mistaken for a mainspring of progress.” (63)
That was about as much lip service as “destructive selfishness” got but no truer words were spoken. The selfishness at the heart of Business Darwinism conditioned society for the final push that began with 9/11.
One might ask how much these metaphorical ways of speaking actually translated into business practices? Just as, upon listening to President Nixon on the Watergate tapes, our view of White House policy-making shifted, so our view of business’s wisdom and maturity may also shift when we listen to the tapes presented at a trial between Bankers Trust and Procter & Gamble.
What the evidence (and other earlier examples of Bankers’ shoddy practices) demonstrated was that ethics took a back seat to profiteering at the bank. In the Economist’s account, the Business-Darwinist drift is plainly seen being translated into action.
“In January [1995] the bank settled a similar case with Gibson’s Greetings, a card company, after internal tapes revealed the bank’s employees giving the client false information about trades in 1993.
“Now BT has been shamed by further revelations about its derivatives sales practices in 1993-94, following a court ruling on October 3rd, which made public previously sealed documents and tapes relating to the P&G case. Astonishing comments by BT employees raise fresh concerns about the bank’s culture at that time.
“Consider, for example, oral references by BT staff to a ‘rip-off factor’ that was attached to complex deals involving leveraged derivatives. One BT salesman describes how he would ‘lure people into that total calm and then totally f*ck them.’ Perhaps worst of all, a video shown to new employees includes a telling description by a BT instructor of how a swap works: he says that BT can ‘get in the middle and rip them [the customers] off.’” Remembering that cameras were rolling, the instructor then apologises. (64)
Anyone not harmed by events could reflect on them philosophically, as Fortune Magazine did, capturing the mood of the times.
“The financial civil war that swept across America in the past decade was a ripsnorting string of shoot-’em-ups like nothing ever seen on Wall Street or Main Street. Withering volleys of money shot back and forth as insurgents stormed one entrenched corporate position after another.” (65)
But the fact remains that getting tough with one’s rivals, which would have been repulsive in a gangster, was made right and desirable in the predatory market environment of the 1985-95 period.
No quarter was given or expected. Getting your licks in, bagging prey, and blitzing one another was just good competitive practice.
Had these been two boxers fighting each other in the ring, perhaps matters might have stopped there. But these lean and mean contenders for the world title stripped millions from their payrolls to get into fighting trim. And they used any weapons they could find to achieve competitive advantage.
Many of those weapons were technological and meant that the employees so eliminated would never return. Thus, what was represented as being in America’s interest may have been in the interest of the CEO’s who, like IBM’s Aker, laid off 14,000 in 1990 and had his pay doubled to $2.2 million for (and I speculate) having ‘what it took to do what was needed.’ (66) But it was not in the interests of the wave of Americans who had to walk the plank.
An unbridled wave of global competition was initiated by following the tenets of a philosophy of predatory competition, a phenomenon which harmed workers in every country it affected. The leaders of business would have said that nothing could be done about it, that it was the market working itself out according to its own ineluctable laws.
However, there’s nothing in any natural law that specifies the human community must operate this way. Their explanations, needless to say, were small comfort to the millions whose lives were, in this age of the smart machine, irreversibly impacted.
Footnotes
(36) Bruce Hager, “Now Comes Sam Heyman, Global Industrialist,” Business Week, 15 July 1991, 110.
(37) Michael Crawford, “No Nerds Need Apply,” Canadian Business, January 1993, 48; Pomice and Cohen, ibid., 46.
(38) Art Zimmerman, “These Materials are Downright Precocious,” Business Week, 16 Sept. 1991, 112J.
(39) David Olive, “The New Hard Line,” Report on Business Magazine, October 1991, 15.
(40) Bruce C. P. Rayner, “Made in America,” Electronic Business, 1 August 1988, 29.
(41) John Carey, “Will Uncle Sam be Dragged Kicking and Screaming into the Lab?” Business Week, 15 July 1991, 128.
(42) BC Tel ad on KVOS TV, Channel 12, Bellingham, WA, 8 Nov. 1991.
(43) Chuck Hawkins, “Super Banker,” Business Week, 15 July 1991, 116-7.
(44) Bruce Nussbaum, “Winners. The Best Product Designs of the Year,” Business Week, 17 June 1991, 62.
(45) Monroe W. Karmin, “Lean Times Loom on the Factory Floor,” U.S. News & World Report, 20 Nov. 1989, 72.
(46) Christopher Farrell, “The U.S. Has a New Weapon: Low-Cost Capital,” Business Week, 29 July 1991, 72.
(47) Blanca Reimer, “‘Quite Frankly, Being Unemployed Stinks,'” Business Week, 15 July 1991, 44.
(48) “Turning it Around,” Electronic Engineering Times, 14 October 1991, S75.
(49) Rep. Ralph Regula, “Wake Up! U.S. Industry is Under Attack,” Business Week, 29 July 1991, 8.
(50) Richard Brandt, “Japan Buys a Big Piece of Silicon Valley,” Business Week, 10 November 1986, 45.)
(51) Robert Neff, “A Year of Twists and Turns,” Business Week, 15 July 1991, 52.
(52) Jay Conrad Levinson, Guerilla Marketing Attack. Strategies, Tactics, and Weapons for Winning Big Profits for your Small Business. Boston: Houghton Mifflin Co., 1989, 2.
(53) Ibid., 1.
(54) Ibid., 4.
(55) Ibid., 3.
(56) Tim Bajarin, Executive VP of Creative Strategies Research Internation Inc. of Santa Clara, CA in Grace Casselman, “Multimedia Looms Large in Comdex Crystal Ball,” Computing Canada, 21 November 1991, 18.
(57) Crawford, ibid., 46.
(58) Paul Magnusson, “The Antitrust Ball and Chain Hobbling High Tech,” Business Week, 29 July 1991, 34.
(59) Karmin, ibid., 72.
(60) Peter Cohen, The Gospel According to the Harvard Business School. Harmondsworth: Penguin, 1973, 8.
(61) Ibid., 8.
(62) W.F. O’Neill, ed. Selected Educational Heresies. Some Unorthodox Views Concerning the Nature and Purposes of Contemporary Education. Glenview, IL: Scott, Foresman & Co., 1969, 47.
(63) Cohen, ibid., 8.
(64) “Bankers Trust: Shamed Again,” Economist, 7 Oct. 1995, 87.
(65) Edward Faltermayer, “The Deal-Decade: Verdict on the ’80s,” Fortune, 26 August 1991, 59.
(66) Olive, ibid., 16.