Retired Ceo and business turnaround specialist Elmer David Gates takes the reader through a tour of his leadership experiences starting with the Korean War through increasing responsibilities at General Electric and finally turning around a failing global manufacturing plant in Pennsylvania. Young and developing leaders at all levels will learn valuable lessons as they walk through Elmer's life with him.
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Acknowledgments, ix,
Foreword, xi,
Introduction, xiii,
PART 1: Foundational Lessons, 1,
Chapter 1: A Young Lieutenant and a Bridge, 7,
Chapter 2: Management Style Emerges at General Electric, 16,
NASA: Daytona Beach, a Government Contract, and a Few More Lessons, 22,
Chapter 3: Balanced Production Program at General Electric's Erie Plant, 28,
Chapter 4: Unions, Labor, and Profitability at General Electric in Schenectady, 51,
PART 2: The Three Stages of Organizational Turnaround, 69,
Leadership Styles for the Stages of a Turnaround, 71,
Chapter 5: U-Turn Assignment: What You'll Find, 79,
Chapter 6: Stage One: The Fix-It Phase, 92,
Chapter 7: Stage Two: The Transition Phase, 114,
Chapter 8: Stage Three: The Growth and Success Phase, 137,
PART 3: Lessons for a Turnaround World, 159,
Chapter 9: Lessons for Startups, 163,
Chapter 10: Echoes from the Lost: The Story of Bethlehem Steel, 187,
Appendices, 197,
About the Author, 209,
Index, 211,
A Young Lieutenant and a Bridge
You can improve any situation you inherit, and when you know you are right, have confidence. The measured risk you take will have a payoff.
Wartime creates an environment where you either learn quickly or too late. I learned that lesson, like most military men, under pressure.
I did not realize until years later that not all the lessons that shaped my philosophy about business were lessons in turnarounds. In truth, all of my experiences, from the time I left my boyhood home in New York state to when I was walking the barren landscape of Korea, laid the foundation that shaped my leadership style and my career.
After all, each of us develops a leadership style from the time we come to the age of realization. We do this in family situations as an older brother or sister, in the classroom when volunteering to deliver things to the office or serving as class president, and on the playground as the captain of the neighborhood baseball team. We also learn how to become de facto leaders, the unappointed and unelected leaders of our peer groups, by deciding which game to play or which ice cream shop to visit.
Most of us don't realize the myriad of leadership experiences we have growing up and how those experiences develop our personal leadership styles. As we grow into mature leaders, we do well to reach back into those foundational lessons to become the unique leaders we are meant to be.
Our job in becoming great leaders is not to imitate someone else's leadership style, but rather to continue to refine our own personal leadership style — the one that evolved from the first time your peer group attended the movie you wanted to see.
* * *
My first exposure to a turnaround occurred in 1952 during the Korean War. I had landed my first paid leadership assignment when I was a twenty-two-year-old combat engineering platoon leader in Korea. It wasn't a turnaround as we experience them in organizations today, but it taught me a valuable lesson and a set of skills I utilized in turnarounds for the rest of my career. That lesson? Any situation can be improved; therefore, the status quo is not acceptable. But I didn't realize what I had learned at the time: reject the status quo.
In Korea, I was expected to perform in the moment, assessing situations and responding, then monitoring results and adjusting on the fly. It wasn't a situation that allowed time for reflection. However, when I returned to work in industry and saw how the lessons I learned in Korea applied in every situation I encountered in the private sector, this essential truth sank in.
Any situation can be improved. Reject the status quo.
My platoon of approximately twenty soldiers was assigned to the 5th Marine Regiment. Our job was to clear minefields, build bridges, and tend a floating (Widgeon) bridge over the Imjim River close to the west coast of Korea. The Imjim River was close enough to the ocean that the tides affected the height of the river. We had to adjust the bridge over the Imjim River twice a day to accommodate the changing tides to supply the front lines and bring back the wounded, the POWs, and more. The bridge not only required an adjustment to compensate for tidal action, but the challenge was compounded by the fact that Korea is a country with steep mountains and little mature vegetation, which exacerbated flooding after the heavy rains during the rainy season. In theory, the bridge could be disassembled when the floods came.
The first day after I arrived, I went down to the bridge to understand what I had inherited. I was struck by the many pieces of the bridge — the large number of rubber pontoons and steel treads — that had washed down river from the bridge site.
When I looked down the length of the river and saw all those parts, it bothered me. "What happened down there?"
The guys told me, "We just can't get this bridge pulled in time when the floods come. We don't have enough time to get the bridge disassembled."
I thought it was an interesting problem. The design of the bridge utilized large rubber pneumatic pontoons in which the air pressure enabled the surface of the bridge to float. Steel treads were mounted on the pontoon floats, and vehicles were able to drive on the treads. The design seemed sufficient to the task, but clearly the assembly and disassembly presented a persistent problem in this unique circumstance.
In retrospect, this situation led me to make the only decision of my career that required me to use my mechanical engineering degree.
After a week or so of getting familiar with my fellow platoon members, building a bridge a few miles upriver, and getting reports on tidal action as well as learning about the bridges, I started studying the construction of this particular bridge. The steel treads, which comprised the driving surface of the bridge, were connected from one pontoon to the next by two steel rods, both two and a half inches in diameter and three feet long, driven through holes in each end of the treads.
When the flood waters came, the water would distort the bridge into an arc, thereby stressing every connection point and making it impossible to remove the pins.
After understanding the connecting mechanism and watching differently sized vehicles travel over the bridge, I realized that by modifying two of the treads in the middle of the bridge, we could prevent the loss of any more bridge parts during the flooding if we could reduce the time it took to disconnect the treads. All that was required was to convert the two holes into slots in one end of the two treads in the middle of the bridge.
I had our welder burn the metal below the hole in the tread to make the slot. The slot made it possible to use the lift on one of our bridge trucks to pull the treads up and out of the slots and then fold them back on the treads behind them. The bridge was then in two pieces, and the winches on our bridge trucks, positioned on each side of the river, could hold the bridge halves on the shore until the flood receded. When the water had subsided, our boats pulled the two halves of the bridge back into position. We lowered the two treads to connect the two halves, and the bridge was completely ready to be traversed...
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