The Best of Corporate America testifies to the overriding importance of good management.


World War II left Japan in ruins. General and gaijin shogun Douglas MacArthur invited a hard-bitten Wyoming engineer to help restore its shattered economy.

Japanese leaders complained they lacked money and technology and could not hope to compete on a global scale. The engineer, W. Edwards Deming, told them to forget about money and technology. What they needed were managers who could rely on the contents of their craniums, not exotic machines. “Technology is brainless,” said Deming. “So are most managers I know.”

Deming knew whereof he spoke. His ideas on leadership had been flatly rejected by the powers at then-mighty General Motors, who preached that executives were interchangeable, products could be engineered to wear out according to plan, and technology could repair any managerial blunder. The result, Deming claimed, was “robots painting robots” — automation without human guidance.

Deming adapted the ancient Japanese term jidoka — meaning human-directed enterprise — to explain how entrepreneurial management could defeat hidebound corporate bureaucracies. He encouraged a struggling Yokohama automaker, Nissan Jidosha, to hire and train leaders who weren’t afraid of risk or breaking barriers separating them from better ideas and higher quality. They hobnobbed with nerdy engineers and the oil-stained rank and file. They tinkered with engines like garage hobbyists. What came of that leadership transformation was a game-changing method in car manufacturing, a process that led to the launch of a series of low-priced, high-performing machines — from the boxy 1600, dubbed the poor man’s BMW, to the svelte Z roadsters — that sent Detroit scurrying for a competitive response.

So, too, the best companies listed in this month’s cover story (see the Best of Corporate America) testify to the overriding importance of good management. Excellence in leadership never goes out of fashion. Nor should it ever be subjected to planned obsolescence.