The Art of Business Is Like Making Sausage, You Don’t Want To Watch Usually

by Hank Coleman

No one likes to see how sausage is made. Even people who love salami and hot dogs do not like to see the messy, behind-the-scenes details of how the meat is made. It is often used to describe how a law gets passed by our government as well. There is a lot of waste, inefficiency, give and take, and ugliness in passing a bill through our Congress.

jack-welchJack Welch, the famous former Chief Executive Officer of General Electric said the same thing about American business in his book, “Jack: Straight from the Gut“. One of the most famous, well respected, and successful business leaders of the past century, Welch said, “No business is perfect. I believe that business is a lot like a world class restaurant. When you peak behind the kitchen doors, the food never looks as good as when it comes to your table on fine china perfectly garnished.” I have definitely heard that from friends who have worked at a few of my favorite dining establishments as well.

human-side-enterpriseYou are probably asking yourself, “So what?” And, I would not blame you. The only thing that I would remind everyone is that while the dishonest actions of a few on Wall Street have tarnished the entire financial industry, most people, businesses, and capitalism is fundamentally good. I’m also a firm believer in “Theory X and Theory Y”. The theories describe two different manager attitudes towards their subordinates. These ideas were developed by Douglas McGregor in his book from 1960, “The Human Side of Enterprise.”

Theory X suggests that employees are inherently lazy and dislike work and responsibility. Because of this, managers must coerce them to work and supervise them closely. This is a rather negative perspective on human behavior. Theory Y, on the other hand, suggests that employees like work and will try hard to do what is right. This is a much more positive perspective on humanity.

Even though Jack Welch wrote his book years before our current crisis, he goes on to say that business is messy and chaotic just like we have witnessed this year. This year has been a perfect example of that chaos personified. We all tend to forget that businesses and our capitalist system in its purest form have always been messy and a little unruly. We just do not mind this so much during the boom times when the companies are lining all of our pockets with capital gains and fat dividends. But, we must always be mindful during the bust times as well. Overall, I still view people and the market, as a whole, in a positive light which ultimately has our best intentions at heart. I am a classic Theory Y believer.

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