Sunday, July 12, 2015
Michael Milken: Father of Modern Management
Businesses may use the language of former fathers like W. Edwards Deming, Peter Drucker, Peter Senge, Peter Block and Stephen Covey, but these are just words. Dr. Deming's teachings on Profound Knowledge have been relegated to two words buried deep inside a corporate compliance program. Continuous improvement is merely a set of tools to be applied, not a comprehensive, integrated management theory which requires it be updated as new theories are confirmed.
Michael Milken's leveraged buyout organizations are the foundation for management today. Dr. Deming decried their existence as the antithesis of constancy of purpose. Extrinsic motivators distort and Milken's greed landed him a $600 million fine and in jail. Yet, this fraudster's practices can be seen over and over in the most cursory examination of private equity, an updated name for leveraged buyout organizations.
Companies use the language of employee appreciation. What call with Wall Street analysts doesn't begin or end with the CEO thanking his employees for all they do day in and day out to provide outstanding service? Never mind senior leaders just decimated that service, yet again, with their latest round of cuts intended to maximize executive compensation.
Fraud is the basis for today's management practices. Management uses fraudulent words. Their personal enrichment is criminal in scope and collusion is clearly behind board approved executive pay schemes. All hail Michael Milken, the father of today's management practices. The theory is "Get mine first by whatever means possible. Legality isn't required."
Dr. Deming, Peter Drucker, Peter Senge, Stephen Covey and Peter Block created theory and knowledge for the betterment of everyone. Milken lied, cheated and stole to join the monied class, the group that now makes an annual pilgrimage to hear him speak and spread his toxins. Appearances would have Milken a prophet, but closer examination reveals his focus, profit by any means.
Update 7-28-15: Bad management theory resulted in excessive executive compensation at the expense of everything else. I can hear Dr. Deming bellow, "Will they ever learn?"
Update 8-15-15: And the mother might be Carly Fiorina, former HP CEO. Fortune described her contributions to horrific management, "A new defensive, finger-pointing style of leadership led to waves of firing. Dissent was equated with disloyalty....Despite such carnage, Fiorina pocketed over $100 million in compensation for her short reign—including a $65 million signing bonus and a $21 million severance."
Update 8-21-15: Amazon's Jeff Bezos knows how to crush the human spirit in Milken like fashion.
Posted by PEU Report/State of the Division at 10:45 AM