I don’t know how everyone else “survived” raising children, but I always found comfort in humour, especially insightful humour that exposed the funny side but did not avoid the complexities and difficulties of raising children.  I found Calvin & Hobbes to very valuable in the early life of our eldest in particular.  Now that we have 3 teenagers, I have moved on to Zits, but still go back to Calvin & Hobbes because teenagers, especially boys, grow faster physically than they do emotionally.

Little did I know that I would come across a Calvin & Hobbes that would capture my response to the bailout of many large institutions across the world.  Don’t get me wrong, I am not against the bailouts themselves, but I have been amused and annoyed by the behaviour of much of the management of the companies that have been bailed out.  My perception of the situation is captured brilliantly by the Calvin & Hobbes cartoon below and exemplified by the Big 3 management arriving in DC on their private jets to ask for a bailout.  Though I have to admit to being equally frustrated by the UAW’s intransigence over a very long time.

What I love most about the cartoon is Calvin’s petulance and failure to grasp the true nature of the situation, his very plausible explanation of why his costs are high, and the ludicrous manner in which he has cut costs.  There is a complete failure to take responsibility.  Am I the only one who sees parallels with the behaviour of the senior management of the financial institutions and auto industry?

On a more serious note, I don’t find the $25B (or whatever the number is now) bailout of the auto industry “funny”, but it does help me to laugh/cry about the situation.  I managed the European automotive practice for one of the supply chain management and advanced planning and scheduling companies in the mid to late 1990’s.  I was staggered how the European and US auto companies implemented Lean as a cost cutting measure but largely paid lip service to the process changes that needed to take place.  This was particularly true when it came to passing on the learning’s of Lean as it was applied in Japan, particularly by Toyota, to the supplier base.  The result was that JIT was implemented everywhere and all that happened was that inventory was transferred from the OEM’s to the suppliers.  In other words, the overall supply chain showed only marginal improvement.  Of course this is a gross generalization and I am sure there are some people who could point at counter examples where Lean and JIT were implemented successfully in Europe and North America.  Nevertheless, I contend that the overall approach was like Calvin’s use a sludge: a way to improve the financials without making these improvements sustainable by implementing process change, let alone creating a product that is desirable.  The real pity is that the auto companies in the US did not use the cash released from their financials to develop new technologies and smaller cars.  Instead they wasted a decade on large trucks, SUV’s, and minivans, and on non-competitive labour practices.

I am far less familiar with financial organizations, but from what I have read there was much the same self-congratulatory attitude .  Why hasn’t the SEC chairman “falling on his sword”?  It is incredible to me that someone who so misread the sub-prime situation and oversees an organization that organization that couldn’t detect Madoff’s fraudulent practices, despite several audits, doesn’t have the courage to admit at the very least  that his management of the SEC is so incompetent that he should resign.

Let us hope that a new generation of managers will enter the market who are more emotionally mature than Calvin.

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