Car Guys vs Bean Counters: The Battle for the Soul of American Business. By Bob Lutz. Portfolio; 241 pages; $26.95. Buy from Amazon.com
AFTER two of America’s “Big Three” car companies plunged into bankruptcy, the idea of a management book from an executive who worked for them all seems implausible. But Bob Lutz is a legend.
The cigar-chomping former marine began his career with General Motors (GM) nearly 50 years ago and worked for both BMW and Ford. But it was a stint at Chrysler from 1986 to 1998 that confirmed his hero status. During that time he delivered a succession of flashy, fast-selling cars and trucks that concealed the company’s underlying weaknesses just long enough to convince Daimler (disastrously) to pay $36 billion for it. Mr Lutz could have rested on his laurels. However, in 2001, at the age of nearly 70, while running Exide, a troubled battery-maker, he answered the call to return to his alma mater, GM.
Rick Wagoner, a GM lifer, had just taken on the top job. Wrestling with the structural problems that finally propelled the world’s biggest car company into Chapter 11 in 2009, he at first wanted Mr Lutz to join him as a consultant, to sprinkle stardust over GM’s achingly dull range of passenger cars (by contrast its light trucks were competitive and still highly profitable). Mr Lutz said he would only return as head of global product development. He wanted the authority to shift GM’s culture away from penny-pinching mediocrity to one that put design before everything. Above all, he thought, the super-analytical approach favoured by GM’s senior management was fatally flawed. The best cars had to stir the emotions of potential buyers and for that you needed the creativity of right-brain types (“car guys” like him) rather than the clever, but left-brain “bean counters” that GM employed in droves.
In this energetic account (there is no mention of a ghost writer), Mr Lutz takes some well-aimed shots at those who conspired to cripple the great American auto industry. He has special contempt for politicians who helped stifle engineering innovation by preferring undemanding, but market-distorting, fuel-efficiency standards to taxing petrol at the same kind of rates that apply in just about every other advanced industrial economy. But his main purpose is to tell the story of the battles he fought to convince the leviathan firm to start making cars that people actually wanted to own and would pay good money to buy. Although fond of blowing his own trumpet, he is not entirely unself-critical, admitting that he would not have made the big bet on China that was by far GM’s smartest move in the 1990s.
Sadly, the revival of GM’s car-making skills that Mr Lutz inspired was too patchy and not sufficiently established in the minds of consumers (many of whom had given up buying American) to save it. A ground-breaking deal with the unions also came just too late. When the double-whammy of a huge spike in oil prices and the financial crisis struck in 2008, GM, which had lost more than $75 billion in the previous four years as Mr Wagoner struggled to streamline the business, was too weak to find a way through.
Today, after the government bail-out and with its balance-sheet largely rinsed of debt, GM is both profitable and making some quite decent vehicles. One of those is the Chevrolet Volt, an innovative electric car that was Mr Lutz’s last great project before he retired. The Volt was not the result of the author’s passion for green causes; he once famously described man-made global warming as “a crock of shit”. Rather it was his determination to put one over on Toyota. What irked Mr Lutz was the halo conferred on every Toyota by the adulation for its Prius hybrid at a time when the Japanese maker was trying to steal what was left of Detroit’s lunch with ever more monstrous pickup trucks and SUVs. Perhaps the real lesson of Mr Lutz’s career is that it is not just a dash of creativity that big organisations need, but an implacable desire to beat the competition by building a better mousetrap.

THERE are few divisions of the book industry with a worse reputation than business publishing. Hundreds if not thousands of business books come out every year, all with glowing press releases and effervescent puffs. Literary editors tend to consign them straight to the bin.
This is understandable. An astonishing number are worthless. Celebrity CEOs blow their trumpets, consultants market miracle cures, self-help gurus promise that you can grow rich by working four hours a week. Wait a few months: the CEOs have been caught with their hands in the till, the miracle cures are poisons, the self-help gurus bankrupt. What remains is a tangle of jargon-ridden prose.
Understandable but wrong. It is silly to dismiss a whole genre just because so many business books are bad. There are some excellent titles in among the dross: CEO biographies that capture something essential about business, useful prescriptions for restoring companies to health, even self-help books that help make sense of the contradictory pressures of modern corporate life. The average employed person in the West spends more waking time in the office than at home, so it makes no sense to be so dismissive of writers who focus on such an important activity.
The best books provide an insight into how business revolutionises the world. Why is the centre of growth shifting from the developed to the developing countries? Why do some companies succeed and others fail? Why are we swapping the white collar for the no-collar workplace? Why do managers say the astonishing things that they say? The answers to these questions lie in the business books that many literary editors so casually toss out.
Some business writers pass Karl Marx’s test of changing the world as well as interpreting it. Peter Drucker’s 1946 classic, “Concept of the Corporation”, made people think of companies as communities rather than just productive units. “The Machine That Changed the World” (1990) by James Womack et al popularised Toyota’s manufacturing system with its emphasis on just-in-time parts and proactive workers. Michael Hammer and James Champy’s “Reengineering the Corporation” (1993) encouraged companies to sack large numbers of workers even as their profits soared.
This week The Economist launches a quarterly review which will highlight a selection of new business books. To introduce this feature we re-examine six classics published over the past half-century or so that illustrate the wide variety of books that march under the banner of business. They also show how the best books help both to shape the business world and to make sense of it.

Henry Ford is rightly credited with inventing the assembly line—and with it mass production. But it was his great rival at General Motors (GM), Alfred Sloan, who really invented modern professional management. Sloan organised his company into divisions that specialised in cars “for every purse and purpose” and he fashioned a managerial class that turned GM into the world’s biggest company. His 1964 book, My Years with General Motors, is a cool explanation of how he did it (“management has been my specialisation,” he wrote flatly). It is a book that puts subsequent business autobiographies to shame.

William Whyte’s The Organisation Man (1956) is business journalism at its best, taking us inside the daily life of the giant corporations that dominated American capitalism during its heyday. Organisation men were conformists to their fingertips. They eschewed creativity in pursuit of pleasing their bosses, hitting the numbers and creating what Sloan called “objective organisations” as distinct from those that “get lost in the subjectivity of personalities”. Later authors, such as Richard Florida, have tried to examine the demise of “organisation man” and the rise of the creative class, but nobody matches Whyte’s ability to mix detailed anecdotes with broad generalisations.
Drucker was the doyen of management gurus—a man who kept up a stream of insightful commentary on business from the 1940s until his death in 2005. Picking his best book is not easy; the inelegantly titled Management: Tasks, Responsibilities, Practices (1973) is as good an example as you can get. Drucker explains why “management may be the most important innovation of the 20th century”. He traces broad revolutions such as the rise of knowledge workers and the development of voluntary organisations, boosting his argument with stories about the growth of the East India Company and the development of Japanese art.
In Search of Excellence by two McKinsey alumni, Tom Peters and Robert Waterman, was the first business blockbuster, selling millions of copies and demonstrating that consultants could talk to a general as well as a business audience. Many of the companies they profiled performed badly in subsequent years and the book has been heavily criticised since it came out in 1982. But it was a powerful attack on the rationalist school of management which saw workers as mere numbers, and it provided a compelling portrait of how companies work.
Clayton Christensen’s The Innovator’s Dilemma (1997) introduced one of the most influential modern business ideas—disruptive innovation—and proved that high academic theory need not be a disadvantage in a book aimed at the general reader. Mr Christensen showed that great companies can fail despite doing everything right: even as they listen to their customers and invest heavily in their most productive technologies, their markets can be destroyed by radical new technologies.
C.K. Prahalad’s The Fortune at the Bottom of the Pyramid (2004) unleashed a business revolution that has done far more good than any number of “Live Aid” concerts. Using a wealth of vivid examples,  from Indian eye clinics to Mexican cement companies, Prahalad made three powerful points: that consumers who live on less than $2 a day collectively represent billions of dollars-worth of demand, that together they will account for much of the growth in global demand in the future, and that companies that want to reach these markets need to start early and rethink their assumptions about design and distribution. Prahalad, who died last year, is one of the writers who is most admired by developing-world entrepreneurs, from Muhammad Yunus, who founded Grameen Bank in Bangladesh, to James Mwangi, CEO of Kenya’s Equity Bank.
Companies and consultancies will buy thousands of books to flatter their CEOs or market their latest “breakthrough” ideas. The temptation for publishers to churn out rubbish should be resisted. Business is going through a particularly fascinating phase, as new technologies disrupt long-established business models, new economic giants shift the balance of economic power and new gurus, many of them from emerging markets, reinterpret the landscape. The need to separate the wheat from the chaff has never been greater.

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