Tales of ITT - an Insider's Report

“As Geneen’s pet project we received a disproportionate amount of attention from important lobbyists, and legisla- tors, especially Congressman Bob Wilson from San Diego, who had parlayed his association with Geneen into hotels and other local investments. He was determined to bring a major manufacturing complex into his back yard. ITT needed a close political associate who would insure Ad- ministration support in the company’s antitrust battles; in Wilson they had the Republican party’s chief fund raiser and a close friend of the President. Nixon was a Southern”

“ments. Such strategy placed ITT in an ideal situation to parlay World War II into an economic triumph. Behn was one of the few who could make meaningful long-range plans — no matter which side won. He waited, watching the fortunes of war, until a discernible pattern of victory emerged. Then, shazam — although ITT had been accused of Axis collaboration at the beginning of the war, Behn emerged as a conquering Allied hero, of sorts. He was the man with strong political influence and business interests all over Europe. As the Allied armies mopped up, Behn was personally on the scene to restore the ITT empire before the military governors could piece things together. And even more remarkably, ITT managed to carry off the role of victim of World War II and file a $30 million claim for damages which recently the United States government has seen fit to pay. So, with discreetly applied pressures and much chutzpah, Behn managed to have it both ways. If the Germans had won, who could tell what rewards would have befallen the faithful industrial empires of Krupp, Siemens, Mercedes, and the several German equivalents of ITT.”

“managed by their presidents. The organization consisted of a loose confederation of fifty-three companies and divi- sions, most of them involved in telecommunications and electronics businesses. Each company guarded its technical secrets and markets against incursion by the others as jealously as they did by competitors. The ITT system was plagued by financial mismanagement, excessively high production costs and duplication of effort. Geneen himself could not have written a better scenario in anticipation of his arrival on the scene.”

“On management style: “Well, I’m no laissez-faire, let- me-know-how-things-are-in-six-months kind of guy. I want to know what’s going on. I don’t want some proud guy to get into his own Vietnam and suddenly hand me his res- ignation. Hell, his resignation couldn’t bring back the ten million dollars he’d lose.”’ On work: “Sure, a lot of guys bitch around here about the long meetings, detailed reports, and hard work. But no one complains anymore about the crazy decisions that come out of New York headquarters.””

“On organization: “Around here, we run a colonial em- pire with 400,000 employees in sixty-seven countries; and we're writing our own management book in the process.” On managers: “Personnel surgery is the only thing this company needs on a continuing basis. You build discipline in a company and the company will perpetuate itself.”

“On reports: “Being smart is only getting all the facts. My”

“guys have to find the genuine snapping turtle from the general turtle population. I want their reports to specifi- cally, directly, and bluntly state the facts. Not high-flung rhetoric. Just facts. Reports that include action recom- mendations, a summary of the problems, reasons why the recommendations are being made and the specific position of the manager preparing the report. We allow no bull or evasion.” On monopoly: “If we are to compete overseas, we can’t be hamstrung at home. We will resist any attempt to deprive us of our proper rights. It is clear that whatever the guise, by imaginary and legal means, what we are experi- encing are direct attacks on bigness as such.””

“On government: “Our (————) government is about to run the country down the drain. Everyone in the govern- ment is really (————). They haven’t the courage to tell the kids they can’t have the ice cream and cookies three times a day. You’ve got to put some dignity back into business.” On his job: “My job is the most complex management job in the country. I’ve never met a man who could keep up with me.” On his company: “I won’t be satisfied until this is the best damn company in the world.””

“On his troops: “Around here, management is the bailing wire that keeps everything in place. They don’t quit, they”

“don’t strike, they just keep the place going. Those who can’t immerse themselves completely in the job just won’t make it here.””

“When Geneen began picking up the pieces at ITT in 1959, he used a lifelong study of General Motors as his model. GM’s organizer, Alfred Sloan, was his personal hero; and the job of remaking ITT became a casting job in the General Motors’ mold. Finance was made a direct reporting function throughout ITT, engineering respon- sibility was centralized, and a large technical staff began to grow into dominance. ITT managers made in-depth studies of the policies under which General Motors op- erated. “If it’s good enough for General Motors, it’s good enough for ITT,” was the new anthem; and the Geneen- directed juggernaut began to roll on that high-octane formula.”

“Litton and LTV.”