Alfred Sloan ran general Motors one hundred years ago. Peter Drucker was invited to write about GM and wrote The Concept of the corporation. That book which I read two decades ago, gave me my first read of Mr Sloan. He was the first true General manager. I have been a great admirer of Sloan and what he did in marketing and management. A friend of mine sent me this book, it summarises Sloan’s style and philosophy on management. Sloan was labelled the manager’s manager, you can see why!

1. Great Leaders – Alfred Sloan

2. Alfred Sloan is widely regarded as
the ultimate professional
Manager. He was CEO of general
Motors 100 years ago.

3. Sloan was the undisputed titan of
industry, he displaced henry Ford,
he invented the modern
marketing system and created the
concept of corporate
management.

4. Sloan sensed that cars were more
than basic transportation
bestowing prestige on their
owners. He gave his customers a
ladder of success to climb and was
the father of segmentation.

5. Sloan did not want any
biographies written for him. He
burned ,most of his personal
papers when he retired from GM
and GM destroyed the rest as per
his wishes.

6. Sloan’s best customer when he
ran a ball bearing unit was henry
ford, followed by Will Durant.
Durant was buying small auto
companies to counter Ford and
called them General Motors.

7. ‘I never give orders, I sell my ideas
to my colleagues if I can’-Alfred
Sloan

8. His work was his passion, he never
smoked, never drank, never
partied, he read widely about his
industry.

9. Sloan competed vs the Ford model
T, which in 1925 cost $260, half
the price of a refrigerator then.
Ford Model T was the car a family
bought first.

10. Sloan believed that a car signaled
the owners status. Fancy cars
spoke of money, power and
prestige, which Henry ford didn’t
practice as he drove the Model t
to be the cheapest car.

11. Sloan said “ we will produce a car
for every purse and every
purpose”, thus bringing in
segmentation.

12. Sloan developed a ladder of
success:
Chevy for the economy minded,
Pontiac for the upwardly mobile,
Oldsmobile for the discreet middle
class, Buick for the country club
strivers and Cadillac for the
wealthy and successful.

13. The longer a buyer went without a
new model, the more dissatisfied
he became and he would end up
envying his neighbor's new car.
This Sloan understood.

14. Sloan invented modern management
by getting the clutch of companies
together. He applied two principles :
Preserve the independence of the
companies that came into the GM
fold, efficient, centralized oversight
that would reward success without
stifling creativity.

15. He got it just right for GM- the
right amount of central control,
the right amount of divisional
independence, and plenty of ways
to share ideas.

16. He had a small corporate office,
whose job was to set overall
policy, allocate resources and co
ordinate, not run the operating
divisions.

17. The plan also created
interdivisional councils where
executives and staff could
exchange ideas or find ways to
exploit economies of scale.

18. GM, thanks to Sloan’s
management practices was the
only American car company to be
profitable in the great depression

19. GM got into a fight with the auto
workers Union and relented when
President FD Roosevelt
intervened. Sloan had to make
concessions and GM came to be
known as generous Motors.

20. Peter Drucker, the management
guru accepted that a number of
his management ideas came from
observing Sloan.

21. Sloan according to Drucker
believed that management
principles depended on clear
structures and the character and
integrity of managers that ran the
structure.

22. Sloan wrote ‘My years with
General Motors’ in response to
Drucker’s The concept of the
Corporation. My years with GM
was a runaway success, and was
the first modern business
bestseller.

23. Sloan convinced Walter Chrysler
to forma car company because he
felt that GM needed competition
for it to stay a step ahead.

24. Sloan was a compassionate and
people focused manager. He
donated a lot , the Sloan school of
management at MIT,the Sloan-
Kettering cancer Institute etc.

25. Sloan had his own management
adages.
The business of business is
business he said
The whole objective of industry
should be to reduce prices,
reduced prices create
employment.

26. Sloan’s management philosophy:
Get the facts, recognize the
equities of all concerned, realize
the necessity of doing a better job
everyday, keep an open mind and
work hard. The last is the most
important of all. There is no short
cut to hard work.

27. Sloan felt it wasn’t a manger’s job
to like people, to change them or
approve of them, he felt that one
must always out their strengths to
work and reward good
performance.

28. Sloan respected facts, welcomed
disagreement and refused to
make decisions till he had all the
alternatives thought through.

29. After Sloan stepped down from GM in
1956, the quality of thinking, vision
and open minded questioning
withered away. GM executives
started having pre meetings before
bigger meetings and thus true
debates never occurred for big
decisions. The company became an
ordinary company.

30. The Sloan way
• Question conventional wisdom
• Never ignore basic changes in your market
• When life gives you lemons, make lemonade
• As a manager, your first duty is to your company
• Managers must be prepared to make personal
sacrifices for the job and the company
• Performance is the only criteria in judging people
• Integrity and character are key for leaders

31. Welcome disagreement, dissent is
not disloyalty. A managers
greatest danger is surrounding
himself with yes men or yes
women.