Strategist of Success

He was not an inventive tinkerer like Henry Ford or a master mechanic like Walter Chrysler; yet he had a more profound effect on the development of the U.S. auto industry than either of them. No auto bears his name, though he made possible the variety of names and styles that mark today's auto industry. He is still spoken of with awe and respect in Detroit, where he performed one of the business miracles of the century: the transformation of a haphazard and inefficient collection of automakers into the world's largest and most profitable industrial enterprise.

At 88, Alfred P. Sloan, the former chief executive of General Motors and its guiding light for 33 years before he retired in 1956, no longer wields the vast executive power he once exerted. But he still keeps busy as a member of G.M.'s finance committee--and he still knows more about the intricate science of running a large corporation than any other living American.* He has now committed much of that knowledge to paper with the help of FORTUNE Editor John McDonald. My Years with General Motors, published last week after five years of preparation, is nothing less than a modern Pentateuch of management technique that has revelations for every executive--and everyone who aspires to be an executive.

In Control. After graduating from M.I.T. in 1895, Sloan parlayed a $5,000 grubstake into control of a small New Jersey roller-bearing plant. In 1916 William Durant, the flamboyant founder of General Motors, bought out Sloan, who became a G.M. executive. Only four years later, when Durant was forced out for speculating in G.M. shares, Sloan had shown such a flair for organization that the new Du Pont management made him executive vice president. In 1923 he became president.

From the time the Du Ponts took over, Sloan and G.M. were inseparable. He took hold of the seemingly unmanageable collection of divisions, some of which hid their cash from the others, and shook hard; he brought order out of chaos, and thus geared the company for a growth that hardly anyone else foresaw. He instituted G.M.'s famed--and often copied--system of "decentralization with coordinated control," emphasized selling autos on the installment plan, and set up G.M.'s first efficient auto-dealer system.

Leveling on Ford. After shaping up G.M., Sloan in the mid-'20s leveled his sights on his bitter and then bigger rival, Ford. Old Henry Ford's policy was to stick with one model, in one color, in one price bracket--forever, if possible. Sloan countered with a strategy of change and diversity that aimed at the auto buyers' varying tastes and pocketbooks and their desire for change. He broadened G.M.'s line by creating the medium-priced Pontiac and by extending Chevrolet further into the low-priced field. He then inaugurated the most unbeatable auto-selling gimmick of them all: the annual model changeover. It quickly became a key factor in spurring the growth of the market.

Sloan's strategy worked so well that Ford was forced to discontinue the Model T and close his plants for six months in 1927 to retool for the Model A. While Ford was shut down, G.M. drove past; it has never been in second place again. By the time the Depression came, Sloan had G.M. in such good shape that it rolled through the '30s without ever failing to pay a dividend. After the Depression eased, Sloan began a thorough modernization of G.M.'s plants, pushed auto refinements that led to better steering and automatic transmissions. In 1946 he gave up the chief executive post to Charles E. Wilson, but stayed on as chairman of the board to help guide G.M. into the huge postwar auto market.

"Not Big Enough." Sloan makes it plain that he holds strictly oldfashioned, lean-hound-dog notions about how to run a company. "The final act of business judgment is intuitive," he says, and "no organization is sounder than the men who run it." He makes clear his belief that the chief responsibility of an executive is to make decisions--even at the risk of making wrong ones.

Sparring with reporters last week, Sloan was asked if he could name any mistakes that he had made in his long years at G.M. "I don't want to keep you up all night," he snapped. "The executive who makes an average of fifty-fifty is doing pretty good." And then the man who shaped the world's biggest enterprise thought of a big failing. "I always made things not big enough," he said. "The demand was always growing faster than I thought."

* With 686,152 shares, Sloan is General Motors' second largest private shareholder after Michigan Philanthropist Charles Stewart Mott (TIME, June 28). Sloan has contributed heavily to the Alfred P. Sloan Foundation (basic scientific research) and to the Sloan-Kettering Institute (cancer research).

This file is automatically generated by a robot program, so reader's discretion is required.