America's Two Minute Warning. - book reviews

Washington Monthly, Feb, 1988 by Thomas J. Peters

"The Japanese spend three to four times the U.S. annual amount per employee on training....The Japanese company-based training system revolves around the concept of a flexible worker. The aim is to select and prepare employees not for one job, but at least two or possibly three, and then to continue to provide learning experiences throughout their working lives....As an order of magnitude, our estimate (is) that most firms should consider doubling or tripling allocations of time and money for training (emphasis added)....(Many) managers believe that training is a cost, not an investment, that it takes people away from their "real work...accounting theory does not put human assets on the balance sheet...the tax code does not encourage to permit capitalization of personel acquisition development costs...many managers fear that once employees are trained they will leave for higher-paying jobs with the compeition...this narrow and traditional view must change."

The authors muster the numbers with skill but they also write with an eye towards the little but telling signs of lethargy in many corporations: "We have walked into many corporate offices where we can literally feel the loss of vitality and flexiblity. Not a physical decay, certainly, but an aura of stodginesss and allegiance to standard operating procedures exudes from the heavy pile carpets, the mahogany walls, and the shelves of policy manuals."

Is anyone listening?

While they devote most of their attention to reforming american firms, Grayson and O'Dell do have an agenda for those in Washington. Democrats, who are promoting some of the most protectionist legislation in two generations, should take heed to their arguments against closing markets. The Reagin administration ought to take notice to their strong arguments against currency devaluation as a way of promoting U.S. trade abroad.

And to those reformers who do understand the threat of foreign compeition, they make a compelling argument against an industrial policy that puts government in the ackward position of deciding how to allocate capital. "Many of the authors and administrators of policies and laws are lawyers...and economists and other scholars who know little about actual business operations....Government cannot plan long range and cannot stay on top of rapid and continuous adjustments called for in a dynamic marketplace."

Grayson and O'Dell do see an important role for the government, especially in education. One major problem is that the United States is educating a bright elite at top universities, but not a high average level of citizen. "The result is a norrow pool of U.S. talent, not the deep and wide base, as their is in Japan, of skilled technicians, machine operators, supervisors, and service people who can write computer programs, follow blueprints and technical manuals, builds, maintain, and troubleshoot their own equipment, interpret statistics for quality control, work well in teams, and learn as they go." In Japan, they write, the average worker can do all this because he or she has been taught, among other things, to understand graphs, charts, and statistics, and can work with some mathematical notation. In the U.S., those skills largely belong to a few engineers who are increasingly separated from daily manufacturing operations.