Search Results for: memoir

What One Woman Discovered About Health Care in the Early 20th Century

“Until then, the Health Department had sought to track down sick children and refer them to physicians, a mostly futile endeavor in the days before antibiotics and modern medicine. Baker decided that the new bureau’s mission would instead be prevention. The city had an established and efficient system of birth registration. As soon as a child was born, her name and address were reported to the Health Department. Baker reasoned that if every new mother were properly taught how to feed and care for a baby and recognize the signs of illness, the mother would have a much better chance of keeping the child alive.

“In her first year at the Bureau of Child Hygiene, Baker sent nurses to the most deadly ward on the Lower East Side. They were to visit every new mother within a day of delivery, encouraging exclusive breast-feeding, fresh air, and regular bathing, and discouraging hazardous practices such as feeding the baby beer or allowing him to play in the gutter. This advice was entirely conventional, but the results were extraordinary: that summer, 1,200 fewer children died in that district compared to the previous year; elsewhere in the city the death rate remained high.”

How Sara Josephine Baker revolutionized medical care through her work in the New York City Health Department in the early 20th Century. She chronicled her experiences in a memoir, Fighting for Life. Read more from the New York Review of Books.

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The Making of McKinsey: A Brief History of Management Consulting in America

Duff McDonald | The Firm, Simon & Schuster | 2013 | 12 minutes (3,000 words)

 

The American Century

In 1941 Time Inc. publisher Henry Luce coined the term “American Century” in a Life magazine editorial. He was describing the country’s global economic and political dominance leading up to World War II. But Luce was also correct in the literal sense: The American Century had actually started several decades before.

The building of the railroads and coincident spread of the telegraph in the United States in the middle and second half of the nineteenth century helped create the world’s first truly “mass” markets. If an executive had ambition, his company didn’t have to serve just local customers. It could serve an entire continent and beyond, if it had the wherewithal to get the organization and logistics right.

The economic historian Alfred Chandler documented the momentous changes in what came to be known as the Second Industrial Revolution in his seminal book Scale and Scope—the title of which referred to the simultaneous revolutions in both scale (in manufacture) and scope (in distribution) in American enterprise. Those twin revolutions transformed the United States from an agrarian society to an industrial powerhouse in the span of a single generation. In 1870 the nation accounted for 23 percent of the world’s industrial production. By 1913 that proportion had jumped to 36 percent, exceeding that of Great Britain.

By 1920, when only a third of homes in the country had electricity and only one in five had a flush toilet, the country’s business establishment was embarking on a course of radical, unprecedented expansion. This brought with it a dilemma that has preoccupied business leaders ever since: how to grow big while maintaining control over the enterprise. Moving from a single-product, owner-run enterprise into a complex and large-scale national one is a difficult task. First, you have to build production facilities massive enough to achieve the desired economies of scale. Second, you have to invest in a national marketing and distribution effort to ensure that sales have a chance of matching that scaled-up production. And third, you have to hire, train, and trust people to administer your business. Those people are called managers, and in the first half of the American Century, they were in very short supply.

The benefits to successful first-movers were gigantic. In industries where only one or two companies took the plunge early, they dominated their field for a very long time to come; this group includes well-known names like Heinz, Campbell Soup, and Westinghouse. A ten-year merger mania, from 1895 through 1904, also brought the creation of a number of corporate entities the likes of which the world had never seen—1,800 companies were crunched into 157 megacorporations, including stalwarts like U.S. Steel, American Cotton, National Biscuit, American Tobacco, General Electric, and AT&T.

The key business problem identified during this transition—and one that underwrote McKinsey’s success for several decades—was that a single, central office could no longer adequately administer such far-flung empires. Power had to be ceded to the extremities. The question was how. It was a quandary that beguiled some of the great thinkers of the time, including political scientist Max Weber, who argued that a systematic approach to marshaling resources through bureaucracy was a necessary and profound improvement over pure charismatic leadership.

In his book American Business, 1920–2000: How It Worked, Harvard professor Thomas McCraw pinpointed the issue: “In the running of a company of whatever size, the hardest thing to manage is usually this: the delicate balance between the necessity for centralized control and the equally strong need for employees to have enough autonomy to make maximum contributions to the company and derive satisfaction from their work. To put it another way, the problem is exactly where within the company to lodge the power to make different kinds of decisions.”

Companies such as DuPont, General Motors, and Sears Roebuck were the first to address this problem systematically. According to Chandler, DuPont sent an emissary to four other companies experiencing similar issues—the meatpackers Armour and Wilson and Company, International Harvester, and Westinghouse Electric—to ask what they were doing. And the answers were remarkably similar: The innovators moved from the centralized system to a multidivisional structure with product and geographic breakdowns. The concept left operating division chiefs with total control over everything except funding resources. Top managers took a more universal view of the business, monitoring the divisions and allocating capital accordingly.

The most successful companies of the era, such as General Electric, Standard Oil, and U.S. Steel, all employed some variant of this model. But by and large, they had developed these ideas on their own, a process of trial and error that was costly and time consuming. They would have much preferred hiring outside experts to help them with it, if only such experts existed. This was a huge commercial opportunity that called for an entirely new kind of service.

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Stepping into the Breach

Unwittingly, the federal government did its part to create the modern consulting business. Starting in the last part of the nineteenth century, Washington made periodic regulatory efforts to curb the power of big business, including the 1890 Sherman Antitrust Act, the Federal Trade Commission Act and Clayton Act of 1914, and the Glass-Steagall Act of 1933. The intended effect of these measures was to prevent corporations from colluding with one another to fix prices and otherwise manipulate the markets. The unintended effect, according to historian Christopher McKenna, was to accelerate the creation of an informal—but legal—way of sharing information among oligopolists. Who could do that? Consultants.

Regulatory efforts paid another rich benefit to the likes of McKinsey: Restricted from cutting backroom deals with each other, firms were thus obliged to actually compete, which meant they needed to make their operations more efficient. Here again, consultants were the answer.

But perhaps the circumstance that most aided the creation of the consulting industry was the entry of a new, key player into business itself. Empire builders with names like Carnegie, Duke, Ford, and Rockefeller had built huge, vertically integrated companies, but they had neither the time, the talent, nor the inclination to create and carry out management systems for those entities. These were the conquerors of capitalism, not its administrators. And yet, as Chandler pointed out, “their strategies of expansion, consolidation, and integration demanded structural changes and innovations at all levels of administration.”

Into the breach stepped a new economic actor who was neither capital nor labor: the professional manager. Gradually, he replaced the robber baron as the steward of American business. Alfred P. Sloan, the legendary president of General Motors, was the first nonowner to become truly famous for his managing skills. His decentralized, multidivisional management structure gave GM the agility to outmaneuver the more plodding Ford Motor Company and snatch the industry lead. Ford may have revolutionized manufacturing, but Sloan realized that the car-buying market had become big enough to be segmented into people who bought Buicks, Cadillacs, Chevrolets, Oldsmobiles, and Pontiacs. By the late 1920s, the car market was maturing, and people wanted choice. Sloan also gave them the ability to buy a car on credit—a groundbreaking idea at the time. Before the decade was over, GM had surpassed Ford as the market share leader, a position it didn’t relinquish until the 1980s.

Sloan and his ilk were perfect customers for McKinsey: Lacking the legitimization of actual ownership, professional managers felt great pressure to show they were using cutting-edge practices. And who better to bring those practices to their attention than consultants who were talking to everyone else? This was the beginning of a decades-long separation of ownership from control in corporate America, and the consultant was an able ally to the professional manager in this tug-of-war—an ally who wasn’t gunning for the manager’s job. Thus began the era of managerial capitalism.

For more than two centuries, economists had argued that companies operated in some sense at the mercy of Adam Smith’s “invisible hand” of the market. But the revolution in management thinking in the United States offered up an alternative idea: the “visible hand” of management, which made things happen, as opposed to merely responding to external market forces.

The academy helped move this ideology along. Before 1900, there was only one undergraduate business school in the country, the University of Pennsylvania’s Wharton School of Finance and Economy, founded in 1881 with a $100,000 donation from financier Joseph Wharton. The Tuck School of Business at Dartmouth followed in 1900. Over the next decade, pretty much every major institution started explicitly preparing its students for careers in management.

Although the rise of today’s industrial-farm-style MBA programs is really a postwar phenomenon, Harvard founded its Graduate School of Business Administration in 1908, with a second-year business policy course designed to give the student an integrative approach to addressing business problems, including accounting, operations, and finance. The purpose of the course, according to the school, was to give the student an ability to see those problems from the top management point of view. Much of James McKinsey’s academic writing centered on this very issue and later informed the practice of his firm.

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McKinsey’s Oeuvre

As a young academic, McKinsey was a prolific writer, if not an especially engaging one. His first four books were dry tomes on the nitty-gritty of accounting and taxes: Federal Incomes and Excess Profits Tax Laws (1918), Principles of Accounting (cowritten with A. C. Hodges, 1920), Bookkeeping and Accounting (1921), and Financial Management (1922). But with his fifth effort, he broadened his horizons significantly. Budgetary Control (1922)—the first definitive work on budgeting—turned accounting on its head, promoting it as an essential tool of managerial decision making. “Budgetary control involves the following,” McKinsey wrote. “1. The statement of the plans of all the departments of the business for a certain period of time in the form of estimates. 2. The coordination of these estimates into a well-balanced program for the business as a whole. 3. The preparation of reports showing a comparison between the actual and the estimated performance, and the revision of the original plans when these reports show that such a revision is necessary.”

It seems commonsensical, but McKinsey’s new way of looking at the use of the budgeting process sparked nothing short of a revolution. “No other mechanism of management of similar scope and complexity has ever been introduced so rapidly,” wrote one commentator just ten years later. “It is estimated that 80 percent of budgets installed in industry have been put in since 1922.”

Up to that point, budgeting was a one-way exercise: Accountants added up all of a firm’s expenses and then tossed in a sales projection almost as an afterthought. In McKinsey’s view, companies should start by developing their business plan, figure out how to achieve it, and then estimate the costs of doing so. In this new context, budgeting wasn’t just a ledger activity; it could also be used to identify excellence in performance (i.e., those who outperform their budget), to spot weaknesses (those who underperform), and to take corrective action. “[While] there are many who do not yet plan scientifically … ,” he wrote, “there are few who will deny the merits of the system.”

Two subsequent books fleshed out McKinsey’s ideas: 1924’s Managerial Accounting and Business Administration. The former taught students how accounting data could be used to solve business problems. Using the data of traditional recordkeeping, he suggested the possibility for much greater control over a company’s destiny, including the establishment of standard procedures (how things should be done and to whom information should be reported), financial standards (ways to judge operating efficiency), and operating standards (including nonfinancial measures, such as quality). To today’s business student, this kind of comprehensiveness seems obvious. But at the time, the idea of planning, directing, controlling, and improving decision making by means of regular and rigorous reporting of company results was novel. The latter book contained the seeds of McKinsey’s General Survey Outline—a thirty-page system for understanding a company in its entirety, from finances to organization to competitive positioning. It became part of his consultants’ toolkit sometime in the early 1930s.

It is hard to overestimate the impact of the General Survey Outline (GSO). It served as the foundation of his approach to understanding a company and provided novice consultants with a clear road map to do so themselves. The survey also shaped consultants’ thinking: The emphasis in the GSO was more on whymanagers did things, as opposed to how they did them. Using the GSO, consultants started every engagement by thinking of the outlook for the industry of their client, the place of the client in the industry, the effectiveness of management, the state of its finances, and favorable or unfavorable factors that might affect the future of the firm. No detail was too small to take note of, whether it was a study of all firm policies—including sales,production, purchasing, financial, and personnel—or an analysis of whether the layout of equipment in a company’s plant provided for the most efficient flow of the production operations. By the time the young consultant had completed the survey for his client, he knew the company and its business cold.

“You can see McKinsey’s intellectual development,” says John Neukom, who worked at McKinsey from 1934 to the early 1970s and wrote a brief memoir of his time at the firm. “He had lost interest in the details of accounting. By the time I arrived, he had lost interest in the budgetary procedure and was now excited and interested in analyzing companies and seeing how companies worked. He was clearly diagnosing the total problems of the company.” In a 1925 speech at a conference for financial executives in New York, McKinsey offered the kind of pointed insight for which he is remembered: “Usually, I find that the executive who says he does not believe in an organization chart does not want to prepare one because he does not wish other people to know that he had not yet thought through his organization properly. For the same reason many men are opposed to budgets. They are unwilling for anyone to see how little they have thought about what they are going to do in future periods.”

Armed with that insight—and the general philosophy that management can shape a company’s destiny—he decided to set up shop and sell it.

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Bastards Require No Diplomacy

In the mid-1920s, McKinsey began doing business under the banner of James O. McKinsey and Company, Accountants and Management Engineers, the progenitor of the modern-day McKinsey & Company. Strangely for a company that prides itself on getting the details right, the actual date of its founding is unknown—a firm training manual from 1937 suggests 1924, while John Neukom’s memoir says 1925. Whichever it was, McKinsey’s timing was excellent. The economy was booming, and the need for consulting services was seemingly endless.

It is worth noting that the word “consultant” was not in the name of his firm. Rather, the term “management engineers” reflected the prevailing ethos of the time: that science held the answers to most serious questions, and even human commerce could profit from the rigors of this kind of data-driven analysis. McKinsey’s standard working pads have always been crosshatched graph paper, another nod to engineering. The fact that McKinsey himself employed no actual engineers was beside the point.

Intellectual underpinnings aside, the firm’s real-world roots were in red meat. McKinsey’s first client was Armour & Company, one of the country’s largest meatpackers. The treasurer of Armour had read Budgetary Control and wanted McKinsey to help rethink the meatpacker’s approach to budgeting and planning.

The first partner McKinsey brought on board was A. Tom Kearney, who had been director of research at Swift & Company, another Chicago meatpacker. Kearney was a warmer, more congenial complement to McKinsey’s formal and pointed demeanor. Another early partner was William Hemphill, the same treasurer of Armour who had hired McKinsey in the first place.

McKinsey continued to teach at the University of Chicago for a time, but he eventually switched full-time to the firm. One reason he seems to have juggled so many responsibilities is that he didn’t waste time with niceties at the office. In Hal Higdon’s 1970 history of consulting, The Business Healers, one associate recalled him saying: “I have to be diplomatic with our clients. But I don’t have to be diplomatic with you bastards.”(Marvin Bower later modeled his own approach to constructive criticism after McKinsey’s tough love approach.)

McKinsey was blunt, but he was also a quick and agile thinker. He once diagnosed a client’s problems just by looking at the company’s letterhead. A Midwestern maker of air conditioners had stationery that announced “Industrial Air Conditioning Installations—Coast to Coast from Canada to Mexico.” In an era before salespeople traveled by airline, McKinsey observed that travel expenses were probably eating up the majority of the company’s profits and that employees should confine themselves to a radius of five hundred miles around Chicago. He was right.

Even the Depression couldn’t stop the growth of the firm. By 1930, McKinsey’s professional staff totaled fifteen. In 1931 he drafted the General Survey Outline, and the next year he opened a New York outpost in the offices of a defunct investment house at 52 Wall Street—six offices with a reception area. The New York–based consultants busied themselves working not only for local industrial companies but also for investment banks like Kuhn, Loeb & Co. In 1934, the Chicago office moved to the forty-first floor of the new Field Building on 135 South LaSalle. By the mid-1930s, McKinsey’s partners were charging $100 a day for their services—a giant figure, though nothing compared with the founder himself, who was billing five times that, the highest rate for a consultant in the country.

From The Firm by Duff McDonald. Copyright © 2013 by Duff McDonald. Reprinted by permission of Simon & Schuster, Inc.

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Illustration by Kjell Reigstad

‘You’re in Trouble. Am I Right?’: My Unsentimental Education

Debra Monroe, 1977 (Photo courtesy of the author)

Debra Monroe | 2012 | 20 minutes (5,101 words)

Debra Monroe is the author of six books, including the memoir “My Unsentimental Education” which will appear in October 2015. Her nonfiction has appeared in The New York Times, The American Scholar, Doubletake, The Morning News and The Southern Review, and she is frequently shortlisted for The Best American Essays. This essay—which is an excerpt from her forthcoming memoir—first appeared on John Griswold‘s Inside Higher Ed blog, and our thanks to Monroe for allowing us to reprint it here. Read more…

‘You’re in Trouble. Am I Right?’: My Unsentimental Education

Longreads Pick

A story of love, LSD and higher education. Monroe is the author of five books, most recently the memoir, On the Outskirts of Normal. This is from her sixth book, in progress.

Source: Longreads
Published: Oct 1, 2013
Length: 20 minutes (5,101 words)

The Doctor Who Made a Revolution

Longreads Pick

How Sara Josephine Baker revolutionized medical care through her work in the New York City Health Department in the early 20th Century. She chronicled her experiences in a memoir, Fighting for Life:

“In her first year at the Bureau of Child Hygiene, Baker sent nurses to the most deadly ward on the Lower East Side. They were to visit every new mother within a day of delivery, encouraging exclusive breast-feeding, fresh air, and regular bathing, and discouraging hazardous practices such as feeding the baby beer or allowing him to play in the gutter. This advice was entirely conventional, but the results were extraordinary: that summer, 1,200 fewer children died in that district compared to the previous year; elsewhere in the city the death rate remained high. The home-visiting program was soon implemented citywide, and in 1910, a network of ‘milk stations’ staffed by nurses and doctors began offering regular baby examinations and safe formula for older children and the infants of women who couldn’t breast-feed. In just three years, the infant death rate in New York City fell by 40 percent, and in December 1911, The New York Times hailed the city as the healthiest in the world.”

Published: Sep 29, 2013
Length: 14 minutes (3,502 words)

A Longreads Guest Pick: Sari Botton on ‘Not Weird About Brooklyn’

Sari is a writer and editor living in Rosendale, N.Y. She writes the Conversations With Writers Braver Than Me column on The Rumpus. An anthology she edited for Seal Press, Goodbye to All That: Writers on Loving and Leaving New York, will be released Oct. 8.

“My favorite longread this week is ‘Not Weird About Brooklyn‘ by Helen Rubinstein in the Paris Review Daily. Having left the East Village for upstate eight years ago with very mixed feelings on the matter, I tend to be very curious about other people’s stories of quitting New York City. Love-hate relationships with the place are so common as to border on the cliche – ditto the city’s tenacious gravitational pull despite the hate part of that equation, despite diminishing returns over time lived there. Rubinstein acknowledges the cliche, even the one inherent in writing about it, ‘the trope of the single woman in New York,’ while giving new, nuanced, if meta, voice to it. Her criteria for a potential mate made me laugh (and I cheered this one: ‘Not anti-memoir.’). I was reminded of an essay by John Tierny in the New York Times Magazine in the mid nineties about how fundamentally picky single New Yorkers can be. (In that one, a criteria for potential mates was, ‘…has resolved her control drama.’) Nine days before she leaves, as she packs up her apartment, Rubinstein seems at once melancholy and resigned to leaving, and as if she’s trying to convince herself she’s made the right choice. It’s a familiar conversation, one I have with myself all the time.”

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On Muppets & Merchandise: How Jim Henson Turned His Art into a Business

Photo by Eva Rinaldi

Elizabeth Hyde Stevens | Make Art Make Money | September 2013 | 17 minutes (4,102 words)

 

In 2011, Longreads highlighted an essay called “Weekend at Kermie’s,” by Elizabeth Hyde Stevens, published by The Awl. Stevens is now back with a new Muppet-inspired Kindle Serial called “Make Art Make Money,” part how-to, part Jim Henson history. Below is the opening chapter. Our thanks to Stevens and Amazon Publishing for sharing this with the Longreads community. Read more…

Michael Hastings’ Dangerous Mind

Longreads Pick

On the life and death of a haunted journalist. The tragic death of Michael Hastings also gave birth to a number of conspiracy theories:

“Hastings never identified himself in his writing as someone suffering from PTSD. The closest he came to such an admission was in May, when he retweeted an article about using pot to treat PTSD. In fact, according to the coroner’s report, that is exactly what he was doing.

“Still, PTSD was not something he discussed even with his close friends. Matt Farwell, a freelance writer and Army veteran, worked with Hastings on two stories for Rolling Stone. The second involved a CIA station chief with PTSD, but even then Hastings did not open up on the subject, Farwell says.

“The death of Hastings’ fiancée clearly had a traumatic effect on him. When asked a few years later on C-SPAN what it was like writing the memoir, he answered, ‘I wrote it in — I was so screwed up when I wrote that book.'”

Source: LA Weekly
Published: Aug 22, 2013
Length: 23 minutes (5,974 words)

Body and Soul

Longreads Pick

The writer recalls an accident that left his friend paralyzed. A memoir about friendship and disability:

“‘You can move your leg!’ I said. When a nurse came in, I pointed. ‘That’s not a muscle spasm, right? He can move his leg.’

“The nurse looked at Dan, then shifted her gaze to the floor. She was silent for a moment.

“‘I’m pretty sure,’ she said softly, ‘that’s a muscle spasm.’

“The blood drained from my face. The nurse left the room, and for the first time since Dan was injured I felt tears in my eyes. He would never walk again, and there was no point in pretending otherwise. I stood at the foot of his bed, watching his leg, which was now twitching uncontrollably. My face began to move in spasms, too, and I wept.”

Source: Walrus Magazine
Published: Aug 15, 2013
Length: 24 minutes (6,225 words)

Playlist: 5 Podcast Episodes on the History of Hip-Hop

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Gabrielle Gantz (@contextual_life) is the blogger behind The Contextual Life, a frequent longreader, and a fan of podcasts. 

1. How Hip-Hop Works (Stuff You Should Know, 52:13)

In this episode of Stuff You Should Know, hosts Chuck and Josh discuss the history of hip-hop, from The Sugar Hill Gang to the present. They add their own personal history, which includes stories of attempted breakdancing and well-intentioned clothing choices.

2. Los Angeles Review of Books: 2pac and Biggie (1 hr.)

Co-authors Jeff Weiss and Evan McGarvey speak with host Colin Marshall about their book 2pac vs. Biggie: An Illustrated History of Rap’s Greatest Battle. They talk about the artists’ rivalry, their beginnings, how their styles differed, and why you’re missing out if you only listen to one and not the other.

3. NPR Fresh Air: Questlove (45:14)

The drummer for The Roots talks about his influences growing up, how he listens to music, and his favorite part of Soul Train. (Bonus: Also check out Terry Gross’s classic 2010 interview with Jay-Z.)

4. Bullseye (formerly Sound of Young America): Dan Charnas, author of The Big Payback (44:00)

Dan Charnas, a veteran hip-hop journalist and one of the first writers for The Source, talks with Jesse Thorn about the history of the hip-hop music business and how executives and entrepreneurs turned an underground scene into the world’s predominant pop culture.

5. WBUR On Point: Fame and Fortune of Jay-Z (48:00)

Andrew Rice, contributing editor for New York magazine, spoke about his article on Jay-Z’s business acumen with James Braxton Peterson, director of Africana Studies, professor of English at Lehigh University, and founder of Hip Hop Scholars. Together they delve into the financial side of Jay-Z’s career.

6. KCRW The Treatment: Michael Rapaport, “Beats, Rhymes & Life” (28:29)

If you were around in the ’90s, you might recognize Michael Rapaport from movies like Zebrahead, Poetic Justice, and Higher Learning. In 2011, he came out with a documentary on A Tribe Called Quest. He talks to The Treatment’s Elvis Mitchell about his love of hip-hop, his childhood in New York City, and his experience filming his favorite artists.

Got a favorite podcast episode on hip-hop? Share it in the comments. 


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