Myth Busters: A Camel Is a Horse Designed by a Committee

Michael McTague |

Myth Busters: A Camel Is a Horse Designed by a Committee    You enter a conference room. The CEO smiles; he or she is making an annual appearance. A long table holds bagels, Danish and coffee. You know this must be important. Maybe everyone is getting a raise, you think. Maybe the CEO is retiring. Then again, this looks serious. Fifteen minutes later, the speeches begin. The meeting was called to launch a new manufacturing process, or a new company policy on travel and expenses, or a new drastic-cut budget or a new software system to be set in motion immediately.

The meeting over, everyone grabs another donut, checks their smart phone and toddles back to the office. Along the way, the mumbling begins. One doesn’t like the features; another abhors the timing; still another wonders why no one asked the employees about it. Then someone says, “A Camel Is a Horse Designed by a Committee.” This universal myth snaps at the weaknesses of all plans and projects developed in secret and set in motion with mandatory meetings.

But, let’s examine this myth. Is the work of the committee really responsible for messing up the project? The myth buster’s role after all is to expose the falseness of all business myths. In most American companies, two patterns prevail. One features a general meeting to tell employees that a new process is being worked on. Six months or a year later, the new policy rolls out, but no one likes it. The second pattern is no general meeting six months or a year ago. Management simply announces the plan, and no one likes it. The truth is there was no committee. Management designed the “camel” without input from the employees. In some cases a committee met diligently and designed a solution. Management may have adopted the solution or modified it. Still the committee gets the blame.

There are two key problems with the myth. First, it implies that the committee was supposed to come out with a horse. The second problem is that the committee – a group of managers and employees – did a poor job simply because they are a committee. Both of these assumptions are false. And this myth goes to the heart of why some companies are more effective than others.

Let’s examine the second argument first: they did a poor job simply because they are a committee. This implies that one or two managers probably working in secret will do a better job than a group of employees. This is often how budgets are chopped mercilessly – no travel, no bonuses, etc. However, this clandestine approach to a major policy occurs rarely and even less so the more complex the situation. The significant problems faced by the company, the problems that derive from issues of quality and that spell the difference between product success and also-ran status, call for groups of employees who understand the nitty-gritty details of the product to look at, review, mull over and eventually find a solution.

Popularized by many Japanese companies, a quality circle joins employees and managers in a search for solutions to all kinds of product problems. They discuss what is wrong and how it might be fixed. They consider the cost and the probability of success and if it looks like a good idea, they implement. According to their website, Toyota implements 90,000 employee suggestions a year.

Just how effective are quality improvement suggestions from employee committees? For many years, Toyota (TM) and Honda (HMC) took away market share from General Motors (GM) and Ford (F). Their focus was quality. In a search of defect rates and recalls for the year 1980 shown on safercar.gov, the Toyota Corolla shows one recall. The Chevy Impala shows three recalls and the Ford Econoline shows four. In a competitive environment, quality determines future market share and quality trumps production goals, the long-term focus of American management. So, while the big American auto makers focused on production quotas, the Japanese companies focused on quality.

American companies do not dawdle. A search for 2012 models on the same website shows a major shrinkage of recalls and a tightening of quality differences across all models. Involving the employees who are closest to the problem and who see quality issues and possible solutions certainly relates to the improvement.

The first part of the myth needs examining also: the committee was supposed to design a horse. The problem with this idea is it assumes that the original idea, the horse, could not be improved upon by the committee. Following the metaphor, horses are beautiful animals; but camels have a few notable features that a committee might find attractive such as their strength and ability to thrive in dry regions. With the exception of a racehorse, a camel can outrun a horse. In a business setting, the committee’s camel may offer better features than management knew about when it announced that a plan would be forthcoming.

Keep reading – another myth will be “busted” next month. Please comment on this myth and let us know which myths need exposure.
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Michael McTague, Ph.D. is Senior Vice President at Able Global Partners, a private equity firm in New York City.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
TM Toyota Motor Corporation 121.46 3.58 3.04 304,641
HMC Honda Motor Company Ltd. 30.02 0.51 1.73 922,248
DCF.DB:CA Difference Capital Financial Inc. 8% Convertible U 97.25 0.00 0.00 0
GM General Motors Company 36.30 1.23 3.51 26,622,378
F Ford Motor Company 13.06 0.50 3.98 58,600,423

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