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Think of the troubles we would avoid if the companies our country depends on read this article by Michael Alan Tate and practiced the principles Hubert Taylor employed in 1932 to turn his company around:

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“There is always an easy solution to every human problem- neat, plausible, and wrong. H.L. Mencken.”

The future of the Club Aluminum Company looked like an uphill race on a mud slick road with bald tires. The market was depressed. Capital was scarce.

The production systems and equipment were in dire need of repair. Unhappy employees toiled to turn out inferior products. Salesmen used high-pressure sales tactics. The management team had rightly earned their rotten reputation.

A new President was hired. His well-intentioned colleagues and consultants probably recommended that he restructure, hire better managers, and get new equipment; but that required cash he didn’t have. He knew he needed to reorganize the business, but he also knew that no matter how much he invested in restructuring; unless he could reform the culture all his efforts would be wasted.

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He decided to develop a document of principles to encourage more productive and honest behavior. Inspired by his vision, he wrote page after page, but it was too long and unclear. So he whittled it down to two pages. It was too wordy for busy people to use. Being a person of faith he prayed for guidance and four questions came to him. He wrote them on a small white card and placed it under the glass on top on his desk. Over the next few months, whenever confronted with a difficult business decision he used the four questions as a guide to come to a better answer faster and with less stress.

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This simple routine benefited him so much that he shared the four questions with his managers. They applied them as he had and experienced the same positive outcomes. The managers then taught what is now called the 4 Way Test to all the workers. Attitudes and actions changed. Employees gained self respect and respect for the character of their supervisors. They started pulling together. The business began to work. The company soon prospered.

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Hubert J. Taylor was the new president of The Club Aluminum Company. In 1932, the heart of the great depression, he took over this company which was $400,000 in debt. In 1936 it was solvent. In four more years it paid $1million in dividends to the investors.

What was the 4 Way Test?

1. Is it the TRUTH?
2. Is it FAIR to all concerned?
4. Will it be BENEFICIAL to all concerned?

A March 2010 report in Forbes stated that 75% of corporate reorganizations and restructuring failed to produce the expected financial return and left the remaining workforce demoralized. Again and again it is proven that the right structure without a healthy culture is like running a high performance race car without the proper grade of oil. It will run fast for a few laps, but will likely breakdown before the checkered flag.

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Copyright 2010 by Michael Alan Tate