I am often asked whether I know of a perfect “management tool.”
The answer is, “Yes:
Alfred Sloan’s hearing aid.”
He was hard of hearing and had been so for many years.
He had an old-fashioned hearing aid with heavy batteries hanging down his chest and a big trumpet on one ear.
It had to be switched off before the wearer could talk, otherwise the roar blasted the wearer but also garbled his voice.
Sloan had an amplifier built into the switch.
When he turned it so as to be able to speak, it sounded like the crack of doom and everybody in the room stopped talking immediately.
But it was the only way in which he dominated a meeting, and he never used it until everybody else had had his say.
As I sat in more GM meetings with Sloan, I began to notice something else in addition to his emphasis on people and his treatment of them:
his way of making decisions.
I think I noticed it first in the heated discussions about the postwar capacity of GM’s accessory divisions.
One group in GM management argued stridently and with lots of figures that accessory capacity should be expanded.
Another group, equally strident, argued in favor of keeping it low.
Sloan listened for a long time without saying anything.
Then he turned off his hearing aid and said, “What is this decision really about?
Is it about accessory capacity?
Or is it about the future shape of the American automobile industry?
You,” and he turned to the most vocal advocate of accessory expansion, “argue that we need to be able to supply independent automobile manufacturers with accessories they cannot make, and that this is our most profitable business—and so it has always been.
And you,” turning to an opponent of accessory expansion, “argue that we need to confine our capacity to what our own automotive divisions and our dealers in the automotive aftermarket need.
It seems to me that you argue over the future of the automobile industry in this country and not about the accessory business, do you agree?
Well then,” said Sloan, “we all agree that we aren’t likely to sell a lot of GM accessories to our big competitors, to Chrysler and Ford.
Do we know whether to expect the independents—Studebaker, Hudson, Packard, Nash, Willys—to grow and why?
I take it we are confident that they will give us their business if they have any to give.”
“But Mr. Sloan,” said the proponent of accessory expansion, “we assume that automobile demand will be growing, and then the independents will surely do well.”
“Sounds plausible to me,” said Sloan, “but have we tested the assumption?
If not, let’s do so.”
A month later the study came in, and to everybody’s surprise it showed that small independents did poorly and were being gobbled up by the big companies in times of rapidly growing automobile demand, and that they only did well in times of fairly stable replacement demand and slow market growth.
“So now,” Sloan said, “the question is really whether we can expect fast automobile growth, once we have supplied the deficiencies the war has created, or slow growth.
Do we know what new automobile demand depends on?’
“Yes, we do know, Mr. Sloan,” someone said; “demand for new automobiles is a direct function of the number of young people who reach the age of the first driver’s license, buy an old jalopy, and thereby create demand for new cars among the older and wealthier population.”
“Just so,” said Sloan—“we learned that twenty years ago.
And what do population figures look like five, ten, fifteen years out?”
And when it turned out that they showed a fairly rapid growth of the teen-age population for some ten years ahead, Sloan said:
“The facts have made the decision—and I was wrong.”
For then, and only then, did Sloan disclose that the proposal to increase accessory capacity had originally been his.
Sloan rarely made a decision by counting noses or by taking a vote.
He made it by creating understanding.
Once one of the staff vice presidents—I believe it was Paul Garrett of Public Relations—made a proposal for a major campaign.
Normally, any proposal of this kind evoked a good deal of discussion.
But Garrett’s proposal was so well prepared that everybody supported it; and it was also suspected that Sloan was heartily in its favor.
But when everybody thought the proposal had been agreed upon, the old man switched off his hearing aid and said, “I take it all you gentlemen are in favor?”
“Yes, Mr. Sloan,” the chorus came back.
“Then I move that we defer action on this for a month to give ourselves a chance to think”—and a month later the proposal was either scuttled or drastically revised.
And after every meeting, no matter how many he attended, he wrote a letter or a memorandum in which he identified the key question and asked:
“Is this what the decision is all about?”
Again I asked him once whether this didn’t take an awful lot of time.
“If a decision comes up to my level,” he said, “it had better take a lot of time.
If it doesn’t deserve it, we’ll throw it back.
We make very few decisions, Mr. Drucker; no one can make a great many and make them right.
But we’d better know what we are deciding and what the decision is all about.”
White Hat Thinking Japanese-Style Input
Discussion, argument and consensus.
If no one puts forward an idea, where do ideas come from?
Make the map first.
The Japanese never acquired the Western habit of argument.
It may be that disagreement was too impolite or too risky in a feudal society.
It may be that mutual respect and saving face are too important to allow the attack of argument.
It may be that Japanese culture is not ego-based like Western culture: argument often has a strong ego base.
The most likely explanation is that Japanese culture was not influenced by those Greek thinking idioms which were refined and developed by medieval monks as a means of proving heretics to be wrong.
It seems odd to us that they do not argue.
It seems odd to them that we cherish argument.
At a Western-style meeting the participants sit there with their points of view and in many cases the conclusion they wish to see agreed upon.
The meeting then consists of arguing through these different points of view to see which one survives the criticism and which one attracts the most adherents.
Modifications and improvements do take place in the initial ideas.
But it tends to be a matter of “marble sculpture,” that is to say starting with a broad block and then carving it down to the end product.
A Western-style consensus meeting is less fiercely argumentative because there are no outright winners or losers.
The output is one that is arrived at by everyone and agreeable to everyone.
This is more like “clay sculpture”: there is a core around which pieces of clay are placed and molded to give the final output.
Japanese meetings are not consensus meetings.
It is hard for Westerners to understand that Japanese participants sit down at a meeting without any preformed ideas in their heads.
The purpose of the meeting is to listen.
So why is there not a total and unproductive silence?
Because each participant in turn puts on the white hat and then proceeds to give his piece of neutral information.
Gradually the map gets more complete.
The map gets richer and more detailed.
When the map is finished the route becomes obvious to everyone.
I am not suggesting that this process takes place at just one meeting.
It may be stretched out over weeks and months with many meetings involved.
The point is that no one puts forward a ready-made idea.
Information is offered in white hat fashion.
This information slowly organizes itself into an idea.
The participants watch this happen.
The Western notion is that ideas should be hammered into shape by argument.
The Japanese notion is that ideas emerge as seedlings and are then nurtured and allowed to grow into shape.
The above is a somewhat idealized version of the contrast between Western argument and Japanese information input.
It is my intention here to make this contrast rather than to follow those who believe that everything Japanese is wonderful and should be emulated.
We cannot change cultures.
So we need some mechanism that will allow us to override our argument habits.
The white hat role does precisely this.
When used by everyone during a meeting, the white hat role can imply: “Let’s all play act being Japanese in a Japanese meeting.”
It is to make this sort of switch in a practical manner that we need artificial devices and idioms like the white thinking hat.
Exhortation and explanation have little practical value.
(I do not want to get into an explanation of why the Japanese are not more inventive.
Invention can require an ego-based culture with cantankerous individuals able to persist with an idea that seems mad to all around.
We can do it in a more practical manner with the deliberate provocations of lateral thinking, which I discuss elsewhere and also in the section on green hat thinking.)
Benefits of the Six Hats Method
In practice, one of the most striking things about the use of the Six Hats method is that decisions seem to make themselves.
When you come to the final blue hat, the decision is often obvious to everyone present.
This seems hard to believe in theory but happens very often in practice.
The week following a short write-up of the method in the Financial Times (London), I had a letter from a man who had been house hunting with his wife.
They could not decide whether or not to buy a large house in the country.
They had discussed the matter for some hours.
The man finally suggested they use the Hats, which he had read about briefly in the newspaper.
He wrote to tell me that within ten minutes they had their decision—which satisfied both of them.
To those who have never tried the method it may seem that the hats help you to fully explore a subject and that a specific decision or design stage should follow.
This view misses the point that certain hats—the red, yellow and black—are used for assessment, not just information.
If you have to drive to a certain destination and the people involved know the roads only vaguely, there will be a lot of argument about which road to take.
If, however, there is a road map laying out the roads, the traffic densities, and the nature of the road surface, then it is easy to choose the best road.
The choice has become obvious to all.
Exactly the same thing happens with the Six Hats method.
If it is not possible to make a decision, then the final blue hat should lay out why it is not possible.
There may be a need for more information at a certain point.
There may be different values that cannot be reconciled.
So the final blue hat can define a new thinking focus.
That new focus can then become the task of a new thinking session.
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