Jenga Leadership: Long Term Planning in the Manufacturing Space

In 2001, Jack Welch, on his retirement as CEO of General Electric, stated that his effectiveness as CEO for twenty years could be measured by the company’s performance over the next two decades. While this assessment was far from wrong, it appears to rate quite highly on the list of things Jack Welch regretted saying, based on his refusal to address it in later years.

Under Jack Welch, the company had grown from the largest manufacturing company in the world to the most valuable company in the world. The two decades that followed led to its delisting from the Dow Jones, dividend cuts, mass layoffs, and finally, its dissolution as a single entity, reforming as separate companies. As of April 2, 2024, General Electric ceased to exist in its prior form, ending a 132-year run as one of the most powerful, influential, and profitable manufacturing companies on the planet. Its constituent elements will go on, and the brand will continue, but the “House that Jack built” is no more.

In this article, I want to consider legacy, and the importance of safeguarding the future. I want to coin a term here, which I call “Jenga Leadership”. Yes, like the game. When I was in Crotonville, GEs famed leadership campus in the Adirondacks, there was a set of oversized Jenga blocks near the downstairs bar, and after spending the days in seminars, I and my peers had many spirited games of Jenga, each leading to an impressive tower, and an even more impressive collapse. I can think of few examples more appropriate to the saga of GE, and more applicably to this article, the US manufacturing industry in general.

Jenga is a game characterized by short term planning, any plan that goes more than 2 or maybe 3 moves out is simply not worth doing. The tower grows by eroding its own foundations, and the excitement of the game is provided by the placing of new blocks on top, in ever more elevated, but precarious positions. We may boast about how high we raised the tower, but we raised it by sacrificing the strength of the structure that holds the whole thing up.

For decades, American Manufacturing has followed the GE model of constantly chasing the new, the exciting, and the precarious. Investing in foundations is boring, our metrics are based on how high the Jenga tower can be stacked. We direct our infrastructure, training, and facilities budgets on adding exciting new blocks to the tower. AI, Robotics, Electric Vehicles, Drones, and more are added to the top of this tottering tower, but each of these industries is deeply dependent on the foundations on which it is laid.

Today, I am writing with the full benefit of hindsight, to insist that we must begin applying far more foresight. The short sightedness of the last four decades has born terrible fruit, and reversing it requires a dramatic change in our fundamental mindset. Traditional manufacturing is still worth investing in, traditional trade skills are more valuable than ever. Chasing short term returns has caused us to underinvest in the basics and has led to a mindset that prefers innovation over iteration. I am absolutely in favor of innovation, but enabling innovation requires building a strong foundation for it, lest it tumble like a Jenga tower as its foundation crumbles. Tech startups tend to fail for extremely traditional reasons of cost, revenue, and personnel management. They are innovative, but not functional businesses.

Older factories understand the value of lean transformation, and likely implemented it back several decades ago, but it has been neglected for so long that a steady decline has brought back all the previous inefficiencies and more. Workforce training programs have been cut, as their short-term benefits seemed negligible, but in the long term nothing is destroying American industry faster than lack of available skills. Even giants like Boeing have pursued growth to the extent they sacrificed the foundations of quality the company was built on and are left struggling to deal with the issues of their own making.

My proposal is a simple one. Reprioritize the basics. Stop building these Jenga towers of industry. Fundamentals matter so much more than is being considered, infrastructure matters, people matter. In my day-to-day work, I spend considerable time in factories all over the country, talking to operators on the plant floor, who are struggling with poor training, little to no understanding of the consequences of their work, and often with outdated or inappropriate equipment. I see multimillion-dollar automated machines accumulating cobwebs because they cannot be maintained, while operators fight with bent tooling on 40-year-old presses that barely cost a hundred dollars to replace.

From small manufacturers to giants, we need to reprioritize our fundamentals. Invest in the basic things, from new push brooms to screwdrivers. Take time to work with your people and train them. Put that automation project on hold until you get your 5S program working how it should, because the automation will appreciate the cleanliness it provides. Make sure your engineers understand the processes you have now, before they rush to add new ones. We can absolutely grow this tower, but grow it the responsible way, by adding new material to the top of solid foundations, rather than cannibalizing its own foundations to support the illusion of advancement, while sewing the seeds of eventual destruction.

Lastly, I encourage the reader to consider their legacy after their retirement. As Jack Welch once said, but then regretted, we should be judged by what happens after we let go of the reins. Coasting into retirement leaves the next generation to struggle with the problems of our making, the least we can do for them is give them the benefit of making their own mistakes, rather than spending their lives fixing ours.

About the Author
Caleb Doty is a multifaceted leader blending military excellence with corporate acumen – Owner of Americas 21, Former GE Professional, U.S. Army Captain, and Proud University of Houston Graduate.