Management in Search of Men

When DAVID A. SHEPARD graduated from Massachusetts Institute of Technology in 1927 and entered the employ of Standard Oil of New Jersey, the oil industry was filled with engineers and those who had earned their seniority in the field without benefit of college. But over the years a change has taken place; men with a liberal arts education have proved their value in oil as in other American industries, and today speaking as a Director of Jersey Standard, Mr. Shepard makes this forthright analysis of his company’s quest for executives.

by DAVID A. SHEPARD

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IN THE early of the days business was the province of the self-made man, and that traditionally rugged, untutored individual sought little help from college boys in running his affairs. Technical requirements in the field were often limited to skill in using a divining rod; advancement in the refinery depended largely on whether you had the strong back needed to fire an oil still.

Within my own recent business experience I have worked with men who were the pioneers in showing that engineers and others with scientific education had great contributions to make to the oil industry. They helped standardize equipment, invented new producing and refining techniques, and, by applying scientific principles to the discovery and recovery of oil in the ground, grew to be so valuable that they made the industry one in which the slide rule became a vital tool.

Now we are on the threshold of a new phase. For as industry grows and its responsibilities with itand this is particularly true of the oil business on the international scene — we recognize that other kinds of skills are also important to the job the corporation has to do. We are vitally interested in gelling properly educated young men and women as present employees and future leaders.

Our interest, I imagine, is reflected by hundreds of thousands of students in American colleges and universities. Many of those students who hope eventually to find positions in industry are deciding upon a field of concentration and choosing courses; others, who are now in their final year, will soon be engaged in the actual search for jobs. Naturally they want to find out what value big business puts on the kind of education they are receiving. And none, I should imagine, are more anxious to know this than those who are candidates for a degree in the liberal arts.

There has been a great deal of talk lately in universities and secondary schools about the vast engineering opportunities in industry, about embryonic engineers just out of school who, clutching their brand-new degrees, are collecting $7000 or more a year for their services. Big city Sunday papers are filled with advertisements for a variety of technical talents.

Does this mean that young men with a liberal arts education find very littleopport unity in modern industry? The answer is, I think, emphatically no. As a matter of fact, the basic question seems to me to be: How many parts Specialization to how many parts Generalization? An anecdote best points up industry’s problem and its solution: —

The president of a large steel company, at the end of a personal search for a bright young man for his office, had two equally impressive candidates — one a metallurgist, the other a liberal arts graduate who had majored in English literature. He had them both to lunch — together. The next day he saw each of them in separate interviews.

The metallurgist came in with an air of resignation. “I know I don’t have a chance for the opening,” he said. “After meeting the other candidate, it’s plain to me that his broader background and his ability to size up all sorts of situations far outweigh the technical knowledge I have to offer.”

The English major also came in to bow out of the picture. “A few minutes’ conversation at luncheon,” he said, “convinced me that I couldn’t hope to compete with a man who has such practical knowledge of the steel industry. I realize now what good equipment a study of the sciences is for business.”

The steel executive solved the problem by hiring both men. Both kinds of abilities were essential to his business. And I believe that is precisely the decision industry in general has come to. We surely have to have the technical men; but large enterprises are social organisms, aggregations of people, societies which must have their ethics, their values, and a sense of perspective as well as technology. They very much need a leadership with depth and breadth in understanding, for the ends of science and technology are human ends and so are many of their means.

Industry’s sense of need for the broadly educated mind is reflected, I think, in an experiment being conducted by one company — which, I am told, has hired a liberal arts student with the express intention of turning him into an electrical engineer. The company hopes that he will absorb enough information by osmosis from the other engineers and by extra reading to become a competent engineer himself. If the experiment succeeds, the firm will have found not only a new way of acquiring technologists but a way of acquiring technologists with uncommonly broad backgrounds.

I concede that this idea is a little extreme; but it is certainly evidence ol the value which business is putting on a good general education. Many studies, articles, and industrial leaders have been emphasizing that it is the well-rounded type of man who is scarce — that it is not enough merely to have men who can do ingenious things with machines or bring forth miracles from test tubes. Irving S. Olds, retired board chairman of the United States Steel Corporation, puts it this way: The most difficult problems American enterprise faces today are neither scientific nor technical, but lie chiefly in the realm of what is embraced in a liberal arts education. ”

Our corporate industrial units require such wisdom quite as much as they do their technology and science. Without it they run the risk of putting the job before the man, the product ahead of the consumer. This kind of distortion could lead to one of the worst of industrial inefficiencies — the failure properly to relate the work of a business organization to the framework of the society it exists to serve.

In Standard Oil Company (New Jersey) we estimate, conservatively, that our full-time directors give more than half of their working hours to problems of a human relations rather than a technical or economic nature. In a situation involving foreign investments, for example, a great deal of care must be taken to integrate company operations with the social and cultural patterns of the host country. Often the difficulty is one of having to move industry into a predominantly agricultural region where roads must be built, houses and schools provided, and community relations developed. Always, too, a delicate balance must be struck between the unavoidable initiative — even paternalism — of the company and a people’s desire for selfsufficiency. Such problems obviously call for the broadest kind of thinking.

A typical problem that confronted us recently was whether to discontinue operations of a certain refinery. From a strictly economic point of view it seemed desirable to close the plant. But there were many social problems to be considered, including the possible repercussions of such an action within the surrounding community. It was finallydecided that these human factors outweighed all the others; consequently, the refinery was kept open.

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IT IS plain, however, that the real measure of the importance attached to the man with a liberal arts education is not so much in what people in industry say or think about it as in what they do about it. So, we may ask, how is the liberal arts graduate faring in big business? Do the nontechnically trained people have a chance to rise to top positions? Also has their college training been a major factor in any success they may have had?

I offer some evidence on ibis point from the experience of Standard Oil Company (New Jersey). We were a little surprised by what we found not long ago when we made a spot check on this question.

Most of us, in guessing how many non-technical college graduates there were among our employees, chose a figure of 10 to 15 per cent. Considering the fact that the oil business is of a highly technical nature, this seemed a very reasonable supposition. However, a survey we made in the parent company and its affiliates in the Western Hemisphere showed that as of the end of 1953 we had 3436 employees with non-technical degrees out of a total of 10,383 college graduates, or 33 per cent.

We found, moreover, that during 1953 our company and its affiliates hired 990 college graduates. Of the 990 newcomers, exactly one third held nontechnical degrees.

It didn’t surprise us that the field of business administration accounted for almost a third of the liberal arts graduates. It might seem somewhat more remarkable that the field of education accounted for 15 per cent, and economics and foreign trade 12 per cent, while 5 per cent had majored in English literature.

This survey was by no means perfect, nor exhaustive. For instance, it did not show how many of each sex were employed, and I suspect that a number of these new graduates were young women with B.A. degrees who were hired to fill stenographic positions. Furthermore, the 15 per cent coming from schools of education undoubtedly were mainly teachers engaged by Latin American affiliates to teach in company-operated schools. But the fact remains that we have been drawing far more nontechnical people into the organization over the years than many of our executives had surmised.

Because of the survey’s limited nature, many of the important questions concerning the relative weights of college influences and career influences in the production of managers have been left unanswered. Our company has recently joined with other corporations from several industries in a factgathering undertaking, hoping to discover some yardstick by which we can identify at an early stage in an employee’s career what qualities, background, education, and environmental influences are likely to help him grow into a successful, top-level executive.

This research project is called E.I.M.P. The abbreviation is much simpler than the jawbreaker for which it stands: Early Identification of Management Potential. Twenty-five companies and two universities are participating.

In its present state, the survey is a measurement of two groups in management which are determined by differences in salary, position, rate of promotion, and similar factors. One group, judged by such standards, is considered more successful than the other. The study begins with each company setting up these yardstick groups from among its own executives. The research will involve the executives in interviews, questionnaires, and a battery of psychological tests. Then one group will be compared with the other in statistical terms to discover whether there are significant differences. When the participating companies have collected enough information they will make a comparison of the data from all twenty-five companies.

The study will take a long time. It will involve a total of several hundred executives. Each of t hem will have been interviewed and will have taken at least eight different tests by questionnaire or otherwise. We already know that the personal history of the individual is one of the promising leads for early discovery of executive potential. The multi-company survey will include questions to bring out what the individual did and something about what he thought from adolescence on through high school, college, and early work experience. The armed forces have had considerable success with this type of questioning, giving us hope that at least in this respect we may be on the right track.

Our interest in identifying management potential at an early stage ties in with a basic program of executive development which has been operating within Jersey Standard for more than ten years now. The program is based on the premise that executive talent can be developed on some sort of systematic basis, in the interests of both the individual and the company. Jersey Standard’s plan takes into account methods of selection, appraising, and training which start early in a man’s career and continue until his retirement. Under the program, a young man who has shown promise will be moved from job to job (and often from country to country) to develop continually his inherent ability, expose him to new backgrounds, and help him learn by actual participation.

A young engineer, for example, after some years in the research labs and pilot plants might be sent to Europe or Latin America to assist in the operations of an affiliate’s refinery. In a few more years, after rising to a management position in some area of that company’s activities, he might come back to the United States for on-the-job training in employee relations, marketing, public relations, or some other phase of the business needed to round out his background. In time he might attend a three-month course at Harvard, the University of Pittsburgh, or one of the twenty-seven other U.S. colleges and universities to which companies now send men to give them a wider perspective on their business and cultural world. Where he would go from there would depend largely on how well he had profited from all this experience. But the chances are good that he would eventually arrive in the higher echelons of management, either in this country or with an affiliated company abroad. The same sort of developing career would be available to a man entering sales, transportation, producing, or any other phase of our business.

Many large corporations have similar programs. In fact, putting a young employee’s advancement on a planned basis has been one of the most significant business developments in the post-war period. Naturally the formal part of such programs can only go so far. Many intangibles must be taken into account: a man’s ability to get along with all sorts and races of men, his own concept of life, his personal integrity — all factors which are founded on early upbringing and education. It is in the hope of discovering clues to these qualities near the beginning of a man’s career that the E.I.M.P. survey is being carried out.

No survey can supply all the answers. But this one will tell us something more about where a liberal arts education fits into the complex pattern of executive potential.

If I were a professor of the humanities concerned with the role of my subject in this modern world, I should be greatly heartened by the change in attitude which seems to me apparent among business organizations today. More and more they are developing a keen interest in the fields of the social sciences, economics, psychology, and the other humanities. Such a movement will surely help to create career opportunities for many liberal arts specialists, including historians, psychologists, anthropologists, personnel and public relat ions experts, and writers. This situation indicates to me that, in the course of its natural evolution, business is really offering more opportunities for liberal arts graduates than ever before.

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