Alfred Sloan’s Management Style – Case 2

Rarely has a chief executive of an American corporation been as respected and as revered as Alfred
P. Sloan, Jr., was at General Motors during his long tenure at the top—from 1920 until 1955. Many
GM managers, especially those who grew up in the 1920s and 1930s, felt a deep personal gratitude
to him for his quiet but decisive acts of kindness, of help, of advice, or just of warm sympathy when
they were in trouble. At the same time, however, Sloan kept aloof from the entire managerial group
in GM. That he never called anyone by his or her first name and was “Mr. Sloan” even to top
executives may have been a reflection of his generation and upbringing—he had been born, after all,
in the 1870s and was a senior executive, running his own business, before 1900. However, unlike
most of his generation, he also addressed the African-American elevator men in the GM building in
Detroit or New York in the same way. They were always “Mr. Smith” or “Mr. Jones.” When he met a
new elevator attendant, he would introduce himself, “I am Mr. Sloan. What is your name?” When
the man answered, “I am Jack, sir,” Sloan would turn white with anger and would say, “I asked for
your name, sir,”— and would from then on always remember it. Sloan also frowned on the use of
first names by his top people among themselves. It was known, for instance, that he felt it unwise of
Mr. Wilson—for many years GM’s president and later Sloan’s successor as chief that he was on first-
name terms with most of GM’s vice presidents. Above all, Sloan had no friends within the GM group.
He was a warm and had been a gregarious man until deafness cut him off from easy human contact.
Although he had had close friends, he outlived them all—he lived well into his nineties. All these
friends had been outside General Motors. Indeed, the one friend who had been in GM, Walter P.
Chrysler, did not become a personal friend until after he had left GM and had, upon Sloan’s advice
and with strong support from Sloan, started his own competing automobile company. As Sloan grew
older, he keenly felt his increasing isolation as his close friends died one by one. Yet he remained
aloof from GM people. He never invited them to his home. Unless it was a business meeting with a
clear business agenda, he did not even sit down to a meal with any of them. He never accepted an
invitation to any of their homes, even on business trips to their hometowns. He was once asked how
he liked Winterthur, the estate of Henry Francis du Pont, a cousin of Pierre S. du Pont, who had been
his boss at GM in 1919 and 1920 and chairman of the GM board for years thereafter. “I have never
been to any of the du Pont homes,” he answered. “Ours is a business relationship.” In his earlier
years, Sloan had been a keen outdoorsman—but his hiking, fishing, and camping companions had all
been non-GM people.

. Only after his retirement in 1955, when advancing old age made it more and more difficult for him
to travel, did he invite GM people to come to his home in New York—and then only to discuss
business in the office wing of his apartment—for he was still a GM director and a member of the top
committees. “It is the duty of the chief executive officer to be objective and impartial,” Sloan said,
explaining his management style. “He must be absolutely tolerant and pay no attention to how a
man does his work, let alone whether he likes a man or not. The only criteria must be performance
and character. And that is incompatible with friendship and social relations. A chief executive officer,
who has ‘friendships’ within the company, has ‘social relations’ with colleagues or discusses any-
thing with them except the job, cannot remain impartial—or at least, which is equally damaging, he
will not appear as such. Loneliness, distance, and formality may be contrary to his temperament—
they have always been contrary to mine—but they are his duty.”
QUESTIONS What do you think of this? And would such successful chief executives as Abraham
Lincoln or Franklin D. Roosevelt have agreed? Would today’s successful executives agree?