My Years with General Motors review

Alfred Sloan's account of his four decades building General Motors is one of the most influential management books ever written, though it reads less like a book and more like a carefully constructed argument. Sloan joined GM in 1918 when it was a loosely connected collection of car companies under the erratic control of William Durant. By the time he retired in 1956, he had built the largest industrial corporation in the world and had defeated Henry Ford's Model T with a radical different philosophy about how to sell cars and organize a company.

The central innovation Sloan describes is coordinated decentralization. Ford's genius was standardization and vertical integration; Sloan's was the opposite. He believed that autonomous divisions — Chevrolet, Pontiac, Buick, Oldsmobile, Cadillac — would outperform any centrally planned operation, provided that financial controls, policy, and strategic coordination sat at the corporate level. This structure became a template for the modern diversified corporation. Sloan gave division managers authority to run their businesses while holding them accountable through a rigorous system of financial reporting and return on investment targets. The details are dense, but the underlying logic is remarkably clear.