This week, the media are giving a lot of attention to the woes of DaimlerChrysler and JetBlue. I have written a fair bit about the merger of Daimler-Benz and Chrysler in 1998, and told Bloomberg Radio last week that the company was “a tragedy story” owing largely to deep forces of change in the global automotive industry. The long-term trend of consolidation in the industry made the merger necessary and almost inevitable for the two firms. Now, the turnaround demanded of CEO Dieter Zetsche is huge and complicated. JetBlue faces a different kind of challenge after a full plane waited for takeoff for 10 hours last week—CEO David Neeleman, one of the most charismatic and effective leaders in the air transport industry, now faces a brand crisis of epic proportions. There is plenty of blame in the atmosphere, not a little of it aimed at the managers of these firms. We should withhold judgment until all the facts are in. Surely the existence of such messes is not the fault of one individual. Given the deep randomness in daily business life, these challenges are more the norm than the exception. And they will become future business school case studies.

The predicaments of Zetsche and Neeleman illustrate well the virtues of studying by the case method. In professional school, students are easily drawn to simply learning tools and concepts—these are important, but one’s education should not stop there. Russell Ackoff, a famous operations researcher retired from the Wharton School, wrote, “Managers are not confronted with problems that are independent of each other, but with dynamic situations that consist of complex systems of changing problems that interact with each other. I call such situations messes…Managers do not solve problems: they manage messes.” (((“The Future of Operational Research is Past,” Journal of Operational Research Society, 30, 1 (Pergamon Press, Ltd., 1979): 93-104.))) From the CEO down to a front-line supervisor, one’s day, week, and year are dominated by the stuff in the environment that distracts one from what is important. The supreme challenge of the business leader is to decide where to direct his or her attention.

Consider the following description of the predicament of General Kutuzov, who has just lost the battle of Borodino to Napoleon in 1812, and whose army is retreating toward Moscow. A textbook problem might lay this situation out as a simple problem of logistical planning, a task to be optimized perhaps using a computer and algorithm. But consider how Leo Tolstoy summarized Kutuzov’s environment:

“The commander-in-chief is always in the midst of a series of shifting events, and so he can never at any moment consider the whole import of an event that is occurring. Moment by moment the event is imperceptibly shaping itself, and at every moment of this continuous, uninterrupted shaping of events, the commander-in-chief is in the midst of the most complex play of intrigues, worries, contingencies, authorities, projects, counsels, threats, and deceptions, and is continually obliged to reply to innumerable questions addressed to him which constantly conflict with one another. An order to retreat must be given to the adjutant, at once, that instant. And the order to retreat carries us past the turn to the Kaluga road. And after the adjutant comes, the commissary-general asks where the stores are to be taken and the chief of the hospitals asks where the wounded are to go, and a courier from Petersburg brings a letter from the sovereign which does not admit of the possibility of abandoning Moscow, and the commander-in-chief’s rival, the man who is undermining him (and there are always not merely one, but several such) presents a new project diametrically opposed to that of turning to the Kaluga road. ((Leo Tolstoy, War and Peace London: Penguin Classics, (Trans. Rosemary Edmonds, 1957) Vol. 2, Page 979.))

Managers manage messes. It is the ability of the case method to capture the messiness of business administration that gives it its enormous instructional power. Each day, three case discussions exercise a student’s skill in identifying problems, analyzing the possible remedies, setting priorities, and framing an action plan. This is excellent preparation for the kinds of messes that faced General Kutuzov, and more latterly, Dieter Zetsche and David Neeleman.

Posted by Robert Bruner at 02/22/2007 11:41:37 AM