In 1920, Alfred Sloan wrote a long report about the best way to organize General Motors. He showed the report, titled "Organization Study," to GM President Pierre DuPont and CEO Billy Durant. DuPont was very impressed. Durant never reacted to it.
Fast forward to 1923: Durant is out, and Sloan's Organization Study is in. Sloan was GM's president from 1923 to 1946 and chairman from 1937 to 1956. His management techniques not only would govern GM but eventually would become the model for modern corporate America.
To understand Sloan and his ideas, one must look first at his predecessor, Durant, the founder of General Motors. Durant, who had collected companies for himself as well as GM, acquired Sloan's Hyatt Roller Bearing Co., of Newark, N.J., in 1916.
That same year, Durant combined Hyatt with three other acquisitions in a new company called United Motors and made Sloan its president. Two years later, Durant brought United Motors into GM and made Sloan a GM vice president.
Durant was a talented collector of businesses but a poor manager. He was an outgoing dreamer who operated on gut instincts, said William Pelfrey, author of Billy, Alfred, and General Motors. Durant was spontaneous and took risks, but financial and organization controls were foreign to him.
Sloan was Durant's opposite, soft-spoken and prudent. He believed in getting all the facts before making a decision. He never acted on emotion.
Today, many view Sloan as the inventor of the modern corporation because he transformed Durant's hodgepodge of mismanaged car companies into the world's largest industrial colossus.