Levi's trendy management falling apart

Ethical and utopian management structures may be politically correct, but they don't sell jeans, as Levi Strauss has found out to its cost. SELWYN PARKER writes.

Do Levi's troubles spell the end of New Age management?

Levi Strauss, the company where employees compulsorily get together to share their inner lives, is in such serious trouble that its utopian management practices are falling into disrepute.

Despite the introduction of politically correct practices such as a "core curriculum" - a 10-day course in diversity, ethics and personal vulnerabilities, Levi Strauss has been slaughtered by competitors who are are much more interested in selling.

While the jeans company was pre-occupied with well-intentioned but inward management initiatives, sales dropped 13 per cent last year to trendier rivals like Gap, Lee and Calvin Klein as well as upstarts like Mudd, Fubu, Kikwear, Bongo, Stussy and Faded Glory.

Because of a plummeting share price, the company's market value has collapsed from $US14 billion to US$8 billion in the last two years.

Levi Strauss has also disclosed plans to close 29 factories, shedding over 16,000 jobs. Most of the blame has been attached to Bob Haas, the fifth of the Levi Strauss family to run the company. A Chaucer-loving English scholar, Haas led a partial management buy-out in 1996 and introduced a form of corporate democracy that was so complete, say insiders, that it practically paralysed the company.

Levi Strauss's values apparently became an end in themselves while rival manufacturers were talking to customers about fashion, leg length and width.

"Values make the company," Haas told the Harvard Business Review. Rivals, who overwhelmed Levi Strauss with new designs, thought it was sales.

Haas is said to be genuine, likeable but not nearly urgent enough.

"Everything had to go into a corporate process, so nothing ever got resolved," a former executive, Robert Siegel, told Fortune magazine.

"Almost half my time was spent in meetings that were absolutely senseless."
Even market-oriented initiatives got bogged down among grand plans, even grander costs and armies of consultants.

A special $US850 million task force working on a scheme to deliver product to stores more rapidly produced a booklet to help staff cope with a supposedly new way of operating.

The publication, which had the intimidating title of 'Individual Readiness for a Changing Environment', was 145 pages long and full of double-speak.

"Let yourself feel the loss, then let go and move on," the book advised sagely.

"New ways should be viewed as neither right nor wrong, neither better nor worse, than the previous ones." It's not surprising that few read it.

* Contributing writer Selwyn Parker is available at wordz@xtra.co.nz