America's Two Minute Warning.

• Author: Peters, Thomas J.

America's Two Minute Warning. Jack Grayson and Carla O'Dell. Free Press, $24.95.

THE FOURTH QUARTER

How Pittsburgh can beat Osaka by Tom Peters

Fortune magazine's November 9, 1987 issue featured a contro9versial cover story on the Harvard Business School. But probably few of America's corporate leaders noticed a small item on page 88, a box that summarized an interview with Honda's new president, Todashi Kume.

Honda is already, by some measures, the most productive automotive company in the world. It's product development cycle, the time it takes to design and manufacture a new modes (such as the Acura), is estimated to be one-third or one-fourth as long as that of its U.S. counterparts. Yet in the interview, Kume declared that his near-term objective, not a 20-year plan, was to triple the company's productivity. Moreover, he said, Honda already has the tools in place to do it.

Words like "double" and "triple" must be talked about the American management, too. Triple the training budget, double productivitiy, cut defeats by 90 percent, reduce inventory by 90 percent, slash product development cycle times by 75 percent.

There isn't a candidate running for president who hasn't talked about competitiveness, and what America must do to remain the world's foremost economic power. Jack Grayson and Carla O'Dell suggest that we face a more sobering question -- what do we have to do, not to lead, but to survive a major economic power int the twenty-first century?*

It's a question that both have spent a great deal fo time considering. In 1977 Grayson founded a think-tank called the American Productivity Center where his co-author Carla O'Dell was a senior consultant and vice-president before starting her own consulting company.

They believe that America can compete but warn that we can only do so when American businesses sense the competitive danger and act. So far most haven't. "(Only) a relatively small number of firms are making the kind of changes required," they warn. "The majority of American firms are not responding at all, doing very little, or engaging in a flurry of activity, much of it short-term cost-reductions, layoffs, slam-bang automation, and closings of inefficient operations...Such efforts give the appearance of adjustment but have not changed the core way firms do business."

Unlike a lot of critics of American business, Grayson and O'Dell have given us something truly useful -- a 130-page agenda of actions management can take to bolster American productivity.

They propose, for instance, a complete rethinking of the last nine decades of conventional managerial wisdom. Their agenda calls for "small operating units...fewer management levels, team...