The Hoover Dam, among the greatest of modern engineering projects, can also be considered one of the greatest testimonies to the management of projects by functional organizations and of the application of old fashioned management control techniques to a gigantic undertaking. From May of 1931, through 1935, for roughly four years, Six Companies Incorporated performed the principal work of erecting the dam. The firms making up Six Companies Inc. (which was incorporated for the expressed purpose of pooling resources, experience and personnel for the Hoover Dam project) were W.A. Bechtel; Henry J. Kaiser; Utah Construction Co.; MacDonald & Kahn Co.; Morrison-Knudsen; J.F Shea Co.; and Pacific Bridge Co.

However despite the mammoth scope of the project and the multiple number of independent companies involved, the active management of the project was left in the hands of four people. Henry J. Kaiser was the Chairman, Charles A. Shea was the Director of Construction, Felix Kahn was Facilities Manager in charge of feeding, housing, and transportation, and S.D. Bechtel who directed the purchasing, auditing, and warehouse activities. Underneath Charles A. Shea, Francis T. Crowe was the General Superintendent of Construction. He acted as the point man between the Board of Directors and the operations personnel. It was Shea's responsibility to carry out the Hoover Dam contract on time and budget. Shea's immediate staff were functionally separated by their specialties such as Traffic Managers, Tunnel Superintendents, Mechanics, Electricians, and Motive Equipment Operators.

What was initially planned to be a seven-year project was actually completed in four years. In one of Compressed Air Magazine's booklets describing the progress the following was written:

"The Speed with which Six Companies Incorporated inaugurated work is characteristic of the zeal and industry which have been since shown. At the very outset, the gigantic undertaking was resolved into its various major factors and every phase of the work that could be started was got underway with the least possible delay. By June, 700 men were at work, and the payroll was $100,000 monthly. Almost over night the desert quiet was transformed into teeming activity. A 3-shift day and a 7-day week were put into effect as soon as the working forces had been fairly organized, and that schedule was adhered to month after month almost without a break. Neither the sizzling summer heat nor the advent of legal holidays was allowed to slow things up. As a result of this vigorous program, remarkable progress has been made during the first year of operations. If maintained, and there seems to be every reason that it will be, it is bound to bring about completion of the contract well ahead of the time limit set."

One of the other concerns of the Hoover Dam Project which occupied the Facilities Division was to provide adequate living quarters for Six Companies Inc. personnel. This was because there was no town or city nearby and all workmen were transported from all over the Western United States. "In this connection," the Compressed Air Magazine author concluded, "it should be emphasized that the ends to which the contractors have gone to minister to the general comfort and well being of their employees is without precedent in American contracting annals." As such, the founding of Boulder City was brought about because of the construction of the Hoover Dam. In this sense, the project was not only a construction job, but a sociological venture as well.

Today, even with all our technological advancements, we would be hard pressed to duplicate this massive project in the same amount of time that it took Six Companies Inc. over 60 years ago. In fact, today widening a stretch of interstate highway or building an addition to a major airport can take just as long to construct as building from scratch the Hoover Dam as well as Boulder City. Why?

One of the reasons that management today cannot compete with our great grandfathers is that we have bastardized the meaning of what management does, for whom they work for, and for how organizations are structured both in terms of departmental separation and lines of authority.

In the first instance, management today instead of managing tends to act like mentors or coaches. Under this abstraction, accountability is diffused among the workers and the manager is less likely to have the real authority to have actually managed. What do we have today? Management by committees, teams, focus groups, quality circles, and process leaders. With all this management by consensus, authority is not commensurate with accountability. Crudely put, nobody is to blame when things go sideways. 

Under the old Hoover Dam system of management a manager headed up a department and was completely accountable for the efficiency and cost effectiveness of the department's output. Under the old Hoover Dam system of scientific management, the manager could not hide behind some management "fad" because the numbers told the story. Today they call scientific management bad management. The theorists today discredit the old management style as authoritative and not applicable in today's new business world and global economy. They say that management needs to concern itself with making workers feel good about their jobs rather than insisting that workers produce. 

Quite frankly, human nature since the construction of the pyramids has not changed, and because of that the management of people cannot change either. Yes indeed, there are good managers and of course there are bad managers. But generally, bad managers can be classified as individuals who cannot make people feel good about working hard. In essence, authoritative behavior does not get results from good workers. But failure to demand results is the antithesis of good management. During the Hoover Dam project, management was held accountable and demanded results. If they would have been too authoritative in their management style, the workers would have not put up with the desert, the heat, the lack of entertainment, and the distance from their families. 

In the second instance, managers today forget that they work for the ownership. Yes, the customer comes first. But ownership has created the vehicle in which a customer can be satisfied (i.e., the company). Of course, employees are the human assets that make-up organizations. But again, without the owners and the capital that they invested, there would be no organization and no employees. So management must concern itself with providing ownership with profitable growth. All companies must grow to compete. And in order to compete, all companies must be profitable. 

The managers of the Hoover Dam project worked for six independent companies that united themselves for the sole purpose of building the dam. The customers were the electricity users in Southern California. The employees were the skilled laborers who worked shift after shift, month after month, for the owners. The customers were real, but not tangible. In other words, the managers knew what their job was, knew their workers, and certainly understood the concept of the satisfied customer, but they worked for and respected the ownership. 

In the third instance, theorists are constantly telling us that the organizations as they were understood a half a century ago are incapable of supporting the advanced product structure, process structure, or administrative overlap of today's modern corporation. So called experts today claim we must be quality driven, process driven, and structured in groups around a form they call matrix. 

What they miss is that a quality driven, process driven, or a group driven organization cannot be held accountable through financial statements. Financial statements should tell the story in terms of sales, cost of goods sold, and expenses, separated into functional departments headed by a functional manager (i.e., production manager, sales manager, administrative manager). Quality is simply an outcome of good management and an efficient quality control standard that supports the product. A process is cross functional and the maintenance of the process is in the hands of a number of managers. To assume that an organization can be set up in processes defies the skills and discipline that make up a department. A group driven company who relies on teamwork misses the important point that teamwork is a byproduct of good management and good coordination of managers through committees (i.e., the budget committee). And finally, matrix organizations who combine the project work and administrative work to be fused together have collectively decided to create a bureaucracy instead of producing a product or service in the most efficient and effective manner. 

Needless to say, the Hoover Dam project was functionally organized. And this is one of the biggest reasons why it was completed on budget and ahead of schedule. 


Source: 
Compressed Air Magazine, The Story of the Hoover Dam, Nevada Publications, Las Vegas, Nevada, 1931-1935.