Work Matters

Tag: GM

  • Is GM’s Culture Really Changing, Or Is It Just More Hot Air?

    The BP fiasco has made many of us even more cynical about the difference between what executives and their spin doctors say about their management styles and organizational cultures versus what is actually happening.  With that caveat in mind, I was still heartened by a story in the Financial Times a couple days back about the cultural changes that CEO Ed Whitacre is apparently implementing at General Motors (note you can read it for free but have to register).  I was sent this article by Alison Beard, an editor I am working with at Harvard Business Review on article for the September issue, which presents and develops some of the ideas in Good Boss, Bad Boss about how the best bosses serve as "human shields" and take steps to protect their people from intrusions, misguided procedures, and idiots and idiocy of any stripe that undermines their performance and dignity.

    I have been extremely critical of GM here as both the public record and my own more haphazard but extended experience with the company convinced me that they had — at least before they went bankrupt — some of the most dysfunctional and inefficient programs, group dynamics, and leadership styles I have ever seen.  I am not surprised they went bankrupt, I am only surprised that it took so long.  You can see my rant about their "No we can't" mindset where I argued that their core competence was justifying why they couldn't do the right things and Mat May's amazing story about the dysfunctional power dynamics at GM and how he confronted GM executives with them.

    At least on the surface, a lot seems to be changing at GM.  The story in the Financial Times listed numerous encouraging things that new CEO Ed Whitacre is doing that strike me as reasonable antidotes to the old GM diseases.  Whether or not these are enough to change what the thousands of other people at GM for the better is another matter.  But there are encouraging signs other than the 1.2 billion dollars that GM made last quarter. A few quotes from the article are intriguing:

    1. The new CEO has little appetite for the PowerPoint presentations that
    have long been a staple of internal GM meetings. He has delegated many
    decisions and honed in on aspects of the old GM’s bureaucratic way of
    doing things that he sees as ripe for the cull. At one meeting in April,
    he questioned the number of websites GM ran – nearly 3,000, two-thirds
    of which were internal and many of which were not updated regularly.
    “Why on earth do we need this many?” a colleague recalls him asking.
    Many have since been closed.

    2. Mr Girsky has chopped the number of regular reports compiled by GM’s
    research group from 94 to four. He may dispense with some of these too,
    after deliberately not e-mailing them to the usual 150 recipients and
    finding that only a handful missed them. If executives give forecasts or
    dates of something they plan to do, Mr Whitacre makes clear they will
    be held accountable. “Everything is a bit more immediate,” says one
    executive.

    3. He regularly lunches in the RenCen’s food court, clearing his tray
    afterwards    .

    Comment: GM top brass have traditionally been treated like royalty — this is not trivial.   The best book on GM culture is very old  — One a Clear Day You Can See General Motors — and is about a guy who got busted a giant drug deal he got involved in to save his new company, John DoLorean –who in some ways was the Elon Musk of is era.

    4. At all levels, Mr Whitacre asks managers to take more risks. When
    subordinates request money for a new initiative, his response is
    typically to ask whether the amount is within their existing budgets. If
    so, they are told that the decision whether to spend it is theirs. “You
    don’t have to wait for that monthly meeting,” says Ed Welburn, GM’s
    design chief, citing a recent decision to change the rear-seat design of
    a new Cadillac model.      (But there is also bad news here.  The article says that "He has also made it clear that the flip side of extra responsibility is
    accountability, with few second chances."     When people are terrified of losing their jobs, they avoid risky behavior… if he is creating… or perhaps revising… a culture of fear, he needs to accept that there will be failures… see Diego's great post on this point).

    5. Mr Welburn, one of the handful of executives still in the same job they
    held two years ago, recalls that prior to the new regime, “half of our
    people were spending all of their time preparing presentations, instead
    of designing great cars”.

    This last quote — which is very consistent with my experience at the old GM — suggests that indeed some heads needed to roll. Perhaps Mr. Whitacre can now introduce some stability and psychological safety– Jack Welch, for example, was known as "Neutron Jack' early in his career because he did so many layoffs and got GE out of so many businesses, but after that phase, he developed a series of programs to engage employees and to make them feel safer, while still improving performance, notably Work-out. 

    So, what do you think?  Is there real hope for GM?   Is this just PR?  If you were advising Mr. Whitacre, what would you tell him?

    I am rooting for him and GM, as returning this company to greatness would help so many people's lives in so many ways, especially in Midwestern United States.

  • Guys List of the Top Ten Candidates to Run GM

    Guy Kawasaki has applied his usual charm and delightfully twisted sense of humor to develop a list of 10 candidates to run GM. Here are Guy's top three, but don't miss the list:

    1. Steve Jobs (Apple). GM would create the most
    beautiful cars, but you’d need to refill it once a day. You could only
    buy accessories from the GM store after Phil Schiller approved them.
    Gas pumps would need new nozzles because Steve mandated non-standard
    gas-tank fittings.

    2. Steve Ballmer (Microsoft). GM cars would look
    similar to those of German and Italian marques, but it would be seven
    revisions into the car’s lifecycle before they ran decently.

    3. Sarah Palin (Unemployed). Palin would introduce
    cars that you couldn’t brake or steer called Rogues. Shotgun racks
    would be a factory option on the Cheney model. However, before they
    ship, she would resign. When Katie Couric asked her which car magazines
    she read, she responded, “Most of ‘em.”

    Also, I was thinking that a serious candidate might be Xerox's Anne Mulcahy, as she led one of the toughest turnarounds in recent U.S. history. Plus all the men have failed at this job, so perhaps it is time to try the other gender! Or, perhaps Carly Fiorina could do this instead of running for the Senate in California to demonstrate that she can keep and flourish in a job where she P& L responsibilities — something she didn't demonstrate at HP.  And if Carly failed, she could have the special distinction of having been thrown under the bus by both John McCain and Barack Obama!

  • My Challenge to GM: A Change You Need to Make If You Really Want Cultural Change

    Today's New York Times has a very encouraging article about the cultural and organizational changes that are happening at GM in the wake of their bankruptcy.  I was simply delighted to read about changes like this, where GM is finally beginning to tackle what Jeff Pfeffer and I call "The Otis Redding Problem."

    In the old General Motors, employees were evaluated according to a “performance measurement process” that could fill a three-ring binder. In
    Terry Woychowski’s case, for example, his job as director of G.M.’s
    vehicle engineers was spelled out in exhaustive detail, and evaluated
    every three months. But in his new job as vice president — a
    promotion he was given 20 days after G.M. emerged from bankruptcy — his
    performance review will be boiled down to a single page, something he
    had never seen in his 29 years with the company.Mr. Woychowski
    said he felt the grip of G.M.’s legendary bureaucracy start to loosen,
    something he never imagined possible. Now, such reviews are being
    scaled down and simplified across the company. “We measured ourselves ten ways from Sunday,” he said. “But as soon as everything is important, nothing is important.”

    As regular readers of this blog may recall, last November, I wrote a rather scathing post on GM's "no we can't mindset" in which I argued that GM's core competence seemed to be coming-up with reasons about why the couldn't stop doing seemingly dumb old things and start doing seemingly smart new things. I provided quite specific suggestions that stemmed from my now nearly 30 years of intermittent contact with diverse parts of the company. I am not especially good at figuring out the impact of different posts, but from the number of page views, number of comments, and the strength of the emotional reactions to it, I think this post had more impact than anything else ever written here.  This Times article suggests that they are making real progress and committed to making more.

    In that spirit, I have a pet peeve that I have been complaining about openly and repeatedly to GM managers and executives about for years.  This is a change I believe they can  and should make immediately, and that will help reverse two of GM's biggest cultural problems:

        1. Management and senior executives don't quite understand and are insulated from the experience of owning and buying a GM car — and how it stacks-up against their competitors.

        2. They think and act like too much like they are just selling cars, when in fact, they are selling a car ownership experience — yes, the car itself is an important part, but there are many other parts such as shopping for a car, buying it, having it serviced, and so on that are treated as separate and less important.

    To me the single most destructive thing they do to themselves is to have a program — one they still have — where managers and executives are given a free GM car to drive.  I have heard a lot about bits and pieces of this program over the years, but I confess to not knowing every detail.  My understanding, as I wrote last November, is that it goes something like this:

    GM has a perk for managers down to fairly
    low levels where all are given a GM car to drive – they rotate from one car to
    another.  I am not sure of the exact details,
    but answers to the questions I’ve asked over the years  suggest it goes something like this: the
    lowest level managers have to buy their own cars, the ones at somewhat higher
    levels get a new car to drive every six months or so but have to do some
    servicing, the managers who are somewhat higher-up get somewhat fancier cars and are freed from any servicing (gas
    is even put in the cars of some executives so they don’t have to go to the
    service station), and the highest level executives get a car and a driver.


    In other words, this system effectively
    insulates people in management – especially those in senior management — from
    experiencing what it is like to shop for, bargain for, purchase, service, and
    sell a car. They only get the driving experience. Well, except for the most
    senior executives, who don’t even get that experience — they watch a person in
    the front seat drive a big car.  Now, it
    is true, that the most senior executives do own GM cars for personal use, but
    it is my understanding that when a car is delivered to a senior executive,
    special attention is devoted to the car – even during the production process –to
    make sure the top brass aren’t exposed to a car with any flaws. Wouldn’t that
    be nice? 

    Here is my challenge to GM, and frankly, since you are running on U.S. taxpayer money, my money and the money of millions of us who would rather see the money going to things like education, I think that you owe to us — and yourself — to do the right thing:

    1. Get rid of the program immediately.

    2. Use the money spent on the program (even though I know it won't have the tax advantages of the old program) to give each manager and executive money to help buy a car for work — they only get the money if they buy a car.

    3. Get rid of the GM employee discount program completely, so that when managers and execs walk into a GM dealer, they have to do the same negotiation as everyone else.

    4. Stipulate that not only can people buy non GM cars, only 25% of those participating in the program at any time can own a GM car.  That way, there will be information in the company about the experience of owning a wide range of cars.

    5. Everyone — from the CEO on down — will be required to partake in the full car ownership experience, from selecting, to shopping for, to servicing, to getting gas, to selling and trading in their cars.

    There are a lot of other things about GM that need to change — or more optimistically — perhaps are already are changing. See this amazing story provided by Matt May about how badly their managers sometimes listen. But I believe that this single change will have a large and positive impact, forcing GM management and executives to break out of their isolation, to learn about competitors' car and car buying experiences, and to come to grips with what the GM ownership experience actually entails.

    Dear GM Executives: you know these problems exist, you know that this program contributes to these problems, and you are at a juncture in your history where change is possible.  Why can't you end this program immediately?  Rather than falling back on your old core competence of explaining why it is impossible for you to do the right thing, how about showing the American taxpayer and yourself too that it is possible for you to do the right thing and to do it fast?