Autoline on Autoblog with John McElroy
GM DON'T NEED NO CULTURE CHANGE
If I have to read another article about how GM needs to change its culture, I think I'll puke. It seems that every analyst and pundit in the business feels the need to write an article about GM's need for culture change.
They wring their hands about how this is going to take years or even decades to achieve. But I've seen enough culture changes at car companies to know it doesn't have to take very long at all.
Human beings are highly trainable animals. We're easier to train than dogs! All you have to do is tell us what needs to be done and, if we agree, we'll pretty much comply.
There's an old adage in business, "tell me how you're going to measure me, and I'll show you how I'm going to perform." You want people to "change their culture?" Then start to measure them the way you want them to perform.
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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Look at the dramatic change that's taken place at the Ford Motor Company since Alan Mulally became CEO. The people I talk to there tell me they finally feel good about going to work, and they believe the company is going to do well in the future. Why? Because everyone there is now focused on the basic work needed to come out with great products, instead of being tied up with projects whose sole purpose is to satisfy the needs of different departments within the company.
Fiat and Nissan are other good examples of companies that were looked upon as complete and total basket cases, but managed to turn themselves around in a breathtakingly short amount of time. Again, with a focus on product.
In each and every case it comes down to good leadership providing a clear direction to the employees of the company. They're able to effect a "culture change" in a very short amount of time, not by subjecting employees to lectures and training sessions, but by making it very clear to everybody what they need to do for the company to come out with terrific products.
So all this talk that GM needs a culture change misses the point. What GM really needs to do is figure out how to harness the incredible talent and energy that already exists within the corporation. It's already made good progress with some products. But now it has to do that with all products all the time. And it has to figure out how to put a process in place that ensures this will continue even after a grandmaster like Bob Lutz retires.
But when they work in a hierarchical or a matrix organization, the loyalty goes to their function or their department. They don't like to cooperate with other areas of the company, because that just means they're competing for limited resources.
Back when GM was great, each of its car divisions were run like separate car companies. It was easy for the employees at Chevrolet, for example, to eat, sleep, live and breathe Chevy. They completely understood what their mission in life was all about. Today, no one at GM in engineering, manufacturing or purchasing works on a particular brand. They just get matrixed into an "architecture" that will probably be badged for several different brands. How can you build any loyalty around that?
What GM really needs to do is create a structure where its employees can clearly see how the work they do results in a specific car for a specific brand. If you measure them on that, and reward them on that, you'll see the culture change in within one design cycle. It happens every time.
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If I have to read another article about how GM needs to change its culture, I think I'll puke. It seems that every analyst and pundit in the business feels the need to write an article about GM's need for culture change.They wring their hands about how this is going to take years or even decades to achieve. But I've seen enough culture changes at car companies to know it doesn't have to take very long at all.
Human beings are highly trainable animals. We're easier to train than dogs! All you have to do is tell us what needs to be done and, if we agree, we'll pretty much comply.
There's an old adage in business, "tell me how you're going to measure me, and I'll show you how I'm going to perform." You want people to "change their culture?" Then start to measure them the way you want them to perform.
____________________________________________________________________________________
John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
____________________________________________________________________________________
Look at the dramatic change that's taken place at the Ford Motor Company since Alan Mulally became CEO. The people I talk to there tell me they finally feel good about going to work, and they believe the company is going to do well in the future. Why? Because everyone there is now focused on the basic work needed to come out with great products, instead of being tied up with projects whose sole purpose is to satisfy the needs of different departments within the company.
It comes down to good leadership providing a clear direction to the employees of the company.
I saw the same sort of thing happen at Chrysler in the early 1990s. It adopted a platform-based organization, where people started working on specific cars and trucks. They developed a loyalty to the products and the brands they were working on, instead of developing a loyalty to a corporate function or department.Fiat and Nissan are other good examples of companies that were looked upon as complete and total basket cases, but managed to turn themselves around in a breathtakingly short amount of time. Again, with a focus on product.
In each and every case it comes down to good leadership providing a clear direction to the employees of the company. They're able to effect a "culture change" in a very short amount of time, not by subjecting employees to lectures and training sessions, but by making it very clear to everybody what they need to do for the company to come out with terrific products.
So all this talk that GM needs a culture change misses the point. What GM really needs to do is figure out how to harness the incredible talent and energy that already exists within the corporation. It's already made good progress with some products. But now it has to do that with all products all the time. And it has to figure out how to put a process in place that ensures this will continue even after a grandmaster like Bob Lutz retires.
When [employees] work in a hierarchical or a matrix organization, the loyalty goes to their function or their department.
The history of the auto industry is replete with examples. When people in a car company can identify with the car that they work on, they develop a tremendous sense of loyalty and a competitive spirit. They fully understand why they come in to work every day, they know who the enemy is, and they want to win. Everyone pulls together to make it happen.But when they work in a hierarchical or a matrix organization, the loyalty goes to their function or their department. They don't like to cooperate with other areas of the company, because that just means they're competing for limited resources.
Back when GM was great, each of its car divisions were run like separate car companies. It was easy for the employees at Chevrolet, for example, to eat, sleep, live and breathe Chevy. They completely understood what their mission in life was all about. Today, no one at GM in engineering, manufacturing or purchasing works on a particular brand. They just get matrixed into an "architecture" that will probably be badged for several different brands. How can you build any loyalty around that?
What GM really needs to do is create a structure where its employees can clearly see how the work they do results in a specific car for a specific brand. If you measure them on that, and reward them on that, you'll see the culture change in within one design cycle. It happens every time.
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Reader Comments (Page 1 of 2)
tuxchown 2:12PM (7/14/2009)
"Back when GM was great, each of its car divisions were run like separate car companies."
Then the powers that be decided they could no longer "afford" to do business like this and look at what happened. Homogenization is the true destroyer.
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Coolio 2:18PM (7/14/2009)
"Back when GM was great, each of its car divisions were run like separate car companies."
Yes, and they had a massive cost structure that they can no longer afford. This is no longer feasible for any automotive manufacturer. Platform sharing is needed to control costs.
What is also needed is way to promote pride in craft and group cooperation on the job while also having a competitive cost structure.
PJ 2:38PM (7/14/2009)
"Back when GM was great, each of its car divisions were run like separate car companies."
Well, John, you can afford to do that when you own over 50% of the market, as GM did in the mid-'60s. When your market share drops to 18%, you have to think like *one* car company--okay, maybe two (Chevy, Cadillac)--and drop the bureaucratic distractions.
tuxchown 2:39PM (7/14/2009)
The question is this: Which came first, the chicken or the egg? ;-)
the4thheat 11:51PM (7/14/2009)
Truth is GM needed a culture change eons ago...merging the platform development when you still had 50% of the market and using your heavy advantage to fuel R&D and market share to cut costs would have helped them keep or maybe even expand that market share.
Waiting until your market share has tanked and THEN doing crappy rebadge jobs for the next few decades to trim costs while doing nothing about the serious fixed cost issues that are the real problem is how you end up bankrupt. Platform sharing isn't a problem because the cars aren't necessarily the same-they just share a robust common underpinning that can have billions poured into R&D. Slapping 5 different badges on the exact same vehicle though *IS* a problem because you're not going to expand your market share when all your brands are just stealing each other sales.
jinushaun 2:17PM (7/14/2009)
So... After reading your entire argument, sounds like you're actually prescribing culture change at GM--which is exactly the opposite of your opening paragraph! Unless, of course, you and I have very different definitions of corporate culture. The way a company itself is organised reflects a company's culture.
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LMBVette 2:25PM (7/14/2009)
That is exactly as I interpreted it....LOL
I disagree with a few things in this article. For example, I know for a fact that those who worked on the Camaro are very, very devoted to the vehicle. They regularly post on Camaro5. They kept the public informed throughout the development of the vehicle.
Evan 2:18PM (7/14/2009)
"Then start to measure them the way you want them to perform."
You mean like - measure their ability to turn a profit?
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DesiAuto 2:24PM (7/14/2009)
It sounds like he is proposing culture change at GM but than why did he started with "GM DON'T NEED NO CULTURE CHANGE". John may be another cup of coffee will help.
In any case, let's not call it a culture change, GM sucks in lot of different ways, they need to stop sucking! Better?
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Redeemed 2:48PM (7/14/2009)
http://spam_somewhere_else.and_dont_post_here.anymore
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MC 2:52PM (7/14/2009)
Um, this appears to be an article arguing in favor of cultural change...
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Harley Cook 3:08PM (7/14/2009)
I don't agree with your comment John, the Detroit 3 need to start making world cars now. What cars currently made by GM would actually be desirable in Europe? There are no sedans, to me the CTS is just too big! Corvette would be low volumn, and Camaro with those goofy gauges would be laughed at! Buick is a joke, there no world class 4-cylinder engines, and no diesel engines. Maybe the Volt will be a hit?
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happyfun86 3:22PM (7/14/2009)
No world-class 4-cylinder engines? Apparently someone hasn't heard of the LNF...
elprogramer 3:47PM (7/14/2009)
Anyone who suggests that General Motors' corporate culture will change or even can change, has never worked for General Motors.
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carguy 3:56PM (7/14/2009)
John - I disagree. Whatever GM corporate values were, whatever their products and operational strategy was - it failed. Now is not the time for GM, after taking billions of dollars to keep the company alive, and continue to stick their head in the sand and ignore what has been decades of bad management borne by a bad corporate culture. Now is not the time to recycle the architects of failure like Bob Lutz and Rick Wagoner but to turn to fresh talent. If the taxpayer will ever see any of their billions again then GM better start making what the customer wants - and that is something that hasn't been part of GMs culture for more than 30 years.
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Tool 3:57PM (7/14/2009)
A 'Culture Change" in of itself isn't going to make any difference. But I think the point of this article is that people need clear ambitious goals and then the freedom to get it done and done right.
GM needs to get its mojo back. It's pretty hard to do that with the same old entrenched management beliefs and behavior. For the most part the management of the New GM is the same as the Old GM (AKA 'Motors Liquidation Company').
The New GM needs fresh blood as well as some real bloodletting to fire the turds that are still in command. Some of the firings should be symbolic and the others should cut deep enough to tell the existing management, some of whom are smart folks, that the old ways of doing things will not work.
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JZeke 4:42PM (7/14/2009)
"They just get matrixed into an "architecture" that will probably be badged for several different brands. How can you build any loyalty around that?"
Two companies spring to mind: Lotus, and Aston Martin. Lotus invented a form of architecture which itself is brand worthy. The VVA has proven so good for Lotus that the Evora has hit the ground running to rave reviews, and Aston Martin (with help from Lotus) has created an incredible family of products around it.
Engineers get excited when their work produces real, tangible results. They aren't slave to brands, and no one needs to bring back the draconian rule of Harley Earl to design studios.
No, "architecture" can be the lifeblood of a company, the product of innovation, dedication and zeal to give the engineers a rallying point. Designers prefer to work with solid foundations to build their expressive canvases. They are getting a lot of well-deserved press for their latest designs. Where are the engineering accolades? If GM has a failing in architecture, its because the engineering culture isn't rewarding innovation, progress or cutting edge thinking.
I feel that Ed Welburn is doing a good job at letting his designers be creative, but engineering at GM has yet to step up with some out-of-the-park hits. However, if the Volt arrives and the market takes to it, you're going to see a lot more excitement around architecture, powertrains as well as design.
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Gardiner Westbound 4:43PM (7/14/2009)
Mulally is the Ford culture change agent. GM's Henderson couldn't change his socks and underwear without calling a 100-person conference.
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Tony 4:45PM (7/14/2009)
Wow sunshine flying out somebody's butt! The culture of our country as a whole has changed and is now driven by greed - not making good products.
"Back when GM was great, each of its car divisions were run like separate car companies."
They COULD afford it back then because the bonus/performance ratio was reasonable! Now even failing companies - ones living on Chinese loan money - still dole out millions in bonuses.
Don't get me wrong - talented people deserve to be paid well - but greed is now the focus instead of designing and selling great products.
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xtasi 5:30PM (7/14/2009)
GM can make great cars... Malibu, CTS, Corvette. However, they are inconsistent. For every great car they have 3 or 4 craptacular ones. They are improving the cars, I'm glad for the bail out. It will allow them to see it through. Cars are in a 4 or 5 year cycle? Within the next 5 years we'll see how good or bad GM can be.
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