- Jul 14, 2009
GM Don't Need No Culture Change - Autoline on Autoblog with John McElroy
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.
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.
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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