• Jul 14, 2009
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.

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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    • 1 Second Ago
  • 21 Comments
      • 5 Years Ago
      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.
      • 5 Years Ago
      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.
      • 5 Years Ago
      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.
        • 5 Years Ago
        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.

      • 5 Years Ago
      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?
      • 5 Years Ago
      Um, this appears to be an article arguing in favor of cultural change...
      • 5 Years Ago
      Mulally is the Ford culture change agent. GM's Henderson couldn't change his socks and underwear without calling a 100-person conference.
      • 5 Years Ago
      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.
      • 5 Years Ago
      "Then start to measure them the way you want them to perform."
      You mean like - measure their ability to turn a profit?
      • 5 Years Ago
      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.
      • 5 Years Ago
      "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.
        • 5 Years Ago
        "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.
        • 5 Years Ago
        The question is this: Which came first, the chicken or the egg? ;-)
        • 5 Years Ago
        "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.
        • 5 Years Ago
        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.
      • 5 Years Ago
      I do hope for the best for GM, but this sort of defense of the status quo is delusional.

      Doesn't the statement,

      "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?"

      tell you they still don't have a clue as to how to structure the company? Sure, the potential is there, but what are the odds of management making enough of them if they haven't got the fundamentals down?

      I started out as an aid to the Plant Manager at Hamtramck/Fleetwood-Clark in the '80s and left GM after 2 years. As a fly on the wall it was very revealing of how management (didn't) work. The same was being said then as now, "The E/K/V platforms will transform and modernize GM."

      It was obvious then to a 22 year old that the problem was a lack of management talent and a completely inbred culture. Without attracting talent, they will not succeed. My thoughts were, "I'm going to hitch my future to these clowns? And, live in Detroit? Are you kidding?"

      Strategically, the US car manufacturers need their headquarters where management, engineering and marketing talent lives (and wants to live).

      Detroit needs to move to San Jose.
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