Today, a respected former auto colleague, Mike Jackson, wrote an article that was published in the Automotive News. I have attached it here because I could not have described Old Detroit better. Mike’s situation mimics my own at Chrysler. Granted, when I was at Chrysler I did not have the same level of leadership as Mike did at GM but I can tell you that when I arrived and Dieter Zetsche, Wolfgang Bernhardt, Jim Schroer, Jeff Bell, Ann Fandozzi and myself were asked to be part of the “change” movement, we felt very much the same way that Mike did when he arrived at GM. We had some great successes and even made money. Then, management shifts occurred and things went south in a hurry. Additionally, no one made the hard decisions necessary, at Chrysler or the other two Detroit OEMs to change the labor agreements, reduce capacity/shut down plants, reduce the dealer body so that they could be more competitive with Toyota and Honda instead of each other, and make vehicles that people really WANTED!
Mike’s recipe for success is spot on but I would add that the consumer needs to have even more of a voice than he suggests. I would say that with the socially connected world today there is no reason not to get feedback, real time from real consumers on everything from features, to incentives. The time has come for a “different kind of car company” and that means run by different people who understand that the OEM’s are NOT manufacturing companies, they are CONSUMER COMPANIES.
ARTICLE FROM AUTOMOTIVE NEWS:
June 8, 2009 – 12:01 am ET
If a new and vibrant General Motors is to emerge from the ashes of mismanagement and neglect, it must change its culture radically. The company intends to focus on developing vehicles that consumers want, but the new GM also must have a leaner, fresher, more focused way to market those vehicles.
Much has been written about what caused the demise of GM. Most accounts fail to acknowledge that the cancer that drove the company into bankruptcy lies within the culture created by the GM lifers in the U.S. sales and marketing organization. It is a culture so bureaucratic it stifles all passion and creativity.
At GM, there is a bias against outsiders, especially those without automotive experience. But to do what is needed, GM again must look outside the organization.
Ten years ago, I was brought into GM as part of a major reorganization led by Rick Wagoner and Ron Zarrella. Wagoner was a great leader with global experience committed to lead a new GM. Zarrella was a visionary marketer committed to making GM brands relevant to American consumers.
It was a strong team. Also recruited from outside were such executives as Paul Ballew, Roger Adams, CJ Fraleigh and Debra Kelly-Ennis. We were charged with revitalizing U.S. sales and marketing efforts.
At first things went well. We earned the respect of those in the organization who embraced the vision and yearned to create a different culture. Veteran leaders such as Bill Lovejoy, Kurt Ritter and Lynn Myers provided support, guidance and experience. Under Lovejoy’s leadership, there was passion and enthusiasm, and we seemed to be gaining momentum.
We were close to changing the culture and achieving outstanding business results. But when Lovejoy retired at the end of 2002, the GM lifers once again assumed control.
Immediately there was talk of returning to the good old days of a command-and-control culture in which a chosen few made every decision. Their tactics were simple: focus on getting dealers to take inventory and launch an incentive program every month. Programs such as Employee Pricing for All and Standards for Excellence infuriated the dealers and alienated consumers.
Eventually, many of us who were supposed to be agents of change got frustrated and left GM and the auto business.
Change the culture
That must not happen again. With the right changes in the organization and the culture, GM’s storied brands and great people can rise from the ash heap. Here are some things that ought to be done:
— Streamline the organization structure. Get rid of the cancerous GM lifers. The new GM must be nimble and evoke emotion and passion. Have the leaders of the divisional brand teams report directly to the office of the CEO, rather than through four layers as they have done.
— Hold sales and marketing leaders accountable for revenue and profit performance.
— Change the image of the company. For too long the image of GM — and the Detroit 3’s leaders — has been one of old white guys. Diversify marketing leadership teams to reflect the organization and the face of America in 2009.
— Target young, well educated, multicultural consumers who live in the smile states and don’t consider domestic brands. Build emotion into the marketing communications.
— Challenge American consumers by being inclusive and give them the cars and trucks that they want.
— Treat dealers, ad agencies, media companies and suppliers as partners, not vendors. The days of big, bad GM and the old our-way-or-the-highway attitude are over. The new GM must value and leverage its partners or replace them with partners who embody the new culture.
This is not as complicated as it might seem to those who worked at the old GM. President Barack Obama has provided a lifeline from the American taxpayer. The automotive task force is addressing the difficult and painful structural issues. The UAW and the dealers have made major concessions. American consumers have been patient and supportive. Now GM’s senior leaders must seize this opportunity to overhaul the culture once and for all.
With fresh leadership, a new GM will emerge and prosper.