Time for GM to overhaul its culture

October 1, 2009 http://detnews.com/article/20091001/OPINION03/910010369

Time for GM to overhaul its culture

DANIEL HOWES

Starting today, General Motors Co. officially begins the big push to change its slow, risk-averse, bureaucratic culture.

Sounds silly, I know, this idea that an exemplar of corporate sclerosis could peg a vital piece of its post-bankruptcy transformation to a date on the calendar. But it is, which is why it’s impossible to understate how important the effort will be to determining whether GM’s second chance will culminate in success or collapse in failure.

Next to changing the conversation about GM’s cars and trucks among consumers — that is, getting more bottoms in seats — nothing is more crucial to the future of GM than burying its cautious, dysfunctional culture and replacing it with one that is quick, decisive, accountable and focused on customers.

That’s not what Jon Katzenbach, a senior partner of Booz & Co. Inc., discovered when he arrived at GM just weeks before the June 1 bankruptcy filing to help devise strategies to change its ossified culture. Doing so is a top priority of GM’s directors, its new owner, the federal government, and CEO Fritz Henderson.

"I found (GM) quite encumbered by a bureaucracy that was concerned with getting things right," Katzenbach said in an interview. "It obscured what customers were experiencing with the cars."

No kidding. Enter GM’s "Performance Management System," debuting today to GM employees worldwide. Instead of evaluating talent on 20 or more metrics, many of which revolved around the boss, the simplified system emphasizes leadership and the things an individual can do to move the business forward.

Already, GM has culled its best leaders from around the world — China, India, Korea, Europe and the States — and highlighted how they lead and get results. The goal: assemble an expanding corps of peers influencing peers, not just reacting to (or ignoring) directives.

"The culture is collectively made up of every single employee of General Motors, and we all have to change," said Mary Barra, vice president of global human resources. "What do you need to change? We want to drive decision-making to the lower levels, to the people who have the most data."

GM pushes bias for action

Which would be a big change. Despite improvement, GM moved slowly, overanalyzed and underexecuted, costing time and resources. Decisions were rehashed instead of made final, driving more work and review back into the system.

Accountability was diluted, leaving a string of executives festering in jobs long after they had failed to achieve results. Process prevailed over product. Caution trumped speed. Both trumped risk-taking.

Short of mass firings, can a company with a lifer as CEO, a leadership team of GM veterans and a winnowed, skeptical workforce actually change how it runs — much less one with GM’s DNA? Yes, Katzenbach said, if calls for change and a leaner operating structure are mated with empowerment of "good behaviors" deeper inside.

And two other things: First, the organization must know it needs to change. GM’s searing bankruptcy should help. Second, successful corporate change comes faster when people behaving the right way — leading teams, delivering results, moving quickly — are freed to do what they do well.

All of which is easier said than done, particularly for a company that’s struggled for years to do so. Until GM spiraled into Chapter 11, its decision making was afflicted with its own corporate constipation.

Nowhere was that more evident than in Automotive Strategy Board meetings, weekly confabs that typically a) lasted all day and b) required scores of pre-meetings, PowerPoints, precise procedures and planning. They went like this:

Clear security. Wait for your time to be ushered in. Present to 18 or so executives — plus just as many staffers — peering over open laptops or glancing away from BlackBerrys. Receive obligatory thanks, exit and repeat.

They’d talk structural cost, dealership renewal, IT strategy, labor, purchasing and diversity. They’d hew to a formal voting process and a question-and-answer period that could span several weeks while answers were found. Seldom, I’m told, would they discuss the cars and trucks GM needed to sell.

I asked Henderson whether my description of ASB meetings, gathered from participants, is accurate. Yes, he said, describing the "executive committee" composed of him and eight top execs with global responsibility for finance, marketing, strategy, manufacturing and more.

Now a staffer runs slides on a single laptop. No security. There is an effort to meet at the heart of the car business, at the Tech Center in Warren or the proving grounds in Milford. Open disagreements mix with informal banter. Most of all, decisions — like the one-day call to kill the Buick Anthem crossover hybrid after it bombed in clinics.

Results drive change

"We say yes, we say no, and we go," Henderson told me. "It’s a lot different." The old strategy boards, also used in each region, "suppressed dialogue and debate. When it came to decisions, you should read the material, come to the meetings and go."

Added an executive who has worked with both groups: "It wasn’t that it was just a quarter of the people and all the pomp and circumstance was gone. There was such a level of authenticity and candor in the room."

It’s about time. Effective today, the departure of another 2,900 salaried employees leaves GM smaller, with fewer layers and a more nimble work force. In theory, there should be fewer obstacles to change, fewer folks to cling to the old GM that failed.

"I haven’t seen a lot of difference in the culture," one North American executive told me. "What I have seen is we’re having a lot of meetings about the culture, which is Old GM. It doesn’t feel any different — yet."

It won’t, either, until results change and people on the inside see the progress, see the brass walking the talk, and then resolve to be part of the solution themselves. In sales. In the financials. And in the way GM makes decisions at the top, the middle and the lower levels.

"It has to start with me," Henderson said, adding that he’s interested in recruiting outsiders to key jobs. "We’re going to keep at this. You’ve got to embed it. We know we have to perform."

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