From CEO on down, GM is focusing on faster decisions and solutions

November 29, 2009

From CEO on down, GM is focusing on faster decisions and solutions

BY TIM HIGGINS
FREE PRESS BUSINESS WRITER

Six months after filing for bankruptcy, General Motors Co. Chief Executive Fritz Henderson’s days are fundamentally different.

He’s running an automaker that has $42.6 billion in cash instead of $90 billion in negative net worth.

Instead of spending each day worrying about restructuring details, he says he’s focusing on new vehicles and customers.

“We’ve talked about cars, customers and culture. It’s about winning in the marketplace again,” Henderson told the Free Press in an interview last week. “That’s the most important thing we can do as a leadership team.”

He says he’s focused on instilling a new corporate culture built around customers and vehicles; accountability; speed; and risk-taking.

Success is crucially important, experts say, because GM’s culture must foster innovation and quickness in order to compete. If not, the company won’t be able to adapt to the changing market and capitalize on its clean slate emerging from bankruptcy.

Henderson has a chance, experts say.

“GM’s near-death experience may just have concentrated the mind enough so that Fritz’s vision may actually come to pass,” said Marina Whitman, a former high-level GM executive who was part of former GM Chairman and Chief Executive Roger Smith’s failed attempts to change the automaker’s culture.

Despite all of his talk of speed, Henderson concedes change will take time. “You don’t flip a light switch and suddenly it changes. It doesn’t work that way,” he said.

GM focuses on solutions

At the new General Motors, the worst insult these days is calling somebody "old GM."

"Them are fighting words. It’s like your-mother-is-ugly-kind of stuff," said Christine Oster, who is overseeing GM’s attempt to revitalize its corporate culture. "I think it says that people are now able to identify the desired behaviors that are required for success in the new GM."

While that is a positive sign, Oster, who was handed her current assignment shortly after Henderson became CEO in March, acknowledged it could take several years before a full culture shift is successful.

The Obama administration’s auto task force was critical of GM’s slow-moving and hierarchical culture. In a Fortune magazine essay, former auto task force head Steven Rattner complained about stunning cultural deficiencies at GM.

In an interview with the Free Press last week, Henderson described how the bankruptcy has helped free GM to focus on the future.

"When you’re going through a restructuring, you don’t spend the kind of time that you should be spending, because you spend time on everything else," Henderson said.

He added: "Having our daily time spent around products and customers is the foundation of the culture change. It’s about having everybody involved."

Underscoring how important cultural change is to the new GM, GM’s board of directors now receives a monthly update on progress in that area, Oster said.

Pushing for change

GM executives and employees point to evidence of a changing culture: fewer meetings, quicker decision-making and greater emphasis on taking responsibility for fixing problems.

There’s also a new, more liberal dress code as well as a new employee performance evaluation system that aims to line up employee goals with developing GM’s new culture.

To help foster cultural change, GM also has hired renowned corporate culture expert Jon Katzenbach and met with leaders at Cisco Systems, Apple and other companies to study their corporate cultures.

GM has identified workers throughout the company, whom it is calling "Pride Builders," to brainstorm new ideas and encourage others to embrace change.

Through the use of an internal company blog, GM is encouraging frank discussions and even correcting issues before they become serious problems. Oster said GM reversed a change in vacation benefits that the blog proved unpopular.

Support from workers

About 60% to 70% of GM workers say the company is on the right track, according to Oster, who cited new quarterly surveys GM is doing with a sampling of its workforce.

Nicholas Svoboda, 23, a GM supply chain analyst, who has been with the company since June 2008, told the Free Press he has noticed a greater willingness to try new things.

"People are more apt to take risks," Svoboda said. "Before our work was more tactical — let’s just do the day-to-day — we didn’t look at how we can do this better. … That’s what we’re doing more of now."

Tony Suggs, plant manager at Grand Blanc Weld Tool Center, has been with GM for 29 years and said the change is real.

"They have empowered the plant to make more decisions on our own," Suggs said. "It’s very infrequent that I have to go to headquarters and … that’s different."

Others, however, are more skeptical.

"It’s not revolutionary, it’s evolutionary," said one GM worker who did not want to be named.

Some raise concerns that Henderson, a 25-year employee of GM himself, is surrounded by other longtime GM executives, which makes cultural change even more difficult.

"I don’t think it’s impossible, but I think they’re going to have to do extraordinary things," said Noel Tichy, a management professor at the University of Michigan.









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