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For GM, Culture Should Be Job One

GM has been in the headlines not so much for what they make or don't make, but for how they operate. Critics cite their "insular" corporate culture as being too bureaucratic and out of touch with consumers.

In response, and in an unprecedented move, the U.S. government is demanding that GM and its Detroit peers transform their corporate cultures to become more competitive.
As Steven Rattner, the head of the president's auto task force, has said: "Addressing cultural issues is just as fundamental to our assignment as addressing the balance sheet or financing."

With veteran GM executives remaining in control, The Automotive News has called into question leadership's ability to change. Defending the company, CFO Ray Young said: "We will lean out the management structure so that it will allow us to make faster decisions."

Paring down management may make sense. But along with leaning out - more of the cost cutting that has yet to spark a turnaround at the auto giant - GM's leaders should think about leaning in - specifically leaning into the source of sustainable value in the world of 21st century business: corporate culture.

Corporate culture is the system of beliefs, norms, practices and values that guide an organization - determining how people act, make decisions and govern their affairs. It represents the way things really work, how decisions are really made, how emails and communications are really composed, how promotions are really earned and how people are really treated.

Announcing change and a new culture is easy. Making it happen is hard. Here's what GM should do.

First, GM leadership needs to reconnect with its employees and look outward to the marketplace. Paradoxically, becoming more "other-regarding" begins with a look in the mirror: Is our culture inspiring our people to embrace our mission and go above and beyond at this crucial time? Or are there scores of people waiting around for marching orders, more concerned about what their bosses want than in delighting customers and creating game-changing technologies?

The government will be looking to GM to demonstrate a real sense of ownership of, responsibility for and urgency about its business, as well as its connections to our broader society. The government wants a healthy culture where leaders and managers trust one another, take risks, stimulate innovation and ultimately propel progress - not just on their balance sheets but with safe, efficient cars people are thrilled to drive.

Second, GM has to take deliberate action to transform its culture and track its progress. To understand what that might look like, recall how business leaders embraced process engineering. When companies realized the soft and subjective aesthetic of quality was in fact hard and quantifiable, they began measuring inefficiencies at every level of production, and as a result, they excelled at quality.

The new GM should approach its culture like an engineering project. They must begin with a vision, evaluate progress, deliver on milestones and relentlessly communicate and share the values that guide their work. They need to make culture a real coworker and member of the team. They must live their culture in every strategic or tactical decisions they make. They must inspire each GM employee to see himself or herself a steward of GM's culture, and therefore, its future.

Just as the ancient philosopher Heraclites said "a man's character is his fate," I believe a company has a character, and that character - its culture - is its fate.

Today, we find ourselves in a world of far greater connectedness and transparency that places greater value in how things are done. Products and services - including the cars that people want and services that enable people to purchase them - still matter, but the behavior of the companies and individuals that make them is as important.

The whole world can see deeply into our operations and make judgments and decisions based not only on what we do but how we do it. This includes how we connect and relate to each other, to our communities and to the places in which we operate.
The companies that get their hows right, and do so consistently, will attract the best and the brightest people to the table and find its greatest source of advantage and sustainability.

The government realizes culture is everything for these automakers. And if they get culture right - they get everything right.

Editor's Note: GM is a client of GreenOrder, an environmental strategy firm that is part of LRN.

By Dov Seidman

 |  June 24, 2009; 8:42 AM ET |  Category:  organizational culture Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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