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Marty Linsky
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Marty Linsky

Co-founder of the leadership-focused consulting firm, Cambridge Leadership Associates, Marty Linsky teaches at the Harvard Kennedy School, co-authors the advice column, Leadership House Call and blogs at Linsky on Leadership .

A Mere Wake-Up Call

When the problems are deep and cultural, as they are in the auto industry, firing the CEO is often less a sign of change than a classic tactic of work avoidance, a technical fix for an adaptive challenge. But Rick Wagoner may be the exception that proves the rule.

In a world requiring Reset and Adaptation, he was hard-wired for Hunkering Down and Restoration.

I assume he is a nice man, and tired his best. But after all, he was a product of GM, the only place he ever worked, and the system had produced him at the top. He could not even see what needed to be done, never mind act on it. To do so would have been a rejection of the values and practices that elevated him.

Almost to the end, he did what pre-financial meltdown CEOs are inured to doing: protect his troops from external threats rather than expose them to the threats and enlist their help in meeting them; let his optimism turn into naïveté because he could not face harsh realities; and keep doing all the things that had made the organization successful rather than accept losses, take risks, run experiments, and make hard choices between what is expendable and what is essential as the world changed around him.

Wagoner's exit is not the real news here. It is sadly revealing of the depth of the change that is required that the GM Board did not make themselves. It is too bad the President did not find a way to fire the Board as well. There is little or no evidence that GM is prepared for the new reality.

By Marty Linsky

 |  March 30, 2009; 1:49 PM ET
Category:  Economic crisis Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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Comments

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Dead-Eye.

I agree with most of what you say. The Obama had no right to fire Rick Wagoner. The government is way out of line on this.

Obama needs more Republicans. I cannot wait for the mid-term elections. The economy will not be in good shape in 2010. The blame will fall to the Democrats.

Posted by: Maryann261 | March 31, 2009 3:20 AM
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All of you corporate mental giants should be concerned that the Government has overexercised its influence in ousting the CEO. This is a GM BOARD issue, not a government issue. The Board has not done its due diligence regarding the issue. Had the Board acted responsibly, perhaps a restructure would be underway without the government dole.

Message hear to corporate boards is pretty clear. Sometimes a business failure need not be a bad thing.

Every CEO in America ought to be concerned about government intrusion regardless of whether there is a bailout attached .... because that is just the tip of the iceberg. Under what other conditions will corporate America find itself when the Administration is dissatisfied with corporate performance.

And, what is the plan to extricate government from the free market process? when?, and how?

Posted by: Dead-eye | March 30, 2009 4:36 PM
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This is not a Bush or Obama issue, this is the result of having the wrong person, in the wrong position, at the wrong time.

Since Wagnor was "leading" GM, the stock has fallen from $70 to $4 and they have lost 10% market share. The organization is bloated because of their unwillingness to cut ties with unprofitable product lines and, all the while, he remained naive about the company's future prospects. The board repeatedly shirked on their responsibility to the shareholders, continuing to give Wagnor a vote of confidence. The entire board should be replaced and an investigation should be initiated to understand why they continued to support a CEO that should have been fired long ago.

Wagnor's lack of leadership in the direst of times is appalling. The fact that his viability plan's foundation was reliant upon the economy improving, and Americans buying cars as they had at the peak of the market, shows his blindness to reality. Furthermore, it demonstrates the fact that he needs to be replaced before he does anymore damage to a company that hundreds of thousands of people rely on for employment.

Posted by: BT23 | March 30, 2009 4:26 PM
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I have no problem with what the adminsitration did. As far as I'm concerned, the only way to fix things is to bring in new blood. The same should happen to all the other executives who allowed this mess to happen.

Don't be concerned about Bush and his cohorts. History will not be kind to them. For as long as they breath, they will have to read about and listen to how they fouled things up.

Posted by: pjente | March 30, 2009 3:25 PM
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The paradox is that Wagoner may not even have been the ultimate target, kinda like those ganster movies where the leader shoots one of his own men (who screwed up) to show what a bad a## he is to his opponents. The message to everyone else is clear.

And that everyone else is the unions and bondholders. Now let's see your best offer when you can't point at management b/c he's lying on the floor. So, it may not have mattered whether Wagoner is or isn't the best person for the job, Indeed, the irony is when the unions and bondholders are arguing indirectly through Wagoner they stand a chance, now they are in the direct line of fire.

The real problem is, of course, is GM has been bankrupt since last fall and the presidency (Bush and Obama) has finally gotten around to acknowledging it. We should have just declared bankruptcy and been down with it instead expensively waiting until now, for that's what this is.

Posted by: jhtlag1 | March 30, 2009 3:18 PM
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An interesting view. But what was the man to do? Are there things he could have done, should have done, but did not?
It seems there are fewer cars needed and there surely are more places to buy them from.
Truth is we just came out of 8 years of Bush and the whole country has acted and thought like Bush and been rewarded for that.

Posted by: gberke | March 30, 2009 2:30 PM
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