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Joanne B. Ciulla

Joanne B. Ciulla

Joanne Ciulla is Professor and Coston Family Chair in Leadership and Ethics at the Jepson School of Leadership Studies, University of Richmond, the only undergraduate degree-granting school of leadership studies in the world.

Designing a New GM Leader

The simple answer to this hypothetical question is: No, it is not the best way to signal change. Removing a leader regardless of talent, culpability, or the disruption it might cause an organization may signal change, but does not do so in the right way.

The need for change that benefits the company and the country does not obviate one's moral obligation to be fair. Using a leader who is blameless as a scapegoat is a cheap shot that appeals to people's lesser selves. Leaders willing to throw their ethics to the wind to make a point or to appease constituents, usually pay for it sometime down the road. It would be very disappointing if President Obama ousted Rick Wagoner simply for symbolic reasons or to appease politicians or the angry public. I doubt that was the case.

There are really two related questions about firing Wagoner. The first is, "Given his past performance as CEO, does Rick Wagoner deserve to continue as CEO?" This is an ethical question about just rewards and punishments.

The second question is, "Does Wagoner have what it takes to reinvent GM?" This is a question about Wagoner's recent performance and potential to be effective. Politicians and the angry public may want to be judge and jury on Wagoner - symbolic gestures that personify righteous indignation and retribution feel so good - but the president and his advisors need to keep their eye on the task at hand. One hopes that the primary reason President Obama, pushed Wagoner aside because of his current performance and appeasing the mob was nothing more than an added benefit.

Over the years, numerous books and case studies chronicled GM's trials and tribulations. GM categorizes its leaders as finance guys and car guys (engineers). For example, Wagoner was a finance guy (Harvard MBA), Jack Smith was a finance guy, Robert Stempel was a car guy (he once headed the team that invented the catalytic converter), and the now somewhat infamous Roger Smith was a finance guy. Like Wagoner, the new CEO, Fritz Henderson is finance guy with a Harvard MBA.

Maybe GM needs another leader category, such as a cheerleader/salesman like Lee Iacocca to restore confidence in the company. Yet, in most of the studies of GM, the dominant underlying problem is GM's balkanized and intractable bureaucracy. Perhaps it could use an organization guy, or even better, an organizational gal. It's unlikely that GM will find a leader who has engineering, finance, marketing, and organizational expertise (although in theory, a Harvard MBA would have studied three out of four). We will have to wait and see what Henderson can bring to the table.

The importance of General Motors goes beyond its size and symbolism. I recently went back and reread Michael Shnayerson's book The Car that Could (Random House, 1996). Shnayerson offers a detailed first hand account of how, in the 1990s, GM developed an electric vehicle called the EV1. It's an amazing tale of visionary leadership, engineering talent, set against the backdrop of GM's internal politics and occasional organizational insanity. Based on its history, GM seems capable of making the cars of the future and that is why we should at least try not to let it disappear.

In his press conference last week, President Obama said fixing the economy was like turning an ocean liner: It doesn't happen immediately. GM is more like a one of those big old winged Cadillacs that, unlike an ocean liner, can turn pretty fast, but it depends on who is driving.

By Joanne B. Ciulla

 |  April 1, 2009; 9:32 AM ET
Category:  Economic crisis Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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