The 'mechanics' of leadership
The following responses come from six of the fellows that make up the Coro Pittsburgh 2011 class.
GM has a well-documented history of executive hubris. The company's management, operating for years on the notion that "what's good for GM is good for America," set the tone for a top-down corporate culture that traditionally had little interest in listening to the concerns of customers and dealers.
But a glance at GM's overseas competition reminds us that there's more than one way to skin an automotive cat. Toyota's management structure, summed up by the principle genchi genbutsu--literally, "go and see"--fosters a corporate culture that values collaboration and an open ear. A new ad campaign, for example, encourages consumers to brainstorm innovative ways of using existing Toyota technologies, and a new partnership with California startup Tesla Motors will soon bring electric Rav4 cars to showrooms. When asked to comment on the Tesla-Toyota partnership, John Hanson, Toyota's national manager of environmental, safety and quality communications, said: "[Tesla has] a way of doing business that we feel we can learn from."
Would GM's former leadership have admitted that they could learn from their competition previously? Perhaps the company's traditionally top-down corporate culture was the reason they never felt the need to "go and see." - Trevor Croxson
Out with the maps and in with the GPS of executive leadership
Something in the milk can't be clean if one is to fully trust in GM's recent Initial Public Offering proposition. Historically speaking, the automaker giant ignored speed limits and foolishly remained buckled into its own slow-moving car wreck. Both a novice and a hedge fund expert would agree that questioning the steering of GM's board of directors and executive leadership is the best way to gauge the transparency and quell the skepticism generated by its recent revival. In post WWII America, Alfred Sloan, CEO and chairman of GM's board, unknowingly helped create a corporate culture that would become its own killer. Sloan's roles as both chairman and CEO should initially have served as a hazard sign on a slippery road void of checks and balances.
Stagnancy prevailed at the time in GM's history when labor unions were given a backseat to the company's leadership, which ignored the gem of advanced electrical car technology, as highlighted by Trevor, in favor of gas-guzzling SUVs. In the '70s and '80s, former GM CEOs Thomas Murphy and Roger Smith dealt with issues by retreating from market threats, and CEOs like Richard Wagoner would later inherit the mess. In an effort to cover this mess, GM rotated through several CEOs, halting innovation in the process. This crafty red herring conveniently distracts the public; and until the public realizes that hubris is what actually drives both GM's market and its CEOs, GM will surely slink back into the garage of failure. -Catherine Carle
Credit where credit Is due (Or not)
As intriguing as today's GM might be, examples out of GM's past show that individual leaders ultimately bear the responsibility for crucial decision-making. In the past 30 years, two different CEOs of GM serve as examples: Roger Smith and Jack Smith (no relation). After identifying a history of production problems, Roger Smith decided in 1984 to restructure GM--critics claim that this decision has negatively affected the company to this day. In contrast, in 1992 Jack Smith put his effort into growing the company's international presence, allowing GM to enter the Chinese market. That market is now a major selling point for investors and has had a significant impact on the company's successful turnaround.
Ultimately, the two individuals' starkly different backgrounds and visions for the company contributed greatly to their divergent results. While some may argue that economic and political climates create change, GM's history shows that individual leaders truly choose whether or not to make these "hard but obvious" decisions and thus ultimately bear responsibility for the successes and failures of their organizations. -Tim Shaw
Labor unions notoriously stifle profit margins. Just look at what happened to the steel industry here in Pittsburgh, where the United Steelworkers essentially killed their own jobs. Pittsburgh simply never got the bailout that Detroit enjoys today.
What has changed in two years? Well, GM and the United Auto Workers' current leadership restructured labor relations in a way that protects the pursuit of profits. Under the new agreement, 17.5 percent of GM's stock funds the UAW's retirement health-care plan. The union would therefore be unwise to pursue higher wages at the expense of share prices.
Hourly wages, however, are not the only challenge here; executives also believe they deserve better pay. Remember when Rick Wagoner flew by private jet to DC to ask for a bailout? GM's executives ignored the seemingly obvious cost-cutting measure of reducing executive pay--something Toyota enacted without government instruction. A sense of "just" compensation--legitimate or not--prevents both union leaders and executives from making the obvious decision to cut costs. -Charles Gamper
GM--an American staple--filing for bankruptcy speaks volumes about an underlying cultural phenomenon amongst American leaders: the tendency to react to problems rather than proactively preventing them.
Integrity has never been one of GM's strong points. In 1977, they were caught swapping engines, which lead to sales representatives providing inaccurate information to consumers. In 1985, management released the Oldsmobile 98 with a faulty fuel injector. In 1988, pre-testing of the Pontiac Fiero revealed engineering flaws, which caused it to catch fire. And in 2010, GM willingly ignored its problems, which forced it into bankruptcy.
GM is only one example of the tendency to miss preventable opportunities. Consider Hurricane Katrina and the government's vast neglect of New Orleans' levees. Destruction of the Gulf illustrates the severity of blatantly ignoring preventable situations. Unfortunately, reviving the Gulf has taken five years and counting.
GM executives, government officials, and other leaders often respond too slowly to address preventable issues. It is easier to move forward when there is only one option, but when there are multiple ways to prevent a disaster, solutions don't seem so obvious. Not being proactive can and will lead to the demise of the hard-working American way of life. - Anthony Emeka Harbour
The political wheel is still in spin
A common assumption is that the private sector champions innovation and that government lags behind.
Oh, the times they are a-changin'. The government's takeover of GM revealed that the implementation of hard decisions often depends on a political environment conducive to those ideas. Two characteristics of the political system at the time reflect this. First, the coordination between a Democrat-led Congress and a Democratic president allowed for the passage of contested bailout stipulations, such as the gas mileage average of 35mpg across all of GM's automobiles and the mandated increases in research of alternative energy vehicles. Second, the alignment of President Obama's green-minded agenda and the need to correct previously shortsighted leadership in the auto industry allowed for smooth implementation of hotly contested policies.
Presently, the staggering redistribution of power within Congress poses a challenge to any extension of these initiatives. A critically needed energy-climate bill, intended to wean the country off of its dependence on foreign oil, increase efficiency standards and further green initiatives is the vehicle that is capable of propelling the country toward an environmentally sustainable future. Without the right political environment, however, the idea remains shelved. As we stare at a future of exhausting oil resources and a rapidly increasing population, an initiative of this scale requires political unity stretching beyond partisanship and rigid political ideologies. If we are to make "hard but necessary" decisions for the future, the political system must act as a catalyst, instead of deterrent, to these brave changes.
Oh the times, are they a-changin'? -Tosin Agbabiaka
November 16, 2010; 12:34 AM ET
Category: Accomplishing Goals , CEOs , Corporate leadership , Crisis leadership , Failures , Government leadership , Leadership weaknesses , Making mistakes , Managing Crises , Organizational Culture Save & Share:
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