Is GM's Culture Really Changing, Or Is It Just More Hot Air?

The BP fiasco has made many of us even more cynical about the difference between what executives and their spin doctors say about their management styles and organizational cultures versus what is actually happening.  With that caveat in mind, I was still heartened by a story in the Financial Times a couple days back about the cultural changes that CEO Ed Whitacre is apparently implementing at General Motors (note you can read it for free but have to register).  I was sent this article by Alison Beard, an editor I am working with at Harvard Business Review on article for the September issue, which presents and develops some of the ideas in Good Boss, Bad Boss about how the best bosses serve as "human shields" and take steps to protect their people from intrusions, misguided procedures, and idiots and idiocy of any stripe that undermines their performance and dignity.

I have been extremely critical of GM here as both the public record and my own more haphazard but extended experience with the company convinced me that they had -- at least before they went bankrupt -- some of the most dysfunctional and inefficient programs, group dynamics, and leadership styles I have ever seen.  I am not surprised they went bankrupt, I am only surprised that it took so long.  You can see my rant about their "No we can't" mindset where I argued that their core competence was justifying why they couldn't do the right things and Mat May's amazing story about the dysfunctional power dynamics at GM and how he confronted GM executives with them.

At least on the surface, a lot seems to be changing at GM.  The story in the Financial Times listed numerous encouraging things that new CEO Ed Whitacre is doing that strike me as reasonable antidotes to the old GM diseases.  Whether or not these are enough to change what the thousands of other people at GM for the better is another matter.  But there are encouraging signs other than the 1.2 billion dollars that GM made last quarter. A few quotes from the article are intriguing:

1. The new CEO has little appetite for the PowerPoint presentations that have long been a staple of internal GM meetings. He has delegated many decisions and honed in on aspects of the old GM’s bureaucratic way of doing things that he sees as ripe for the cull. At one meeting in April, he questioned the number of websites GM ran – nearly 3,000, two-thirds of which were internal and many of which were not updated regularly. “Why on earth do we need this many?” a colleague recalls him asking. Many have since been closed.

2. Mr Girsky has chopped the number of regular reports compiled by GM’s research group from 94 to four. He may dispense with some of these too, after deliberately not e-mailing them to the usual 150 recipients and finding that only a handful missed them. If executives give forecasts or dates of something they plan to do, Mr Whitacre makes clear they will be held accountable. “Everything is a bit more immediate,” says one executive.

3. He regularly lunches in the RenCen’s food court, clearing his tray afterwards.

Comment: GM top brass have traditionally been treated like royalty -- this is not trivial.   The best book on GM culture is very old  -- One a Clear Day You Can See General Motors -- and is about a guy who got busted a giant drug deal he got involved in to save his new company, John DoLorean --who in some ways was the Elon Musk of is era.

4. At all levels, Mr Whitacre asks managers to take more risks. When subordinates request money for a new initiative, his response is typically to ask whether the amount is within their existing budgets. If so, they are told that the decision whether to spend it is theirs. “You don’t have to wait for that monthly meeting,” says Ed Welburn, GM’s design chief, citing a recent decision to change the rear-seat design of a new Cadillac model.  (But there is also bad news here.  The article says that "He has also made it clear that the flip side of extra responsibility is accountability, with few second chances." When people are terrified of losing their jobs, they avoid risky behavior... if he is creating... or perhaps revising... a culture of fear, he needs to accept that there will be failures... see Diego's great post on this point).

5. Mr Welburn, one of the handful of executives still in the same job they held two years ago, recalls that prior to the new regime, “half of our people were spending all of their time preparing presentations, instead of designing great cars”.

This last quote -- which is very consistent with my experience at the old GM -- suggests that indeed some heads needed to roll. Perhaps Mr. Whitacre can now introduce some stability and psychological safety-- Jack Welch, for example, was known as "Neutron Jack' early in his career because he did so many layoffs and got GE out of so many businesses, but after that phase, he developed a series of programs to engage employees and to make them feel safer, while still improving performance, notably Work-out. 

So, what do you think?  Is there real hope for GM?   Is this just PR?  If you were advising Mr. Whitacre, what would you tell him?

I am rooting for him and GM, as returning this company to greatness would help so many people's lives in so many ways, especially in Midwestern United States.

Comments

[Bobbi Kahler]

I, too, would like to hope the GM can turn things around. I have a question for you, though. My brother-in-law used to be a manager at three different GM plants. He managed different lines and shifts. He eventually left due to the problems between management and the union. The workers would wear t-shirts saying "F*** Management. We don't have to listen." What do you do in this type of culture? How do you bring things together to focus on performance? Even when one of the plants was in danger of shutting down (which it eventually did), they couldn't come together. Even if things change at the top, how do you get things to change in the factory? Thanks!

[Michael Coelho]

Will the culture change it stick when Mr. Whitacre departs GM. Old habits die hard and the root cause of their cost structure still exits.

[Greg]

re: "regularly lunches in the RenCen’s food court," that IS huge. Now, if they can do away with executive Rest Rooms...