June 19, 2009

If I meant Washington as in George, then I’d be cheering. Sadly, I refer to Washington DC, the White House and Congress in particular. If we thought GM was in trouble before, just wait.

I read today of a speech given by GM CEO Fritz Henderson in which he points out that back in the 60’s, the corporate culture at GM was so good it was copied by scores of other companies. He compared that to recent times when their culture and management system has been heavily criticized and no one copies them any more. Then he said this: "I certainly think our management system has to drive the right decisions, so we’re fast, we’re accountable, we’re market-focused, and everything we do within the company has to be focused on that."

Well, does anyone really believe that’s going to happen with the US Government being the majority owner of GM? And the labor unions holding almost 18%? (they control a whopping 65% of Chrysler!).

Creation of corporate culture begins with the senior leadership team and especially the CEO or owner. It’s the job of the CEO to set the vision, look into the future and create a vision so compelling that people will follow gladly. Fritz Henderson may be the CEO of GM, but let’s not kid ourselves into thinking the vision and management system will be generated from anywhere other than the White House and Congress. We’ve already seen the President of the United States outline his vision for the US auto industry in general, from the types of cars he thinks should be made to the management structure of GM and Chrysler to specific compensation systems. And where does that leave the alleged CEO of GM, Fritz Henderson, who, by the way, received his position through White House influence?

It makes Henderson a figure-head, devoid of any real leadership influence. His primary responsibilities are taken over by the US Government and he warms the CEO seat while waiting to be told what to do.

This is exactly how not to create a high-performing culture. I’ve read that well, GM and others did a pretty lousy job on their own, this will force the unions to think and act like owners and the government will give Henderson a long leash because they really don’t want to be in car business. Right. And I’m leaving for Fantasy Island tomorrow.

Culture influences belief and behavior, and an effective culture is essential to business success. If it’s being determined by Washington then I see no cause for optimism and plenty of reasons to worry.

June 4, 2009

This is not time to be Chicken Little. The sky has fallen on certain industries and in some cases they seemed to actively pull it down themselves, like the US auto industry. GM and Chrysler need only look in the mirror to see the real reason for their downfalls. But other segments of the economy are holding their own and here again, the reason is internal. They’re doing things differently and making improvements. It only makes sense to do this.

I know of a couple of movie theater complexes that are doing pretty well through innovating and diversifying their services. Yes, they don’t have to only show movies! They can and now do other things, like renting out their spaces for group gatherings, and improve upon what they already do, like better seating and a place for kids to play (like McDonald’s has done for years). I love having reclining seats and cup holders when I go to a movie. Wouldn’t you?

When I heard Rahm Emmanuel exclaim “never waste a good crisis,” I was concerned because I don’t trust his motives. On the other hand, that’s great advice for the business community today! Is there a crisis? Yes, there is (although some of it is just perception). Don’t waste it by running for cover or becoming inert. Do what my client is doing that I wrote about in my previous post. Examine the whole business. See what can be improved and do it. Reinvent yourself in areas of your strengths and market need.

Tony Robbins once wrote that when things go wrong we should immediately ask what’s great about this situation. That seems counter-intuitive, but I can tell you from personal experience it works. Businesses today should do the same.