Car Guys vs. Bean Counters - Bob Lutz [88]
“I want to spend $2 billion between now and the end of the year.” Fritz and I gasped in astonishment: it was not in the profit budget! “Wal,” he drawled, “the government just gave you fifty billion dollars. What the heck do you plan to spend it on? We’ve got to let the country know about our great new products!” And so, with this stroke of simple genius that often marked Ed Whitacre, we broke the vicious cycle of “lower sales equal less money for marketing, which in turn drives lower awareness and lower sales.”
Soon, profitability and cash flow exceeded the commitments made to the Feds in the benchmark fourth and final “Viability Plan” submitted to the Treasury and the task force. One would have expected approval and support from the board in the face of such demonstrated, unexpected progress but, in fact, the opposite took place. In every board meeting, the slings and arrows flew, with ever more unfounded criticisms, “suggestions,” and downright accusations of incompetence. It was clear that the board did not share my enthusiasm for Henderson’s leadership. But Fritz, shaken but undaunted, focused on his responsibility and professed optimism that, as results became public and the new board became more familiar with the complexities of our business, approval and support would surely follow. This was to prove a naïve assumption, and on December 1, 2009, the board requested Henderson’s resignation.
To the Treasury, the task force, and the board, it was simply unacceptable that a GM “lifer,” however successful in his track record and current assignment, should play a key role in the rebirth of the company. At least one board member basically said it: “This team is lousy. If it were any good, you wouldn’t have gone Chapter 11!” The expectation was that we were all subpar, and only a clean sweep of all the upper echelons would produce the much-needed change from an underperforming culture into a high-performance one.
In truth, I can conjure up a modicum of sympathy for that view: charged with “changing the culture” as his highest priority, Henderson, to my dismay, went about it the old GM way. The “problem” was discussed, democratically, teams for “culture change” were appointed, and consultants were hired. At several instances, I pointed out that this was emphatically not the way to “change the culture.” I was, as always in situations of this type, an advocate of a much simpler, stronger, and more forceful management style. “Lead, follow, or get out of the way” (while maintaining an accessible, sometimes humorous, often self-deprecating posture) has always worked for me, and in my estimation, was exactly what was needed. But coming up with that solution, effective though it may be, is simply not what “culture change” teams and consultants do. I now believe that the traditional GM approach to changing the culture—well-intentioned, slow, and democratic—may well have been the one legitimate source of impatience (even exasperation) on the board’s part.
Not surprisingly, Ed Whitacre replaced Henderson as CEO and quickly adopted the management style I felt had so long been missing: somewhat authoritarian, but delegating to the proven performers. Results or else. Everybody made to understand the mission and do their job. Cut out the silly “metrics” and meetings dealing with nonessential nice-to-have fluff. In one of his first meetings, Whitacre cancelled the “culture change” initiative, fired the consultants, and declared the culture fixed. And it was! The media correctly summarized Henderson’s departure with the words “he never had a chance.” But he was a good leader and did the right things overall. Maybe, by inclination and training, he just didn’t want to adopt a stronger leadership style.
Let’s back up. On June 1, 2009, GM officially declared Chapter 11.