5 Leadership Lessons: What Went Wrong at GM? – Book

In Car Guys vs. Bean Counters, legendary auto executive Bob Lutz gives an eye-opening account about what went wrong in the U.S. auto industry, with details of behind the scenes activities. He puts “numbers” in perspective. Too often they are used to overrule common sense. “Where,” Lutz asks, “is the business school that preaches, above all, acceptance of the obvious, simplicity, and that uncommon virtue, common sense?” He talks about the things that distracted GM and others from doing what had made them successful and can distract us too. 

 

Auto Industry

Lutz devotes a chapter talking about GM’s failed “culture of excellence.” A misunderstood “drive for excellence” bore some really strange fruit says Lutz. In this culture, management had to improve on every detail, no matter how trivial, “focusing their ray guns of unbridled excellence on targets of complete irrelevance.” It was “grindingly negative, detail-focused, and customer-distant.” This is an easy pit to fall into in part due to the inward-focus described in point four below. Lutz described it as typical GM hubris: “if we’re doing it, we do it all the way. We know what’s best, no matter what others are doing.”

1  It really boils down to a matter of focus, priorities, and business philosophy. Leaders who are predominantly motivated by financial reward, who bake that reward into the business plan and then manipulate all other variables to “hit that number,” will usually not hit the number, or, if they do, then only once. But the enterprise that is focused on excellence and on providing superior value will see revenue materialize and grow, and will be rewarded with good profit.

2  A senior executive who needs a quantified list of objectives to know what he or she should be working on should not be a senior executive in the first place. 

3  One curious cultural characteristic I encountered at GM was an exaggerated respect for authority, with the acceptance of everything uttered by the CEO and other senior leaders as infallible gospel. It is bred into the system. Senior people are seen as being in possession of some superior wisdom, to be revered if not downright feared. The reality is that the company’s most senior executives are just people who happen to get promoted and who daily face the insecurity of wondering if they are doing the right thing. The good leader deals with that insecurity by putting forth his or her ideas, then letting subordinates dissect and critique them.

4  There were hundreds, maybe thousands of these sacred do’s and don’ts embedded in the engineering culture … a culture that was inwardly focused in pursuit of its own goals, with the customer left out of the equation. [Is there anything that we are doggedly pursuing without regard to the actual impact it is having on our intended audience? If it only makes sense to us, it may not be making sense at all.]

5  The problem lies, as it so often does, in the deliberate intellectualizing of a very simple task: creating and selling a meaningfully superior product or service to the public. It’s not rocket science…. The business schools should be asking themselves how and why it all went wrong. They have produced generations of number-crunching, alternate-scenario-loving, spreadsheet-addicted idiot-savants. They should be ashamed.

Source : http://www.leadershipnow.com

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