Magazine article Workforce Management

GM's Latest Model

Magazine article Workforce Management

GM's Latest Model

Article excerpt

BY THE TIME Fritz Henderson was named CEO of General Motors on March 30, he was already looking be- yond the company's restructuring. A finance guy with a knack for numbers, Henderson was talking intangibles - the kinds of things that are hard to articulate, harder yet to teach, but, in a successful company, as easy to spot as profit and loss. He was thinking about a company's culture.

Shortly after he replaced Rick Wagoner as CEO1 he turned to then-head of HR Katy Barclay.

"Well, he came to my boss, Katy Barclay, and said, 'You know, I want to start having a dialogue about culture,' " says Chris Oster, director of global change management and organizational development. " ? think I know what want the cultural priorities to be. I think I know what the organizational design needs to be, but I don't want to do that alone.' "

The company entered Chapter 1 1 bankruptcy protection in June and emerged five weeks later, a couple months short of its 101st birthday. With the intervention of the U.S. government, the automaker has slashed headcount, eliminated vehicle brands, shuttered dealerships and reduced its debt and benefit obligations.

GM is running much leaner. It now operates with 1 0 1 ,000 employees in North America, of whom 27,000 are salaried workers. In 1998, GM employed 226,000 workers in North America.

Equally important, bankruptcy inspired radical change in the operations of the new GM. Out of about 1 5 bullet points scribbled on a piece of scrap paper, Henderson distilled his vision of die new GM's culture to four precepts: risk-taking, accountability, speed and, at the heart of it all, customer and product focus.

Henderson immediately employed at least one of those values - speed. By the end of July, the top of the organization had been restructured and HR's role in organizational change was defined: It would support culture change, but not drive it. Company leaders developed a process to put Henderson's precepts into practice, including a new performance management system, an education series to explain the new culture, a communications drive to articulate the values, and a project called Building the Movement.

Building the Movement would infuse GM with its new culture without making it a top-down process. At this point, the new cultural initiatives have been limited to the salaried workforce.

Whether the company can put these new principles into widespread practice - and even whether these new values will lead GM back to profitability - are questions yet to be answered. The future of the company, and the $55 billion of taxpayer money that it has received, hangs in the balance.


While GM is fixated on the company's future, any student of automotive history can tell you the company has tried before - with mixed success - to reinvent itself. The company's past is littered with the buzzwords of culture change: GoFast, a program to reduce bureaucratic waste; Synchronous, a top-down process engi- neering program; and GMS, the compa- ny's version of the lean production system that has made Toyota and other Japanese manufacturers ascendant. Current and former employees say that in all those cases, GM struggled to impose cultural change across the highly bureaucratic company in which brands, departments and regions operated like self-governing and competing states within a federation.

"I'm not sure that we didn't have too much of segmentation," Oster says. "That sometimes when we would have a corporate or enterprise-wide initiative, you know, you had to sell it to each space, get them on board. It's very challenging. And people would say, "You know we already got something going on here.' "

The difference this time, GM executives say, is the bankruptcy and the simultaneous culling of leadership, an experience that has been both traumatic and salutary.

"GM is an organization that if you went to a psychiatrist he would have prescribed electroshock treatments," says Gerald Meyers, a former CEO of American Motors Corp. …

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