It may have been true that even a decade ago, a successful leader could have been a technocrat, well versed in one facet of the business, who could depend on external reports and data inputs to fill in the gaps and make up for the fact that he or she was functionally myopic.
Such a mindset won’t work today.
For example, no CEO wants to suffer the fate of GM chairman and CEO Rick Wagoner, who on March 29, 2009 was forced to resign after GM, which was once the world’s undisputed colossus of manufacturing, announced it was filing for bankruptcy protection.
Under Wagoner’s nine-year tenure as CEO, GM lost billions in revenue, added billions in debt, and sacrificed sizeable market share. Wagoner—who by all accounts is a nice guy—did his best, but it was not good enough.
According to published reports, Wagoner failed to innovate. He never pushed back against the culture of the status quo that had been baked into the company. He failed to create access, take action, and display authenticity. Crisis demands urgent change, but Wagoner and other GM leaders acted as if “business as usual” was the way to go. Responding to crisis demands putting the right people in place to make good decisions quickly and responsibly well before major crises strike.
But perhaps most of all, Wagoner appeared to lack a broad, holistic perspective. He was a career finance executive who first joined GM as an analyst in the treasurer’s office, and then became treasurer of GM’s Brazil subsidiary and later served as managing director. In 1992, he was named GM’s chief financial officer. Two years later he became executive vice president of North American Operations.
He was not a “car guy.” Innovation didn’t interest him. Insiders say he was insulated and oblivious to both internal and external challenges. He reportedly packed his board of directors with chummy allies who wouldn’t question him, including several CEOs who had been fired from other companies, and ceremonial, nonbusiness figures. When legitimate criticisms arose, the fat-cat board circled the wagons to protect their friend. Wagoner resisted the large-scale restructuring that GM’s dire situation demanded, and instead of making the company more efficient by doing things differently, he chose keep doing things the same way, just with fewer people.
In the opinion of many analysts, his approach was not holistic. It was piecemeal, fractured, and myopic. It was opposed to innovation.
Disrupting the Status Quo = Management Innovation
In contrast, the current president and CEO, Mary Barra, came up through the GM ranks by hopping from job to job, gaining exposure to many different divisions and viewpoints. She ran a manufacturing plant, led internal communications, led human resources, and led product development. Another executive who worked with her told ABC News, “I don’t think it’s often that you find a CEO who has run internal communications and HR.”
Despite being a GM “lifer,” Mary Barra has shown the willingness to disrupt the status quo. This is what helped her navigate a serious crisis. In February 2014, just two weeks after she assumed the top position of what was then the third-largest carmaker in the world, GM became engulfed in a massive recall due to a faulty ignition switch linked to 124 deaths. In the coming months, as the scale of the recall grew to 2.6 million cars, Barra faced both relatives of the victims and a congressional committee demanding to know why the company had put dangerous vehicles on the road. By focusing on core values and connecting to the company’s stakeholders, she brought GM through the crisis.
Barra says GM’s goal is to be “the most valued automotive company,” a concept that goes beyond sales or stock value. “It means most valued by all the stakeholders we partner with to do business, whether it’s our suppliers, dealers, employees, unions or the communities where we do business,” she told the Detroit Free Press. “It means suppliers bring their best technology to us first. Employees want to work here. Dealers focus on our brands. All of that creates the most value, which then allows us to have the right return for our shareholders.”
Two leaders, two attitudes toward innovation, two levels of engagement. On a personal level, both are very nice, well educated people. But one represented the past; the other represents the future. One was fractured, the other is holistic.
One of them was one step behind. The other is one step ahead.
I’m sure you know which side you want to be on.
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