A Culture Change as a Survival Mechanism

UPDATE: In a surprise move, GM chief executive Fritz Henderson announced his resignation on Dec. 1, 2009. GM chairman Ed Whitacre will assume responsibilities until a replacement is found. After reading this blog post, one may wonder why Henderson called it quits so abruptly. Whitacre told reporters, “While momentum has been building over the past several months, all agreed that changes needed to be made.” 

I recently posted a status update to my Facebook page expressing delight with General Motors’ new dress code. The company’s VP of global human resources was quoted in the Detroit Free Press as saying the automaker’s buttoned-down dress code was loosening up to the point that, when appropriate, employees could wear jeans to work. The VP fielded several calls from long-time GM employees who found this hard to believe.

This story was especially interesting to me  because I recently worked for legacy organization where jeans were not allowed except on casual Friday’s, usually held once a quarter. I’ve also worked for major corporations where blue jeans were allowed any day of the week as long as employees were not meeting with clients.

Judging by some of the comments in the Detroit Free Press article, I’m guessing the relaxed dress code is a big deal for some GM employees and probably not a big deal for others. The bigger issue though is, what is happening to foster a change in culture that enables a 150+ year old organization to relax it’s dress code?

A Hierarchical Culture is not easy to change

You have to go back to earlier in the year when we all woke up one morning to discover the federal government had fired former GM chief executive Rick Waggoner. GM was at the brink of going out of business which would have further exacerbated our fragile economy devastated the global economy. In order to keep from going out of business, the automaker requested a huge cash infusion of taxpayer money to stay in business. The feds, after much wrangling, said yes to the request for money but with stipulations: Waggoner had to go.

Enter Fritz Henderson the new CEO. Only Henderson wasn’t exactly new. His father was a GM sales exec and Henderson himself had been with GM most of his professional career. Not too many people thought this was such a good idea afterall, GM like most legacy organizations, had a hierarchical culture that fostered anything but quick decision making, customer and employee engagement, transparency and leadership not afraid to take a risk.

Needless to say, Henderson had his work cut out for him.

Changing Culture to Survive

Let’s be honest. General Motors is in survival mode and the culture change is a big part of the survival mechanism.  The automaker has fewer brands, has reduced the number of execs in the U.S. by 35% and under the leadership of  Henderson, a once sluggish and insular corporate culture is being transformed. Back in July, Henderson told The Washington Post, “It’s a new era, and everyone associated with the company must realize this and be prepared to change, and fast.”

In order to get his executives to understand the urgency of change, Henderson emphasized that doing things the same way and expecting different results was not realistic. It reminded me of what Satchel Paige of the old Negro Baseball League used to say, “If you always do what you always did, you always get what you always got.” Not exactly grammatically correct but very profound.

A Culture that Focuses on Solutions

Experts say GM has to build a culture that fosters innovation and quickness in order to compete. As part of the transformation, Henderson has assigned eight people to an executive committee in order to speed up the decision making process. Focusing on products and customers, believe it or not, is another part of the transformation at General Motors. And just to emphasize how important culture change is to the automaker, the board of directors receives a monthly update on the company’s progress.

The bigger issue to culture change, though, is how it is received by the employees. Because if GM wants to engage customers it has to engage the employees even in the midst of a workforce reduction. Christine Oster was tapped by Henderson to oversee the revitalization of the coroproate culture. She explained to the Detroit Free Press that measures have been put in place to drive desired behaviors which are required for success. “Pride Builders” are workers identified throughout the company who are chosen to brainstorm new ideas and encourage others to embrace change.  And company officials say according to quarterly surveys of the workforce, 60% to 70% of workers say the company is on the right track.

Social Media integrated into Cultural Change

There’s a transparency model at work in General Motors as well. An internal company blog gets credit for reversing a change in vacation benefits that was viewed as unpopular by employees. The company launched a new website, Tell Fritz, which allows consumers to send comments to company executives. Here’s an excerpt from the website suggsting GM make accommodations to loyal Saturn owners:

I suggest that GM put a focus on wooing Saturn buyers over to the Chevy brand products (special offers, events, sales literature mapping the Chevys which meet the Saturn brand promise, etc). The Saturn customers are loyal and need to be in GM vehicles!

Response:

Thank you for your suggestion. We agree that we need to keep our Saturn owners in the GM family. We are developing a plan specifically for Saturn owners that includes much of what you are suggesting. I appreciate you sending in your thoughts to us.

-Susan Docherty, GM Vice President, U.S. Sales

 

I am now more inclined to root for GM’s success because if the company is able to successfully emerge from bankruptcy — and payback the money they borrowed from taxpayers — it will be one of the most inspiring transformations of all time. And it will serve as an example to other legacy organizations that with transparency, employee and customer engagement and leadership that has the courage to take risks, an old dog can learn new tricks to survive.