Gm must find GM again - General Motors management in the 1990's - Editorial

Automotive Industries, July, 1998 by Marjorie Sorge

General Motors Chairman Jack Smith soon begins some of the most important work he's ever done. He will teach a class -- "History and the Lessons We've Learned" -- at GM University. The school is run by GM to help its workers update their skills and knowledge base.

Only the best and the brightest get to take Smith's class. In fact, those interested must pass a pre-test.

This is not going to be an easy class to teach. Until recently, GM didn't learn from its past. The arrogance of being the largest corporation in the world stood in the way. That's because the smugness was based on history -- GM always dominated the automotive business. Few in the corporation understood that the glory days ended in the 1970s, that is until the company almost went belly up in the early 1990s.

While that terrified many, it may have been the best thing that ever happened to GM. It forced the automaker to look at its past when somehow the aura, the Mark of Excellence mystique, disappeared. That's what GM has to get back.

To do that future leaders must understand history. What did GM do so well in the '50s and '60s that it couldn't do in the 1980s -- and why? If Smith's class can teach this and its students cascade the message throughout the company, the future looks bright. But he'll have to tackle some very tough issues and teach a dynamic, useful history class that will help future leaders create a strategy for tomorrow. Here are areas to consider.

* Managers must take responsibility for their actions. In the past, GM simply promoted its previously ordained "high potential" people out of difficult situations, often leaving the mess for someone else to clean up. Other companies fired or demoted underperforming managers.

* Employees must be empowered to make decisions, not run them back up the corporate ladder.

* Putting off tough decisions causes chaos. For example, GM should have closed plants and reduced its workforce back in the 1980s when its market share started to dip and its competitors were downsizing. If it had, its relationship with the union might be better today and it might not have come close to bankruptcy in the early 1990s.

* GM is not an agile corporation. It couldn't adapt as quickly as its competitors when the industrial world changed from an international quilt of regional markets to a global economy. Consequently, it didn't create common processes or a common culture. The key to the future is creating a company that is agile enough to accept the idea that the future is chaos, and move with the change.

Hopefully, Smith will bring in some guest lecturers such as retired GM, UAW and supplier executives and hourly workers to discuss these issues. There's no better way to learn history than from those who lived it.

GMU's goal, says its President, Richard "Skip" LeFauve, is to move from a "knowing" organization to a "learning" organization. What's the difference? A knowing organization has incompatible systems, independent units, causes duplication, hurts quality and adds costs. A learning organization creates interdependent units, common systems, sharing, higher quality and lower costs. "GMU will help us build a global workforce that shares a common culture and vision of our company's future," he says.

It's a wonderful program; one that shows GM is on the right track. Common practices and processes are taught by a single, focused operation. Plus, GMU asked dealers, suppliers and the UAW to get involved. Getting buy-in from those groups is imperative before GM can truly become an efficient, productive operation. But Smith's class holds the key.

As we all know, those who do not learn from history are doomed to repeat it. In GM's case, that would be disastrous.

Marjorie Sorge is the editor-in-chief of Automotive Industries. You can reach her via e-mail at: msorge@chilton.net.