Five Keys to Turning a Company Around

Posted on by in Business, Change, Growth, Leadership, Strategy

If you were in charge of GM, what would you do?

Even if you’re not leading a large company, there are still a few lessons you can draw from CEO Fritz Henderson’s US-AUTO-GM-HENDERSONplaybook, that could make a big difference in your business if you want to grow faster and be more profitable.

In an article in Business Week (June 29, 2009), David Welch outlines a number of Henderson’s initiatives and changes that are worth paying attention to. For example,

1. Focus on a Few Key Metrics. Under the previous administration, Wagoner was a data geek and had too many metrics in place. The problem with too many metrics is that when you have too many metrics, you really have none. To correct that, Henderson has narrowed down their key metrics to five–plus the ones he’s chosen, focus on the most important things for GM (you know, little things like sales and profits :-), and they focus on the company’s overall health vs. individual departments.

2. Encourage Ideas AND Criticism. Under Wagoner’s administration, there was a sense of fear and a corresponding lack of honesty among employees (i.e. just because employees aren’t bringing you bad news doesn’t mean it’s not there). To correct that, Henderson is actively encouraging dissent, criticism and critique from employees to eliminate the culture of fear while encouraging honest engagement.

One of the phrases I use continually with clients is, “You should never be afraid of a question. The only reason to be afraid of a question is if you’re afraid of the answer.” So ask away. Remember, asking your people a question doesn’t mean you have to agree with their answers, it just means you’re listening and open. And as long as you regularly make changes based on feedback, your people won’t mind that you don’t act on everything.

3. Act Fast. Again, under the previous administration, there was a culture of analysis paralysis and CYA with data. The problem with that is that by the time anyone was willing to pull the trigger, the opportunity had passed. In order to correct this, Henderson is working hard to change the culture whereby they make decisions without all the data.

4. Ditch Bottlenecks. I love David Welch’s phrase, “Henderson is tackling GM’s glacial decision-making process.” What a great picture. To accomplish this, Henderson is taking a hatchet to things like holding meetings to decide the agenda of the real meeting. He’s cutting four hour meetings down to two. And he’s empowering people to make decisions.

For example, at one point, all of the executives were weighing in on a decision to add some pricey features to a future Buick model. After a short debate, Henderson turned to the person in charge of it, Susan Docherty, and said, “You’re the vice-president of Buick, you make the call.” She did. Done. Now let’s move on.

5. Speed up the Decision Meeting Process. This one is still in development, but up to this point, a small group of people (16) who make up the Automotive Strategy Board meet monthly and make the big decisions for GM. The problem is that if a decision needs to be made today but the board doesn’t meet until three weeks for now, the decision can’t be made until, often, it’s too late. To correct this, Henderson is thinking about replacing the strategy board with a set of small teams that meet weekly and who would make decisions farther down in the company–which I think would be an incredibly wise decision to make. Faster decisions, down the chain, by people who actually have to do the work is usually a wise choice.

So, as you look at your business, which of these five do you need to pay attention to? For example, do you have a small set of metrics that you continually focus on? Are they the right ones? Do you have too many or too few? Do they focus on the whole company or a subset? And do they focus on the most important things?

Take each one of these five keys and ask yourself a set of questions about them–you might be surprised that some of the keys to GM’s hopeful turnaround, just might be the key to your turnaround as well!

To your accelerated success!

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