The ax fell today for Rick Wagoner at GM. The Obama administration has decided that he is not the right man to lead the change that GM needs in order to survive. Wagoner was called, alternatively, the "sacrificial lamb" by the governor of Michigan, and a successful CEO by others in the automotive space. But, we come neither to praise Wagoner or to bury Wagoner. We come to talk about one other comment about Wagoner - this from Frank Langfit of NPR, who called Wagoner a "creature of the culture".
Langfit meant that Wagoner had become bound by the culture, and bound to the culture of GM, and unable to full rationalize the change necessary to GM for it to be successful. In some ways this is an issue for any firm where the management team has such consistency across its ranks, and such longevity in its industry. For the most part GM's management reflects the automotive industry and little else, and as such "grew up" in the industry and has little outside experience. Recently we had word that most senior GM executive participated in a program that gave them a new car, at no cost, every 3 to 6 months and paid for their gasoline. Having an industry myopia is bad enough - did GM executives get out and interact as regular consumers with their products?
So the question we have before us is - can a senior manager respect the culture, reinforce the culture but also recognize valuable aspects of management style or philosophy from outside the culture and bring those facets to bear? Does leadership shape the culture or over time does the culture of an organization inform how senior leaders think? One could easily argue that executives who have a long tenure in an industry understand the challenges of the industry and don't have to "learn" the industry. However, one can also easily argue that longevity and success in an industry can blind any manager to changes in the market and disruptions or disruptors, and create a cocoon around those managers.
In most organizations, there is enough institutional arrogance to ignore a lot of news about an industry that is not what the organization believes or wants to hear. If the management team reinforces that arrogance and distance from the customer, then the culture becomes one that doesn't listen or explains away problems, which is what the US automotive industry has been doing for twenty years. The cultures of these organizations have become indoctrinated to believe their own clippings, and the management teams have constantly reassured the organizations that nothing is wrong, so there is no urgency for change.
I believe that ultimately any CEO can force change on a culture, but perhaps those CEOs need to come from outside the organization to be successful. Mullaly at Ford and Nardelli at Chrysler will prove this out to some extent, and Mullaly already has to some level. However, any management team willing to align itself to a dominant culture will happily put on the blinders and become creatures of the culture, spouting the corporate line rather than challenging the organization to change.
Wagoner wasn't fully a creature of the culture, but had so much investment in the culture that he could not challenge it effectively. What GM needs is a CEO from the outside, ready to confront the culture and make change happen.