Its amazing how the personality of the CEO and the performance of the organization are inter-twined. Whenever we think of organizational culture, we cannot help thinking of the CEO. Although organizational culture is made up of shared beliefs, assumptions and norms of behaviour within a group – be it a business organization, a university or a Government department- there is no doubt that the one who influences it the most is the Big Chief – the CEO.
In this context, a business story that makes interesting reading for the many twists and turns over the decades is that of the US automaker – Chrysler. It was founded way back in 1924 by Walter Chrysler, former President of the Buick Motor Company.
One of management legends of my time was fashioned by Lee Iacocca who turned Chrysler around in the early ‘80s when it was going down the drain. Gradually Chrysler became a good name again and profits poured in. History repeats itself and years later under CEO Robert Eaton complacency set in. Layers of management were added and soon Chrysler had to be sold because of its poor results.
Chrysler’s example shows that cultural change, though powerful, is always subject to the whims of senior leaders. In the late 1990s, Eaton sold Chrysler to Daimler-Benz supposedly at an immense personal profit. Strong leaders dropped away or were asked to resign, and Chrysler reverted to “old-style” behavior: massive, simple cost-cutting, lack of clear and honest communication, and concentrating on short-term fixes rather than more constructive long-term investments
Things didn’t work out in this amalgamation either. Strong differences in the German and American cultures would certainly have played a major part in making what promised to be a powerful alliance limp along.
Now, ex- GE veteran, Robert Nardelli has been brought in by Chrysler’s new owners from Home Depot. “What Nardelli is doing is applying lessons from GE first to Home Depot and then to Chrysler,” said Peter Cappelli, a management professor at the Wharton School of the University of Pennsylvania.
Interviews with top Chrysler executives paint a picture of a new culture developing at the Auburn Hills, Mich., automaker that revels in speed. Nardelli publicly and privately talks about his philosophy of quick yes or no answers but “never a slow maybe.”
Under Chrysler’s previous owner, Germany-based DaimlerChrysler AG, decisions could take months. Now as a private company under Cerberus Capital Management, Nardelli is creating a culture that seems to celebrate the idea that billion-dollar decisions can be made with great speed.
Noel Tichy, a University of Michigan professor and GE expert who has known Nardelli for more than 20 years, is not surprised that he has moved quickly.
“He went to school with Mister Speed, Simplicity and Self-Confidence,” Tichy said, referring to legendary GE leader Jack Welch. “He grew up under Welch, who said the worst thing to do in a transformation is to peel the Band-Aid off slowly.”
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This is the 79 th of the “A Step A Day” series : To provide perspective and provoke thought to facilitate self-development across a wide spectrum of issues- big and small- crucial for executive success.