I am amazed at how little we have learned from history. In the mid 70's Chrysler was on its way down rapidly, and when Lee Iacocca arrived in 1978 it was in serous trouble. There were many reasons for the problems: 35 vice presidents each with their own fiefdoms, with no collaboration; short term perspective with no strategic thinking, lackadaisical culture (Chrysler execs were known as some of the best golfers) and one of the biggest was that it was run by senior executives who were all financiers. Before Iacocca arrived, the financial wizards at Chrysler decided that they had to make more Imperials (their Cadillac equivalent) because that is where the margins were. The more Imperials they made the more profit they would make: that was their thinking. When Iacocca arrived Chrysler had acres of storage fields filled with unsold Imperials. Where was the strategic thinking? Where was the systems thinking?
Not much has changed today. The approach to solving organizational problems is different but the uni-dimensional thinking is still the same. Take GM. Rick Wagoner was ousted by the financiers in the Obama administration because the cuts at GM were not deep enough. Forget the fact that GM had cut over 100,000 jobs since 2001. Wagner did a great job of cutting. Where he fell down was on building cars that people wanted. Like Ford and Chrysler, GM was building SUV's and trucks because that is where the margins were. Sound familiar. In the meantime Toyota and Honda were having the Big Three for lunch with their Camry and Accord. The Big Three kept loosing their market share.
Another example is Air Canada. Monte Brewer, CEO of Air Canada lost his job (one day after Wagoner) and was replaced by Calin Rovinescue a financier. Clearly his mandate will be to slash and burn. But what about the future? Where is the strategic thinking? The financiers got us into this global economic mess and we shouldn't be looking to them to get us out of it. We need leaders who understand systems, who are both strategic thinkers and who know how to execute. They have be willing to listen to their employees who know the business better than anyone else and begin to produce products and services that customers will want. They have to get back to basics and run an organization that will excite and engaged their employees. Their efficiency will come from engaged employees and not from employee cuts. The innovation and creativity for desired services and products that they need to survive and sustain their companies will come from the engaged employees. Where are the leaders and the mangers we desperately need today?
