Last Sunday 60 Minutes did a story on Chrysler’s great comeback since Sergio Marchionne of Fiat took the reins of the company in 2009. When Marchionne came on, Chrysler used a $6 billion high interest loan from the U.S. Treasury to modernize the company’s plants with state of the art equipment, upgrade 16 existing car models in just 18 months and begin integrating Chrysler and Fiat’s operations. Last year Chrysler turned a $1.83 billion profit and paid back its $6 billion federal bailout six years ahead of time.
When Marchionne came on, one of the first things he did was overhaul the company’s hierarchical management structure. He appointed 26 new young leaders from within the company, many of whom had not previously been at the top of the food chain, to report to him directly. He then vacated the chairman’s office on the top floor of Chrysler headquarters and moved his office to the floor with the engineers so he could better connect with the people designing the products. The revitalized company has recently come up with ingenious advertising campaigns such as the Superbowl ad with Clint Eastwood and the “Imported from Detroit” commercial featuring rapper Eminem.
Marchionne’s story at Chrysler reminds me of Theo Epstein’s recent hiring as the Chicago Cubs new President of Baseball Operations. Epstein, the man who many credit with ending the Boston Red Sox “Curse of the Bambino,” immediately cleaned house, keeping only a handful of front office people from the previous Cubs regime. He then assembled a management team composed of several guys from his former Boston and San Diego stints. This offseason, in a matter of months, the Cubs went from having the smallest management team in the Majors to having one of the largest with an army of scouts. Epstein quickly cut large salaried players and traded a few popular ones for players he considered undervalued. He hired Dale Sveum as the new manager, a coach with a decent baseball pedigree but definitely not the sexiest crowd pleasing candidate available. Epstein believes that Sveum will change the team’s culture to emphasize fielding fundamentals and accountability, the basics it appears the team has lost.
Epstein and Marchionne were brought in to run the Cubs and Chrysler because the organizations needed a reboot. Quick fixes just wouldn’t cut it anymore. Radical, fundamental change was the only choice to succeed.
Why do people believe these guys will succeed where so many others have failed? Because they don’t have the same handcuffs which hinder most managers. They appear to have no fear to try new radical things even if it may mean hurting feelings, laying people off, creating a lot of new work, or just failing in front of everyone.
Most people are inclined to make decisions based on “how things have always been done,” and much of the time we are unconscious that this is the basis for our decisions. People also make wrong decisions because trying new things, although exciting, is scary. The Cubs will probably have to lose a bunch of games before they start to dominate. Maybe the next new Chrysler model will be an Aztec. The greats can deal with these possibilities.
Take a step back and examine your business, or your personal life for that matter. Are you too scared to make changes which likely are imperative to succeed and be happy? Do you have the guts to make decisions like a turnaround master? I need to work that out with my shrink next week.
Question 1: Which will happen first, Chrysler is Number 1 in American car sales, or the Cubs win the World Series?
Question 2: Does using Clint Eastwood and Eminem to advertise cars offend you?