Archive for the ‘Organizational Culture’ Category

Practices of a Level 5 Leader

Thursday, May 1st, 2014 by Troy Schrock

Alan Mulally’s upcoming retirement as CEO of Ford Motor Company is big news these days. All organizations, not just those in the automotive sector, should take notice. Mulally’s leadership in turning around Ford highlights a Level 5 Leader (a leader who places the success and results of the organization ahead of their own individual accomplishments and legacy). Here are some key practices he, and the executive leaders, used to take Ford to the top of the industry.

Most significantly, or simply, Mulally used a tight weekly executive team meeting (his BPR, or Business Process Review) to drive both business plan execution and building a strong leadership team. Candor, trust and accountability, virtually non-existent in past Ford culture, now form the foundation for the executive level leaders. With that foundation, a deliberate focus on data culminated in a dramatic turn-around (2007 – 2009) followed by years of consistent business performance.

Second, Mulally created a simple vision for the organization, repeated that vision all the time and didn’t change the course even when people outside were constantly looking for the next “new plan”. His view was, we have the right plan and we’re still working on implementing it.

Third, Mulally focused the organization back on the customer. Significant money was invested in new product development and quality initiatives even during significant cuts to operations. What mattered to customers was appealing designs, good fuel economy and cars that didn’t break.

Fourth, Mulally simplified the business. Ford reduced the number of brands (auto name plates) down to two. They also reduced waste and redundancy in operations by coordinating design, engineering, quality and manufacturing efforts across the entire global organization.

Mulally’s final step will be completing a deliberate and orderly succession. Here is a link to a recent article highlighting the transition.

For more in-depth understanding, see the book, American Icon: Alan Mulally and the Fight to Save Ford Motor Company by Bryce G. Hoffman.

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Sergio Marchionne, an Exemplary Leader

Tuesday, October 23rd, 2012 by Ellen Bryson

In December of 2011, Sergio Marchionne, CEO of Fiat and Chrysler, was awarded the Dwight D. Eisenhower Global Leadership award from the Business Council for International Understanding (BCIU). BCIU recognized Marchionne for his unprecendented success at turning around two automotive car makers in the last decade; first Fiat, then Chrysler. No small feat.

In less than two years after taking the reins at each company, both returned to profitability. When Marchionne assumed the role of CEO at Chrysler in 2008, most in the car industry thought he was crazy. Chrysler seemed headed for bankruptcy, but Marchionne and Fiat drove a hard bargain to take control of the company. Marchionne had a compelling vision and saw how Chrysler could complete the Fiat product range to make it a more global company.

Marchionne epitomizes great leadership! Chrysler returned to profitability in the first quarter of 2011, repaid its $6 billion high interest government loan in May…six years ahead of schedule, and hit sales of over $55 billion by the end of 2011. Plants were modernized, Fiat and Chrysler operations were integrated, and the management structure was flattened somewhat. Not only did Marchionne restore Chrysler to profitability, he changed the culture. The company went from being a bureaucratic organization run from the Chairman’s office to an innovative culture focused on quality and execution where the CEO builds the cars with the guys on the floor! Now that’s transformational!

If you are like me, I’m sometimes skeptical about what I read or hear in the media, so I decided to check out the situation at Chrysler with someone on the inside to see if the culture really is different, and this is what I learned from Scott Bahr, a friend that has recently returned to Chrysler after four years away. “Yes, this is a good time to be at Chrysler. Morale is very high, and there is an earnest desire company-wide for people to “push the envelope” toward improvement. Bureaucracies and “old ways” will always be present in an organization of this size, but I am impressed by how much we are developing a culture of not being limited by those things and even openly questioning them. It’s one of the things that won me over to coming back here.” This confirms it for me. I hope it does for you. Sergio Marchionne is a great leader and a man we can all learn from.

To get inspired in your role as a leader and learn how Sergio orchestrated the Chrysler resurgence, listen to his recent interview with Sixty Minutes. It’s about 14 minutes long, but worth your time.

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The Fundamental of Core Culture

Monday, October 15th, 2012 by Troy Schrock

The great thing about working on business fundamentals is that they will be equally as relevant in twenty years as they are today and were twenty years ago.

Perhaps the most important fundamental is culture, which is defined by the organization’s core values and purpose.  Strong leaders spend a great deal of time repeating the core values and purpose of their organizations and creating mechanisms that support the culture.  In The Winning Performance, Richard Cavanagh and Donald Clifford, Jr. provide a plethora of examples of businesses where the CEO and executive team spend a significant portion of their time communicating the fundamental values of the organization in an effort to protect the culture.  “Successful companies,” they write, “are run by people who have their priorities straight, their values clear, their direction tight, and a strong grasp of culture” (p. 17, emphasis added).

Don’t lose sight of culture.  The larger the organization, the greater amount of time the executive team should spend communicating and reinforcing the core ideology throughout the organization.

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Debrief Like a Fighter Pilot

Tuesday, August 7th, 2012 by Troy Schrock

I am fascinated by the U.S. Military practice of systematic debriefing.  Geoff Colvin writes in Talent is Overrated:

“After any significant action, in training or in combat, soldiers and officers meet to discuss what happened.  They take off their helmets – a symbolic action indicating that ‘there’s no rank in the room,’ as [Colonel Thomas] Kolditz says.  ‘Comments are blunt.  If the boss made a bad decision, often it’s a subordinate who points that out.’  The session isn’t about blaming; instead, it’s ‘a professional discussion,’ as an army training circular puts it.  Part of its strength is that it yields very complete feedback.”

Wow.  Does your organization regularly run debriefs like that?  Think of the professionalism it requires.   Think of the discipline it demands.  Think of the trust teammates must have in one another to engage in that exercise.

Think of the results it must get.

If you don’t already, get in the habit of objectively reviewing successes and failures with your team.  Regardless of outcome, it’s important to pay attention to the decision making process that led to your present situation.  Remember, bad process sometimes yields good results, so unless you’re willing to debrief like the military, you may never catch your mistakes in order to fix them.

For more on this, you might be interested in Afterburner, a corporate training company led by fighter pilots that helps organizations implement the disciplines of flawless execution.

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Trust & Conflict: Why They Belong Together

Tuesday, May 15th, 2012 by Troy Schrock

“Trust” is one of those warm & fuzzy words.  It’s a word that just makes you feel good inside, and for good reason.  Trust is the necessary ingredient in any relationship – family, business, or otherwise.  The word itself brings a sense of security and breeds a confidence that one can handle whatever is coming.

“Conflict” is not a warm & fuzzy word.  It’s something most of us try to avoid.  Just thinking about the word makes you uncomfortable, suspicious, and edgy.  Many would say that it’s the core ingredient in broken relationships.

What a contrast in words.  So why would best-selling author Patrick Lencioni write, “By building trust, a team makes conflict possible”? (See The Five Dysfunctions of a Team, pg. 202.)  There are two confusing aspects to this quote.  First, Lencioni says that trust (that warm & fuzzy word) leads to conflict (that bad word).  Second, the quote implies that conflict is desirable. 

If you live or work in an environment where everyone naturally agrees with one another, then Lencioni’s quote makes no sense.  But if you’re like the rest of us, you need to revise your view of conflict.  Conflict can be good because it drives resolution, but conflict will only be good in an
atmosphere of trust.  That’s why Lencioni’s statement makes sense and why these seemingly incongruent words belong with each other.

If you never see conflict in your workplace, your organization is in trouble.  If you find a meeting ending early to avoid confronting a contentious issue, your organization is in trouble.  If the most outspoken person on your team always gets his way because nobody has the nerve to openly disagree with him, your organization is in trouble.  Why?  Because the absence of conflict indicates the absence of trust, and no relationship can survive without trust.

I strongly recommend that you read Patrick Lencioni’s The Five Dysfunctions of a Team.  If you have thoughts or questions on increasing trust in the workplace, please post a comment.  We can all learn from each other.

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The Wrong Purpose

Monday, February 20th, 2012 by Ellen Bryson

Unless your employees clearly understand and buy into your company’s reason for existence, they will eventually lose any passion they have for your work and ultimately leave your organization. Today’s workers want more than a paycheck; they want connection to something bigger than themselves. They want to know how their talents contribute to the successful realization of a shared vision. If they don’t find it at your company, they will seek it elsewhere. Based on the evidence of today’s highly transitory workforce, it seems they do not often find it at their next stop, either. In short, those companies who are able to align their employees around a clearly articulated purpose seize a distinct competitive advantage in the marketplace.

All purposes are not created equal, however. While there is no “right” purpose, I suspect there is a wrong one: financial performance. When growth becomes your purpose, trouble is not far away.  Is financial performance important? Of course! But it is the result, not the cause, of serving customers well.

For more on this topic, check out my recently published article: “Should Financial Performance Driver Your Culture?”

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