Monday, March 30, 2009

When a New Direction Requires New Leadership

One of the arguments for removing Wagoner as CEO of GM is that GM needs a new direction, and a new direction can only be achieved with new leadership. I wonder if that is true.

It is certainly true that people find it difficult to change, and when a program or initiative is someone’s idea, that person is particularly attached to it. Peter Drucker has written extensively about change over the years writing that pharmaceutical companies know that in order to survive they have to replace three quarters of their products with completely new ones every 10 years.

Do automakers know this? Does GM? GM is launching the new Camero in 2010. Is the Camero a new product?

It is hard to change.

However, there are stories of companies who can reinvent themselves. Andy Grove, in the 80s, knew Intel was in trouble and expected the Board of Directors to fire him. He asked his partner what the new CEO would do with the company when he takes over. The answer was that he would abandon memory chips (Intel’s bread and butter, then) and go into microprocessors. “Why don’t we fire ourselves, come back and do ourselves?” They did, and Intel thrived mostly famously with the Intel Inside Pentium chips.

Why are some able to abandon all they know for a new direction? Some can and some cannot, I suppose. But more people can learn to do this by adopting a belief that once they launch an initiative, they must start planning to replace it with something new in the future. That must be your thought process…to build change into the process.

It is the only way a manager can survive.

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