Free advice for GM #3-Put SAAB back on the edge

I was going to go with Saturn next, but a tweet from Diego on Metacool got me motivated to play with SAAB.  He says, SAAB should get back into rallying, which lends support to my understanding of this brand.

Rally to the edge

Rally to the edge

Technology, cool, edgy, unique.   Born from jets.  Svenska Aeroplan Aktie Bolaget is Swedish Airplane Company in Swedish.  Somewhere it all fell apart and they ended up another mediocre GM-mobile that had no style, no technology, and poor quality.

The organization behind an edgy car has to be edgy.  This is called brand integration (the outside and the inside have to align).  To create edgy things, people have to take risks and push the envelope.  Edge is by definition NOT THE MAINSTREAM.  Okay, I’m ranting… but it’s amazing to me how something edgy can get so rounded off to fit into a corporate model, that it’s no longer viable.

The interdependent organization archetype is a great model for SAAB because it could bring together an array of people and companies from many centers of excellence to work on the coolest automotive technology in the world.  There would need to be lots of experimentation (and failure) going on to find out what new ideas work and what theories don’t hold water.  You just can’t pull this kind of behavior off, if you are trying to please heads of engineering and design at the top of a corporate pyramid.

Key traits of the new SAAB organization:

1. Ad hoc reciprocal structure- each car should be viewed as a project, with full design-build responsibilities.  The designs should connect to the heritage of SAAB (e.g. efficient drag coefficient) but the technology should represent the best of what’s possible in the current market.  These teams should work under temporary agreements with other companies to bring resources necessary for manufacturing.

2. Each model is an experiment- transparency while prototyping (instead of secrecy) promotes involvement from others and improves quality.  Check out Martin Eberhard’s post on how blogs helped at Tesla Motors.  Instead of a long line of reductionist designs, hidden in secrecy while the companies round off the edges to save money, the clean slate approach gives the model team a chance to be truly innovative.  An open process pushes everyone to solve the complex tensions between viability, feasibility, and desirability.  The prototypes should be rallying all over the world to show off and test the new ideas.

3. Entrepreneurial leaders- leadership in today’s auto market is coming from disruptors like Tesla and Fiskar Automotive.  These are entrepreneurial ventures with something to prove and lots of backing to get there.  Each model should be considered and investment and live up to a market based promise of innovation.  Leadership teams should have to start over again with each model to prove this new idea is worth making (and buying).

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Free Advice for GM #2- A Chevy for Everyone

Continuing in a series of posts about GM and organization design, let’s take a closer look at creating the right organization for Chevrolet.  I know restructuring is not this simple; so take this as the first installment in a high level comparison of organization design options, not a comprehensive plan of action.

A return the the chevy brand essence?

A return to the Chevy brand essence?

Let’s start with Chevrolet, because that’s the easiest to imagine given their current situation.

To me, Chevy is Americana.  This is the car that represents the American Dream, value, performance, and accessibility.

Chevrolet should help people get their first car, the family car, and have a competitive truck option.  This market means head-to-head competition with Toyota and Honda, so it has to be efficient and cost competitive and produce top quality, reliable, desirable vehicles.  Check out this post on The Truth About Cars for a quick review of the Chevy brand.

Key Traits of the new Chevrolet organization:

1. Efficient hierarchical structure. Clean lines of authority to provide clear direction, efficient decision-making, speed to market, and drive focus on customer needs as the basis for every action.  This market is not about sexy cars, it’s about helping people feel good while they get places safely and manage household costs.

2. Make each model a business. Get past the silos of design, engineering, marketing, etc. and organize each model around a General Manager, with a P&L outcome and a target consumer to drive functional integration.   Fidelity Investments organizes this way (dozens of P&L units), and it works really well.  Develop a rabid consumer orientation as a rallying point, rather than being fractured by functional expertise.

3. Restructure the supply chain. As pointed out by Charles Mann in Beyond Detroit, source great parts from the best suppliers by developing a modular platform.  Don’t try to own everything, focus on total design, build, and sell.

4. Engage employees. Focus on great leadership and build pride (See Jon Katzenbach). The days of management v. labor must be left behind.  This organization needs every single person engaged in a mission to deliver cost competitive, high quality vehicles.  Organize production around manufacturing teams provide job rotations to help employees learn, grow, and develop as a natural component of work.  Use the portfolio of models to allow employees career movement.

5. Reward performance. Pay individuals, teams, and business units more when they meet performance goals in revenue, quality, and costs.  Create healthy internal competition between the businesses.

Next up, how to recover the SATURN brand through an open-source organization.

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The rise of the atomic organization

Human kind has had a long love affair with hierarchical organizations, and I think they still have their place in the world, but given the number of large failures of this type of organization lately, I’m with the group (Gary Hamel, for example) who thinks it’s time to expand our options and do some serious experimentation with fundamentally different organization models.

Much of the interesting discussion around this topic centers on social networks.  Great people like Rob Cross and Clay Shirky have shown that there is considerable power in the emergent relationships we all have around us.  Esteemed management consultant Jon Katzenbach and his colleague Zia Kahn describe the informal organization as an overlay to a traditional organization chart that acknowledges the way things really work.  I’m sure they are all on to something big.

Yet, one of the best tests for how an organization functions comes when people ask, “can you show me the org chart?”  Despite many efforts to engage in peer-to-peer activities, “bottom-up” feedback, and a kinder-gentler management philosophy, I find the “org-chart test” often reveals that power and authority still reside at the top of the house.

My experience at IDEO has shown me something quite different is possible.  As my colleague Bob Sutton says, IDEO does not play by the same rules as most businesses (or non-profits for that matter).  See Tim Brown’s blog about how IDEO uses design thinking to create innovative outcomes.  For the past few years, we’ve been trying to understand more about the conditions that enable design thinkers to thrive.  One significant output of this work is a concept called the “atomic organization” which is not simply a social network, but a fully different paradigm for organization behavior.

It’s ambiguous and slippery, but it’s not chaos.  It is a governed, open system with rules, deadlines, and high performance outcomes.  But there is nobody “in charge”, there’s no corporate strategy, and there’s an amazing amount of transparency and interconnectedness.  Ask for an org-chart at IDEO and people either laugh knowingly or simply don’t get the question.

Atomic ExampleSo we asked dozens of people here to draw their version of IDEO.  The synthesized result is a formal structure with consistent parts and rules that show a right way and a wrong way to organize, but a fundamentally different premise of control.  This approach works from the individual out, much like an atom has a nucleus with electrons orbiting around it, and atoms bond together to create molecules, people at IDEO exist at the center of their org-chart with several orbits full of people surrounding them.

This type of organization is both planned and emergent… it can evolve, grow, and contract.  It can be used to get decisions made and others to act.  Atomic organizations have gravity and density, and can be added together to create organizational mass and aggregated impact.  They make it possible to have multiple leaders of the same business unit, include “non-employees” without calling them outsiders, exist at a scale that is comfortable and manageable for the people within, yet still has incredible reach.

So who’s in charge?  That depends… what’s your question?

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