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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Infectious Action

Here in Palo Alto there’s a movement afoot.  The folks over at the Stanford d.school are hoping to get a portion of downtown Palo Alto to become a pedestrian mall.  Check out the post on Metacool by Diego Rodriguez for more details and to join in the action.

I love that they have a class called Creating Infectious Action (CIA) there.  Based on the recent scare caused by the swine flu, infectious transmission of very small things is a force to respect.  I loved Stephen King’s view of this topic (The Stand) as it plays on all of the big fears involved in such an outbreak.  The point is, if you want to make change happen, understanding how this dynamic works is like being a change magician.

Damon Centola at MIT has done some great research to point out how social networking theory needs a bit of a makeover.  In short, the original “small world” theory (Granovetter, 1973) proposed that people who don’t know each other very well can spread behaviors, information and diseases through a dynamic called long ties.  This appears to hold up just fine with simple contagions that can be passed between two people with no other effort (like the flu), but not to hold up if the contagion being passed requires 2 or more people to reinforce it.  Think of it like being a carrier of a flu virus which requires you also to kiss someone else in 10 minutes to activate the infection.  If you catch the bug, but don’t kiss someone within the time limit, the bug dies out and there’s no spread.

Complex Contagion Bridge

For something like the Palo Alto pedestrian mall to come to life, there’s quite a lot of reinforcement that needs to happen, long ties are too weak in this case.  It’s a complex contagion that requires conversation, discussion, influence, and discernment.  In order for it to take hold, a person has to first “catch” the idea via one of the hundreds of people posting it on Facebook or a blog (long ties/small world) and then they have to discuss it with people they know well (strong/high bandwidth ties).

According to Damon, complex contagions operate under four social mechanisms:

1. Strategic complementarity (huh?)… that is, several complimentary factors in play at the same time. Like how technology and cost go together to support innovation.  Until costs come down, some technologies are not enough to create action.

2. Credibility… this is the “everybody’s doing it” influence factor at work.   Research by Chip and Dan Heath shows how hearing the same thing from multiple sources helps get something to “stick”.

3. Legitimacy… if close friends do something together, “innocent bystanders” feel more able to join in.

4. Emotional Contagion… ever feel the vibe of a big crowd and just go for it?  That’s this one.

So don’t just let Facebook do your work with a simple post.  You have to mix it up with people mano a mano, get some demonstrations going, and experience live interaction to get a real change to take place.

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