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 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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Despite the deep malaise in the auto industry and the lackluster efforts by the federal government, articles like this show there is light at the end of the tunnel with practical ideas and solid advice. I thought I’d join the fray with an idea for how GM might move forward to a better place. I’m not claiming to be an auto industry expert, but my distance from it might be an advantage (at IDEO we call this the “naïve mind”).
Ever notice how just knowing something is real can change your behavior? Like when you look in a mirror and notice a piece of food from lunch stuck in your teeth? Or you’re cruisin’ down the highway only to glance at the speedometer and notice you are going 20 MPH over the speed limit? Most people react suddenly in these cases and make adjustments.
So 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.
