Wednesday, December 21, 2005

Flag Bearing CEOs



GM's CEO Rick Wagoner was interviewed by Bill Holstein (editor of Chief Executive) magazine in The New York Times last Sunday about how the big auto giant was faring. Wagoner provided his advice for leaders who find themselves in a similar position -- righting the ship. His advice was 1) focus on the key factors that will drive the turnaround; 2) always do what is right for the business; and 3) communicate effectively.

"People are always hungrier for information when times are challenging," remarked Wagoner. He could not be more right. During difficult periods, CEOs have to be the flag bearer. Wagoner has done a yeoman's job of keeping a dialogue going with all of GM's diverse stakeholders. In fact the automotive industry on the whole -- from Ford's Bill Ford to DaimlerChrysler's Dieter Zetsche -- have all been carrying the flag these days. They have all spoken of sacrifice in light of difficult financial conditions and reputation challenges.

Reminds me of an episode I read in Nissan CEO Carlos Ghosn's book titled Shift. Ghosn arrived in Japan in 1999 to turn around the suffering global automotive manufacturer and quickly learned that the company had not been profitable since 1991. After three months, Ghosn called a press conference and laid out his revival plan which was meant to communicate the changes necessary to revive the company. Ghosn took his job of chief communicator very seriously. He wrote in his book: "As the CEO, my responsibility is to be certain that everyone who works for Nissan is clear about his role as a necessary part of the company...we must communicate with all of them [employees], we must make them part of the company's advance, we have to keep them informed of its progress, and we have to share its fruits in the most honest possible way."

Ghosn's idea of employees as the company's advance team makes sense. With CEO flag bearers and employee advance teams, the auto industry is possibly marching in the right direction.

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