Upcoming Podcast Interview with former GM Exec Bob Lutz

As someone who started his career in the auto industry, I’m excited to be interviewing a modern auto-industry legend on Friday for an upcoming podcastBob Lutz, the retired former Vice Chairman of General Motors. We’ll be talking about his new book Car Guys vs. Bean Counters: The Battle for the Soul of American Business (Google Books preview).

I’ve generally been a fan – of his passion for designing and designing great cars and his iconoclastic spirit (I mean, the guy flies fighter jets for fun). I saw Lutz give an amazing talk at the Harvard Business School in the late 90s (when I was able to come over as a guest with some classmates from MIT). I don’t recall the details of his talk, but he had an audience full of potential bean counters (and I considered myself a “car guy”). Let’s look at some of things we could talk about on Friday – and give me your input.

I’m going to share some recent articles and a video interview he did with the WSJ. I don’t agree with everything he says, especially his criticisms of participative management and the “total quality excellence” consultants of the late 1980s (see the free WSJ video below). He’s a complicated figure, perhaps. I respect the man greatly, but he’s not a “Lean management” guy. At age 79, he seems like he might be stuck in some old-school management ways.

Now, one thing I am trying to figure out is how to approach this interview. The easy thing would be to tee him up to tell a few colorful stories and promote his book. That would get me listeners, but my podcast is a labor of love, not a business where I have the financial pressures of, say, CNN. I was criticized (I think) in one blog comment after my interview of Mike George, namely that I hadn’t challenged him enough on statements that I likely disagreed with.

So, Bob’s book argues that car companies should be run by “car guys.” I brought him up in the context of the recent discussion about whether doctors should be running hospitals. I think I’ll ask him about whether doctors are “patient people” who should be running hospitals instead of “bean counters”?

Some recent articles about Lutz and his book:

Even if you’re not a WSJ subscriber, you should be able to watch this video embedded below on or this page: Bring Back the Autocratic CEO

A lot of the provocative material appears in the first four minutes.

Some notes:

Lutz says that Detroit got a case of “scientific management disease,” where they tried to run everything by the numbers, in the place of things like “emotion, excitement, and beauty” and other non-quantifiable things. He says “the car business is a lot like the movie business – it’s not rational.”

I like his viewpoint there. This would seem to fit with Dr. Deming’s view that not everything that’s important is quantifiable or measurable.

He adds that the late 1980s brought us “the Total Quality Excellence consultants” who emphasized “a nice, harmonious social environment , freedom from fear, respect for everyone’s opinion… don’t demean people in meetings… and it’s a noble social experiment.” Lutz mocks this approach as going home saying “we had a meeting for 8 hours” but nobody decided anything.

Deming famously talked about eliminating fear from the workplace. Lutz sort of rolls his eyes at the idea of “freedom from fear” – so is he knocking Deming without mentioning him by name (Total Quality Excellence ~= TQM = Deming?) or did he take Dr. Deming’s message the wrong way? Does Bob Lutz believe that you should demean people in meetings and not listen to everyone’s opinion? Do his criticisms of TQE/TQM extend to Lean and the Toyota Production System? How could I ask him about this is a constructive way? His comments remind me of (off base) criticisms that Lean/TPS is all about standing in circles singing Kumbaya.

Lutz says “we went too far the other way” away from autocratic management. Lutz makes his approach sound a bit more palatable in that he was “explaining why my way was correct,” rather than just dictating it. The old “bull in the woods boss, that was bad too,” says Lutz.

I’ll agree with Lutz in the idea that if you are being directive and pushing people, you at least owe it to them to explain WHY rather than just dictating things because you are the boss.

Lutz says Detroit went too far toward “participative management, permissive management, and hands off management and “the person who never tells anyone what to do,” adding “we’re simply not tough enough in the way we run our businesses.”

Here, I’m not sure if he’s talking about Lean, because participative management (of which I’d describe Lean) is neither “permissive” nor “hands off.”

If were made CEO of GM, he would have “probably made some mistakes” but he claims he would have cut wasteful administrative processes. That sounds like a lean thinker, in a way.

Lutz is right to criticize GM leaders who earlier said that “GM is in the money making business, not the car-making business” and “we’re basically a bank (GMAC) that incidentally produces cars.”

I agree with Lutz in holding up Apple’s Steve Jobs as a leader who is all about creating the best products – knowing that profits will follow.

Lutz pretty much rolled his eyes saying, “Toyota had been elevated to God-like status” – that their management was smarter, less greedy, and cared about the environment more than the American automakers. Interesting perspective. Toyota leaders aren’t perfect (nor is the company), but I think most readers here will agree they have the better management philosophy.

So, as a reader – your reactions to Lutz and his comments? What questions would you ask him if you were in my position? How should I address his comments downplaying “participative management” in favor of “autocratic management?”

Either way, it should be an interesting discussion. I’m interviewing him on Friday and will get the podcast out next week.


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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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12 Comments on "Upcoming Podcast Interview with former GM Exec Bob Lutz"

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  1. Michael Kahn says:

    I’m looking forward to this podcast.

    With regard to Lutz’s views on Deming and how to diplomatically engage in a useful discussion: I might tee up the same question that the WSJ editor asked, in an effort to elicit the same statement about TQM consultants and “freedom from fear.” My follow-up to Lutz would be: “Let’s go back to something you said about ‘freedom from fear’ being overrated. Can you explain the role of fear in your leadership style, in autocratic management? is it beneficial?” This asks Lutz to reflect inward, instead of outward against a philosophy he demeans, and might open him up.

  2. Mark Graban
    Twitter:
    says:

    Here’s another recent TV interview, from Detroit, with Bob Lutz:

    http://www.youtube.com/watch?v=O3Nijmh0Ixo

  3. Andy Wagner says:

    I’m a big fan of Bob Lutz, with many of the same reservations you had.

    I came out squarely on the side of the RN/MD hospital CEO, and agree with Lutz that leaders should come with domain expertise.

    Here are some thoughts on things to ask him:

    One of Alan Mulally’s mantras is that “data will set you free”. Clearly he’s been successful at Ford, using numbers and not being a “car guy”. What do you think of Mulally?

    I would also ask him the hospital CEO question. I’m curious if he would apply his “car guy” theory there too.

    If you want to get controversial, I’d ask him about some of the government appointed GM CEOs in recent years, Whiteacre, Ackerson.

    I’m also curious what thoughts he has on some of the other recent “leadership” failures. Was the BP-Deepwater a leadership failure because bean-counters were running the show instead of oilmen, as some have suggested? How about the banking failure? Bean counters gone crazy?

    • Mark Graban
      Twitter:
      says:

      I think I’ll definitely ask him about how the “car guy” idea applies to different industries. He’s a fan of Steve Jobs from that standpoint.

      In a few of the other interviews I’ve watched, he’s complementary of Mulally and he has positive things to say about Whitacre and Akerson, too.

      Interesting question about BP and other leadership failures. I don’t know quite how to ask it, but if the financial sector and mega investment banks are all bean counters, who are the “car guys” there who want to design “insanely great products” as Jobs would say and Lutz would probably agree with?

  4. Sounds like Bob’s management style is somewhere between kumbaya and kickass. You could note that he’s been critical of TQM as well as the traditional autocratic management style, then ask him to clarify, noting that your audience consists of managers and executives. I think that would be constructive, and he might like the opportunity.

    I’d also be curious to hear what he thinks about the lean management tenet that if you give people answers you take away responsibility for a problem; thus it’s better for a boss to learn how to ask questions that help people learn and become problem solvers.

    Maybe you could ask him how he would describe his preferred style — a boss who gave answers or asked questions.

    I saw him speak at a PR society conference in Detroit years ago. He was frustrated by media coverage of Toyota. No matter what Toyota did, Lutz believed, the news was spun favorably. On the other hand, Detroit’s best efforts got an unfavorable angle. I’d like to hear him comment about Toyota’s recent troubles.

    Should be a good interview, Mark. I’ll look forward to it.

  5. Conal Scanlon says:

    Really looking forward to this podcast, Mark. Should be very insightful. One thing that I’m interested in hearing is how Bob, who has an MBA and worked in marketing, turned into more of “Car Guy” than a bean counter.

    Admittedly, I’m not too familiar with Bob or his management style, but just from looking at his background I would guess he was a bean counter. More generally, it looks like he is using these terms to refer to people who focus on the bottom-line more than the actual product. If so, are there any requirements to being a car guy, other than a focus on the product? Like, say, actual production floor experience, an engineering degree, etc.?

    Looking forward to it!

  6. Chuck Hoffman says:

    Some questions I would like to ask:

    If employees have good ideas, how would you recommend dealing with them?

    What do you do to provide an environment that encourages everyone to contribute ideas, solutions, and improvements, instead of watching the clock?

    How do you balance this with autocratic management?

  7. Mark Graban
    Twitter:
    says:

    A few more detailed notes on the Lutz articles I linked to.

    In the first WSJ piece, Lutz makes pretty clear that he thinks a car company is a unique corporate organism, that an autocrat couldn’t run a diversified conglomerate like GE. He narrows his comments a bit more by saying that being an autocrat works great, it seems, in automotive product development.

    Astonishingly, in this critical area of product creation, where the future of the car company hangs in the balance, the much-scorned autocratic style of management works well, and numerous success stories confirm it. The big proviso, of course, is that the autocrat must be so steeped in the car business, and have so much taste, skill, intuition, and sense for the customer, as to be nearly infallible. (I shall eschew discussion of the less-than-knowledgeable autocrat, who delves into things he or she knows little about and demands that it be done this or that way. It is a near-infallible recipe for disaster. According to many, the former chairman of Daewoo, many years ago, fit this mold, and he destroyed the company while making sure all his employees treated him with due reverence.)

  8. Mark Graban
    Twitter:
    says:

    But there’s also this excerpt, where Lutz shares his disdain for having to persuade and demonstrate… instead of just being blindly accepted as being correct?

    But in an American corporate environment attuned to “mutual consideration and respect,” I could not be quite like Mr. Piëch [autocratic CEO of Volkswagen]. Where he could order others around under threat of dire consequences, I had to demonstrate, argue, persuade, field counterarguments and compromise, only to find that what I thought had been understood was not what people “decided” I had meant, and so the loop began all over again. It was time consuming. Mr. Piëch would have done it faster, but he was CEO, and I was only a vice chairman. Still, I often ask myself if the company could have achieved the turnaround in product excellence faster if I had been less patient and more brutal in my approach.

  9. Mark Graban
    Twitter:
    says:

    Curious to hear thoughts on this from others who have worked in automotive operations:

    Many of the company’s activities are day-to-day: running the plants to produce components and assemble cars, procuring supplier parts, moving the finished vehicles to the dealers, billing same and booking the revenue. The operations portion of the automobile business has been thoroughly optimized over many decades, doesn’t vary much from one automobile company to another, and can be managed with a focus on repetitive process. It is the “hard” part of the car business and requires little in the way of creativity, vision or imagination. Almost all car companies do this very well, and there is little or no competitive advantage to be gained by “trying even harder” in procurement, manufacturing or wholesale.

    It’s not worth “trying harder,” even today, in operations? Toyota was absolutely destroying us in the mid 1990s when I was at GM and Toyota had twice the engine plant productivity and better quality…

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