Will Changing the CEO Help GM?
I don't mean to kick Fritz Henderson while he's down, after he resigned as CEO of Government Motors this week.
He resigned on Tuesday and I didn't even learn about it until Thursday, as I was under a proverbial rock, busy teaching a workshop those two days. In my briefest of news scans, I guess he didn't knock the White House party crashers off the top of the news, but that's a different sad story.
The WSJ had a good article talking about how changing the CEO alone rarely has the impact people think.
If you took the CEOs with the best track records and brought them in to run the businesses with the worst performance, how often would those companies become more profitable? According to economist Antoinette Schoar of Massachusetts Institute of Technology's Sloan School of Management, who has studied the effects of hundreds of management changes, the answer is roughly 60%. That isn't much better than the flip of a coin.
“Some people,” Prof. Schoar says, “may have this almost blind belief that the manager at the top changes everything. Our results show that managers do matter, but they don't change everything.”
I wasn't a fan of Rick Wagoner and I didn't think Henderson was a great change agent or figurehead that screamed “change.” Maybe I was putting too much stock in him as one man. What about the overall culture and systems of an organization? Can one man fix all of that? Is Steve Jobs, as “CEO of the Decade” a uniquely heroic force of nature or is that perception wrong as well at Apple?
I'm certainly not a fan of the new guy, former AT&T CEO Ed Whitacre. AT&T isn't known for being a real customer-focused company, so what positive traits will Whitacre bring to the mix? His TV ads for GM, of the “ego ad” genre, (see Sprint's Dan Hesse for another bad example) proved little more than his ability to walk and talk at the same time. He's no Lee Iacocca (his 1984 ad here – makes for an interesting side-by-side comparison of content and style).
Whitacre knows nothing (his admission) about the auto industry, is this a plus? It may have proved helpful for Alan Mulally moving from Boeing to Ford, but what of this case?
If any organization is struggling, including a hospital, is changing the CEO a pancea or silver bullet? The research would suggest it's nowhere close to being a cure all. What have you seen?
What do you think of Fritz being forced out? Will this be a positive tipping point for GM or are they just headed for more of the same? Will Toyota's new CEO be more effective at bringing needed change to that organization, given their recent quality problems?