On the Recent Passing of Two American Auto Industry Legends: Lee Iacocca and Ross Perot

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Lee Iacocca, the former CEO of Chrysler, passed away on July 2.

Ross Perot, founder and former CEO of EDS, also passed away a week later. In reading about him recently, I learned Perot didn't like to be called “H. Ross Perot” because he thought it sounded too snooty.

When I was growing up around in the 1980s, Iacocca was by far the biggest personality of the Big Three CEOs at the time. Iacocca, of course, starred in Chrysler commercials where he challenged the public, “If you can find a better car, buy it.”

I remember Iacocca as a driving force behind the restoration of the Statue of Liberty in the 1980s. Read the remembrances posted on the Ellis Island Foundation website. Iacocca also created the Ford Mustang. What a life!

Our pal Jamie Flinchbaugh, who worked under Iacocca at Chrysler, shared some reflections in this piece for IndustryWeek:

Jamie and I are going to talk about both men in our next Lean Whiskey podcast.

You might not think of Ross Perot as an auto industry leader. You might think of him as a technology executive (EDS) or as a presidential candidate with his charts and all. Like Iacocca, Perot starred in commercials… but 30 minutes long instead of 30 seconds and the product was himself:

I remember a time when people tried drafting Iacocca to run for President, so there's another near similarity between the two.

When General Motors bought EDS in 1984, Perot ended up with a seat on the GM board of directors. I think GM had hoped that Perot and EDS would make GM more nimble and entrepreneurial, but it didn't pan out that way. Perot was bought out and fired from the GM board in 1986 and GM spun off EDS in 1995.

The most memorable expression from Perot was about GM and “committees on snakes.”

Here is the full quote from a 1988 article in FORTUNE… I had forgotten about the consultant part:

THE GM SYSTEM IS LIKE A BLANKET OF FOG

“They can design, engineer, and build the best products in the world.

My question is: Why haven't we unleashed their potential? The answer is: the General Motors system. It's like a blanket of fog that keeps these people from doing what they know needs to be done.

I come from an environment where, if you see a snake, you kill it. At GM, if you see a snake, the first thing you do is go hire a consultant on snakes. Then you get a committee on snakes, and then you discuss it for a couple of years. The most likely course of action is — nothing. You figure, the snake hasn't bitten anybody yet, so you just let him crawl around on the factory floor.

We need to build an environment where the first guy who sees the snake kills it.

At Electronic Data Systems employees were trained from the day they joined the company to spend all day serving the customer, getting results, being the best in the world — not being good bureaucrats.

At GM the stress is not on getting results — on winning — but on bureaucracy, on conforming to the GM system. You get to the top of General Motors not by doing something, but by not making a mistake. You form groups, hold meetings, get consensuses, don't make decisions. You just kind of let this big old log keep rolling, knowing that sooner or later you're going to retire and get a big retirement anyhow.”

Only Ross Perot could think of saying something so true so colorfully.

Another spot-on summary from him:

“One day I made a speech to some senior executives. I said, ”Okay, guys, I'm going to give you the whole code on what's wrong. You don't like your customers. You don't like your dealers. You don't like the people who make your cars. You don't like your stockholders. And, to a large extent, you don't like one another.

”For this company to win, we're going to have to love our customers. We're going to have to stop fretting about dealers who make too much money and hope they make $1 billion a year through us. The guys on the factory floor are the salt of the earth — not mad-dog, rabid, burn-the-plant-down radicals. And all this sniping at one another — the financial guys vs. the car guys — is terribly destructive.”

Perot had hoped to change GM… what a challenge to take on:

“I told General Motors very openly that the only reason I was selling my company to them is that I couldn't think of anything more interesting to do with my life than to work night and day to help revitalize one of the world's great corporations and help it achieve its full potential. I'll work night and day to help them. They grew up inside the system, and things that are killing the company may still look normal to them.”

That last sentence definitely reminds me of many hospitals…

Rest in peace Mr. Iacocca and Mr. Perot, as we remember two legendary leaders.

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Mark Graban is an internationally-recognized consultant, author, and professional speaker who has worked in healthcare, manufacturing, and startups. His latest book is Measures of Success: React Less, Lead Better, Improve More. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. He also published the anthology Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also a Senior Advisor to the technology company KaiNexus.

4 Comments
  1. Tom Gormley says

    Wow, he was colorful, and smart. What a clash of cultures!! I wonder where GM would be today if they’d made him CEO. I can’t say I was a fan of his Presidential campaign, but he was certainly different.

    1. Mark Graban says

      Thanks for commenting, Tom.

      Perot was only in the GM orbit for two years, but I think he was very insightful. It’s a shame that he was so out of sync with the organization that they saw him as a bad fit and drummed him out. I also wonder what would have happened if he had worked his way into being CEO. As the FORTUNE article said, he didn’t know the auto industry, but I think he knew customers and leadership…

  2. Mark Graban says

    Here, Perot says, basically, that GM executives needed to “go to gemba” (he didn’t use those words) and experience the real reality that their customers faced.

    “Symbolism is important. I took the position that anybody who needed a chauffeur to drive him to work was probably too old to be on the payroll, and that anybody in a car company ought to be driving his own car because you didn’t get much of a feel in the back seat.

    We shouldn’t be giving handmade cars to executives. We ought to cut out this business that if you’re an executive your car comes into the garage every morning and the mechanics take it, and if there’s anything wrong with it they fix it. You don’t know what reality is. Your car is perfect. I say no. Go to a dealer. Buy a car. Negotiate for it. Have the engine fail. Have the transmission fall out. Have the tailpipe fall off.”

  3. Mark Graban says

    LinkedIn Discussion:

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