There seem to be signs emerging that Rick Wagoner may soon be out at GM. After an embarrassing first appearance and an inconsistent second appearance in Congress, influential Congressman and other Detroit executives in the auto business are beginning to pass the word that there needs to be change at the top. Apparently, Congress will not get around to approving a bailout without that change as a condition.
The subject of effective leadership at auto companies, and at other product design and marketing companies, comes again to the fore. There is much evidence of the benefit of having a “product guy” at the top of an organization when innovation is the agenda. GM is blamed for having, a generation ago, passed the reigns of leadership to “finance guys,” and beginning a practice of killing design initiatives and longer-term product investments for short-term profits, and using financial tools like cash incentives to move metal where customer desire wouldn’t.
I am not sure who in the pipeline for leadership could provide the shift in thinking that would generate the innovation that has been missing at GM and that now seems to be at the center of the demand from Congress. They want a payback for the taxpayers, and rightly seem to be judging that customers will not be effectively moved unless the product portfolio has something they want.
Ironically, the strongest car guy in the company, Bob Lutz, while long saying that GM has to design and build products that people want, has been the guy who has also said that global warming is bull—a comment frequently resurrected as Congress, and the market, seek greener products and companies. He is, in any case, now too old for next generation leadership, both in age as well as in thinking.
Fritz Henderson has a lot of support. His background is also finance, and most of the success stories in his resume are not about product but about cost-cutting, labor negotiations, and brand strategy. Will he turn to design as a key strategy for success in the next generation? Who will he turn to to rely on for the design and product innovation leadership, passion, power, and influence, necessary for survival and sustainability as a new kind of business?