Thursday, June 11, 2009

Culture Clash

One giant organization (The United States) attempts to reform the insular organizational culture of another (GM).:

But it will be up to the federal government, which will own a majority of General Motors when it emerges from bankruptcy, to tackle what is perhaps the most difficult challenge in Detroit: transforming G.M.’s insular culture — at times as bureaucratic as the government’s — to make the company more competitive.

If the effort fails, the Treasury may never recoup the $50 billion it has provided G.M.

“Addressing cultural issues is just as fundamental to our assignment as addressing the balance sheet or financing,” said Steven Rattner, the lead adviser to the White House on the automobile industry.

In just one example, whenever a top G.M. executive was called to appear before lawmakers in Washington, staff members would prepare a briefing binder as thick as a Manhattan phonebook and hold multiple meetings to strategize over five minutes of testimony (Fritz Henderson, the new chief executive, has told employees to stop doing that).

In a Senate hearing Wednesday, Ron Bloom, another adviser on the auto task force, also talked about the need for G.M. to break longstanding habits that have made the company, with its bloated structure, lose a step to more nimble competitors.

“General Motors has been kicking problems down the road for a long time,” Mr. Bloom said.

Mr. Rattner and other government officials have repeatedly said they have no interest in running the company day-to-day. But they are taking a keen interest in shaping the new leadership team.

Measuring any progress in changing the culture will take time. The results, after all, will be seen in the new vehicles that the company develops and produces — and whether they reflect world-class business practices that are required to win against the best of its global competitors.

Yet another addition to the strucure/agency/culture debates! And one that suggests organizational culture flows from the top down, as evidenced by attempts to shape the new leadership: