Comments

Is it possible for large companies with a long history to change their culture?

Mike - Yes I think it is possible, but only by radical surgery.

I’ve always believed culture is created mainly by the BEHAVIOUR of the leaders. In the ‘new world’ culture is created not only by leaders but also by ‘followers.’ Information is not in the hands of an ‘elite’ few at the top any more. We mere mortals have it too!!

The modern ‘leader’ will listen to followers and change direction accordingly. Burying heads in the sand and not looking at what competitors are doing - and as a consequence changing what we do - is a sure fire recipe for failure.

I often hear people referred to as ‘weak’ if they change direction or change their mind – I disagree.

Changing PRINCIPLES is not acceptable.

Changing direction tactically and pragmatically is acceptable to me. It makes eminent sense and frankly could be the difference between survival and metaphorical death.

So in nutshell my answer is ‘yes but not without pain.’

Posted by Trevor Gay at February 22, 2007 5:46 PM

Yes, the culture can be changed, but not without lots and lots and lots of pain. The first step is to admit that there is a problem, which both Ford and GM seem reluctant to do. The facets of their culture which need to be thrown away and replaced are numerous and deal with supplier relations, design, manufacturing, quality, dealers, end customers, and etc. There is still so much denial and inertia in those two behemoths that it is still very uncertain if either of them will survive without being gobbled up by a smaller, but more agile competitor.

I read Daniel Howes all the time and I am dismayed at his attitude toward our first gentleman. Mr. Howes is usually a bit more objective than that and he usually is one of the first to take Ford and GM to task when they do something stupid. I wonder what gives at the News? I applaud the Gov's husband for speaking the truth. So many of our fellow Michiganians want to return to the good old days when there was no real competition. Time to pull their collective heads out of the sand and get on with fixing things! Take a lesson from the Toyota Way--don't worry about WHO is to BLAME, focus on FIXING the PROBLEM!

Posted by Mike at February 22, 2007 6:53 PM

Trevor and Mike...Thanks...and I agree. Understand that I love our heritage here in Michigan. The auto industry allowed my blue collar Dad to put 5 kids through college. I sat on Walter Reuther's knee as a child. I still drive a Chrysler. But dammit...something basic is wrong in this industry and I so get the feeling that many of the execs figure if they can cut costs and wait, the problem will go away. I am not sure at this point whether it can be salvaged. And in my darker moments, I even wonder whether it should be saved. Mike you are right....enough infighting...lets fix the problem!

Posted by Mike Neiss at February 22, 2007 7:19 PM

Trevor..one of my favorite Turkish proverbs. "no matter how far you go down the wrong road, turn around!"

Posted by Mike Neiss at February 22, 2007 7:20 PM

Great post. I'm one of those who would really like to see at least SOME large scale industrial employers survive in the States because they have historically provided so many blue collar workers the opportunity to join the middle class, own homes, educate their kids - things that don't seem as likely to happen through service jobs.

Change would - as noted - not be without pain, but I'd love to see the Big Two (and the UAW) sit down and start by asking: if we were starting from scratch, what would we do? What would we build? How would we operate? I wonder how much of the "this is the way we do things" would survive.

Posted by Maureen Rogers at February 22, 2007 7:31 PM

Here here Maureen!

Posted by Mike Neiss at February 22, 2007 7:39 PM

Personally I see it as an opportunity.

When the dinosaurs die out the age of man begins.

Posted by craig at February 22, 2007 7:44 PM

Maybe so Craig. I do struggle whether it is a good thing that orgainzations that lose their relevance should just go away. But then again, my neighbors work there....

Posted by Mike Neiss at February 22, 2007 7:46 PM

At the macro level, everything may work out just fine when the dinosaurs die. At the micro (i.e., human being) level, there always end up being real dislocations and for many individuals dinosaur death is a really terrible thing to have happen. (This seems to be the "dinosaur on the table" when we talk about the upside of plant closings, globalization, off-shoring, etc.)

Posted by Maureen Rogers at February 22, 2007 8:44 PM

The sad thing is that organisations so often "need" a death-threatening experience to realise just what a predicament they're in. You'd have hoped the US automobile industry would learn from history or learn from what's happened here in the UK, see the writing on the wall and then make big, radical changes to re-position themselves.

The other sad thing is that it's seen as disloyal to praise someone else's success. It smacks of, "My country, right or wrong" and we all know where that can lead us, be it my country / family / company or whatever. As I explain to all my colleagues, if I see a good idea that I think we can use, I'll take it. And I'll have no problem acknowledging where or who it came from.

Posted by Mark JF at February 23, 2007 3:40 AM

‘Trevor..one of my favorite Turkish proverbs. "no matter how far you go down the wrong road, turn around!"

Hi Mike – That wonderful quote reminds me of when I had the pleasure of seeing Tom in London last May at his all day seminar. A delegate asked Tom what we do when faced by our cynical and conservative bosses who need convincing about implementing Tom’s ideas.

Tom thought long and hard and came up with a wonderful piece of wisdom I have unashamedly stolen and I now use a lot in talks. I think this is a relevant quote in the context of this discussion about how to change culture don't you?

Tom said:

‘If you bang your head against a brick wall once and give up you are a QUITTER

If you bang your head against brick wall ten times you are an IDIOT

Somewhere in that range is the right answer’

I just love that Mike

Posted by Trevor Gay at February 23, 2007 5:52 AM

At its core, Toyota has built a deep, learning culture. The level to which they have embraced Demming's PDCA cycle (Plan-Do-Check-Adjust) is mind boggling. Even more so, is how very rapidly they execute PDCA. (Check Tom's many comments about John Boyd here)

As a result, they have very good vehicles made very efficiently and bring new cars to the market faster than anyone else.

Ford and GM, while marveling at this phenomoenon, seem unwilling or unable to learn from it. I wish they could. But they have confused the "tools" of Toyota (kanban, just-in-time, etc) with the "culture" of Toyota (relentless learning through PDCA-style experimentation).

Only to the degree they can get to this learning culture can they change. And the intertia is so strong (look at the press' backlash at these comments), it appears unlikely.

Posted by Joe Ely at February 23, 2007 6:57 AM

Joe...I tend to agree with you. While at GM, I had the great opportunity to work with Dr Deming and be involved with the implementation of some of Suzaki's methods of shop floor management. It always appeared to me that we "cherry picked" pieces of the Toyota Production System, of course then killing the idea that it was a SYSTEM! It drove me freaking nuts. By the way, I see many other organizations trying to do the same thing...they use the tools, but don't buy the things that affect them personally. Like putting the plant manager's desk on the factory floor, or limiting executive pay based on production worker pay...

Two things, among many, I remember Dr Deming saying. He said we had little chance at GM because we couldn't fix things we couldn't see! And then he looked around the room of senior executives and said simply, "You're all hacks" :)

Posted by Mike Neiss at February 23, 2007 7:24 AM

Even large companies can change, but it is very hard and painful. Some companies (and their CEOs) that have managed this would in my book include IBM (Lou Gerstner), Scandinavian Airlines (Jan Carlzon) and P&G (A J Laffley). The first requirement is the insight to admit that a problem exists, and that the company will not survive unless that problem is solved.

Posted by Mats at February 23, 2007 8:56 AM

1. "Pain" in change is sooooooooooooooo 20th Century

2. Yes - change radically in a heartbeat - Ford & GM can do it & must

3. Big 2 must focus on vision of radical pleasure in once more providing optimal transportation & freedom for the masses

Posted by sean_detroit_fan at February 23, 2007 9:05 AM

This conversation reminds me of Alan Deutschman and his article then book "Change or Die". Alas, when people go in survival mode everyone thinks only of themselves... and not others who will be impacted.

I've seen it over and over again in mergers and acquisitions where one of the companies -- and sometimes both -- have to die. Lots of people, good people, people who are on the wrong side of the political game, get shot or trampled over while the executive team is cutting deals for themselves.

Interestingly I've observed that somehow people think if they don't own the problem they can't be held accountable. That's insane: they are accountable, whether they own up to it or not.

Posted by Valeria Maltoni at February 23, 2007 9:27 AM

Thanks for reminding me about that article Valeria. for others, it is here: http://www.fastcompany.com/magazine/94/open_change-or-die.html

Throughout my career I have been privileged to know many of the auto execs, and unless they have completely bamboozled me, I don't believe they are primarily concerned with their own well being. They are passionate and caring about their companies, and if anything is selfish, there is concern about their personal legacy. I suspect the problem has more to do with the inertia that has been building for so many years. It must be very scary to realize that the system you grew up and learned from is not going to work moving forward. I think it will require uncommon courage to destroy the old while not being completely convinced about new strategies. Except in some isolated areas, I have found that the perceived security of the known appeals more to them than the uncertain promise of the new. Many of the improvement efforts to date have been focused on making the old more efficient. Tough situation. I am not letting them off the hook; perhaps it is the luck of the draw that their time to lead came at such a difficult period. As I hear so often on the factory floor "Heh, that's why they get paid the big bucks!"

Posted by Mike Neiss at February 23, 2007 11:00 AM

I've often wondered about how groups recover when they seem to lose their momentum. In Confidence, Rosabeth Moss Kanter suggests three steps in doing a turnaround:

• Face the facts and reinforce responsibility
• Cultivate collaboration
• Inspire initiative and innovation

She does give examples of organizations that have done this successfully.

Posted by Bill Harris at February 23, 2007 12:01 PM

thanks Bill...big fan of Ms. Kanter

Posted by Mike Neiss at February 23, 2007 12:32 PM

It was Jack Nicholson who made the comment famous in A Few Good Men when he said "You can't handle the truth." It's somehow funny that we tend to think it's always the other person who can't handle the truth. We ourselves, of course, have no trouble with it.
I teach management to engineers and at the end of every lecture I flash a cell that says "Veritas." That's Latin for truth, and I learned it in college and I always try to live up to the concept. It's not easy, and the more personal it gets, the harder it seems to be.
When I read the News article I was furious at the attack on (as I saw it) one of the finest and truest gentlemen I have ever met. But after I calmed down and read some of the reactions, particularly Dan Mulhern's own comments, I thought, you know, as he says, he simply touched a nerve. And there is simply a lot of emotion on both sides, or all facets actually, of the issue. Everybody has an opinion, but what is the truth?
Is there truth, or is it all relative, as some seem to believe. The car companies are in big trouble. Michigan is in big trouble. The world is in big trouble (Am I allowed to say that?). My wife says that the truth never hurt anybody. Dan Mulhern is looking for answers to very big questions, and so is his wife as the Governor of the State of Michigan. If you have anything to offer (and you do, because if not you, then who?) drop him a note on his blog at danmulhern.com. I guarantee he will be gracious enough to listen.

Posted by John Gillis at February 23, 2007 4:13 PM

I'm of the thought that you can't change people (especially those who are part of the root) so you change people. The only way to change the culture is to cut out the root and start anew.

Posted by Mike at February 25, 2007 10:10 AM

John Gillis--good comment. I have to take issue with one aspect, simply because it has become a common misconception. Michigan is NOT in trouble. Southeastern Michigan, the heart of the Big 3 "auto belt" is suffering the pains of change and possibly future growth, for sure. Housing foreclosures throughout MI are at an all time high, but according to my local bankers and realtors this is due in large part to the high divorce rate and a relatively new phenomenon--gambling debts. Michigan, as a whole, has a robust economy that is growing every month, and no--I am not part of the state gov't or the state chamber of commerce. I am simply a MI native who happens to work for a very successful manufacturing outfit that is in the auto industry. Michigan no longer revolves around what happens in Flint and Detroit, and that is a GOOD THING. I think the sooner we all make peace with that bit of truth, the sooner we can move forward into the future.

Posted by Mike at February 25, 2007 8:49 PM

Yes, I loved the FastCompany article about Toyota. And yes, I agree with those who pointed out how other companies "cherry picked" from Toyota's practices without understanding the philosophical system that supports those practices--a mistake that we continue to see in business today, unfortunately. Here's my two cents: I believe that a real key to Toyota's success was simply in placing a value on the ideas and input of their workers--the people who are any company's greatest resource. By listening and implementing their workers' good ideas, Toyota was tapping into a vast and unlimited resource of creativity and innovation. AND at the same time, they were sending an incredible message to their people: you are important! This simple practice also created enormous engagement, buy-in, support, and loyalty among their people (not to mention, incredible productivity!). The success of the NUMI plant bears testimony to the impact of this practice. The mindset of US companies, on the other hand, was best summed up by a long-term Ford employee who shared his insight on-camera: "For many years at FORD, when a worker shared ideas with his boss, he was told: 'You're not getting paid to think... you're being paid to work...'" When I hear things like that, it's hard for me to shed tears for Ford. For better or worse, US companies will be judged unmercifully at the bar of justice we call "competition." If they want to succeed, they will have to find a way to change. They better learn fast!

Posted by Dr. Jim Dyke at February 26, 2007 9:12 PM