Feature Article - July 2008

Too much too soon or too little too late?

Chrysler CEO lives turnaround lessons we all need to know

                                                                                                                                                  by Tom Davidson

It might be your first job as a manager, but it could be your last. 

If you stay in management long enough, you will eventually find yourself in the precarious position of having to lead a “turnaround” where something is broken, and you have to fix it.    It’s a complex challenge that pits “too much too soon” against “too little too late,” and striking the right balance is your responsibility, whether you are CEO or supervisor. 

Chrysler CEO lives the challenge daily

A high-profile example of this is currently taking place at Chrysler, where Chief Executive Robert Nardelli is tackling the problem from the highest possible perch.  One of the “big three” automakers in the United States, Chrysler has fallen below the industry average on customer satisfaction, and it’s Jeep brand holds the very last position on J. D. Powers and Associates’ satisfaction survey. 

According to the Wall Street Journal, “In May, its U.S. vehicle sales fell 25%, and they are likely to continue falling because Chrysler offers few small cars, and those it has aren’t big sellers.”  While it’s still hitting financial targets, high gas prices are driving buyers away from the trucks, sports-utility vehicles and minivans that make up about 70% of Chryslers sales.  Clearly, the company is facing hard times.

He came to a fork in the road and took it

Nardelli isn’t waiting for the red ink; he’s acting now.  In what has been called “the campaign for culture change,” the CEO is attacking some of the root causes of Chrysler’s woes, and he has made no bones about what those might be.  “The traditional ways of running the company got us where we are now,” he said.  “So we’re trying to break some of the old paradigms.”

Nardelli has chosen the heavy-handed approach, ousting some of the “old guard” managers, personally re-evaluating 300 of the organization’s top executives, and leading a series of in-house seminars meant to instill a more customer-focused mindset.  These are part of a year-long effort to “overhaul attitudes,” and they will not be easy on anyone.  In fact, his “brusque style,” open attack on the organization’s past and culture-change initiatives are already “rubbing people the wrong way” according to the same article.  Key figures have left the organization voluntarily due to personal clashes, and many more are bound to be stewing below the surface.  But Nardelli doesn’t have much time, and the world knows it.

Alternatively, since he only joined the industry in August, he could have taken advantage of the honeymoon period to adjust his own thinking, learn what the organization was doing right, and partner with the “old guard” to make change more slowly and palatably.  This approach has pros and cons as well. 

Your path has potholes either way you go

Your choice of approaches lies along a continuum from fast and furious to slow and meticulous, and your choice depends upon the nature of the problem, the ingrained culture surrounding it, and the relative amount of time you have to make changes. 

If you choose fast and furious, like Nardelli, you might get things moving faster but by doing too much too soon, you may alienate a critical mass of the people who might otherwise have supported you.  You could also “throw out the baby with the bathwater” by inadvertently disposing of people and systems that were working quite well.  By “popping the clutch” on your work team, you could accidentally stall the change process rather than accelerating it.  Also, if you survive the shift, you will have a hard time overcoming “the baggage” you created during the turnaround and that could be your undoing.

On the other hand, if you choose the slow and meticulous route, you might bring people along with less turmoil and create less long-term baggage.  However, you take a big risk that the change might be too little too late.  Deeply held norms (i.e., “the way we do things around here”) are difficult to change quickly, and they take more patience and leadership dexterity.   Outside stakeholders tend to have little patience for this approach and may even label leadership as “weak” even though it may be the stronger choice.  As a result, you might be through before you even get started.

Choose carefully but choose you must

You may not be CEO yet, but you will certainly find yourself in similar situations while you are on your way up.  My advice is to be deliberate about the path you choose and not default to the one you prefer or the one that is most comfortable for you.  Your choice should be situational, and you should weigh the pros and cons.  The results will have a lasting impact on your organization and your reputation, so choose carefully.  It’s your job!

Click here to Subscribe to our Leadership Newsletter