I am writing today to announce the closure of the Michigan Messenger. After four years of operation in Michigan, the board of the American Independent News Network, has decided to shift publication of its news into a single site, The American Independent at Americanindependent.com. This is part of a shift in strategy, towards new forms [...]
An abstinence-only presentation provided to numerous school districts in Calhoun and Eaton Counties in October of this year provided false and misleading information to students about HIV, experts allege.
Two county registers of deeds filed a class action lawsuit Monday on behalf of Michigan’s 83 counties alleging that the Mortgage Electronic Registration Services owes millions of dollars in property title transfer taxes.
Despite evidence of the impact of mercury on children and public health, Michigan Attorney General Bill Schuette last month joined with 24 other state attorneys general in filing a lawsuit to scuttle new EPA regulations that would reduce mercury emissions from power plants.
A former General Motors executive who has spent the last 15 years as a consultant for America’s largest automaker has issued a report on the website of the University of Michigan Transportation Research Institute arguing that the company has a broken corporate culture and that they are not willing to make the changes necessary to turn the company around.
Rob Klienbaum has spent the last 24 years working for GM either as an executive or a consultant. He argues in this paper that the financial problems faced by GM were not merely the result of an economic downturn they could not foresee but was rather the result of a company coasting on its past victories rather than fighting for future successes:
Culture means the “values, attitudes, beliefs, and underlying assumptions.” The importance of culture is that it forms the foundation of the business logic brought to any specific decision or problem; there is little chance something will be done that violates the culture, as it would mean contradicting fundamental beliefs. The success of many companies, including McKinsey, P&G, and Pixar is attributed to their cultures and a recent study of Toyota concluded its success is due as much to its culture as the Toyota Production System. Sometimes societies may change their culture in response to a major disruption, as Germany and Japan did after World War II and companies have as well, such as GE, IBM and Alberto-Culver, after their own near-death experiences. But in all these cases there was a consensus among the leadership that the culture needed to change and serious efforts were put in place to implement those changes. It is fairly apparent from their behavior and statements that GM leadership in North America do not believe there is anything fundamentally wrong with the company’s culture; indeed they seem firmly convinced that they were well on their way to recovery but were overtaken by events beyond their control; specifically the large spike in energy prices and the collapse of the credit markets that have led to the current recession.
GM’s current response seems to reflect its fundamental beliefs about the way the world works and it is almost identical to what it has been doing for the last 30 years: cut “structural costs,” wait for future products to bring salvation, and count on cash from the other regions (and, now, the government) to help prop things up in the meantime, but make no truly fundamental change in the business, its structure or people running it, as they are clearly the best and brightest, know how to manage things in a serious way and have a sound plan. The proposed changes are touted as “profound” and “fundamental” but are really the minimum change from status quo the company believes it can get away with. There is a profound reluctance to make hard decisions that would cause short term pain but would lead to fixing the problem in the long run; instead there is a continual compromise of action that leads to too little too late but defers immediate catastrophe. This is reflected in every aspect of the enterprise, from decisions on manufacturing, which never brings capacity into line with market realities, to people, where almost no one is ever fired for poor performance. This has not worked yet and it is difficult to believe it will work now.
Klienbaum makes a distinction between progressive and static corporate cultures and says that progressive cultures are dynamic and focused on the future while static cultures are hidebound and focused on reliving past glories. GM, he says, has a static culture and making the company viable again requires building a “radically different organization.”
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