Introduction
Organizations experience different kinds of changes in their life cycles. These changes require effective management to allow organizations to thrive in the future. In this essay, we apply the Four Frames of Bolman & Deal (2008) and the Eight Stages of Kotter & Cohen (2002) to create a plan to manage culture change at General Motors (GM). It shows how a new organizational culture change can save GM.
Critique the GM’s Profile
GM has been in business for over 100 years. However, in the year 2009, the company declared its state of bankruptcy after losses and declines in market shares and profitability. These events necessitated a large-scale culture change at the company. GM had to change its culture and processes to avert a total closure. Changes started with the appointment of the new CEO, Fritz Henderson.
It is important to note that bankruptcy stimulated a radical cultural transformation in the operations of the company. Henderson focused on a new culture for GM by concentrating on four areas namely, “risk-taking, accountability, speed, and customer and product focus” (Smerd, 2009). The next stage involved effective communication with GM workers and other stakeholders in order to avoid further financial losses. The new CEO faced imminent pressure to turnaround the company through his proposed culture changes. Moreover, Henderson faced pressure from the Federal Government because it expected quick improvement from bankruptcy.
A Plan for Creating Urgency at GM
The new management team must understand a sense of urgency to determine the level of complacency within GM. GM has been on top of the market but faced bankruptcy, which it has to recover from somehow. The company had failed to react positively to signs of imminent bankruptcy. The state of bankruptcy inspired significant changes, which the new CEO had to incorporate in order to steer the company to profitability.
The new management team must ‘aim for the heart’ i.e., guarantee to succeed in its change effort. The new management team must turn to human resource managers and employees to inspire them to grow the company. Employees must inspire culture change at GM. The new CEO must engage employees and communicate effectively to inspire success.
GM must restructure its top leadership and define the new roles of the HR department. The HR department must support a culture change in GM, but it must let employees and leaders to drive the change. GM must develop a procedure for adopting a culture change and put it into practice. It must have a new performance management approach, training for the new culture, effective communication systems for its new values, and a project management team.
An approach to attracting a guiding team
The new CEO needs help to create the right vision, communicate effectively to all employees, eliminate challenges and realize short-term wins. Also, the new CEO needs to lead and manage culture change and inculcate changes deep in the GM’s culture. The company must work on a new culture, which requires a guiding team that would lead GM to success. A guiding team must have the right people to lead a culture.
The guiding team would provide several advantages to the new GM. After the bankruptcy, GM must not miss the opportunity to make decisions that would transform the company. Leaders and managers must be a part of the guiding team in the culture change program. Trust is critical among team members because it would allow them to function effectively.
The team must share similar values and develop trust to make a culture change successful. In this regard, the new CEO and other managers must consider the expertise of the members in order to attract a team with the required expertise, viewpoints, and decision-making abilities. The team must consist of adequate team players to avoid blockage of progresses. The CEO and other managers within the team must be credible leaders so that employees can take their decisions and announcements seriously. Finally, the guiding team must consist of people with leadership abilities, who can drive culture change in GM.
The culture team for GM must consist of a favorable number of leaders and the HR manager.
Components of a change initiative at GM
According to Rob Kleinbaum, “a focus on changing structural costs would not save GM” (Kleinbaum, 2009) from its troubles and bankruptcy. Hence, the focus should be on culture change at GM. Culture change must ensure that the board holds the CEO and other senior managers accountable for results and performance. Training and education programs for employees must reflect best practices in the industry. The company’s culture on promotion must emphasize merits rather than patronage. Regular meetings must not kill ideas but focus on product and business developments. On this note, GM’s culture change must focus on four critical areas.
First, GM must change its performance management approach. Performance must reflect merits. Second, GM must develop a new training program to inform leaders and employees about the new culture and what they should contribute in the process. Third, GM must communicate effectively with all stakeholders by using both internal and external communication channels. Finally, the company must create a team to drive culture change programs.
All these initiatives must focus on risk-taking approaches, accountability of senior executives, urgency, customer, and products.
A Communication Plan
A communication plan for GM must reflect culture change efforts. Also, the new CEO must ensure that many employees understand and embrace cultural change. The plan must avoid miscommunication and inconsistency.
The new CEO must communicate the new culture on an hour-by-hour basis, and the message must reach all departments of GM.
Henderson must use effective communication channels to pronounce culture change in GM. He will use:
- E-mails
- Memos
- Meetings (must be exciting and engaging)
- Presentations (must be lively)
Communications must focus on GM’s problems and the new culture. Communications should be simple and vivid with examples from the industry, and employees should be able to replicate such ideas in their departments. The CEO must use:
One-way communication
This would involve the provision of information about details of the new culture to employees.
Two-way communication
The new CEO would use this approach to facilitate feedback from employees and other stakeholders. Senior executives must provide convincing responses to employees and the board.
Senior executives must seek feedback from employees in all forms of communication channels. A mere gratitude may not be adequate when changing a culture of an organization. In other words, senior executives must insist on employees’ feedback and inputs. This allows employees to have direct inputs and influences on the change process.
All forms of communication must be precise and clear. For instance, senior executives must declare their objectives precisely.
Leaders must also engage in the process and ‘walk the talk’.
Questions and Answers anticipated from employees
What is the new culture and will it save the company?
The new culture aims to introduce a sustainable business model at GM. The culture will save the company because the focus will be on areas of weaknesses such as customer experience, business, and product development, and downsizing.
Will the new culture improve liquidity, eliminate bankruptcy, and lead to profitability?
Effective implementation of a sustainable business model would change the company bankruptcy and lead to profitability.
GM is a large corporation with thousands of workers. How will the company put culture change into practice throughout its global networks?
The company will facilitate two-way communications. Moreover, senior executives would encourage employees to own the process, ask questions, and provide their inputs and feedback.
What are the roles of employees in the new culture?
All employees must ensure that change reaches every part of the company and display the best practices in the automobile industry.
Maintaining credibility with the employees and creating faith in the change effort
The first approach would involve developing trust among all stakeholders. Senior executives must establish trusts among themselves and with employees.
The guiding team must be experts and people who have track records of performance. This would establish credibility in the change process.
Leaders must believe in the change effort to create faith among employees. Senior executives must translate whatever they say about culture change into action. Leaders who are willing to transform GM must engage in action to establish credibility and create faith in culture change. This makes such senior executives living examples and representatives of the new desired GM culture.
All communications and communication channels must be consistent. Leaders must establish credibility through consistent communications and information. Employees will require their superiors to back up their communications and information with facts, logic, data, action, and behaviors (Bolman & Deal, 2008). When change agents and leaders behavior in a manner that facilitates culture change, then the whole firm will change and follow their direction. Senior executives would be able to motivate, inspire, create faith, and reduce cynicism among employees.
Senior executives must enhance their credibility by involving other employees in developing and implementing the suggested change efforts. Employees would embrace the change effort as soon as they begin to realize positive outcomes.
A plan to empower GM
In most cases, the internal structures of GM have opposed changes. For instance, Smead noted that current and former employees showed that GM had “struggled to impose cultural change across the highly bureaucratic system in which brands, departments, and regions operated like self-governing and competing states within a federation” (Smerd, 2009). Also, there were “times when senior managers have pushed cultural change and there was resistance from the workforce, then there had been times when the workforce wanted to change and resistance came from senior management” (Smerd, 2009).
Such odd visions within the organization have hindered culture change. Structural barriers in GM have originated from complex and bureaucratic decision-making processes. Empowering GM would involve eliminating the fragmented processes, improving decision-making processes, and reducing groups that create costly programs and processes.
These challenges have existed in GM for several years. Hence, they would present considerable challenges to culture change. Empowering the company would require realignment of performance appraisal approaches, promotion, and incentives. This would ensure that change efforts have profound impacts on the company.
Managers must use the information management system to enhance the implementation processes of culture change. GM must use effective and powerful communication systems to empower employees. This would facilitate feedback and provide information required for efficient culture change.
GM had problems with its managers who would oppose the proposed culture changes. Such habits often become components of management style within the company. While such managers may not oppose culture change openly, they do not support change initiatives as required. In most cases, change agents have failed to get support from this group of leaders. GM must avoid challenges, which such leaders pose to culture change by seeking for their supports. However, senior executives must recognize that resistance from managers may not have an easy solution. Nevertheless, honest discussions may aid in overcoming challenges associated with management resistance.
The political climate and sub-climates within GM
GM had a tradition of fierce competition among its many divisions and branches. The independent automakers competed for resources, market shares, and there was a general lack of centralization in all processes of the company. This was costly to GM. This culture of competition created a company in which leadership believed in competition for available resources and constant conflicts.
The new culture requires GM leadership to create networks and coalitions that support the fair distribution of resources. GM must create leadership that can adapt to such cultures and support new cultures of effective utilization of available resources.
GM must centralize its operations to reduce conflicts and competition among its subsidiaries. Elimination of competition for funding and other resources will enhance innovation within GM and create streamlined operations. After the bankruptcy, GM leadership must reach a consensus that the need for change culture is inevitable. However, some leaders have maintained that GM’s culture was perfect. Instead, they blamed economic crisis and high fuel prices for their problems. After the consensus, different leaders will support and implement culture change programs.
Disempowering symptoms within GM culture
Competitions for resources and conflicts within GM are major symptoms within its culture. Also, bureaucratic processes of decision-making in GM have affected some departments negatively. These symptoms have resulted in costly affairs for the company.
GM has failed to implement an enterprise-wide initiative and sell it to all departments because of decentralized systems. Many departments would resist such attempts by saying that they already have ‘something going on’ in their areas.
How to change these practices, empower action within the pockets of politics, and create short-term wins that generate ongoing momentum for change initiative
GM must begin by replacing some top senior executives. This process must start at Detroit. The company can replace them with outsiders, or people who have experienced different cultures within GM i.e., from oversees. These changes must also affect the board because of their key contributions to the company. The GM’s board has failed to ensure any form of accountability or culture change from senior executives. Instead, they have favored management decisions without any questions.
GM must adopt centralized and unified systems and work as a team toward eradicating bankruptcy and changing its culture. This would result in streamlined and cost-effective processes within GM. GM will have to eliminate several departments and adopt a single department that focuses on business and product developments. This would eliminate redundancy and bureaucratic processes in the company.
GM must embrace training and education in the entire organization. Training and education must change juniors, as well as seniors. Education would ensure that the company overcomes short-term challenges and establish long-term commitment for the future. Education should extend beyond the company and enhance exposure among some of its outside stakeholders.
Symbols used at GM
For several years, the GM’s board and management have supported the existing culture by asserting that nothing was wrong with it. Moreover, the board and senior executives have claimed that these events were beyond their control. This notion has instilled situations in which “most meetings are still exercised in procrastination, rubber stamping or idea killing, without anything that would pass for genuine debate and dialogue” (Kleinbaum, 2009). Smead noted that GM had “hierarchies and bloated executive ranks in which no one wanted to criticize a project that was not working for fear of a boss’s reprisal” (Smerd, 2009). This resulted in slow decision-making processes, which had negative effects on product developments.
Such approaches to core decision-making in GM have created symbols that have resulted in slow processes and bureaucratic leadership. GM can overcome such symbols through “genuine discussion, feedback, and intellectual engagement” (Kleinbaum, 2009).
GM can only change these symbols by changing its people and leadership. Also, GM must alter its internal structures to create an enabling environment for cultural changes. However, this must be a conscious process among senior executives who want to facilitate culture change.
Senior executives have been reluctant to make tough decisions that would affect the company in the short-term but create long-term solutions. Instead, they have resorted to continual compromise of important decisions, which resulted in immediate challenges. GM has failed to align its manufacturing and operations to market realities. The company has never fired any employees for poor performance. The new culture must change these belief systems, but it can only work with the support of senior executives.
GM must adopt a progressive culture and abandon relying on its past success (Glover, Rainwater, Jones & Friedman, 2002). The static culture has created a situation in which the company cannot make fundamental decisions for tomorrow. While the company has made some achievements in its reform efforts, there is little to praise because senior managers have not changed as required.
GM must rise beyond cost reduction as a strategy to restore its profitability and define new paths for investments. The board and senior managers believe that the company can “reduce its capital investment in products whenever times get bad without having to pay for it in consequences of compromised characteristics and lower share and price” (Kleinbaum, 2009). Instead of capital restructuring, the company should invest in its products and employees.
To overcome these challenges, GM leadership must ignite inspiration in its employees. Leadership must appeal to employees and capture their attention in order to instill a culture of continuous change (Glover, Friedman & Jones, 2002). It must communicate the intended vision effectively.
GM must adopt zero-tolerance for senior executives who do not support the new culture change. The company must create a sense of urgency by acting quickly, boldly and listening to “feedback from customers, employees, dealers, media, and just about anyone else with an opinion” (Smerd, 2009).
References
Bolman, L. G. & Deal, T. E. (2008). Reframing organizations: Artistry, choice, and leadership. San Francisco, CA: Jossey-Bass.
Glover, J., Friedman, H., & Jones, G. (2002). Adaptive leadership: When change is not enough (part one). Organization Development Journal, 20(2), 15-32.
Glover, J., Rainwater, K., Jones, G., & Friedman, H. (2002). Adaptive leadership (part two): Four principles of being adaptive. Organization Development Journal, Chesterland, 20(4), 18-38.
Kleinbaum, R. (2009). Retooling GM’s Culture. Web.
Kotter, J. P. & Cohen, D. S. (2002). The heart of change: Real-life stories of how people change their organizations. Boston, MA: Harvard Business School Press.
Smerd, J. (2009). Can a new corporate culture save General Motors? Web.