By on August 13, 2009

BusinessWeek (BW) offers its readers a look inside Brand Spanking New Chrysler, or whatever they call it these days. Although the article’s written in the style of a PR puff piece, there’s plenty to disconcert the inherently skeptical (guess who). For example, does this strike you as the best way to re-jig your executive ranks? “Rather than rely on suggestions from top management, Marchionne asked more than 100 middle- and lower-ranked staffers what they thought of their bosses. Then, say people familiar with the process, he picked people most respected by their subordinates. ‘If he didn’t hear expressions of leadership voluntarily from people, he took it as a sign that they didn’t view the executive as a leader.'” So no one lied about their boss? Or everyone did? Or Marchionne favored the suits favored by brown nosers? And how did he know whether a testimonial was voluntary or inspired by Christmas party pictures? Color me confused about Chrysler.

It seems that Sergio has also taken a leaf from Old/New GM, where brand fiefdoms compete for scarce resources, even as they’re supposed to be searching for synergy.

To help strengthen and focus Chrysler’s brands, Marchionne decided they should compete with each other for marketing and development resources. He has turned Dodge, Jeep, and Chrysler into separate companies, each with its own CEO. The risk is that the brand chiefs wind up undermining each other. To prevent that, Marchionne gave these executives corporate responsibilities, too. For example, Fong runs the Chrysler brand but is also in charge of sales for the whole company. The Dodge chief is responsible for the marketing strategy of all three brands.

Oh, yeah; overlapping responsibilities and confusion are just the thing to put a stop to internecine warfare. Meanwhile, Sergio like to move it, move it.

No lover of hierarchy and process, Marchionne has stripped people of fancy titles and moved the CEO’s office from the 15th story to the ground floor, where designers and engineers dream up new cars. He encourages low- and midlevel staff to keep the work moving even if they have to bypass a supervisor to get a project or expenditure approved. Before, says a Chrysler executive, “People guarded the chain of command and their titles like mother lions.”‘

Now? Now they couldn’t care less. Apparently. It’s all for one and everyone for themselves.

Marchionne is at heart a delegator. He sets goals and expects his reports to tell him how to proceed. For example, the chief was set on quickly bringing Fiat to the U.S. and ditching the Chrysler brand. His team persuaded him that doing so would be too expensive right now.

Whoa! Hold on there! This confirms the rumor—put out there by TTAC and TTAC alone—that Chrysler wanted to kill the Chrysler brand. And that “right now” caveat speaks volumes; we can now file Chrysler with Buick and Saturn (amongst many, many others) as “damaged brands.” Anyway, there’s nothing here that makes me optimistic that Chrysler will live any longer than the next time they ask for your tax money.

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28 Comments on “Chrysler Organizational Strategy Revealed...”


  • avatar
    rnc

    “Rather than rely on suggestions from top management, Marchionne asked more than 100 middle- and lower-ranked staffers what they thought of their bosses. Then, say people familiar with the process, he picked people most respected by their subordinates. ‘If he didn’t hear expressions of leadership voluntarily from people, he took it as a sign that they didn’t view the executive as a leader’”.

    Actually the Army developed this review system and it is considered to one of the best in the world (most importantly its annonymous). In terms of lying if you have 25 raving reviews and one bad one, you can discard the bad one and vice-versa. The ones in the trenches making $40-80k/year are the ones that really know whats going on. The ones making $150+ are the ones with every incentive to hang on to thier jobs regardless, they are also the ones that need to be weeded out.

  • avatar

    rnc

    Are you saying the U.S. Army has a fair, objective and comprehensive methodology for assessing candidates for promotion? Frank Williams might have a word or two for you on that subject.

    And how we can be sure Chrysler’s survey was anonymous?

  • avatar
    djn

    quote: “It seems that Sergio has also taken a leaf from Old/New GM, where brand fiefdoms compete for scarce resources, even as they’re supposed to be searching for synergy.”

    Cut Sergio some slack. He’s got his recipe down for turning around companies and he didn’t borrow it from GM. Its worked twice, SGS and FIAT

  • avatar
    rnc

    Yes the army has a “360 degree review system”, up reviews down, down reviews up and side to side. And yes there’s some outliers in every system, doesn’t make the whole thing bad.

    Yes because if it wasn’t you wouldn’t get any honest answers and what would be the point? Lets give the man some credit he did pull Fiat out of the drain.

  • avatar

    As much as I love a great myth, Marchionne’s FIAT is far from a complete success. In fact, MarketWatch reports that it’s not feeling so well, lately. I know: who is? But still, you gotta wonder… Well, I do, remembering that GM’s billions (for not buying FIAT) funded Sergio’s rescue plan. OPM will only take you so far. If you know what I mean.

  • avatar

    It’s not a perfect method, but it’s better than the altnernatives. I wrote an entire thesis on the difficulty executives encounter when trying to know who’s truly talented, and what’s really going on in the organization. The people in the trenches tends to know a lot more than the execs do, because they live with the results.

    Overall, what I hear about Marchionne’s methods sounds great. Problem is, what you read in the press and what’s really happening are often two different things.

    http://www.truedelta.com/execsum.php

  • avatar
    CyCarConsulting

    It’s amazing that in Dolorean’s book from the 70’s about GM ,he talked about the same things they are talking about now. They didn’t listen to him then, and rather decided to oust him. Will anyone listen now at Fiatsler?, Unlikely

  • avatar
    Dynamic88

    For example, does this strike you as the best way to re-jig your executive ranks? “Rather than rely on suggestions from top management, Marchionne asked more than 100 middle- and lower-ranked staffers what they thought of their bosses. Then, say people familiar with the process, he picked people most respected by their subordinates. ‘If he didn’t hear expressions of leadership voluntarily from people, he took it as a sign that they didn’t view the executive as a leader.’” So no one lied about their boss? Or everyone did? Or Marchionne favored the suits favored by brown nosers? And how did he know whether a testimonial was voluntary or inspired by Christmas party pictures? Color me confused about Chrysler.

    Color me confused about what you would recommend doing about the executive ranks.

  • avatar

    Dynamic88

    You fire ALL the friggin’ idiots responsible for vehicles like the Sebring. And then a bunch more, just for good measure. (Seriously. Consult Machiavelli for details.)

    At the same time, you find the best possible new senior executives (a large percentage of whom should be Chrysler outsiders) and let them choose their own teams.

    You set benchmarks and hold the suits accountable for their actions. Wash, rinse, repeat. If you can’t identify “real” leaders, if you can’t find people who can assemble successful teams, you ask yourself if your career is the result of the Peter Principle.

  • avatar
    ajla-

    To help strengthen and focus Chrysler’s brands, Marchionne decided they should compete with each other for marketing and development resources. He has turned Dodge, Jeep, and Chrysler into separate companies, each with its own CEO.

    I’m a bit confused with this. Is Fiatsler trying to implement a 1960s GM type system where the individual brands do their own thing (for the most part) and don’t like each other?

    That should at least keep away the release of more Compass, Aspen, and Nitro-style abominations and doing stupid things like naming a 4-door V6 car “Charger”.

  • avatar
    johnthacker

    For example, does this strike you as the best way to re-jig your executive ranks?

    Compared to most ways I’ve seen? Yes.

  • avatar
    Juniper

    Farago
    So you believe in the “Kill them all and let God sort it out” management style?
    It sounds cute in a blog but??
    I think the Sebring Idiots work for Mercedes.
    By the way,Since you are throwing out all kinds of management advice, How long have you ever worked for a larger company without getting fired?

  • avatar
    Boff

    Fire everyone who worked on the Sebring? Bring in a bunch of outsiders and let them build their own teams? Sounds like what any armchair MBA would say.

    A company as established as Chryco likely has the talent (even now) within the organization to thrive…they just require better management.

    A manager who can delegate and who can listen is the ideal.

  • avatar
    windswords

    Juniper:

    “I think the Sebring Idiots work for Mercedes.”

    Thank you. It’s good to know that there is at least one other person that gets it.

    Robert Farago:

    “Are you saying the U.S. Army has a fair, objective and comprehensive methodology for assessing candidates for promotion? Frank Williams might have a word or two for you on that subject.”

    Yes. As fair, objective and comprehensive a methodology as they know so far. Unless Frank Williams just got discharged I would guess he served when they used a different methodology.

    This whole post seems to be in search of a point. You cast dispersions on what Sergio is doing so far but you don’t have any real idea of what is going on, just what you read in Business Week. That’s not a good source IMO. If you have a contact inside Chrysler who can tell us all the bad goings on under Sergio, fine. I would be interested in reading about it. But this seems much ado about nothing.

  • avatar
    Wolven

    Well, I kinda like the sound of what Sergios doing according to this report. Letting the ground troops anonymously dethrone and choose their leaders is not a bad idea, IMO.

    I REALLY like the idea of treating the 3 brands as independent companies. Besides setting them free to develop their own ideasidentites, it will be a great help down the road if you have to part the company out.

    I like RF’s ideas on accountability and executing the idiots (massive failures). In the past it seems that the independent thinkersdoers that actually created something decent (like a couple of the primary Mustang creators at Ford) generally got fired or demoted for doing what it took to bring a good idea to fruition. Hopefully, you not only execute the idiots, you greatly reward the boldly brilliant.

  • avatar
    holydonut

    I don’t think the Blogsphere is allowed to lay claim to any published idea where the headline is punctuated with a question mark. This practice of just lobbing ideas/rumors out there really took off in recent years as people just wanted to write about stories – so they set out to write stories even if there wasn’t much merit at the time to communicate the news.

    The question mark gets used as a shield because if the article is wrong – then obviously the answer to the question was false. But if it’s true – then you have yourself a modern day Nostradamus.

    No major news outlet dared publish anything about nixing the Chrysler Brand since there was nothing to substantiate the claim at that time. Lot of people were thinking about the novel idea, but they weren’t about to toot their own horn for the sake of putting letters on a page. The lack of products in the pipeline and low brand strength made for easy fodder.

    Killing the Chrysler brand also seemed like a natural idea since they were already in the process of killing any standalone Chrysler dealer during the bankruptcy dealer cull. But at no time did Jim Press, Marchionne, or Obama really make a strong move to getting rid of the Chrysler brand; so it would have been impossible for most writers to jump to a preliminary conclusion.

    I don’t remember the LaCrosse Wiring Harness entry having “Wild Ass Rumor” as a prefix until very recently. When that bit of news first went up it was almost stated as a fact (and done so without a question mark suffix in the title).

  • avatar
    dkulmacz

    I have experience with 360deg feedback for performance assessment at two companies. On was an online system for entering written comments on various topics; the other involved telephone or face-to-face interviews with a neutral reviewer. In both cases I felt no qualms about speaking my mind about my boss, my boss’s boss, or my colleagues . . . positive or negative. It’s a wonderful system, IMO. As earlier was mentioned . . . you can generally form a accurate consensus view by discounting outliers, and you also understand how a manager works with subordinates and peers, not just their boss.

    It’s pretty straightforward to set up a good 360 system (just insure confidentiality); no one in their right mind would intentionally use one designed to provide bad data; SM is not a madman, nor a fool. This sounds like good management, plain and simple.

    Yet the article implies (at least) that the process is flawed, or corrupt, or self-delusional, or something somehow nefarious.

    The fact that you are so cynical about this says a lot. If you imagine shadowy reasons for a rational businessman to delude himself when making critical personnel decisions . . . then of course you’ll also see government boogiemen and corrupt executives around every corner. Trust no one.

    Also your suggested management strategy (+1 for “Kill them all and let God sort it out”!) is neanderthal. That’s not ‘accountability’ . . . it’s intimidation, and it’s lazy. On any project — success or failure — there are always good people and bad people. It’s your job to sort them out, not God’s.

    I’ll just say I’m glad I never have and never will work for you!

  • avatar
    holydonut

    dkulmacz – I think Al Dunlap (he wasn’t nicknamed Chainsaw for nothing) was probably the best example of what happens when a CEO goes into a situation firing everybody and intimidating people to get results.

    Any CEO that writes in his book “I’m a superstar in my field” is probably a bit too high on their own abilities. Dunlap has also been banned from running any publicly traded company after his leadership tactics proved to be unsuccessful.

    The hack and slash management style works well in stories though. The stuff that movie Gung Ho is hilarious.

    But regarding the Sebring; If the Vegas odds for the number of good people on the program is 3.5, then I think we’d all take the under bet.

  • avatar
    SherbornSean

    One correction. What’s being described is Organizational Strategy, not Corporate Strategy.

    Everyone knows that Chrysler’s corporate strategy is to make the lowest quality vehicles on the market and then cut price enough to stimulate demand.

  • avatar
    Wolven

    Based on the picture, I thought the news was going to be that they were praying for Gods guidance, borrowing money from the Pope, and committed to building the best damn pedophile mobile on the market… :)

  • avatar
    PeteMoran

    Is that the new Viper in the background with The Pope?

  • avatar
    lahru

    They should have culled management. Not dealers.

  • avatar
    ajla-

    They should have culled management.

    Going off the Chrysler LLC website, here’s the current upper management:

    *Sergio Marchionne-CEO-Brand New

    *Robert Kidder-Chairman-Brand New

    *Jim Press-Deputy CEO-Hired in 2007. His usefulness since coming over from Toyota is debatable, so maybe he should have been axed.

    *Frank Ewasyshyn-Executive Vice President-Hired in 1977 (nearly his whole working life). I don’t see anything he’s been in charge of that warrants keeping him around any longer.

    *Michael Accavitti-Dodge Brand CEO-Hired in 1999. Accavitti was in charge of Chrysler Canada and the SRT group until the C11 filing. I think those have been successful arms of the company, so keeping him around, and in charge of Dodge, isn’t a bad idea IMO.

    *Peter Fong-Chrysler Brand CEO-Brand New

    *Pietro Gorlier-MOPAR President and Customer Services Chief-Brand New

    *Michael Manley-Jeep Brand CEO-Hired in 2000. He was the head of Chrysler’s international development and dealer operations before C11. I’d probably get rid of him.
    __________________________________________________

    Now let’s look at GM:

    Fritz– GM executive since 1991, hired in 1984
    Lutz– GM executive since 2000, and a useless blowhard.
    LaNeve-GM executive since 2000. Also worked at GM from 1981 to 1985.
    Docherty– GM employee since 1985.
    Stephens-GM executive since 1993. Started working there in 1969.
    Spina-GM executive since 2000.
    Young-GM employee since 1988. Executive since 2001.
    _______________________________________________________

    At least Fiatsler has a couple new people. GM is still full of people that only know the GM way of life.

  • avatar
    CyCarConsulting

    Anyone notice the Clergy? Omen?

  • avatar
    Stingray

    A manager who can delegate and who can listen is the ideal.

    And a manager that will keep its ass safe, I must add.

    I ALWAYS listen to my people. They know the day to day details I don’t and usually have some ideas or views of the problem I don’t. So a decision taken hearing them is more complete, and they feel is “theirs” also.

    And is the manager responsibility to assemble its team. If you have bad apples, better get rid of them, so they don’t contaminate the rest. Also you have to choose the best ones, straight from the interview, an art I sadly have not mastered, yet.

    Happily, I feel good about my team of people.
    They’re very responsible, proactive and very independent. And this is with engineers right now. It was the same with plain workers.

  • avatar
    menno

    The obvious reason they have brought in the Pope, is that they truly need a miracle to pull this one off…..

    (badum-bump! ker-ching! thank you, thank you, I’m here all week. Tip the waitresses)

  • avatar

    Unless Frank Williams just got discharged I would guess he served when they used a different methodology.

    I retired from the AIR FORCE four years ago, so I can’t really comment on the Army’s promotion system.

  • avatar
    windswords

    Thank you for your service Frank.

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