Chrysler Organizational Strategy Revealed

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.