Don’t lose touch with your workers (Editor’s notes)

Aloof and arrogant executives can hurt an organization
By Todd Humber
|Canadian HR Reporter|Last Updated: 11/30/2009

Arrogance is a quality often valued in CEOs and top executives. The top dog, after all, needs a bit of swagger because she is responsible for the ultimate success or failure of a company.

But that attitude needs to be checked at the door when it comes to dealing with employees. That killer instinct may be good in the marketplace, in crushing the competition and winning new business, but it doesn’t translate well on the shop floor. And if executives lose touch with what everyone agrees is a company’s most valuable asset — its people — then bad things are bound to happen.

Just ask General Motors. When the economy tanked last year, GM ran out of gas pretty quickly. The Canadian and United States governments rode to its aide, pumping billions of dollars into the automaker and keeping it afloat. At the beginning, it looked like GM was just a victim of the poor economy. And while that certainly played a major part in its troubles, there was more to the story.

With big government money comes a bit of government interference. Washington wasn’t going to sink tens of billions of dollars into GM without poking around under the hood. Steven Rattner was appointed to be President Barack Obama’s “car czar” and when he started kicking the tires at GM, he uncovered a few tidbits that are of interest to HR professionals.

Rattner wrote a scathing commentary published by Fortune magazine on Oct. 21, entitled “Why we had to get rid of GM’s CEO.” His first target at GM was finance, which he called “perhaps the weakest finance operation any of us had ever seen in a major company.” (The company burned through US$21 billion in 2008 and US$13 billion in the first quarter of 2009.)

But what’s most interesting for HR folks is the second problem he seized upon — the cultural deficiencies were just as stunning as the problems in finance, he said.

“At GM’s Renaissance Center headquarters, the top brass were sequestered on the uppermost floor, behind locked and guarded glass doors,” said Rattner. “Executives housed on that floor had elevator cards that allowed them to descend to their private garage without stopping at any of the intervening floors (no mixing with the drones).”

While Rattner said chairman and CEO Rick Wagoner was likeable, dedicated and generally knowledgeable, he also set a tone of “friendly arrogance that seemed to permeate the organization.” Wagoner was ousted.

It’s too early to tell if GM’s culture has been turned around, but its books are improving. In the middle of November, the company announced plans to pay back about US$1.2 billion to the Canadian and U.S. governments and its new chairman said he expects governments to recoup every penny they sunk into the company — “sooner than you think.”

That’s good news. And talk like that showcases some of that good arrogance leaders need to have.

Let’s just hope that elevator ride at the end of the day in Detroit includes stops on at least a couple of floors.

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