Rot at the top.
The idea that people in leadership positions sometimes lose touch with their ethical and cultural roots is a theme that runs deep in American political and business culture.
More than a decade ago, John DeLorean, a tragic example of the problem, wrote a book titled On a Clear Day You Can See General Motors, an insightful critique of the management style and mores of America’s largest corporation. The book was recently named to Business Week’s list of the top business books of the past decade.
“Lie low and succeed” was the preferred strategy for making it to the top at GM, during a period when GM was beginning to lose nearly one-third of its market share to the Japanese and other producers.
Top executives spent most of their time talking to each other. Their schedules were filled months ahead with meetings – nearly all with each other. They spent their social life with each other, losing contact with people outside their industry and with the larger community.
The life of the GM topgun was filled with perks. Because top executives were provided a new care every six months by the company, they lost touch with the dealer network. Because they were provided valet parking, which included repair services, they lost touch with the shimmies and sputters of their own product, problems that ordinary people, including their customers, confronted daily.
Because their gasoline tanks were topped off every other day or so, they lost touch with the service stations and the grease monkeys who really knew the cars they serviced. Because of growing layers of middle management, top executives lost touch with the supplier network and the quality of the product being produced.
GM’s top guns lived in an increasingly abstract and analytical environment. Accountants replaced those skilled in manufacturing and marketing as top decision makers. Instead of direct contact with dealers, customers and suppliers, GM executives relied on reports and briefings.
Cautious analysts with “No” buttons replaced bold decision makers who, in earlier times, made GM the world’s foremost producer of automobiles.
In short, the leadership of GM emerged from the 1960s disconnected from sinews of everyday life. The consequences would soon be seen in the marketplace. It took less than 10 years.
And the story continues, as shown by last year’s stunning documentary movie, Roger and Me, dramatically detailing the arrogance of GM’s top guns and other events surrounding Roger Smith’s recent retirement.
Business leadership in the new economy requires a new breed of executive, people who value performance over credentials, who trust intuition as much as analysis, who have deep understanding of culture and broad contact with the larger global society in which they live and do business.
And the practice of leadership is changing, from inside work to outside work, from delegating to doing, from planning to participating.
Business as usual won’t do. The game has changed.