In the new memoir American Turnaround, former AT&T and General Motors CEO Ed Whitacre details his experiences as a corporate Mr. Fix-It. Hired to take the reigns a GM after the American auto giant declared bankruptcy in 2009, Whitacre says rebuilding was all about taking responsibility, banishing bureaucracy and knowing when to shut up. Here with, the tough-talking Texan's secrets to success.
Being an outsider can help you fix what's inside
I started at GM knowing very little about that particular business. Not being an expert means you have to learn everything, starting from the basics. You're not tinted or tainted by past experience, and that might help you to realize that some of practices a company has been carrying on on for years aren't logical or aren't as effective as they could be. It could be organization, work methods, meetings. In the case of GM, it wasn't looking so much at how they were building cars, but how their company functioned.
Matrixes are for the movies
When I got to GM they were using a matrix method of management which means everybody has more than one boss. I first heard about that system many years ago. It's supposed to help with collaboration, but my assessment is that it's pretty hard to get geared for action that way. What I did was make sure that we had direct lines of reporting and authority and accountability, so that every person knew who they were responsible to and for. And then we just got out of the way.
Energy is nothing without a harness
When I went into GM there was a lack of moral. The company had gone bankrupt and the people who worked there were embarrassed. Underneath all of, though, there was a will to show what they were capable of, but nobody knew exactly what to do. In the first week, I asked a lot of the senior manages to tell me what do we do here and I couldn't get a clear and simple answer. We sat down and one of them came up with "We're going to design, build and sell the world's best vehicles." It sounds simple, but we actually had to work to get there and then it was just – okay, let's go do it!
It's always your fault
We were having a discussion about what had happened and one of the people at GM employees said we didn't do anything wrong, the economy got us. So of course I asked well why didn't it get the other car companies then and the couldn't answer that. It was a question of being in that system for so many years. They thought they were infallible, and while they were saying that they went from 50 per cent market share to less than 20.
Seek strength, make changes
I was out in the engineering centre one day and I came across this OnStar engineer who was working for us. I asked him why we weren't doing well with OnStar? It looks like a great tool for our consumers: You can get help, find directions, unlock the car via satellite. He told me it was because we weren't marketing it well, so I asked if he thought he could do better. He said he knew he could and so on Monday he reported to the marketing department.
Shut up and act!
I've been accused many times of not talking very much, but I guess I don't believe in talking things to death. You can talk too much on most anything and it stops being productive. There is a time for action. Eventually you have to pull the trigger.
This interview has been edited and condensed