Crossroads

At the intersection of technology, finance and the Pacific Rim.

Monday, June 12, 2006

I read with interest in a recent WSJ article the way in which Richard Waggoner, CEO of GM, had to change his nature to save his job--to become more conscious of the outside since "perceptions are reality". Also interesting was the way Ken Fisher, Board Member of GM and former CEO of Motorola handled the critical board meeting. I have "preached" in many of my classes the importance of preparation. What is it? It is being prepared for all possible contingencies or situations through forward thought and planning--especially in important meetings or events. If you confront a situation where there are multiple potential outcomes, think through each one and figure out how you should respond in advance. Too often, people go in with their "gut" and rely on "intuition" to make a snap decision. But your gut can be swayed by your heart/emotion and is usually one sided--i.e., does not consider all potential alternatives.

At a critical board meeting where the performance of Richard Waggoner was discussed openly by the Board, Fisher was able to control the meeting through his preparation. The Board was trying to decide whether to endorse Mr. Waggoner or not. This is a demonstration of how you get things done in a fast way with precision.

(Addressing the Board) the planned April 9 meeting put him in a precarious position, Waggoner said. He requested a strong and unified expression of support. Without it, he added, in a matter-of-fact tone, he couldn't continue as chief executive.

Mr. Wagoner then left the call. Mr. Fisher asked that directors issue a "reaffirmation" of their confidence in Mr. Wagoner and his turnaround strategy. It was clear the board wasn't eager to face the crisis of a suddenly vanished CEO without a clear successor lined up. "If not Wagoner, who?" asked one director.

Some said Mr. Wagoner was making progress on the strategy they all had approved. Director Armando Codina, according to a person familiar with the meeting, said that labor relations were a critical issue, and that Mr. Wagoner had unions' respect to work out a labor pact without a debilitating strike. Through a GM spokesman, Mr. Codina declined to comment.
Several directors voiced concerns about parts of Mr. Wagoner's strategy, such as his focus on large sport-utility vehicles. Mr. Wagoner had moved up the timetable to unveil a redesigned Tahoe, a big SUV, during the first quarter. Its sales popped at first, but the move also turned out to be just before a spike in fuel prices that hurt all car makers' SUV sales.
Avoiding a Vote

Some directors indicated they were uneasy going public with a show of support they might wish to withdraw in the future. But Mr. Fisher urged fellow directors to consider what was "in the best interest of GM right now." Then, avoiding a vote, he called for a consensus that the auto maker under Mr. Wagoner's leadership was moving in the right direction.
Mr. Fisher had come equipped with three possible wordings for such a statement, varying in the strength of their endorsement. Despite reservations by some, the directors finally agreed on a relatively strong statement from his list.





"

5 Comments:

Blogger LeftBack said...

"If you confront a situation where there are multiple potential outcomes, think through each one and figure out how you should respond in advance. Too often, people go in with their "gut" and rely on "intuition" to make a snap decision. But your gut can be swayed by your heart/emotion and is usually one sided--i.e., does not consider all potential alternatives.

This was exactly the objection I had with Malcolm Gladwell's recent bestseller Blink, sited in an earlier post. And I quote:

We live in a society dedicated to the idea that we're always better off gathering as much information and spending as much time as possible in deliberation. As children, this lesson is drummed into us again and again: haste makes waste, look before you leap, stop and think. But I don't think this is true. There are lots of situations--particularly at times of high pressure and stress--when haste does not make waste, when our snap judgments and first impressions offer a much better means of making sense of the world.

12:56 AM  
Blogger Jinwoo IM said...

Good comment which can give me inspiration.

From the article, the most impressive part is "If not Wagoner, who?". For using the strategy, Richard Waggoner surely has been doing his job credibly.

9:44 AM  
Blogger Stan Sakai said...

I read Blink. And this was one part where I think where he should "think before he blinks". There are moments (always) where there is no data or what data there is is not relevant to your particular circumstance--and in such circumstances blink is all you have to make the decision (and sometimes that decision is to wait). And blink is good for sizing up people, gauging their integrity and understanding their motives. But there is no substitute for hard facts and preparation.

4:05 PM  
Blogger Jinwoo IM said...

So, we're in the training course to interpret the hard facts and prepare the those kinds of facts, right? But, I sometimes feel that due to learning, more specifically a certain learning format, my intutition used to be restrained.

10:49 AM  
Blogger LeftBack said...

I think I was a little too quick to dismiss Gladwell.

On that note, I wonder how Gladwell would feel if he knew readers were using his own Blink! techniques to size up and criticize his writing. ;-)

3:08 PM  

Post a Comment

Links to this post:

Create a Link

<< Home