The Boston Herald’s recently published an article on Fiat’s ‘shake up’ of management and culture at Chrysler (see full article). Quite interesting, there is a realization that the change needs to go beyond moving the boxes and changing names, titles, and logos.
Fiat certainly has a story to tell when it comes to corporate and cultural transformation. Sergio Marchionne’s HBR article describes how he transformed a staunchy, tightly controlled, slow to change culture into an example of makeovers. He did four things:
1) Engaged with and developed a new breed of leaders.
2) Pushed the organization to accomplish the impossible by challenging old assumptions.
3) Looked to the outside for innovation and new ideas.
4) Demonstrated real, tangible respect for employees.
I’m sure it took lots more work and it was complicated, messy, and painful than the article makes it sound (these articles never tell you the whole story of course). But if the story is as good as it looks the question is…can they do a repeat with Chrysler? Probably so but they’ll need to go at it differently, you can’t expect the same results when you have a different series of variables at play.
Here are some challenges to consider:
- Italian and American cultures are quite different. The communication and collaboration styles will need to be well understood and managed.
- The American union environment might be quite different from the Italian form of collective bargaining process.
- The environmental situation is quite different from what it was in 2004-2005 when Fiat started its own transformation. Today’s economic landscape is quite more volatile and with GM going through its own bankrutpcy, you can’t ignore the effect that has on the overall auto industry.
- Corporate governance is not the same. Fiat’s 35% stake in Chrysler may not provide the necessary leverage to accomplish some of the most difficult tasks.
Bottom line…can Fiat pull it off? Maybe! At least that’s what we all are hoping for. What’s certain is that it’ll be an uphill battle and it’ll prove a real test for Fiat to see if their success can be replicated at Chrysler.
