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January 28, 2005

Myths and Facts about Fuel Economy

By Tom Stephens
Group Vice President, GM Powertrain

I'm going to jump into this blog from time to time as I see items that interest me.

Last week, someone posted: "In view of rising gas prices, when is GM going to get off the gas guzzler wagon and start building, promoting, and selling more fuel efficient vehicles?

Let's explode that myth with some facts.

• GM leads the auto industry in providing the broadest array of fuel-efficient cars, trucks, SUVs and vans -- according to 2005 data from the Environmental Protection Agency. GM makes 19 models that get 30 mpg or better on the highway, more than any other automaker. Volkswagen and DaimlerChrysler are next with 14 and 13 models, respectively.
• Using 2005 EPA data, for trucks there are 69 unique model/powertrain combinations where the top six manufacturers compete. As a full line manufacturer, GM offers 66 of those combinations and is the fuel economy leader in 41 of them. The second place manufacturer has only nine fuel economy "wins." On a percentage basis, GM wins 62 percent of these head-to-head comparisons (41 of 66) while the second place finisher wins 40 percent (6 of 15).
• Using 2005 EPA data, for cars there are 82 unique model/powertrain combinations where the top six manufacturers compete. GM offers 53 of those combinations and is the fuel economy leader in 28 of them. The second place manufacturer has only 18 fuel economy "wins." On a percentage basis, GM wins 53 percent of these head-to-head comparisons (28 of 53) while the second place finisher wins 45 percent (9 of 20).
• Using 2005 EPA data across Ward's Automotive segmentation, GM is the city fuel economy leader in 7 of 25 segments and the highway fuel economy leader in 8 of 25 segments.

What's the bottom line? For a given segment of the market, it's likely that GM sells the most fuel-efficient model available.

Here's a shameless plug. Bob Lutz has been talking about brands, but none of these vehicles would move without engines and transmissions. While he's been working on this "FastLane" blog, us engine people developed our own blog for the most popular engine ever made, the Smallblock Engine blog. This blog celebrates the 50th anniversary of the smallblock engine. We've made 90 million smallblock engines. The latest iteration produces 500 horsepower and 475 foot-pounds of torque and will propel the Corvette Z06 from zero-to-60 in well under four seconds.

GM is intent on satisfying the needs of buyers: small cars to heavy duty trucks, fuel-sipping vehicles for urban rush hours to performance vehicles for an adrenaline rush.

Tom Stephens biography

Posted by Editor at 9:14 AM
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January 25, 2005

Sharpening the Arrowhead

By Bob Lutz
GM Vice Chairman

OK, where was I? I was discussing some of our brands like Saturn and Chevrolet. Let's talk about Pontiac now. In the midst of all the Saturn excitement at the Detroit auto show, did anyone notice the interest of the public in the new G6 coupe and convertible? They, and the new Torrent SUV, are the latest entries in a Pontiac lineup that's being replenished and expanded.

For the past few years I have been getting up in front of the press and extolling the virtues of Pontiac's potential. We want Pontiac to be a performance-oriented division offering vehicles that can really be driven the way vehicles are meant to be driven. In the old days, that meant, simply... fast, straight-ahead, foot-down excitement. This time around, we want Pontiac to be about total performance. Not just straight-ahead power, but great vehicle dynamics and chassis management, and firm handling without compromising ride quality.

We started this with the launch of the new GTO. Many people complained about it because it didn't look anything like the old GTO. But it was never supposed to look like the old GTO - it was supposed to feel like the old GTO. When you put your right foot into it, it's supposed to give you the same visceral thrill as the old one, its V8 launching you from a standing start. All the GTO enthusiasts out there... their affection was not based upon the car's looks, but upon the driving experience. Anyone who's driven the new one will tell you that the power is there, the feeling is there, and the handling is better than it ever was. Apparently, its current owners think so, because their love and enthusiasm for it helped it win Most Appealing Sporty Car in the most recent JD Power APEAL awards.

Anyway, that's the plan for all the Pontiacs, from the forthcoming Solstice roadster to the new Torrent SUV. Even the ones that aren't performance cars per se will make the driver feel connected to the road.

Compare a Pontiac showroom from ten or even five years ago to how one will look next year. Except for the sign out front, you won't even recognize the place.

You'll have the beautiful Solstice. The G6 family will be complete, with the coupe and retractable hard-top convertible to go along with the sedan that, thanks to Oprah, delivered the most TV exposure Pontiac has had since The Rockford Files. You'll see a stylish new SUV in the Torrent, an innovative crossover sport van in the Montana SV6, and our various GXP performance packages.

It will be a whole new ballgame for Pontiac, one that we hope excites current Pontiac fans and creates new ones at the same time. Stay tuned.
Pontiac shows off a new coupe, convertible and SUV in the City of Angels.

Posted by Lutz at 11:40 AM
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January 14, 2005

Let the Big Dog Eat

By Bob Lutz
GM Vice Chairman

Well, the Detroit show media preview week has wound up, and I've finally had time to scroll through the comments on these pages, and I must say I'm overwhelmed at the number of responses, and the enthusiasm contained therein. I wish I could reply personally to all of them but if I did I'd never get around to doing all the things you've asked me to do. I will, however, briefly address one issue that's coming up a lot: As far as the blog goes, I, like many of you, also hope that we "get it." I'm sure you'll tell us if we don't!

It's more important to me that we "get" what each of our brands means, so that we can better communicate that to you with our products and our messages. One brand that has been mentioned often here, even though we started this with a discussion about Saturn, is Chevrolet.

Chevrolet is the big dog in GM's sled team, and it's crucial that it be strong, healthy and on the move. We have been reloading Chevy's product barrel, and we'll continue to do so. We've already introduced the Equinox, Colorado, SSR, Uplander, Malibu and Malibu Maxx, Aveo, Cobalt, and of course the all-new Corvette.

At the Los Angeles Auto Show earlier this month, we introduced the Chevy HHR, Monte Carlo and Impala. HHR is a great design that has inspired a lot of passion - on both ends of the ball. Some have derided it as too late, too retro or too derivative. But to others, it's too cool. I fall into the latter camp, and I think it will do well in the marketplace.

Monte Carlo and Impala are key vehicles in our midsize lineup, especially Impala. The current Impala is GM's best-selling passenger car, with over 290,000 units sold last year. That helped Chevrolet sell more cars than any other brand in America in 2004 - more than Ford, and more than Toyota.

And there's more to come ... including our all-new full-size trucks and sport-utilities. I'd love to add at this point for all you Camaro fans that I'm using the blog to announce the rebirth of the F-bodies ... but I'm afraid that would be tantamount to yet another Internet hoax. Sorry.

But I do love the passion with which the Camaro faithful express their undying commitment to the object of their affections. Believe me, I've gotten enough email from you to know! At the end of the day, that's what our business is all about - inspiring passion among the faithful. That's what has allowed me to spend my life's work in an industry I'm passionate about. We should all be so lucky.

Have a great weekend.

Posted by Lutz at 11:25 AM
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January 13, 2005

Saturn Sky, Cadillac STS-V and Corvette Z06 at NAIAS

Watch the webcasts of GM North America President Gary Cowger introducing the 2007 Saturn Sky, and Bob Lutz introducing 2006 Cadillac STS-V and the 2006 Corvette Z06 at the 2005 North American International Auto Show in Detroit. The auto show opens Jan. 15 and runs through Jan. 23.

Posted by Editor at 1:19 PM
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January 10, 2005

Quick Missive from the Show Floor

By Bob Lutz
GM Vice Chairman

I'm seeing a lot of "chatter" here regarding the new Saturns unveiled at Detroit, which says essentially, "What we see ain't what we'll get." Given the industry's somewhat spotty record of taking concept cars to production intact, your concerns are understandable.

So let me put your fears to rest right here, right now.

The Aura, as far as the sheet-metal is concerned, is 100 percent production-ready, right down to the size of the tires. And that also goes for much of the interior. The thing is ready to go. And the Sky, of course, isn't a concept car at all. That is the full, no-excuses, what-you-see-is-what-you-get production vehicle. We're playing for keeps.

Posted by Lutz at 11:47 AM
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January 8, 2005

Wow

I'm impressed with the passion and insight of you fastlane bloggers. Believe me: interiors definitely are as high on my list as they are on yours. Stuff like you see on HHR and Cobalt, H3, or the Sky will be the standard at GM going forward. Very much encouraged also by many of you acknowledging that you see the progress we're making. You real people have more faith in us than many media seem to do! Pity I can't reply individually to each of you. Keep up the flow, even though I might be too busy these next 2-3 days with the Detroit auto show to give much of an instant response.

Bob Lutz

Posted by Lutz at 6:38 PM
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Wow

I'm impressed with the passion and insight of you fastlane bloggers. Believe me: interiors definitely are as high on my list as they are on yours. Stuff like you see on HHR and Cobalt, H3, or the Sky will be the standard at GM going forward. Very much encouraged also by many of you acknowledging that you see the progress we're making. You real people have more faith in us than many media seem to do! Pity I can't reply individually to each of you. Keep up the flow, even though I might be too busy these next 2-3 days with the Detroit auto show to give much of an instant response.

Bob Lutz

Posted by Lutz at 6:38 PM
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January 7, 2005

On Design Interiors

By Bob Lutz
GM Vice Chairman

In response to the comment below on the G-6 interior: I would admit that the Accord has a great interior, as does Acura. But we're talking much higher prices there. When the G-6 4-cylinder versions come out, you'll see a substantial price difference in our favor to Accord.

But give us credit for a vast, vast improvement over previous Pontiac interiors. And, for world-class interiors in their categories, check out our new cross-over sports vans, as well as the new Buick LaCrosse and upcoming Buick Lucerne, which you'll see in Chicago. The G-6 interior was work in progress. It "works" for most customers at the price point. But what you're seeing is only phase one in our assault on interior quality. Did you take a look at seat tailoring? Carpet fits? Sheet metal quality in terms of door gaps, hood gaps, hem flanges? We used to be bad at those, too. Now I'll invite comparison with anybody, any price class, any national origin.

The road to excellence is always under construction, we're far from perfect, but improving fast. And ... G-6 is selling extremely well.

Posted by Lutz at 2:45 PM
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Great Comments

Really happy and pleased to see the comments. I like the fact that Saturn still has your interest --

we'll make it worthwhile, take my word for it! Just look at the pictures of the two Saturns we'll present this coming Sunday at the Detroit auto show. Great new products are hitting the road and many more are on the way -- We want you to keep watching and keep talking to us, that's why I'm out here ...

Posted by Lutz at 1:42 PM
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January 5, 2005

Saturn: Product Will Reign

By Bob Lutz
GM Vice Chairman

After years of reading and reacting to the automotive press, I finally get to put the shoe on the other foot. In the age of the Internet, anybody can be a "journalist." This is the first of many commentaries I will make on this forum, and I'd like to begin with, surprise, some product talk - specifically, Saturn products.

The true testament of the potential of the Saturn brand has been right under our noses all along. I'm referring of course to its consistently high customer service ratings.

What would you do if you had a brand whose customer service reputation was that high for that long despite having a narrow, aging product lineup? I, for one, would first get down on my knees and thank the Maker for the finest retail network in the industry. Then, I would set to work replenishing the product portfolio.

That's exactly what we're doing with Saturn. And that's precisely why my hopes for the brand are so high. We won't let the brand fall victim to the tyranny of the "or." It's not a case of having a great retail and customer care program or having great products. It's possible to have both, and we plan to do so. Finally.

We're about to introduce the new "face" of Saturn at the North American International Auto Show in Detroit. We'll introduce the Sky roadster and Aura sedan there (we'll post photos here Friday), and both are good indications of Saturn's future design direction. They're both products that the brand has needed for a long time.

Purely in terms of the vehicles, Saturn has lacked a strong, cohesive product philosophy, and it's never had exciting vehicles like it's about to get now ... I'm talking about vehicles with a fluid, uniform design theme, top-notch engines, dynamic chassis philosophy and a focus on detailed interior and exterior execution.

Rest assured, in Detroit, the media will tell me what they think of the new Saturns and the new design direction - they always do. But I'd like to hear what you think. So please feel free to provide your input to this blog.

More to come next week ...

Posted by Lutz at 10:08 PM
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Welcome to FastLane

The FastLane blog is your source for the latest, greatest musings of GM leaders on topics relevant to the company, the industry and the global economy, and -- most of all -- to our customers and other car enthusiasts. We look forward to an open exchange of viewpoints and welcome your ideas and feedback throughout 2005.

Posted by Editor at 4:25 PM
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Lutz Biography

Robert A. Lutz
GM Vice Chairman, Product Development, and Chairman, GM North America

Robert A. Lutz was named General Motors vice chairman of product development on September 1, 2001, and on November 13, 2001, he was named chairman of GM North America. He served as president of GM Europe on an interim basis from March to June 2004.

Prior to rejoining GM as vice chairman, Lutz was chairman and chief executive officer of Exide Technologies. He served as chairman until his resignation on May 17, 2002, and as a member of Exide's board of directors until May 5, 2004.

Lutz joined Exide after a distinguished career with the former Chrysler Corporation from 1986 to 1998, where he reached the position of vice chairman. Lutz also served as president and chief operating officer, responsible for Chrysler's car and truck operations worldwide.

Lutz led all of Chrysler's automotive activities, including sales, marketing, product development, manufacturing, and procurement and supply. He began his service with Chrysler in 1986 as executive vice president and was shortly thereafter elected to the Chrysler Corporation board. His 12 years with the company are chronicled in his 1998 book, Guts: The Seven Laws of Business That Made Chrysler the World's Hottest Car Company. Guts was revised and updated in 2003 and retitled, Guts: 8 Laws of Business from One of the Most Innovative Business Leaders of our Time.

Before Chrysler, Lutz spent 12 years at Ford Motor Company, where his last position was executive vice president of truck operations. He also served as chairman of Ford of Europe and as executive vice president of Ford's international operations. From 1982 to 1986, Lutz was a member of Ford's board.

Lutz began his automotive career in September 1963 at GM, where he held a variety of senior positions in Europe until December 1971. For the next three years, he served as executive vice president of sales at BMW in Munich and as a member of that company's board of management.

He serves as chairman of The New Common School Foundation and as a trustee of the Barbara Ann Karmanos Cancer Institute. He is also a member of the board of trustees for the U.S. Marine Corps University Foundation and vice chairman of the board of trustees for the Marine Military Academy in Harlingen, Texas.

Lutz received his bachelor's degree in production management from the University of California-Berkeley in 1961, where he earned distinction as a Phi Beta Kappa. He received a master's degree in business administration, with highest honors, from the University of California-Berkeley in 1962. He received an honorary degree of doctor of management from Kettering University on June 21, 2003, and an honorary doctorate of law from Boston University in 1985.

He also served as a jet-attack aviator in the United States Marine Corps from 1954 to 1965 and attained the rank of captain. Lutz was born on February 12, 1932, in Zurich, Switzerland.

Posted by Editor at 3:43 PM
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Previously Published Interviews with Lutz

Design: The New York Times looks at Lutz’s tenure so far, in an article reprinted in GoUpstate.com. Auto design has headed in several different directions, he told the Lansing State Journal last year.

Quality: Lutz talked to the New York Times’ Danny Hakim about how details make the difference in customer perceptions of vehicle quality. And he talked about his quest for better interiors, better fit and finish and GM's hopes for a small car in a May interview with the San Jose Mercury News.

Business: Lutz looks at the changes in the car business over the last 40 years, in an interview with Edmunds.com.

Posted by Editor at 3:13 PM
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Lutz Speech on Design

Text of a Lutz speech at the Pratt Institute on examples of lackluster car design and great car design, what makes a good automotive designer, and on thinking outside of the box.

Thank you, Dr. Schutte, and good afternoon, everyone.

It’s a pleasure for me to be here with you today in this fabulous setting. It’s hard to imagine NOT being inspired to do great creative work on this beautiful campus. How can you think about anything but great design when every time you turn around you see the Brooklyn Bridge?

I asked the organizers what they’d like me to talk about today, and they said, “Anything you want would be fine.”

So I said, “Great. How about 20 minutes on cigars, gin and military technology?”

And they said, “well ... okay ... fine. But can you work ‘design’ in there anywhere?”

Lucky for them, design happens to be another one of my passions that I’m prepared to talk about at the drop of a hat.

In fact, I’m so enamored with it that I’ll skip the other passions and just talk about design. And I’ll offer up some survival tips for later when you put your design talents to work.

What I’d like to talk about, specifically, is what I think constitutes good automotive design and what makes a good designer. Not being a designer myself, I feel uniquely qualified to comment!

No other product in the world has the ability to inspire passion quite like the automobile. And passion can be generated from different aspects of a vehicle. A terrific powertrain with a growling, throaty exhaust tone can inspire passion. Superb vehicle dynamics, great cornering, good road manners — those can all appeal to someone’s passion for driving.

But what really communicates passion in a vehicle is design. Particularly exterior design ... which makes the initial emotional connection with potential customers. Interior design is extremely important too, but if the exterior design fails, the interior doesn’t matter, because most people won’t get close enough to see what the inside looks like.

So what makes good design? Well, it’s more than just “looking pretty.” The physical appearance of a vehicle speaks volumes to the viewer about its brand, its heritage, and about its real or implied characteristics.

A required starting point is basic proportion: Are the length/height/width relationships such that an elegant vehicle can be created? Does the vehicle exude strength, grace, stability or whatever is desired?

Here are some vital cues that, if missed, and they frequently are, can doom a vehicle to lackluster design.

The first sin is what’s known as “lateral overhang,” when the body appears to be too wide for the tread width. It’s a fatal flaw and one that even gorgeously shaped sheet metal can’t overcome.

A good design starts with the right sheet metal to tread relationship. The body should look like it was stretched tautly over the chassis.

Another organizing principle is that the look of dynamism and stability is hugely enhanced by tumble-home. Here, especially if we are prisoners of a relatively narrow platform, there is frequently pressure to achieve maximum package by increasing shoulder width and lateral headroom.

While everything must be an intelligent compromise, I believe that creating a slab-sided, non-tumble-home car to achieve maximum package is a road to disaster. People will never get close enough to an ungainly, static-looking vehicle to experience how great the package really is!

I’d like to take a moment now to share with you what are some of my all-time favorite automotive designs, and why.

• Alfa Romeo
• 1941 Lincoln Continental
• 1963 Corvette split window
• 1961 Jaguar E-Type
• 1957 Cadillac Eldorado Brougham

What these designs all share is the unquestioned ability to inspire passion, to make an immediate emotional connection with anyone who looks at them.

That passion is the result of hard work and creativity. What it is NOT the result of is another thing that these vehicles have in common: None of them were created by focus groups.

It’s very important to remember that, as designers, you have to create on your own terms. Not someone else’s. Especially not someone with a margin of error plus or minus three percent.

You have to come up with the “big idea.” In other words, the big idea has to come from Steven Spielberg, not from the tabulated replies of thousands of moviegoers pouring out of theaters.

The creative process is not, nor will it ever be, “scientific.” You cannot start with quantitative research to find the “big idea.” Whether it’s cars or movies or clothes, a company needs inspired, free-ranging discussion among its top creative people.

Once an idea has attained its physical shape, then you do your research. And those who ignore the results of research at that point do so at their own peril. Too often, we creative people have a dangerous tendency to “talk to ourselves.” We need the counterbalance of research.

So now that we know what great design is and where it comes from, what about great designers? Where do they come from, besides Pratt?

Well, great designers are born, then they’re trained. They learn their rendering techniques and develop a sense of taste that they didn’t have before.

The really great designers have to be much more than just the ones who draw the prettiest pictures, a/k/a “hot pencils.” They have to be great leaders, great managers, great salespeople, great communicators, and great diplomats.

It’s a complicated profession.

I don’t think people realize how interlocking the process is and how many tradeoffs are necessary. Designing a great car is about fulfilling cost, safety, manufacturing, and space and comfort objectives ... a whole host of requirements.

What makes the really good designer is being able to get the best-looking car for the company under often hugely conflicting sets of conditions. Sometimes it’s simply the person who is able to fight the hardest to force other people to make compromises.

The master designer is a good salesperson who can interact effectively with colleagues in sales and senior management.

A great designer is a good leader and manager. Because in a large automobile company you just can’t do it all yourself. A lot of it has to be delegated. The design heads of large companies seldom if ever take pencil to paper, unless it’s to correct somebody else’s renderings.

Now, if you put all that together, you’ve got a great designer, but it still doesn’t mean you get great designs. The last piece of the puzzle is direction from senior leadership.

I realize there isn’t much you can do about that… but it’s essential nonetheless.

The best example of that is the Chrysler design community from the time of the horrible boxy Imperials, Fifth Avenues, and LeBarons with the padded vinyl roofs and the opera windows. We went from those to the LH cars with essentially the same design team. What changed was what senior management was asking for.

You can’t expect anything more out of the designers than what the direction of management gives them, because they can’t operate in a vacuum.

The best way to ensure solid direction from senior management, of course, is to become a part of it. But you have to survive and stick it out a long time to reach that goal.

I’d like to give you a couple of things to keep in mind as you try to get there ... two little phrases I’ve come to live by. The first is “Sez Who?” And the second is “Often wrong, but seldom in doubt.”

They both mean… stand up for your convictions. If you don’t have any convictions, get some. Then, stand up for 'em.

Don’t be afraid to question conventional wisdom. Don’t settle for, “Because that’s the way we always do it.” Don’t be afraid to propose a radical idea. Don’t be afraid to take a different approach. Redesign the program, and wait for other people to catch up to you. Don’t spend your career catching up to everyone else.

Corporate America is plagued by “groupthink.” No one wants to be the first to disagree, so everyone agrees that whatever it is can’t be done. No one wants to rock the boat. We need more “integrative thinkers” who think outside the box, who come up with new ways of doing things.

At GM, our goal is to move beyond the artificial limitations imposed by the “process” and use people’s intellect, creativity and passion for vehicles that are truly beautiful and desirable. We are trying to encourage the boat rockers.

Now, I’m not endorsing anarchy or armed revolution. Once the debate is over and the decision is made, we need to enable it. We will never make progress if people circumvent or undermine decisions.

In my opinion, disruptive people are an asset. But that’s just to a point. It’s like anything else in life; you have to strike a balance. You have to know when to push back, how to push back, and when to retreat to fight another day.

For some of you, the balance will be instinctive. Others will have to learn by making mistakes. You owe it to the company to be somewhat disruptive, and to criticize and suggest improvements. But on the other hand, you also have to know where to stop.

There’s a fine line, and if you’re on the good side of the line, you’re a grain of sand that helps produce the pearl in the oyster. Pearls are produced by irritants such as an errant grain of sand, after all. But if you go too far, you’re a great big pebble that the oyster spits out. So strike a balance.

If you are one of those people, and you’re a great designer to boot, we can use you at GM. Design has ascended to a new level of importance and awareness at GM, and it’s a fun place to be right now.

In fact, there’s been a long relationship between Pratt and GM. Many of your distinguished alumni have contributed mightily to GM, including John Cafaro, who is here today. John played a big role in the design of the current Chevy Corvette, among other vehicles.

He can tell you about the new and exciting cars and trucks coming down the pike from GM. We are going to change people’s perceptions about the company, and change them significantly.

Let’s take a look at a few things we’ve done recently, beginning with a couple of concept cars that garnered a lot of attention.

• Pontiac Solstice
• Cadillac Sixteen

And some of our recent production cars ...

• Hummer H2


• Pontiac GTO


• Chevy SSR


• Cadillac XLR

I hope you can see that we’re serious about what we’re doing and where we’re going. GM is going to be the team to beat in this business.

I’d like to wrap up today with a final thought about integrative thinking, in the form of a story about fleas.

Yes, you heard me right: fleas.

Flea trainers have observed a predictable and strange habit of fleas. They train fleas by putting them in a cardboard box with a lid on it. The fleas will jump up and hit the top of the box over and over and over again. It gives them a terrible headache!

When you take off the lid, the fleas continue to jump, but they will not jump out of the box. They won’t jump out because they can’t jump out. Why? The reason is simple. They have conditioned themselves to jump as high as the lid of the box. And once they’ve taught themselves to jump just so high, that’s all they can do!

Well, the same thing happens to people. They restrict themselves and never reach their potential. Just like the fleas, they fail to go any higher, thinking they’re already doing all they can do.

We have to condition ourselves to jump out of the box. And you are at the perfect time in your careers to start doing that — the beginning. Heck, you haven’t even started yet!

Now is the time for you to program yourselves to jump out of the box. By unlocking your creative potential and questioning traditional thinking — wherever you deem it appropriate to do so — you will build a solid foundation for success.

I hope that success comes at General Motors, selfishly, but wherever it comes, I wish you nothing but the best.

Thank you for your kind attention. I’d be happy to take any questions you might have now.

Remarks by Robert A. Lutz
President’s Lecture Series
Pratt Institute
Brooklyn, New York
April 9, 2003

Posted by Editor at 12:59 PM
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Lutz Speech on Managing Change

Text of a Lutz speech in Detroit to the Michigan Council for Arts and Cultural Affairs on managing change to unleash creativity and innovation.

Thank you, Gene [Gargaro, VP at Masco and chairman of Michigan Council for Arts and Cultural Affairs], and good afternoon everyone.

It’s great to be able to talk to you today, and I’d like to welcome you all to Detroit — I hope you enjoy yourselves here. I’d just like to get one thing off my chest before we start: I make no pretense of being an expert in the arts.

I do know that Oscar Wilde said of art, “It is through art, and through art only, that we can realize our perfection.”

I also know that Groucho Marx said, “Well, art is art, isn’t it? Still, on the other hand, water is water! And east is east and west is west and if you take cranberries and stew them up like applesauce they taste much more like prunes than rhubarb does.”The bottom line is, I can’t tell you what either of those quotes means!

But I can tell you a thing or two about the topic you’ve chosen for your conference, Driving New Agendas, which in essence is managing change.

And, as an added bonus, to expound on that topic, I’ll even give you one more quote that’s semi-related to art, and it’s from the poet Samuel Taylor Coleridge, who said, “There is one art of which man should be master, the art of reflection.”

I’ve been in the car business a long time, and I’ve had ample time to reflect on the way things are done. And organizing and managing change is one of the subjects that I hold dear. I know that our fields are very different, although I would argue that a beautifully designed automobile is certainly a work of art.

But there is at least one thing we have in common, and that’s change. Change comes whether you like it or not, and there are those who will resist it, whether you want them to or not.

I was asked the question by the organizers of this event, “Can change be managed?” And the answer is absolutely, yes.

Although I must point out, it’s a qualified “yes.” It’s like someone asking, “Can you stop the rain?” Well, no ... but I can bring an umbrella.

There are some things you can control, and some things you can’t. The trick is to control everything that you can, and to use your common sense to prepare yourself, your staff and your organization for the things you cannot control.

If you keep that in mind, then you’re already past step one of change management: don’t panic.

Corporations have come to approach change with an almost childish tendency toward overreaction. First they bring in the latest thinker, author, lecturer or change maven who has discovered that, sure enough, there’s change happening out there.

He or she speaks to management and warns of the impending crisis. Committees are formed. Retreats are held. Brows furrow with the weighty realization that change is bearing down on the company like the Mongol hordes.

It will be here any day, and we have to get ready! What to do? Hire consultants, that’s what! Change agents, that’s what we need!

In the old days change agents were called “leaders.”

The first responsibility of leaders is to manage change. That’s what they do every day, all day. And there is nothing new about it.

One of the more disturbing features of our current preoccupation with change is the presumption that all change is good. Look at the language that the human resources people put on employee review forms today: “Does the employee embrace change?”

I conjure the image of fast trackers desperately looking in every nook and cranny of the company for some undiscovered and unembraced dollop of change that they can put their arms around and squeeze.

That’s silly, of course. Change has no inherent normative value at all. Some change is good. Some is bad. People ought to be evaluated based on whether they can tell the difference, not on whether they obediently and mindlessly embrace unexamined change.

So, once you separate the good change from the bad, you recognize that a good leader has to be a change killer as well as a change agent.

I’ll focus on the change agent, because it’s often the more difficult of the two roles. The biggest problem the change agent faces is, more likely than not, having to overcome his organization’s disinclination to change — the natural inertia that impedes any institution.

Driving an organization toward beneficial change requires enormous energy, conviction, persuasiveness, and, ultimately, stubbornness.

You will meet resistance. The organization is successful as it is, why change? Why experiment? Why venture into the unknown?

When I was at Chrysler in the late ‘80s, this attitude was much in evidence as we tried to switch to a horizontal approach to engineering vehicles as part of a move to platform teams.

That means we were trying to draw small groups from different specialties to engineer a whole vehicle, rather than their specific areas. And that was threatening to the partisans of the traditional system, even though we were all living under a wasteful, error-prone, slow-moving process.

The flood of anonymous letters from these partisans to Lee Iacocca was impressive, both in quantity and quality. It would have been easy for management to flinch.

Instead, we persevered. We relied on countless, no-holds-barred “town hall” meetings to allay workers’ fears and explain why change was necessary. We tried to impress upon everybody that we were adopting one of the hallmarks of what was then Japanese superiority.

The forces of conservatism remained strong, and were joined by those who worried that their status was in jeopardy — which, of course, it was! Their power and influence, tied to the old fiefdoms, would be reduced from the moment personnel from these groups were split up and reassigned to platform teams. So they resisted with all their might.

Well, we weren’t going to give in, because we knew we were right. So we followed the change agent’s correct course of action: we calmly pressed ahead, continuing to explain the why of change, while at the same time forcefully implementing action.

It’s remarkable to see how quickly resistance crumbles once the first tangible successes of the new approach become evident. Our plans were implemented in full and it changed the company forever, for the better.

Sometimes, the change agent gets resistance from above, and I don’t mean from Heaven, but something even scarier — from senior management.

One effective tool to use in cases like this is benchmarking. Show the bosses how somebody else is doing it better or, almost as important, more cost-effectively. Nobody likes to hear the competition is making better products or saving more money.

At Chrysler, a Honda benchmarking study proved instrumental in helping us see that we had to change and change quickly. And no junior managers were shot for suggesting that we needed to. They weren’t criticizing Chrysler directly; they were just reporting how Honda went about making cars. The study was invaluable.

It’s very important to foster a culture of open communication and encourage ‘push-back.’ It leads to innovation and new ideas. If someone is afraid to make a suggestion or challenge the way things are done, things rarely improve. In fact, they stagnate.

When I started at GM just over a year ago, I handed out thousands of buttons I’d purchased at my own expense that said “Sez Who?” It was my way of telling everyone to have the gumption to question things they thought weren’t right. I wasn’t encouraging armed insurrection, but I did and do want to see some resistance to old ways of thinking.
Whether you’re taking orders or giving them, you have to do all you can to unleash the creative talents of an organization and encourage innovation, at all levels.

Innovation is the new frontier in the automotive business, and in a lot of other areas as well. It’s what “quality” was in the '80s and '90s. The pace of innovation is what will separate the winners from the losers. And innovation thrives in a culture of encouragement and acceptance.

Sometimes, even in the most accepting of cultures, the message of change simply cannot get through. It’s like the Cone of Silence is hovering over the decision makers.

Well, when all else fails, the change agent can always fall back on the dreaded consultant. I know the cynic’s definition of a consultant: someone who travels a thousand miles and charges five thousand dollars a day to tell the boss what you already know.

I once wanted to pin a medal on the chest of a friend of mine who’s on the board of a large corporation. When its CEO recommended bringing in a consultant to write the company’s strategic business plan, my friend told him, “This board is certainly willing to pay for a business plan. Now, we can either pay you to do the strategic thinking for the company, or we can pay the consultant, but we’re only going to pay once.”

Nonetheless, good consultants, just by virtue of being outsiders, can often get your colleagues’ attention in a way that you, being familiar and in-house, cannot.

I realize that for some of you, high-priced consultants are not an option. I also realize that for a lot of state-funded agencies, “driving new agendas” really means “how to do what we do but do it with less money.”

And if that’s the crux of what we’re really talking about here, I’m sorry it’s taken me this long to get to it. But I do have some thoughts, and I’d like to illustrate them with another example that you’re probably familiar with.

The way to do more with less is by making stretch goals, and encouraging everyone to do everything they can to reach them. That way, even if you don’t reach them, you’re still likely to drive improvement to new levels.

The best example I can think of is actually one of the defining, and perhaps underrated, moments of the 20th century, and that is the Berlin Airlift.

On June 25, 1948, the former Soviet Union shut down all the roads to West Berlin, which was of course surrounded by Soviet-controlled East Germany.

It was an effort to force the U.S., France and Britain out of Berlin. When the Western enclave, devoid of supplies, eventually shut down, the Soviets would simply march in.

It was estimated that the two million inhabitants of West Berlin could get by on a minimum ration of thirty-five hundred tons of food and coal daily.

No one, including the U.S. Air Force, had ever moved so much tonnage so quickly. With one plane landing in Berlin every eight minutes carrying two and a half tons, an average of one thousand tons a day were delivered in the first 10 days. The Soviets ridiculed the American effort as futile.

By mid-July, however, deliveries had climbed to fifteen hundred tons per day. By August, with larger cargo planes in use, the number climbed to four thousand tons daily.

The pressure on crews and aircraft was tremendous: eight hours of flight time followed by eight hours of ground duty and mechanics working around the clock. The work was becoming chaotic, and problems were mounting.

Maj. Gen. William H. Tunner, who in World War II had organized the airlift of supplies over the Himalayas from India to China, was brought in to supervise.

To bolster waning morale, Tunner introduced a host of measures, including a special newspaper — The Berlin Airlift Times — to celebrate feats accomplished and records broken.

By using the newspaper to excite a friendly rivalry between crews, Tunner gave the Berlin Airlift the trappings of a competitive sport. By keeping his troops’ spirits high and their competitive instinct aroused, he pushed their results even higher.

By March of 1949, more than seven thousand tons of supplies were coming into Berlin daily, twice the survival level.

But Tunner, in the spirit of true leadership, felt his crews needed a new challenge to shake off any creeping complacency. He set an arbitrary, “impossible” goal of 10,000 tons in one day. His challenge was publicized in the Times under the headline “Tonnage for Tunner.”

His troops’ imagination was captured. They strove to find new ways to make the impossible possible. They began ‘prepositioning’ loads, for example. In other words, they innovated.

On Easter Sunday, April 16, 1949, the impossible was done. Twelve thousand nine hundred and forty tons were delivered to Berlin. By mid-May, the Soviets, realizing their blockade was futile, restored access to West Berlin. The Americans had won the first and defining battle of the Cold War, and won it decisively.

The battle was won through hard work and great leadership. The single greatest attribute of Tunner’s leadership style, in my opinion, was its insistence on constant change.

He changed the pilots’ flight rules from visual to instruments. He had bulldozers cut apart, lifted to Berlin and welded back together to build more runways. And he experimented constantly with innovations like the newspaper to improve motivation and instill teamwork.

He cajoled his people to meet impossible goals and celebrated exceptional achievement. He created a “Super Bowl” mentality that made attainment of the goal possible. That the goal was exceeded by more than 20 percent shows just how much can be achieved by average men and women, overworked though they may be, if they believe in their mission and receive strong leadership.

Now, am I suggesting you go back to your agencies and redesign all of your newsletters or start some sort of competition among your staffs?

Of course not. I’m saying you have to be creative, especially in difficult times, to motivate your people and get them to be more innovative, and do the impossible. Or at least the improbable. It’s a hallmark of leadership.

One last thing ... another question I was asked by the organizers was how to best position ourselves for an unknowable future.

Well, what I’d like to know is how to best position myself for a knowable future?

The future is always unknowable! So you prepare for it just like you would prepare for anything else ... by using your common sense, the greatest weapon at your disposal. That’s what lets you discern good change from bad change. That’s what hones your instincts and sharpens your senses as you gain experience in your field. And the more you use it, the sharper it gets.

I’ll leave you with one final quote to think about, and that is what Emerson said about this. He said, “Common sense is genius dressed in its working clothes.”

So put on those working clothes and you’ll be surprised how easy it really is to manage change effectively.

Thank you for your kind attention and if there are any questions I’d be happy to take them.

Remarks by Robert A. Lutz
National Assembly of State Arts Agencies
Annual Meeting
Marriott Renaissance Center
Detroit, Michigan
October 17, 2002

Posted by Editor at 12:49 PM
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