Bankrupt leadership and silver linings can lead to gold.

I’m almost done reading Ruthless Focus by Thomas Hall and Wally Bock and highly recommend it to anyone looking to improve their business.

Which should be all of us all the time, right?

Two real-time case studies that have stood out for me so far are the rise of Samuel Adams, the well-crafted American beer (always true to my heart) and the story of GM and Toyota (and there are many case studies to choose from).

That reminded me of something I wrote a few months ago that still floors me when I think about it.

I had taken in our Saturn VUE to be serviced. The now defunct company was once a GM gem of quality and reliability.

It didn’t start out that way when Saturn first hit the market in 1991, but eventually it became a much better product.

We know because we are longtime fans of Saturn and did our due diligence and research. However, I was a Toyota man until won over by Saturn.

But I’m not that interested in car-buying behavior or preference. I’m interested in leadership.

Or lack thereof. Failed personal leadership, collaborative leadership and overall leadership.

Fail, fail, fail.

While I sat at the Cadillac dealer in San Jose waiting for the Saturn servicing to be done, working away with free WiFi, not more than 30 miles away more than 4,700 employees at the Nummi car plant in Fremont were working their last day.

On April Fool’s Day no less.

On the way to and from getting the Saturn serviced, I listened to a This American Life production all about the rise and fall of Nummi. I was riveted the entire time. Really.

In 1984, the joint venture between Toyota and GM reopened the Nummi plant after GM had shut it down in 1982. The joint venture was all about a new, innovative to build cars, reducing defects and improving quality and safety. GM’s market share had plummeted from almost 50% in the mid-70’s to around 30% in the early 80’s and kept dropping precipitously.

To quote a UAW leader about the quality of GM cars back in the day: “They were crappy.”

But what I never knew was how bad the American Worker and Management had become. I’m not disparaging the UAW or GM leadership; they did that all by themselves. Pathetic, but there was no LAMEness.

When faced with failure, leaders must develop the capacity to:

  • Learn
  • Adapt
  • Modify
  • Elevate

The Nummi plant prior to shutting down in 1982 had become Sodom and Gomorrah. It was equated to prison, with the workers held captive by the management man and the management man held captive by the workers.

Alcohol, drugs, sex — anything you wanted while on the job you could get. The level of production defect in cars? Egregious. Just listen to the This American Life story.

Then the joint venture came about and the Nummi folks were trained in the Toyota Way.

Under the two headings, or “pillars,” of Respect for People and Continuous Improvement, Toyota sums up the values and conduct guidelines with the following five principles:

  • Challenge
  • Kaizen (improvement)
  • Genchi Genbutsu (go and see)
  • Respect
  • Teamwork

Good stuff. The Nummi plant transformation went way beyond expectations. It was a true model of responsible leadership and teamwork with a focus on quality not shoddy quantity.

But they couldn’t replicate it. Weak and misguided leadership and a staunch resistance to change kept everything status quo for a long time.

Alas, GM didn’t get it right until they went bankrupt. They pulled out of Nummi and then Toyota, having GM troubles of their own, decided to shut the plant down.

In fact, it took GM over two decades allow the positive and productive leadership ripple to reach their masses and turn the business around for the better — and as we know now, Toyota has been grappling with their own leadership failures of late unfortunately taking a page from the old GM playbook.

Don’t let the leadership gap bankrupt your company. Do something about it today.

Lastly, there’s nothing like a spark of innovation to light of fire of what once was — Telsa bought the NUMMI plant to work with Toyota.

Only a fraction of the workers that worked at NUMMI will work there, but silver linings can lead to gold.


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