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Mr Whitacre, Are You Experienced?

June 14, 2009

This week GM named Edward Whitacre, a former CEO of AT&T, to be the Chairman of GM’s Board.  Now Mr. Whitacre admittedly knows nothing about cars, so what is GM up to here?  Are we not to hire Corporate leaders based upon solid industry experience anymore?   GM sees what IBM saw in Lou Gerstner when he was named Chairman and CEO fresh off a stint at American Express.  Both GM and IBM saw solid leaders who could quickly grasp their new industries.   An analogy from basketball is the saying, “you can teach a kid to shoot and dribble, but you can’t teach tall!”   In other words, you can learn a new industry, but good luck trying to teach someone to be a great leader.   This doesn’t just apply to Chairmen and CEO’s, it applies at all levels of an organization.  You will find that there are plenty of people who have the experience for the job, but there are far fewer who have that intangible ability to adapt and succeed under any circumstance.

Now why not just find a great leader from within your industry you may ask?  Many successful companies eventually become victims of their own success.  IBM was days away from bankruptcy in the 90’s prior to bringing in Gerstner.  They had become blinded by their dominating success with the mainframe and began to ignore key indicators that they were due for a strategic realignment.   GM also became paralyzed by the same factors that made them successful.  Like a too tall building that eventually crumbles under it’s own weight, the legacy policies and programs that built a great company, slowly began to suffocate the corporation and led to an unsustainable business model.  Like IBM, they too had blinders on and didn’t recognize the need for a strategic shift.  Bringing in an outsider like Whitacre will bring a new perspective with unbiased judgement and fresh ideas to GM.  Sometimes to get “out of the box” thinking you actually have to find someone who is not in your box!

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