Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.bonus,americast.usa-today.bonus From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: bonus Fri, Nov 6 1992 Date: Fri, 6 Nov 92 05:29:35 EST Message-ID: 11-06 0000 BONUS: Smith advised to be bold USA TODAY Update Nov. 6-8, 1992 Source: USA TODAY:Gannett National Information Network President-elect Clinton and newly elected General Motors CEO Jack Smith are being thrown into office with the same mandate: Reverse an economic slide. Restore morale. Make dramatic changes. And do it fast. HOW FAST SHOULD THE CHANGES HAPPEN? "Fast" to many leadership experts means 100 days. That's how long the honeymoon lasts when a leader takes charge in crisis. If a new leader goes beyond that heady period without setting ambitious goals, rallying employees or making big improvements, he might have blown a magical opportunity and sealed his own doom. HOW QUICKLY CAN CEOS MAKE PROGRESS? Obviously, you can't teach an elephant like GM to tap dance in a matter of months. But multinationals such as Goodyear, Campbell Soup and Compaq were in dire shape before new CEOs stepped in, took charge and began to turn downtrodden employees into chest-thumping braggarts. "You always get more done when you have a crisis. There's no doubt about it," says John Sculley, who became CEO of Apple Computer in 1983 in the midst of the first major shakeout in the personal computer industry. HOW CAN BOLD MOVES BE MADE SO EASILY? "It's very possible (to make bold moves) then because there's a vacuum at the top, and there's a degree of excitement in the land," says Tom Peters, co-author of In Search of Excellence. A crisis atmosphere can be the best hothouse to nurture change. That's when employees are swatted by reality: If they don't change, the company could fail and they'll lose their jobs. "Do it in 50 days!" urges David Johnson, CEO at Campbell Soup. WHAT ARE NECESSARY PRECAUTIONS? But former Ford Motor CEO Donald Petersen, among others, cautions that massive overhauls at corporations the size of Ford or GM can take years. "About all you can do in the first 100 days is take symbolic actions," says Petersen. Ford began to change in 1980 after Petersen became Ford's president and chief operating officer and began preaching the benefits of teamwork and continuous process improvement. WHAT IS THE ATTITUDE AT GM? Whether it's realistic or not, shareholders, Wall Street stock analysts and frustrated board members are demanding quick improvements at GM - and Smith knows it. "We have an opportunity here that we can't let pass by," says Smith. "We must make (GM's North American) operations profitable." WHAT IS THE TREND IN OVERHAULS? History shows that presidents can turn 100-day miracles. Franklin Delano Roosevelt took charge in the Great Depression and pushed through Congress the main elements of the famous New Deal - 15 major laws - in less than three months. In 1961, President John F. Kennedy reacted to the U.S.S.R.'s Sputnik launch by setting a clear goal: Land a man on the moon "before the decade is out." Astronaut Neil Armstrong took his "great step for mankind" July 20, 1969. And riding the wave of a popular mandate, Ronald Reagan pushed supply-side tax cuts through a once-reluctant Congress in July 1981, just six months after his inauguration. HOW IS A PRESIDENT LIKE A CEO? In a crisis, "You need one person who makes a difference, whether it's the president of the United States or the head of a company," says Ben Rosen, chairman of Compaq Computer who was instrumental in ousting Rod Canion as CEO a year ago. You have to become a "hero, almost," says Frank Farley, president of the American Psychological Association. "You have to be upfront and honest with people. To get people behind you, you have to be courageous and an adventurous risk taker." WHAT DO LEADERSHIP EXPERTS SAY CEOS SHOULD DO? Make a bold move right away. Sell a division. Kill a product line. Move corporate headquarters to another city. "If the board of GM put me in charge, I would immediately find the 150 people I needed to run the company," says Peters. "That's the maximum (needed) for a corporate headquarters. I'd move the HQ to Atlanta to force management to look out the window at new things in a new place." HOW SHOULD BAD NEWS BE HANDLED? Get it over with. If bad news like big job cuts is slow in coming, an organization can become paralyzed as people spend time protecting their turf. Deciding to cut employees quickly signals to employees that management isn't afraid to make tough decisions, no matter how painful. Employees, who often know long before management of troubles, can be the most relieved by action. "Don't let the bad news dribble out," says management consultant Lisa LeMaster of Fairchild:LeMaster in Dallas. "And be sure to communicate the human emotion you're feeling." HOW SHOULD SPECIFIC, MEASURABLE GOALS BE SET? When Johnson took over as CEO of Campbell Soup in 1990, he immediately set his 20-20-20 goal: For every year the next three years, average net earnings per share, return on equity and average cash return on assets would rise 20%. So far, each has. "You have to manage by numbers," says Johnson. For example, "I would urge Clinton to set goals that can be measured, whether it's exports or job creation or the deficit. Hold the feet of Congress and the government to the fire of accountability. And keep the heat on." SHOULD A CORE TEAM BE DEVELOPED? Yes. And get rid of the old team, if it isn't on board with your program, says Charles O'Reilly, an organizational psychologist at University of California, Berkeley. "With the old regime, you're saddled with all these mental sets, like `That's what made us successful before.' " He points to problems at Sears, Roebuck. The giant retailer has been losing the retail wars, but Sears executives "just keep saying, `We are America's retailer.' " WHAT ABOUT MAKING A SYMBOLIC CHANGE? Already, GM's Smith has surprised and delighted GM watchers with his breezy style. He's said he won't work much out of GM's Detroit headquarters - seen as an ivory tower of detached executives. He'll stick closer to workers at the GM Technical Center in Warren, Mich. And after his first meeting with stock analysts next week, Smith says he'll brief the press on what he says - something no GM chief has done before. WHAT SHOULD SMITH DO? Peters suggests Smith make several major announcements - a couple good, a couple bad. "If it's true that Oldsmobile needs to go, it would be gone. ... And maybe I'd make a $1 billion investment in Saturn," GM's successful small-car subsidiary. Says Peters, "Those moves would be remembered for a long time." The key is planning - and speed. "A crisis is an environment where you can get a lot done - if you know what you're doing," says D. Quinn Mills, author of Rebirth of the Corporation. "Whatever you do," says LeMaster, "move!" Bonus Editor: Kate Coughlin. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM