On Tuesday, New York Times columnist Thomas Friedman (author of The World is Flat) chided the auto companies for their lack of innovation and desire for government assistance (read article here).  Setting off a firestorm of comments across the web, he not only recommended replacing the Board of Directors and executives at GM (as I have blogged), but went so far as to recommend asking Steve Jobs to take over GM leadership as an act of national service.

The other side of this argument was made by columnist John Dvorak on Marketwatch (read article here).  Mr. Dvorak says this is a foolish idea, because the auto industry is so integrated and unique that only someone within the auto industry could hope to run an auto company.  He recommends searching within the bowels of the auto companies for some overlooked wonderkind who is able to turn around the organization while maintaining the existing business model.  He goes on to say that the only reason Steve Jobs has been successful is due to the unique features of the tech industry, implying no tech manager could hope to run a company as complex as GM.

Mr. Dvorak suffers from the sort of traditional management thinking that has gotten GM (Ford, Chrysler, Citibank, Washington Mutual, Sears, General Growth Properties, Sun Microsystems, etc.) into big trouble.  As he lists off the "unique features" of the industry, and discusses "the manufacturing, inventory, subassemblies, delivery and other systems that are in place…too delicately balanced and complicated for a newbie to deal with" he describes Lock-in.  Mr. Dvorak views what's been done in the name of Defend & Extend Management as good – and therefore necessary to keep.  Thus, any turnaround would require doing more of what's been done – hoping somehow doing it better, faster and cheaper can make the company successful again.  But he completely ignores the fact, which he actually makes in his article, that there are a lot of other auto companies competing with GM, Ford and Chrysler — and they are better at running these complexities than GM, because they are able to make autos that customers purchase at a higher profit.  Mr. Dvorak ignores the obvious fact that it is very likely the structural and behavioral Lock-ins which he thinks impossible for a new leader to manage that are causing the horrible results in the U.S. auto companies.  He ignores the notion that it is the very heart of the GM Success Formula that is competitively outdated, and thus causing these horrible results.

Successful turnarounds are rarely accomplished by people who are part of the industry.  Because those in the companies are Locked-in to the Success Formula which is producing the poor results.  Existing leders and mangers accept those Lock-ins, and that old Success Formula, thus trying marginal changes – or more of the same but with less resource.  What really works is when a new leader implements significant Disruptions that cause people to approach the work with a very different frame of mind, and then implement White Space projects (usually several, and with lots of resources and visibility) which allow the company to develop a very different Success Formula to which the company can migrate.  Example – consumer products leader Lou Gerstner's turnaround of tech giant IBM.

While Steve Jobs likely could make a significant difference in GM, I don't think it has to be Steve Jobs.  We so love our heros we start thinking only they can make a difference.  What GM needs is new leadership that works like Steve Jobs.  Leadership that (a) focuses on future needs rather than current problems (b) obsesses about competition rather than thinking all solutions lie within the company (c) is not only willing to be Disruptive – but enjoys creating Disruptions to the Lock-ins which overwhelm the Status Quo Police and (d) set up White Space projects where leaders are given permission to do things very differently, and the resources to achieve significant goals.

It can happen in the auto industry.  About 25 years ago much maligned Chairman Roger Smith took cost savings from closing outdated plants in places like Flint, Michigan (the reason for Michael Moore's first docu-story Roger and Me) and invested them in a start-up company called Saturn.  Saturn was White Space where the leaders were not forced to follow old G.M. Success Formula tactics – like keeping the same union contracts, or using the same components, or using the same dealers, or using the same customer pricing mechanisms.  Saturn came on the scene with great fanfare.  With only 3 vehicles in their initial line-up, the company's brand became "Apple-like" with its near-cult status.  People loved the smaller cars, the focus on safety and consistency, the no-negotiating price method and the low-pressure dealerships.  This was a great example of White Space that produced a very significant change in customer opinions about American cars - and car companies – and in just a few years.

Unfortunately, Roger Smith retired and over the years GM's management has dismantled what made Saturn great.  Rather than migrate GM in the direction of what made Saturn a winner, they slowly pulled Saturn into the old Success Formula of GM, killing its advantages.  Away went all the uniqueness of Saturn as it was turned into just another division GM.  Similarly, the acquisition of Hummer from American General offered an opportunity for GM to move in unique directions – but quickly Hummer became just another division which focused on a narrow product range and eliminated much of its uniqueness homogenizing the brand into something far less desirable.  GM spent billions on developing an electric car, more than a decade before the hybrids were launched by Toyota and Honda.  But management's Lock-in to preset ideas about what that car needed to do caused them to kill the project — and go so far as to sue test customers to retrieve the electric autos they LOVED.

GM desperately needs leaders willing to Disrupt.  And willing to implement White Space to develop a new Success Formula.  Leaders willing to let the company migrate toward new ways of operating – who believe it is essential.  People like Steve Jobs.  People the auto companies weeded out long ago when forcing those who move up to slavishly accept the failing Success Formula and focus on Defending & Extending it – despite the declining results.  It will take people from outside GM, Ford and Chrysler to turn them around.  It can be done.