Posts from — February 2012

If Great Corporations Could Lead: How to Unite Right and Left and Save the World

What if our great corporations could direct their enormous capabilities to solving the global mess we have all created – financial crises, depressed economies, political gridlock, climate change, and endless conflict? Yes, business is the engine driving economic progress, but American firms outsource work abroad while jobs are scarce at home. They sit on $ 2 trillion in cash while the economy remains depressed. And they give billions to sway votes. The Occupy Wall Street Movement has a point  – many common business practices do little to help the nation, and they may do serious harm.

Our economy was once powered by the belief that “What’s good for General Motors is good for the USA.” In addition to making money, suppose Apple, IBM, GE, Google, Microsoft, Exxon, and other corporate icons could expand their vision to hit this problem head on? What would a 21st Century version of progressive corporate management look like? The following “Vision for General Motors” was produced in my Executive MBA class to illustrate a way out of this mess.


A Vision for General Motors

GM plans to regain global leadership by reinventing the modern corporation for the 21st Century. We hope to accomplish for auto making what Apple did for computers and electronics, and thereby help move the world to a sustainable economic system.

Our first goal is to invite the world’s most creative car designers to offer their best ideas for hybrids, electrics, fuel cells, and internal combustion engines in competitive forums.  This will include other breakthrough technologies in self-driving cars, lightweight bodies, solar panels, mass transportation, and anything else that will make a difference. GM will use these ideas to develop a variety of advanced models that compete internally for further development, and the most promising will be produced.

We will work with the UAW to automate routine tasks, moving employees into advanced positions that are challenging and more productive. Our workers, office staffs, engineers, and managers will be encouraged to form self-managed teams that are responsible for performance, rewarded accordingly, and given wide latitude. Teams that succeed will receive attractive bonuses and recognition, while those that fail will be coached and moved to other applications. Employees will also be offered GM stock at preferred prices to make them partners in the enterprise. Wethink this structure of “internal enterprises” working in a “self-organizing system” will encourage innovation, ensure accountability, and drive economic growth.

Our dealers, car buyers, suppliers, local and federal governments, energy companies, environmentalists, and others concerned parties will be consulted for advice, and they will also be offered GM stock at preferred rates. We intend to involve all constituencies in GM life, creating a community serving all interests  – fulfilling work, customer value, public service, and attractive financial rewards. This strategy is guided in part by the innovative work of our Saturn division, which pioneered in collaborative stakeholder relations years ago with good success.

For example, we will work with car dealers to transform the showroom into an exciting display of great cars and sound advice at fixed prices, rather than bargaining with manipulative sales persons. Like Apple stores, “GM Stores” will offer useful information, help buyers find solutions (even if it’s not GM), show how various features work, help you test drive, and answer questions. Refreshments will be offered and special events held to make GM Stores inviting and profitable.

These partnerships will broaden GM ownership, and thereby avoid the stock market’s demand for immediate gains. We think this may lessen the risk of financial markets, and help make GM stock a more stable as well as an attractive investment for all holders. We will accordingly expand our management systems to include representatives of all stakeholders on the Board of Directors, making GM the first “democratic” corporation in the world.

By bringing these various groups into GM ownership and management, we intend to harness the ideas, resources, and support of our entire corporate community to form a more productive whole. With the world facing unprecedented challenges of globalization, growing needs for good transportation, severe environmental threats, a transition in energy, and mounting dissatisfaction with the economic status-quo, the time has come for a broader definition of corporate management. As before, General Motors intends to lead the way.

 Only Requires Leadership

This type of collaboration requires skills most CEOs lack today, and it may take convincing to get past decades of distrust. But many great companies now practice elements of this basic idea, illustrating how creative thought could change this situation we seem to be stuck in. Wells Fargo, Google, Johnson & Johnson, Nucor Steel, Whole Foods, and a host of other creative firms have been developing this “democratic” form of enterprise for years. The rise of corporate ethics, social responsibility, the triple bottom line, strategic alliances, women entering management, and other trends are coalescing into a broader model of business based on stakeholder collaboration. Speaking at the World Economic Forum in Davos, Henry Blodget of Business Insider proposed we “’shift to a more balanced focus on profit, employees, and customers.”

This idea of uniting the business firm – bedrock of all economies – into a collaborative socio-economic system would change everything. Social interests could be integrated into business in a productive way. Firms would compete by collaborating to serve social needs as well as making money. Those that excel would make MORE money while also serving society better. And we would need less government as the corporation becomes self-regulating.

A key feature is that this vision unifies right- and left-wing ideals – free enterprise and social community –  so it could help resolve political gridlock. If Americans could realize the potential of this economic breakthrough, we could reinvent business and government, turn the economy around, and possibly even lead the world again. It all starts with strong leadership, and that could emerge anywhere.

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William E. Halal is a business professor at George Washington University, Washington, DC., and president of TechCast LLC (www.TechCast.org) His most recent book is Technology’s Promise: Expert Knowledge on the Transformation of Business and Society (London: Palgrave Macmillan)

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February 10, 2012   2 Comments