Chrysler's new boss

Robert Nardelli, the controversial former chief executive of Home Depot, takes over as the new CEO of Chrysler this week. His arrival may mean a cultural shake-up for employees at the vehicle maker.

by The Wall Street Journal
Last Updated: 23 Jul 2013

Nardelli left Home Depot under a cloud over his huge pay packet, authoritarian leadership style and questions over his strategic decision-making. His job at Chrysler, which is now owned by private equity group Cerberus Capital Management LLC, will be to execute a restructuring plan - one that requires the shedding of 13,000 jobs.

In his six years at Home Depot, he changes the management structure from one in which managers had a high degree of autonomy into a command-and-control culture in which he sat at the top of a centralised pyramid.

The result was higher profits but a bigger turnover of managers, many of whom complained of endless form filling. Former military officers more accustomed to the top-down management model often filled their shoes.

Nardelli arrives at Chrysler claiming that he wants to build a relationship of trust with managers and unions. One challenge he faces is to successfully lead Chrysler employees in a direction of strategic change without undermining the company's culture and philosophy.

Sheila Margolis of the Workplace Culture Institute in Atlanta says the new CEOs need to understand the traditional purpose and culture of the company, the reasons why employees feel what they do matters and why they want to work where they do. Nardelli may feel a need to change Chrysler's culture, in which case, Margolis says he will need to state clearly how the culture will change so that employees can evaluate whether they want to stay on.

He could take a page out of the book of Ron Sargent, who, when he took over office supplier Staples five years ago, polled employees to find out what was most important to them. The results showed that most employees worked not out of a passion for office supplies, but in order to help others. This in turn dovetailed with Sargent's desire to improve customer service at the company. His solution was to push decision-making down the command change, introduce training programmes for staff about Staples' product lines, and a system team bonuses. The result was increased sales and expansion.

Perhaps there are messages here for another new boss: The Wall Street Journal's new owner Rupert Murdoch.

New CEOs' cultural challenge
Carol Hymowitz
The Wall Street Journal, 13 August

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