Wednesday, August 09, 2006

If You’re Serious About Change, Maybe You Oughta Move

"If You’re Serious About Change, Maybe You Oughta Move" by Oren Harari. August 9, 2006

Here’s a little note about “change”. Are you ready for something that goes beyond lip service and micro-incremental adjustments to your current processes and culture? Well, here it is: If you’re leading a company that’s in dire need for serious, big-time change, then consider moving headquarters to another state.

That’s what Carlos Ghosn is doing to shake up Nissan U.S.A. He shut down the company’s U.S. headquarters in Los Angeles and moved it to Nashville. The two immediate payoffs are pretty obvious: lower costs on one hand, and closer proximity to the local Nissan factories on the other hand

But as Holman Jenkins of the Wall St. Journal points out in his July 5 column, the really big payoff of Ghosn’s move is that “it blew up a status quo that was showing signs of staleness.” Jenkins goes further and suggests that leaders the of wounded GM could learn something from Ghosn. Here’s what he says:

“GM moving itself from Detroit would be unthinkable, and that’s the problem. History, tradition, the importance to the local economy, and deep roots, blah, blah. Against that, it’s hard to put your finger on any quantifiable gain from moving the company’s HQ from Detroit, except that it would change everything. Thousands of managers would refuse to go. Entire departments and a corporate hierarchy would have to be reconstituted. Old office plans and job charts would be trashed. New ones would be designed from scratch.”

Would moving GM’s headquarters be the elixir that would solve the company’s colossal challenges? On its own, of course not. But I think it would put real teeth into the notion of “change”. It would inject urgency and speed into the “change process.” It would open the doors for transformations in how the business is conducted. It would open the doors for new blood, new thinking, new kinds of managers and employees. With a company as calcified as GM, it might be the move that actually breaks through the inert corporate cholesterol that is now strangling the organization despite (or perhaps, because of) the careful, cautious good intentions of its leaders.

As Jenkins points out, “most of us, in this sense, are too conservative for our own good…Radical steps are sometimes indicated in corporate pathology.”

There are many radical steps that we as leaders fail to pursue because we think they’re too painful or risky. The reality is that not pursuing them will often lead to even more pain and risk.


Post a Comment

<< Home