From Bankrupt to Profitable: Chrysler’s Culture Change

chryslerThe Guardian has an excellent profile of how Chrysler has turned around its culture, shifting from a bureaucratic, innovation-killing culture to a flatter, faster and more purposeful one:

Incoming CEO Sergio Marchionne was determined to revitalize the business. He understood this could only be accomplished by changing Chrysler’s innovation-stifling culture. [Chairman] Kidder put his faith in Marchionne, assembling a board of directors who would stand behind the new CEO’s efforts to perform radical surgery.

“Sergio crashed through the old culture,” Kidder recalls. On his very first day at Chrysler, Marchionne moved the CEO’s office from the penthouse to the middle of the engineering department. He then streamlined senior leadership and asked most of his remaining 15 direct reports to lead more than one function, knowing that the increased work load would yield faster decision making. Marchionne also gave his team full authority to take risks without bureaucratic barriers. People were trusted to make smart decisions and be accountable. Kidder says: “Suddenly, we had this very flat organization, and guess what? The speed picked up immensely.”

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