Ed Whitacre
became a CEO of General Motors in 2009. He was a former executive of AT&T.
When he became a CEO of GM, he had no experiences related to the auto industry.
However, the company wanted him to join the GM board because the company
thought his experience from a fast changing industry, which is AT&T could
bring him fresh knowledge and a new perspective to implement successful changes
in GM. Usually we think that a CEO should have more experiences and knowledge
about the industry in order to perform well.
However, it is not necessary because when a company choses new CEO from a
different type of organization, he or she is expected to make huge change of a
company with new ideas in order to perform better with new strategy. Where a CEO
of a company preforms poorly, the new CEO can change previous performance
easily without following the plans of the previous CEO. Having CEOs from different organizations
brings companies a new outlook. According to
MIT Sloan Management Review, outsider CEOs- who are less tied up with
internal political relationships face fewer obstacles in pursing the
entrepreneurial decision making needed for growth and for implementing crucial
strategic changes in a timely manner. This indicates that even though they do
not have much experience of organizations, they can propose efficient and wider
vision of strategy because they have plans and goals to make huge changes in
companies. In addition, if a company makes a new executive group, these
executives do not have negative previous experiences and strategies, thus they
are able to start with clear mind and come up with new ideas.
http://sloanreview.mit.edu/the-magazine/2012-summer/53408/when-is-an-outsider-ceo-a-good-choice/
I believed that it wasn't possible for an outstanding leader to be equally outstanding in a totally different organization. But after reading your blog, I came to realize that you had a very good point in saying that they are most likely hired in the new organization because they want fresh eyes and a new perspective for their organization. They believe that the person will give them the change that they need within the company. Didn't really think about that before reading this.
ReplyDeleteSome leaders can make changes in other fields but I believe that majority of leaders cannot perform well in a totally different environment because in order for them to approach in a different way with a different strategy, leaders need experiences and knowledge. Without this important factors, these leaders might put the company in danger due to the change. Well, its just my opinion so you dont have to take it seriously~
ReplyDeleteI try to mold and develop my own leadership style on the expertise of others and conceptualizing problems. Ed Whitacre's time at GM has proven to be successful after the organization's near collapse. The Board did a great job to find an outsider to bring in fresh ideas and adapt successful techniques from another industry to promote the best products and services GM can provide. As he continues in this role, he needs to have access to people who are experts in all facets of the auto industry and can provide honest and material feedback on the business.
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