Incentive - January 2008 - (Page 28)

A SHOT AT REDEMPTION they left Chrysler’s North American dealers meeting in late October. Their support came in large part because of the announcement that a new incentive program would replace the much-disliked current program as of this month. Already, “I’ve seen internal correspondences citing how happy the dealers were with the level of engagement they got from the leadership team,” says Jim Schroer, president and CEO of Minneapolis-based Carlson Marketing Worldwide, whose firm ran the Chrysler event. “To get that response from these dealers, who have been through so much over the years and are a very jaded group, really says something.” Indeed, this unexpected momentum swing at Chrysler speaks not only to the business acumen Nardelli developed as one of Jack Welch’s top lieutenants at General Electric, but also to a lesson Nardelli apparently learned from his Home Depot experience that could help him become a But that specific praise is notable for what it lacks regarding the need to communicate a big-picture vision to workers. After the process of selecting his successor at GE ended in late 2000, Welch reportedly said that Nardelli’s track record notwithstanding, “I had to go with my gut” and back Jeff Immelt for the position. In June 2002, Nardelli reflected on why he might have lost out on his dream job, telling Fortune that “There was always this rap against me about being functionally proficient but not very strategic.” This would include his inability to properly articulate the need for actions that will move the company toward its goals. At Home Depot, Nardelli’s functional proficiency did result in a 70 percent rise in revenue and 93-percent rise in profit over his tenure. Nonetheless, he lost the perception battle because his communication strategy could not control dissent. And this happened precisely because “Nardelli went Chrysler needs more hits like the hugely popular 300 Sedan Burnishing the Brand nlike most other industries, the automotive sector enjoys ubiquitous branding; after all, its products zip down the world’s highways, avenues and side streets every day. For Chrysler in particular, the “eye candy” of innovative design is what’s always defined the positive notions of its brand. Because of this, new CEO Robert Nardelli will have to rely on his designers to reinforce the elements that brought Chrysler such a loyal following in the ’60s and early ’70s. “This car company, more than any other, lives and dies on its new-product hits,” says Carlson Marketing CEO Jim Schroer. “The design team must be pushed to accentuate that passion for unique design,” not only to attract present and past Chrysler owners, but also to pump up the dealers, says Barry LaBov, president of Fort Wayne, Ind.–based incentive firm LaBov and Beyond. “In this business, holding on to loyal customers who don’t need discounts to come through the door puts a company in great shape.” What’s more, the quality team—will surely see and hear a lot of Nardelli—will have to improve product rankings so that first-time buyers will feel comfortable plunking down cash for a sexy new model. Finally, says LaBov, “the dealers feel they are every bit as important to the success of this company as anyone else. Their incentive plan will be different now [See p. 30, “Anatomy of a Broken Program”], but in this situation, that’s just part of the package that can win them over. The dealers also need to see the DNA of the brand within the new designs, they need improved quality—and they need to see [Chrysler leadership’s] commitment to them over the long term.” —R.C. U “It’s such a different task to engage the entrepreneurs in your system, the dealers, versus the employees.” –Jim Schroer, Carlson Marketing legendary executive like his mentor. The lesson is this: Shrewd business decisions alone are not enough—it’s good communication that wins the support of the workforce. And if you can’t do that part well, entrust the job to colleagues who can. away from his personal strengths—he didn’t make the big changes he wanted to make fast enough,” says Six Sigma expert David Silverstein, CEO of Breakthrough Management Group in Longmont, Colo., and co-author of Insourcing Innovation. “If you are going to change the culture—and Nardelli was right to do it, because it was time for Home Depot to grow up—you do it fast. But he tried to phase in changes over years; it’s possible he had veteran employees consulting him who said, ‘You’d better go slowly or you will have a lot of dissension.’ ” Compounding his error, Nardelli made awkward,—even angry—comments during the 2004 and 2006 shareholder meetings to counter the dissension, further weakening him. “If he had gotten all of the unpleasantness over with quickly and had to explain it BATTLING PERCEPTION A 29-year veteran and Six Sigma superstar for General Electric, Nardelli possesses operational excellence that was touted ad nauseam when he was hired at Home Depot in late 2000. In Nardelli’s four years heading up GE’s Power Systems division, it went from breaking even to making a $1.7 billion profit, with half of its revenue coming from new products. Based on this success, Jack Welch, GE’s former chairman and CEO, said in August that Nardelli “will make Chrysler more efficient than it has ever been.” 28 | Incentive | January 2008 | incentivemag.com http://incentivemag.com

Table of Contents Feed for the Digital Edition of Incentive - January 2008

Incentive - January 2008 Contents Editor’s Note: Out of SITE In The News Cover Story: Include a Meeting, Improve Morale Case Study: DHL Delivers Recognition Incentive Primer: How To Use Promo Products How Bob Nardelli Rallied Chrysler’s Dealers Incentive Interview: Ken Blanchard Says Be Nice TV’s Extreme Makeover Motivates Giving Pre-Employment Motivation The Daycare Dilemma Happy Employees Shouldn’t Mix with Sick Employees Incentive Research: Consumer Promotions Report In Her Shoes: Winning Approval Of Flextime Travel News Field Report: Barcelona Field Report: Bermuda Golf: Follow The Pros potentials Here and Now Watches As Jewelry Awards: Online Gift Cards Tech Gadgets for 2008 Last Word: Stanley Bing Bashes Bully Bosses

Incentive - January 2008

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