Frank Pullia interviews Sergio Marchionne
Frank Pullia interviews Sergio Marchionne

Click above to watch Sergio Marchionne in a candid interview with Frank Pullia

(Photo : Auto Blog - Footage : Net News Ledger)


“The Man who saved the Car Business”

Walk into any branch of Exclusive Books or CNA, and you’ll find whole divisions dedicated to business and leadership. Universities have Business Schools to promote the art of entrepreneurship, and all of them profess to be able to teach you about leadership. We’re not convinced though, that leadership is a thing you get from a manuscript, or that there is a prescriptive manual that churns out leaders. We think these things are more cultural than statistical or technological, more human than they are mechanical, and more about values and judgment and philosophy than they are about rules and regulations.

Sharp businessmen, dealers, inventors, lawyers and doctors don’t necessarily make good leaders, and good leaders don’t necessarily make any of those, they simply surround themselves with people who make it all work. We don’t know that Sir Alec Ferguson or Mike de Kock, for example, ever attended a business school, we know that Ronald Reagan was a great leader, but we’re not sure how smart he was. What all good leaders have in common is a sense of values, and they know what they don’t know, and whom they have to employ in order to supplement their shortcomings. You often hear that lament “he’s a good captain, but he’s a poor man manager”. At Summerhill we don’t think good people need managing, they need inspiring, because they know how and what to do, but they need to have hope and the encouragement to live for it. A recent story by Bill Saporito about the resurgence of the Chrysler Motor Corporation in the US, is illuminating :

Ask any of the 11000 people bustling around the Auburn Hills, Michigan, headquarters of Chrysler Group why the automaker the US government thought couldn’t possibly survive now can’t possibly fail, and the answer is “Because we have Sergio…”

Cross the Atlantic to Tortino, Italy, and ask a similar question about the future of Fiat, Chrysler’s majority owner, and you get this : “Because we have Marchionne.”

The difference is purely cultural - Americans use first names to refer to colleagues; Italians prefer last names. But they are talking about the same guy; Sergio Marchionne, ‘The Man Who Saved the Car Business.

The boss of Chrysler, Fiat and Fiat Industrial is one very unusual management mosaic; a cigarette-puffing, music loving, gadget-obsessed, speed-demon Italo-Canadian lawyer and accountant who has revived iconic but dysfunctional automobile companies on both sides of the Atlantic. Not only has Marchionne restored Chrysler, a bankrupt wreck three years ago, but he’s also preserved and created thousands of precious manufacturing jobs in the US.

“There were things that Fiat had, that I had, that if applied here could have pulled this out,” Marchionne explains. “I knew I could help technically. And I had a guy who was willing to fund it.” A guy named Obama.

Sales at Chrysler Group are up 23% through the third quarter of 2011 and are expected to hit $53 billion for the year. Chrysler was losing $1 billion a month in 2009; now its operating profit could reach $5 billion.

Marchionne brings an analytical ability that allows him to drill down to the smallest detail of manufacturing or even advertising. He is blind to rank and open to new ideas, no matter where they come from. “We flattened the organisation out. We reached out and brought people on the management team who had been buried underneath the classical hierarchy of corporate America,” says Marchionne. “They were given an opportunity to play. These are people who had been two or three layers down from senior leadership.”

It’s known as loose-tight management, meaning that Marchionne is also unforgiving in holding people accountable for executing their ideas.

That’s Marchionne’s MO : give people all the rope they need and then yank it, if he has to. Or maybe even if he doesn’t. It can produce brilliance, as in the company’s “Imported from Detroit” Super Bowl commercial featuring Eminem. That was concocted by his chief marketing officer, a poet and genially offbeat Frenchman named Olivier Francois, whom he plicked from below and put in charge of the Lancia and Chrysler brands. “What I look for in people is the ability to use that space inteligently, not to abuse the freedom,” he says. “It’s to remain absolutely focused on the objective but not to define the method of execution.”

After Marchionne saw a nearly complete version of the commercial - and after listening to lots of Eminem - he pushed his team to devote the entire two minutes of airtime the company purchased for $ 9million to one brand and one model; the revived Chrysler 200. He even helped edit the final version hours before it ran. An unabashed Apple admirer, Marchionne has the Steve Jobs gift of absolute focus. His willingness to buy into Chrysler’s people who were un-loved by their former German masters at Daimler and over-whelmed by the financial meltdown as part of private-equity company Cerberus, has made him a cult hero. Many on the 21 pesron management team that reports directly to him are Chrysler veterans aching to prove that they are not the monumental foul-ups who nearly destroyed the Motor City, the people that some Republican Senators wanted to finish off. The Italians who moved to th US to help transfer Fiat’s marketing and technology skills to Detroit have seen this turnaround movie before - and they are sticking around for a Marchionne rerun. Many don’t plan to return home. “We burned the ships,” says Pietro Gorlier, who runs Chrysler’s Mopar aftermarket business, one of the many tattered parts of the company that have been restored.

“Leadership is not a quantitative thing. People either smell it in you or they don’t,” says Marchionne. “People need to trust you that you’re going to pull them out and that they will follow you when you pull them out. If they don’t get that comfort, they’re going to drop you. This is true of organizations. It’s true of countries.

Extract from Time Magazine