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Summer of the silent phone

2007 was a pivotal year for DaimlerChrysler as it was separating into two corporations, "carving out" Chrysler Corporation from the future Daimler AG. After 9 years of building parallel businesses and organizations, it was now being torn apart following the sale of Chrysler to Cerberus Capital Management. I did not realize at the moment how this would challenge my leadership skills for the coming years.

I was named Managing Director of Chrysler Russia at the peak of the "carve out". It was my assignment to build a Chrysler organization that previously did not exist. The Chrysler-focused staff were primarily mid-level managers working in shared departments side-by-side with Mercedes-Benz staff under senior Mercedes executives. Most of the Chrysler employees did not even know each other within the DaimlerChrysler Automotive Russia organization.

Physical relocation was the easiest stage. The fledgling Chrysler Russia moved to unused Daimler AG office space at their Aftersales center on Moscow's edges. For the first time the Chrysler team could see itself as a whole and feel its independence. But now began the challenging part - building an effective team.

Until very recently, the Chrysler Russia Management Team (MT) had been buried in the Daimler organization, not taking decisions but supporting Mercedes management in taking Chrysler-related decisions. Now this team of five had been promoted overnight to being the leadership of a new company in a notoriously difficult market. They went from "safe" positions to high exposure overnight.

Russian businesses were historically structured with a strong leadership providing orders to the staff who would then work to carry them out. Often, there was no questioning, no suggestions to improve, or any initiative. Staff were expected to just carry out the orders. That was not going to work for an American-based company bracing itself for growth in one of the fastest-growing BRIC markets of the time. A more Western-oriented leadership with flexibility, initiative, and accountability was required, and quickly.

Knowing that change would not come overnight, I developed a four phase leadership transformation process which I will explain in an oversimplified way. For the first three month phase I asked the MT members to bring me all available information, well summarized, so that I could take the decisions for them. In the subsequent months-long phase, I requested the same information but with their recommendation for my decision making. And in the final stage they were to bring summarized information and a prepared decision which I would simply sign off.

The fourth and final phase was "reality" wherein the team would take decisions on their own up to certain limits outlined in a Delegation of Authority. Well-structured Management Team meetings with transparent sharing of issues and departmental activities, alignment to a single company strategy, and a common direction were central to our success.

How did the leadership transformation process fare?

My first summer vacation at Chrysler Russia came during the first phases of transformation. I had returned to the United States for a break. But, with the 8 hour time difference, my phone started ringing very early every morning to take decisions. I gave up on a relaxing holiday and accepted having to participate in decision making calls every sunrise.

Fast forward one year. What a difference. My phone did not ring. It lay silent on the dresser every morning. After several days I called my assistant and asked her to call me to assure that my phone was working properly. It was. And I smiled.

After more than one year of crystallizing as a Management Team, establishing responsibilities, developing confidence, enhancing decision-making capabilities, and entrenching a feeling of accountability, the process felt complete. Each of these team characteristics took painstaking focus since not every member of the team learned or transformed at the same pace. Some required more time. Some required less. But importantly, all felt a sense of belonging, engagement, and pride in their roles. All were aligned to a common company direction.

The team's leadership was put to the test in 2009 with the global financial crisis wherein the Russian automotive market contracted by half but the Chrysler, Jeep and Dodge brands contracted by 85% due to the uncertainty of the global corporation's future. The Russian market had only seen growth, never contraction, and this was a serious test of the team. None had ever been required to manage a crisis because there had been none. Thanks to their learnings, resilience, calm guidance, the battered Chrysler Russia pulled through the crisis and prepared again for growth.

A different test arose in 2011 when Chrysler Russia was tasked with integrating a Fiat distributorship within 3.5 months and a hard December 31 due date when the previous Fiat distributor would cease all operations. Within that time period the very same MT grew the organization from 30 to 80 employees, added parts warehouses, opened new Fiat import operations, integrated 115 Fiat dealers with Chrysler's 15 dealers. The company also realigned to Italian overlords instead of American as the global organization was changed. The work was relentless and brutal and did not stop when the deadline fell. But it was successful. All tasks required to run a successfully merged Fiat Chrysler Automotive sales company were achieved within 3.5 short months.

Ultimately, this was the result of leadership and teamwork. Growing a team from being new, inexperienced leaders to a highly seasoned, world class team working in one of the most challenging markets. Each individual required their own degree of support or coaching. Each had different motivations and frustrations and their own leadership style. But importantly, we were an aligned team with a common vision.

Shiftgate Consulting can leverage this experience in a complex country to shape and form your team for success, preparing them for adversities that might not even be predicted today. No matter whether the team is at an early stage or an existing one requiring a transformation, we can support in assessing, plotting a path forward, or even executing the shift.

John Jörn Stech


Shiftgate Consulting LLC

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