Sergio Marchionne
Dear Sergio,
I know this letter is probably as much of a long shot as your writing Mary Barra CEO GM and suggesting a merger, but I definitely wanted to give it a try.

I met you when you were CEO of Allu Suisse Luna, after being brought in by Thomas Moll to help with a leadership program. I still remember your beautiful Audi 8 sitting on the cobblestones in the parking lot.

Thomas and I then went to Paris where I gave him leadership lectures at the Louvre. I remember Thomas telling me that you were a great guy, but got mad when people didn’t bring you the bad news right away.

About me: I am a CEO whisperer, author of Masterful Coaching, co-founder of the Harvard Leadership Project. Many of the people I coached are people I spotted in mid-career who went on to become Fortune 500 CEOs.

I’ve coached the Chairman of the New York Stock Exchange, Fortune 500 CEO of the Year, European Entrepreneur of the Year. I’ve done leadership immersion experiences with over 30,000 people in a past lifetime. My book is considered the bible of executive coaching because it puts results in the front of the board vs. competencies.

I am fascinated and intrigued by what you have done as CEO of Chrysler and believe we are both cut from the same creative, contrarian cloth.

My Intention: I read and watched everything I could get my hands on about you in the past few weeks, and found myself really fascinated and intrigued. I would like to be your thought leader, most trusted advisor, and go to source on everything concerning the make or break process of CEO succession, which I heard was high on your agenda for 2015.

I would like to work with you at Fiat Chrysler to develop not just a leadership pipeline for at least the top one 100 jobs (you pick the number), but also I would like to help you build the Sergio Marchionne Leadership Center, based on the teachable points of view (TPOVs) I have written about and which are close to your own.

I love what you did in firing the top guys and talented leaders in the middle. I love what you said, “I don’t lead from the top, I lead from the middle” . . . it told me so much.

My brand of accelerated CEO (top exec) development has nothing at all to do with homogenized corporate leadership competency lists or other conventional approaches.

Succession – Why it’s The Make or Break Process. As you know, leadership is important and succession is important. If you were to grade the CEO succession and development processes of most Fortune 500s, they would get a C.

Examples: The numbers tell the story:

  • When Carly Fiorina, came in as CEO at HP in 2000 and took over, the company was worth $100 billion. Ten years later, with three outside CEOs, the company had lost almost 40% of its market value.
  • By contrast, in 2000 (same year), when Steve Jobs returned to Apple, it was worth a mere $5 billion. In 2010, its market value had increased to $500 billion.
  • When Bill Gates retired and appointed Steve Ballmer CEO a similar thing happened. The company’s market cap was cut in ten years from $555 billion to an astounding $266 billion.
  • When Jack Welch was made CEO in 1981, the company was worth $26 billion. When he retired it was worth $410 billion.
  • Today, nearly 12 years of Jeff Immelt being CEO, the company is worth 37% less than it was the day Jack left.

Getting succession wrong at Chrysler: This is where you came into the movie.
I am a CEO aficionado, and to be sure, every era has its luminaries—from Lee Iacocca to Jack Welch, to Herb Kelleher, and Edgar Bronfman. During their time, each of these leaders is praised for being a transformative figure, staging amazing company transformations.

The problem is that when they exit stage right, they leave in place a CEO successor that cannot handle the leadership challenges and strategic challenges half as deftly as they did and the companies starts a re-do loop solving the same problems over and over again.

Sergio that is where you came into the story. If you go back and read old articles about Lee Iacocca, they could have taken his name out and put your name in as he did much of the same stuff you did. How did Chrysler go from a miraculous turnaround with Iacocca to the way you found it when you walked through the door? The reason was lack of focus on the make or break process of succession, and a broken leadership pipeline.

Sergio, you have, engineered a spectacular comeback for Chrysler, negotiating the bailout, starting a leadership revolution, shifting corporate culture, reinventing car and truck brands, driving financial performance. You have taken giant steps to install a new generation of transformational leaders, shift corporate culture, and transform the relationship with unions.

Anyway I am sure that you didn’t exhaust yourself flying between the US and Europe, bust your butt working 24/7 and sacrifice 100% of your personal life, only to have it wiped out by a half backed succession planning process. Did you?

Forgive me, if you already have a great succession and development thing in place. Chances are you don’t, given that the prevailing paradigm of leadership development is upside down.

Sergio Marchionne Leadership Center: One of the ideas I would like to talk to you about is helping you set up the Sergio Marchionne Leadership Center that will help you to develop a transformational leadership pipeline, long after your term of office is over.

The Sergio Marchionne Leadership Center would be a way to institutionalize the kind of transformational leadership that you represent at Chrysler. It will link development to meeting Chrysler strategic challenges, catalytic experiences, pivotal action learning projects, and relentless coaching.

It would be a leadership center that would develop people at all levels of the organization and all stages of their career—from the recent engineering graduate, to the first time manager, to the Vice President in charge of a mark, to the Vice Chairman who is a candidate to become CEO, and chairman.

Guiding Principles: Succession & Development

1. Leadership is a strategy at Chrysler. The entire company is 100% clear on the fact that leadership is important, succession is important, development is important.

2. Three way Partnership of Board, CEO and CHRO on the make or break process succession and building a transformational leadership pipeline.

3. CEO Is Personally Directly Involved. The CEO doesn’t lead from the top, but leads from the middle with a teachable point of view about how to succeed in this business.

4. Sergio Marchionne Leadership Center. It makes succession and development an integral part of the business structure vs. just another dangling leadership initiative.

5. Starts with Purpose. Everyone is involved in creating an auto company that truly matters which accelerates performance and development.

6. Succession Sessions to Spot Talent. Succession starts with a structured process for spotting exceptional talent inside the company that doesn’t fit the mold.

7. Development & Meeting Strategic Challenges Happen Simultaneously. Development happens 20% in the classroom, 80% in meeting strategic challenges in the business.

8. Reimagine Org Structure so it creates the maximum number of development opportunities and support strategy.

9. Catalytic Stretch Assignments for CEO Contenders and all top job candidates. Combines deployment of leadership, talent, strategy, organization.

10. Pivotal Action Learning Projects. People develop in meeting Big Challenges in the business that are high profile, high risk high reward.

11. 360 Transformational Coaching. Leaders are coached to transform in the process of transforming the organization. 360 Feedback is powerful and profound, not a numbers game

How my approach is different

My favorite topic is Transformational Leadership, the kind that can create a monopoly business or reinvent an existing business. Transformational Leadership is the scarcest resource in most companies, and so my goal with you would be to help you develop a transformational leadership pipeline.

In the normal course of events, most development programs start with list of corporate homogenized leadership competencies, and build everything around that. As Noel Tichy of the University of Michigan says, despite the fact that almost every company in the world takes this approach, there is not a shred of evidence that it has any impact on leadership ability.

I believe leadership is about development and comes from driving toward an impossible future and from crucible experiences that involve trying to do something in the business that is difficult or impossible.

I build my development programs around “catalytic stretch assignments,” pivotal action learning projects that are high profile, high risk, and high reward, relentless masterful coaching. More when we talk . . .

Next Steps. I would like to have a conversation, whether on the phone or in person. Please tell me if you could jump on a 15 minute call.

Sincerely, Robert Hargrove
1 617 953 5252
Robert.Hargrove@rhargrove.com

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