The Chrysler turn around is the stuff of business school legend. The company had a banner year in 2012 with record sales and profits. While all the major worldwide car brands did well last year, Chrysler was the biggest winner out of the all brands with a 39.13 increase in sales year over year from 2011. The accolades have not been in short supply either. Their UConnect infotainment system just won AOL Auto’s technology of the year award at last week’s CES, and the Ram 1500 was just announced as the North American Truck of the Year.
The company has been jumping from hit to hit with the new Jeep Wrangler and they even needed to add another shift at the factory to meed Ram production demand. This is all a far cry from their 2010, which was an ugly year for them to say the least. So how did Chrysler go from bailouts and mergers to record sales and profits in such a short time?
Despite what you may be thinking, they did not simply hire a batch of young soul-patched recent graduates with crazy ideas about design and management. Nor did they crowd-source ideas or acqui-hire startup teams. No, they did something far more difficult and devious. They listened to their current employees.
I recently had an in-depth and frank chat with a Chrysler group PR employee, and this was her main point: Chrysler didn’t hire anyone (not in any great numbers anyway), they didn’t “go back to the drawing board,” and they didn’t find a box they should all try to think outside of. In fact, it is all the same people in the design and engineering departments thinking their same thoughts. The difference in her opinion is that the new CEO Sergio Marchionne simply removed their filter. She insisted these employees have had great ideas for years, possibly decades but were forced to churn out mediocre products. The constraint on the whole system according to her was their managers. Previously, short-term-obsessed managers had held everything back in hopes of meeting poorly planned quarterly goals and objectives. Those restrictions have now been forcefully expunged from the company, and people of all levels are again allowed to run free and voice their ideas.
Chrysler has been here before, of course. Lee Iococca saved the automaker when they faced insolvency in the late 70’s, and the firm has seemed to vacillate from boom to bust frequently since then. Perhaps the company’s new Italian suitor will have better luck keeping the company in the black. The key to its future success could be as simple as listening.