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Thursday, February 4, 1993 - Page updated at 12:00 AM

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Culture Shock -- Process Of Reinventing GM Begins With Top Management

Washington Post

DETROIT - For generations, the 14th floor of the General Motors Corp. headquarters, with its thick carpets, mahogany walls and electronically controlled glass doors, has been the ultimate symbol of power at the world's largest company. Access was by invitation only.

Top executives were sealed off from the rest of the GM work force. Chauffeured into the basement garage, GM's leaders were whisked by private elevator to the 14th floor's executive row, where their meals were catered in a private dining room.

The 14th floor was an essential part of the corporate culture that shaped GM - for better, and recently for worse - for more than half a century. Now, as GM's board and a new team of managers struggle to make the company more competitive, they are beginning by destroying the mystique of the fabled executive floor, in an effort to change a corporate culture marked by insularity and inbred management.

Behind the GM revolution are the company's outside directors - those who are not current or recent employees of the company. They are rewriting the book on corporate governance. The new chapters are being copied by other troubled corporations almost as fast as they're written.

GM already is beginning the painful process of trying to reinvent itself. In the nine months since GM's outside directors staged the biggest boardroom coup in modern corporate history, the executive dining room has been closed and the company's power center

has been shifted 15 miles out of Detroit to the GM Technical Center, a sprawling, square-mile complex with the look of a 1960s community-college campus.

The Tech Center is where GM President John Smith Jr., the man picked by the board to run the daily operations of the company, spends most of his time trying to find direction for a corporation that lost its way.

The shift away from managerial perks and isolation was deliberate, a signal by the outside directors to the company's legendary bureaucracy that things were about to change.

Long before the firing of GM Chairman Robert Stempel last October, the outside directors began discussing the lifestyle of the 14th floor and the message it sent.

"It was something we talked about long before the change. It was always the symbol" of what was wrong with GM, said a participant. "GM's top management was walled off from the rest of the company." The changes, he said, have helped "unlock the lower levels" of GM management.

Many ranking GM officials still occupy space on the 14th floor, but it has lost its luster. Not only is the executive dining room gone, but access to executive row, once a formal affair involving memos and telephone calls, has been reduced to an electronic card game. If you have a card to open the locks, you get in - and nowadays, it seems, everybody in the GM headquarters building has a card.

The space is still as quiet as a church sanctuary after services, but some of the stiffness is gone. Friday, for example, has been officially designated "casual day," which means some officials work in sweaters and shirtsleeves.

Such changes, by themselves, have little effect on the bottom line. "But to the degree that they are dismantling the image of the 14th floor, they are removing a formidable link with the past," said J. Patrick Wright, author of "On A Clear Day You Can See General Motors," which chronicled the career of John DeLorean, a maverick GM executive who left the company in 1973.

Harry Pearce, executive vice president and general counsel of GM and half of a two-man legal team that helped shape the board revolution, said that after a few false starts "we now understand the absolute necessity of redesigning the culture of GM. Those who can't adapt to the new GM culture will have to leave the company."

"The old culture," Pearce said, "was risk-averse." The norm, he said, was "not sticking your neck out in any way."

That attitude, like the perks of the executive suite, is beginning to fade. Under the new system, he said, the directors expect managers to motivate the workers to do a better job. "If we don't do it, they've got to get rid of us," said Pearce, sticking his neck out in the fashion of the new day.

Pearce has done his bit to help change GM's management style, moving the legal department out of the ornate headquarters, with its marble walls and vaulted, gold-leaf ceilings, to a building across the street.

He has eliminated traditional titles among the professional staff, and lawyers today are simply known as "associates." . Another target on the Pearce hit list: meetings. In the past, Pearce said, meetings were judged a success if everyone got along, even if nothing was accomplished.

The impact of the new management style is being felt at the plant level, too. Ron Harbour, vice president of James E. Harbour & Associates, a leading auto consulting firm in nearby Troy, Mich., said: "GM is beginning to get tough on plant managers, urging them to meet certain objectives. But rather than do that, a lot of those managers are heading toward the door."

For whatever reasons, during the past year more than 12,000 salaried GM managers and other white-collar workers have taken advantage of buyout and early-retirement programs.

Copyright (c) 1993 Seattle Times Company, All Rights Reserved.

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