Back in 1999, General Motors' market-research guru, Mike DiGiovanni, was standing in front of the company's all-powerful strategy board with three new ideas to offer. On the first two, the board quickly hit the reject button. So DiGiovanni tried the third idea: "Chunk." The gist was that GM should snag the marketing rights to Hummer, the military vehicle made famous during the Gulf War, from its manufacturer, AM General, and create "son of Hummer" -- aka H2 -- a smaller, friendlier version of the original.
The strategy board gave DiGiovanni the go-ahead -- with strings attached. Once known in Detroit as "Generous Motors," the new, stingier GM had almost no money, few people, and no factories to put behind Chunk. If GM pursued the Hummer idea, it would be on one of the skinniest budgets ever approved for a vehicle project.
As it turned out, what looked like an obstacle to Hummer's success turned into an unforeseen advantage. Hummer has become GM's hottest division, with October and November 2002 new-model sales topping Ford Motor Co.'s Lincoln Navigator. From its July launch through November, the H2 posted sales of over 15,000 units. Based on this performance, GM is considering adding an even smaller SUV, the H3, and a truck version of the H2 to the Hummer line -- all of which, DiGiovanni says, might put Hummer on track to be as big as Infiniti or Acura in the next few years.
But the real story behind Hummer isn't just the unanticipated success of the vehicle. It's the unanticipated lesson behind the vehicle's success: Winning in the auto industry is as much a matter of putting together the right team as it is putting together the right parts. In this case, GM benefited from the passion and personal commitment of an unlikely band of veterans. "I knew Hummer would never get out of the box without a good team," DiGiovanni says. "But I needed some cockiness, irreverence, and a belief that you could change the rules. I needed people who would constantly push each other out of their comfort zone."
A Different Kind of Car Division The way it usually goes, creating new vehicles is like preparing for war: Dump billions of dollars, several years, and thousands of people into the project; hand the leadership to a manager who has earned his stripes elsewhere; and drive up everyone's expectations for success.
But Hummer, it turns out, was more covert action than all-out war. "In the beginning, no one even thought of Hummer as a division," explains Ken Lindensmith, a 30-year GM veteran and Hummer's vehicle-line director. The first sign that Hummer was a far different project was the unusual agreement that was signed by AM General and GM. GM usually retains tight control over its manufacturing. But in this case, GM agreed to design, engineer, and market the vehicles, leaving AM General to manufacture them at an Indiana plant built with money loaned from GM. GM pays a manufacturing fee on every H2 that gets built.
The second signal that Hummer was made from very different stuff was the decision to grant DiGiovanni his wish: to lead the Hummer team. As executive director of the market-intelligence unit, DiGiovanni met with the strategy board every few months. But that didn't make him part of GM's inner executive circle. "I'd always wanted to be a general manager of a division," DiGiovanni says. "But I hadn't broadened myself, so there was no way I'd ever work my way up to a general-manager job."
What the board saw was DiGiovanni's passion for Hummer. "There's nothing more appealing than someone who wants to try to grow their own idea," says Gary Cowger, president of GM's North American operations and a member of the strategy board. "Mike wanted the job, and ultimately, that made all of the difference."
Picking the Parts To make Hummer go, DiGiovanni would need all of the passion that he could muster. In January 2000, with the AM General agreement signed and an H2 concept vehicle unveiled at Detroit's annual auto show, DiGiovanni got his marching orders from the strategy board: You've got two years to put H2s on the road. At the time, the Hummer team consisted of three people, no plant, no dealers, and no vehicles.
DiGiovanni needed to find a few more people willing to share the risk. He knew he wanted to keep the people who had already worked hard to make Hummer a reality -- even though that wasn't tradition at GM. Lindensmith, who had helped negotiate the AM General agreement, fully expected to go back to his old job in truck product forecasting. "There were other people better suited for this job," he says. "But if passion was the most important element, I guess I had it. My boss said, 'Now you get to live with your decisions day in and day out.' "
DiGiovanni also wanted people who not only knew how to work in GM's vast bureaucracy, but also how to work around it. Marc Hernandez, an 18-year veteran of GM's field sales, service, and marketing and now Hummer marketing director, had moved nine times in those 18 years, all the while building a network of relationships. Hummer would need to beg, borrow, and steal from all of GM to get going -- and Hernandez knew that he'd have to use all of his diplomatic powers to make it work. He also sensed that the risk would be worth it. "It's easy to get lost in the faceless ranks of GM," Hernandez says. "This time, I finally felt like I could get some skin in the game."
That "faceless ranks" problem hit DiGiovanni when he searched for someone to run Hummer's advertising. For every other hire, he'd found the right GM veteran buried somewhere inside the company. Marketing was a problem area. "There wasn't anyone in advertising at GM who I thought had the attitude to do Hummer right," DiGiovanni says.
He knew who he wanted: Liz Vanzura, Volkswagen's marketing chief. She had spent more than a decade at GM before leaving in 1996 to make a name with her award-winning "Drivers Wanted" ads. DiGiovanni figured he'd broken a lot of rules getting Hummer this far. Now all he had to do was get Vanzura for a lot less money than her résumé commanded. So instead of offering Vanzura big bucks, he offered her flexibility: To give her more time with her family, he brought her on as a part-time employee.
But if any hire showed DiGiovanni's commitment to finding truly passionate people, it was the decision to hire Paul Beckett. Beckett's hiring posed a special kind of problem: He had been diagnosed with colon cancer and was scheduled to begin weekly rounds of chemotherapy the week he was expected to start work at Hummer in March 2001. Would he have the stamina for the 14-hour days that would lead up to H2's launch? His old bosses at Pontiac urged him to stay with the division, where others could support him.
But Beckett knew that the intense Hummer job would keep his mind off of his illness: "I'd rather work on something fun while I go through this than sit in a rocking-chair job." Beckett ultimately missed only one day of work during his treatments. And his creativity helped spread the Hummer team's passion to the rest of GM: He came up with the idea for a group of "personal consultants" who took early sales orders for Hummers and kept in touch with potential buyers before there were Hummer dealers. Now Cadillac is rolling out its own personal consultants, based on Hummer's experience. Says DiGiovanni: "When a team like Hummer gets going, it's greater than the sum of its parts."
Sidebar: How to Build a Hummer (Team)
Putting together the right team was Mike DiGiovanni's toughest job. "I needed people who knew what it was like to push boulders up a hill, because that's what it was going to be like with Hummer for the first years," he says. Here are three ways that he built his team.
Search the rock pile. DiGiovanni picked people "who had their wrists slapped for speaking their minds and had been sent to the rock pile." He liked their irreverent attitudes and their willingness to stand up for what they thought was right, not what was politically correct.
Throw out the hiring lists. DiGiovanni wanted people who wanted to be on the team -- not people who were next in line for a job.
Find the networkers. DiGiovanni searched for GM veterans who'd been around the system. Conventional wisdom says that newbies are more innovative -- but DiGiovanni won with savvy vets.