Keeping the Crisis in Chrysler

It's the Company, not the Cult of Personality

Zetsche's willingness to listen to and learn from veteran executives spoke volumes to the company's more than 80,000 employees. Past executives who had helped lead the company out of downturns often ignored the accomplishments of the whole company after the crisis was over. They began emphasizing their own roles in the turnaround.

It was easy to see how the cult of personality could take hold. The car industry seems to breed bigger-than-life executives. Iconic leaders such as Iacocca (whose very name, serendipitously, is an acronym for "I Am Chairman of Chrysler Corporation of America") and Lutz became synonymous with Chrysler's turnarounds and were lionized in the press. Obviously, though, thousands of people worked long and hard to engineer the recoveries -- a fact that could become glaringly obvious when Chrysler honchos left the company to try their turnaround magic elsewhere. In 2001 GM hired Lutz to help engineer its own back-from-the-bust strategy. But early this year, GM's CEO Richard Wagoner took back control of the company's North American operations, which had been part of Lutz's portfolio, as the company's recovery continued to sputter.

Zetsche recognizes that he can't cast himself as the leader who saved Chrysler. Each executive who "saved" Chrysler went on to help put Chrysler back into a tailspin by hoarding authority and devaluing the contributions of others. By contrast, Zetsche depends on a team of executives, including LaSorda and Creed, to make decisions together even in the good times. And instead of assuming he knows what's best, he has spent a huge amount of time getting to know the company he leads by learning about its history.

Not long after he arrived at the company, Zetsche made the first of what would become many visits to the Walter P. Chrysler Museum, a glass-and-brick building housed on a quiet corner of the company's headquarters campus in suburban Detroit. Zetsche, 52, says the visits have been a way of connecting with a culture and company he knew very little about before he landed in the CEO's suite. "I grew up in the '70s and '80s, which weren't the best times for American cars," he says as he walks through the museum. But many of the older cars on display have been a pleasant surprise to him -- like one of his favorites, a cornflower-blue 1953 Chrysler Special with elegant European curves and an interior with soft leather and instrument gauges the size of dinner plates. "This is where I learned the rules of Chrysler," Zetsche says. "These are the cars that Chrysler was built on, and that heritage is going to help build the future of the company."

Zetsche's more understated approach to leadership has given executives such as Creed room for hope, finally, that Chrysler won't take a nosedive again. "I think we finally have the discipline, the decision making, and the leadership that is going to be sustaining," he says.

Keep Those Bellies Burning

One reason for Creed's more hopeful attitude is a newfound intensity about something that Chrysler rarely focused on: quality. During crisis years, Chrysler veterans say, there was a burning desire to design the best cars ever since they might be the company's only salvation. The formula for success was to find the undiscovered wants of consumers and then have Creed's designers wrap a sharp design around those ideas. That "fire in the belly" had given Chrysler some of the industry's best-selling vehicles, including the minivans and cab-forward vehicles, which brought far more interior space to the family sedan.

But that same intensity was never applied to the one thing that always came back to bite Chrysler in the boom times: poor quality. While the cool designs got people to come back to Chrysler, quality problems often meant they didn't repeat their purchase. It was the opposite problem facing a company like Toyota, known for dishwater-dull styling but great quality. The difference was that people were willing to overlook Toyota's boring designs while they couldn't overlook Chrysler's shoddiness.

What if, as Creed suggested in his conversation with Zetsche, the company applied the same crisis-driven intensity to quality? It was a lesson that fit perfectly with Zetsche's own background as an engineer on what was -- at least until recently -- one of the world's highest-quality vehicles. Zetsche had already planned to apply Mercedes's quality controls to Chrysler. But he knew that could cause problems with employees who were still chafing under the new German management. Still, if he could persuade engineers and designers to care as much about quality as they did about heart-stopping design, he might be able to finally get Chrysler to build better cars.

He didn't have to wait long to find out if the strategy would work.