To Saturn and Back Again : how General Motors’ creation of a new corporate culture backfired.
She looked like the manager who had just briefed us on the company that morning. Now she had the apron on in addition to her corporate suit, looking out of place behind the counter serving lunch.
As if knowing what I had been thinking about, she then volunteered the information “Yes, this is my other duty!” and plunked some gravy onto a staff’s food tray.
Apparently managers are expected to serve lunch as well in Saturn (by the way, I am talking about the Saturn motor company, not the planet).
“Ok”, I had thought. These things were supposed to impress upon me. Yet strangely I felt oddly detached and devoid of awe. In my opinion, it was fine for managers to serve their subordinates but it was not an earth-shattering fact. However, in an environment usually set for a pecking order, Saturn insisted on a humbler corporate culture and got the Managers to come down from Olympus, join the rest of the workforce, and serve them lunch.
When we came into their building that morning, the Spring Hill Tennessee, USA based company 30 miles south of Nashville had displayed their latest vehicle models near the entrance. General Motors – the parent company had found that their market share had been eroded by Japanese manufacturers the likes of Toyota, Nissan and Honda. Seeking to regain back the market share, General Motors put into place an impressive plan : to beat the Japanese at their game, GM needed to become more like the Japanese and the focus was on smaller cars.
Enter stage right – the Saturn motor company – or as General Motors called it – “A different kind of company “. Created as an independently operated part of General Motors, the idea was to create a different approach to the company and the products. Everything was freshly conceptualised and created : vehicle design, the manufacturing process, retailing (note : not referred to as sales!) and after-sales support.
Spring Hill was chosen as the site of the factory with a chunk of the population there supplying the labour. The initial core expertise came from General Motors of course. However from the get go, Saturn was run like a perpetual experiment in motion.
The basic concepts were …. well basic enough : have a team of people who were committed to both their customers’ needs and one another’s success; demand accountability for results and develop multi-skill flexibility throughout the system so that team members could work and assist each other wherever there was a need. In orher words, Saturn was doing whatever is needed to be competitive..
“We have a corporate university”, the manager had also said earlier, reflecting an uncommon method to retain staff. Corporate students sit for courses in the evenings and earned credits that could qualify them for entry into external universities.
During lunch, we discussed about their methods and compare them to what similar companies were doing. Saturn had been building an ecosystem for their workforce’s development. Its ability to compete was directly related to how dedicated its people were in pursuing success in the market. Dedication in turn was earned via a set of support systems that allowed the individual to feel at home, to feel encouraged in self development and to be immersed in a relatively non hierarchical culture. Heady stuff for 1995.
And the results showed: Saturn got to be so successful and was able to compete with the Japanese manufacturers for a share in the US market. Saturn cars would become amongst the ten best selling passenger cars in the USA. The brand’s customer loyalty and satisfaction ratings would also become the success story of the industry.
Saturn was so successful in fact that it actually cannibalised the market share from parent company General Motors.
Exit stage left : Saturn.
And that was it. General Motors closed down the company in 2010, effectively killing a competitor which it had helped create.
Sometimes I wonder whatever happened to the manager in the apron. I supposed she would have relinquished both her duties as the manager and lunch server, be transferred back to the main company, or found work in another company in the same sector.
In an environment where corporate culture and experimentation coexists, it was good to see human factors and good will being exercised and considered. But by those same tokens but seen from General Motors’ perspectives, Saturn also paid dearly and unfairly for its efficiency in the market. They had the right approach to build a truly different corporate culture. The problem was also that General Motors and UAW union executives came to a realisation that the new organizational culture constructed in Spring Hill had made the Saturn workers think of themselves not as General Motors subordinates or as belonging to the UAW. They were simply the Saturn team embedded with their own strong identity.
To nip it in the bud, General Motors broke up the Saturn outfit. Production was transferred from Spring Hill and absorbed into other General Motors plants. Saturn’s workers returned back to terra firma and became integrated back into the mainstream General Motors workforce, subject as well to the UAW International contract.
Companies come and go. Great companies sustain and stay around longer. Saturn’s demise was after only 25 years of operation. It was a brief life, no doubt caused by an unclear vision of General Motors and the inability to decipher market dynamics. Saturn had the financial backing and muscles to implement its corporate culture and various workforce benefits and operating principles. But when it came to dollars and “sense”, its very success against the hand that fed it ultimately became responsible for its demise.
And no “corporate apron” in the world however kind, well meaning and large can save it.
Saturn the “Different Kind of Company” – had become a victim by being different in an otherwise indifferent environment.