Harvard Business Publishing

With the declaration of Chapter 11, GM is poised to enter a new era. Deciding to place a big bet that a massive, tax-payer funded restructuring will truly turn the company around, the Obama Administration is forcing changes that should have occurred a decade or more ago. The core of the transformation strategy is a separation of "New GM" from "Old GM." Essentially the company will be split in two with the assets of the old being sold or otherwise liquidated. So far, we know that several smaller units such as Hummer and Saturn will be disposed of, as well as one long-time GM brand — Pontiac. Up to 20 factories also will be sold or closed. More than a 1000 dealerships are likely to shut their doors. In the auto industry the term "Job 1" is used to denote the first car of a new model that comes off... Keep Reading »

In this post, I continue my evaluation of President Obama's first stretch in office, focusing on the third and final evaluative dimension: creating a compelling vision. Has he begun to articulate an inspiring vision for what he will accomplish during his first term? Transitioning executives must begin to lay out a vision for what they will accomplish during their tenure in the role. For President Obama, this means defining and communicating what he hopes to accomplish during his first full term in office. The vision must be one that pulls people forward and energizes them to make the right sacrifices for the greater good. Critically, it must be balance inspiration with realism. There is, after all, a fine line between grand and grandiose. In my assessment, President Obama's performance has been weakest on this dimension. This is somewhat surprising given his evident rhetorical skill. But while he might be given... Keep Reading »

In this post, I continue my evaluation of President Obama's first stretch in office, focusing on a second key dimension: laying a foundation. Has he laid a solid foundation for accomplishing his A-item priorities during the remainder of his first year in office? Early wins - the first dimension - help new leaders get off to a good start, but they are not sufficient for continued success. Like all newly-appointed executives, President Obama should also have begun to lay a foundation for the deeper changes he plans to make. The process is not unlike the launching of a multi-stage rocket into orbit; securing early wins (or avoiding early losses) lifts a new leader off the ground, and efforts at foundation-building provide the thrust necessary to achieve orbit and avoid falling back to earth. In evaluating President Obama's effectiveness on this dimension, the first question concerns whether he has appointed a... Keep Reading »

In my last post, I laid out a framework for evaluating President Obama's first 100 days on three dimensions: Securing early wins (short-term). Did the he build credibility by scoring early victories while avoiding or mitigating losses? Laying a foundation (medium-term). Did he lay a solid foundation for accomplishing A-item priorities during the remainder of his first year? Articulating a vision (long-term). Did he begin to articulate an inspiring vision for what he will accomplish during his full tenure?This post is my evaluation of his effectiveness on first dimension: securing early wins. Early wins are critical for every new executive because they help to build credibility and create a sense that positive momentum is building. In the earliest days, new leaders have to make the right symbolic gestures. Then it's about identifying and securing some more substantive wins. Above all, it's about avoiding early losses. Absence of early losses really... Keep Reading »

Editor's note: This post is part of our special package examining Obama's transition into the Presidency. As President Obama's first 100 days draw to a close, countless news organizations, pundits, and bloggers are gearing up to deliver their assessments. In fact, the media machinations are taking on the character of an arms race. So here's my opening salvo. It's not (yet) an assessment of our new President's first 100 days, it's about how we should assess our new Chief Executive. In this post, I'm going to lay out a framework for assessing Obama's transition into his new role. In subsequent posts, I will use this framework to render my judgments on how he has done so far. How should we assess President Obama's transition into his new role? I find it most useful to evaluate executive transition effectiveness along three distinct dimensions: Securing early wins (short-term). Did the new leader... Keep Reading »

When it comes to getting things done in the domestic arena, Presidents can lean heavily on the executive authority that comes packaged with the Office. The situation shifts substantially when it comes to international relations. Here the President has little inherent authority to mandate outcomes; he must wield the age-old tools of diplomacy to achieve progress. And President Obama's recent international foray amply highlighted the myriad challenges we face, given the severe diminution of America's status as the world's sole remaining superpower. In negotiations ranging from the future of the wars in Iraq and Afghanistan to nuclear proliferation in Iran and North Korea, we witnessed the paradox of Obama's substantial personal popularity not translating into much-needed diplomatic wins. One interpretation, favored by conservative commentators, is that our new President is too weak and too naïve to deal effectively "the bad guys." But the notion that our new President isn't tough... Keep Reading »

This post is part of HarvardBusiness.org's in-depth look at the First 90 Days of Obama's Administration. While much attention is being focused on the (welcome) details of the Geithner plan for stabilizing the banking system, little attention has been given to the remarkable changes in the way economic policy is being formulated in the Obama Administration. Much more than was the case in previous Administrations, economic policy is being made through a cross-department integration mechanism known as the National Economic Council (NEC) directed by Dr. Lawrence Summers, formerly the President of Harvard University and Deputy Secretary of the Treasury. And it's but one example of a broader trend in the Obama Administration to set up integrative mechanisms to coordinate policy-making across Departments (others include the appointment of regional envoys such as George Mitchell for the Middle East and Richard Holbrooke for Afghanistan and Pakistan.) Welcome to the matrix Presidency. By... Keep Reading »

This article is part of our in-depth look at President Obama's first three months in office. In a feature article in the Wall Street Journal this weekend historian David Greenberg writes of "The Folly of the First Hundred Days" . His piece describes some Presidents who did a lot in their first hundred days (FDR, Reagan), and others who worried a lot about it (Kennedy). But nowhere does he provide an iota of evidence to support the proposition that focusing on the first hundred days is "folly" for new Presidents. Greenberg's argument actually boils down to "the first 100 days is really important, but in a better world it wouldn't be." The "folly" about which he writes is the placing of too much attention by the public and pundits on what Presidents do in their early days. To wit, "New presidents tend to be clueless about governing. Even running a... Keep Reading »

This post is part of our in-depth look at Obama's first 90 Days in office. The most fundamental guiding principle for making successful transitions is to secure early wins. Early wins are essential because they build the new leader's credibility and create the perception that momentum is building in positive directions. Wins translate into significant deposits in new leaders' political bank accounts; capital on which they can draw to make needed changes happen. Failure to get early wins is therefore not a good thing. Far worse for newly appointed leaders, however, is incurring significant early losses. Worst of all are errors that make new leaders look simultaneously incompetent (for letting something bad happen in the first place) and powerless (to do much about it once it has happened, beyond expressing outrage). The AIG bonus fiasco is shaping up to be a significant early loss for President Obama. AIG is not... Keep Reading »

Have you heard the one about the retiring CEO's final meeting with his successor? Telling the new leader that he will face many trials in his tenure, the wizened one hands him three letters. "Each time you face a challenge that seems insurmountable," he says, "open one of these." A few months into the role, the newly-appointed CEO finds himself in a sticky situation, with angry shareholders and a restive Board, so he opens the first letter. "Blame me," it says. Siezing this advice, he paints the company's troubles as the legacy of his predessor's neglect and wins a reprieve. A few more months pass and another crisis erupts, so he opens the second letter. "Blame the economy," it says. He does, and once again the storm subsides. Yet more time passes, and new, even more pressing difficulties emerge. Opening the final letter, he reads, "prepare three letters." At this... Keep Reading »