“Leaders are not born, but made. Leadership qualities are forged in times of distress. It is quite easy to take a sip of coffee while sitting with feet up on the desk dictating theories to subordinates but quite difficult to lead when the business is on the verge to collapse” (Lee Iacocca).
Acquiring fame, money and power may be thrilling for others, but to Iacocca, all these outcomes did not matter much. To Iacocca, these outcomes were mortal that would vanish with time. Iacocca has always focused on leaving quality impression through his zeal and contributions. Making a difference in the world matters the most to Iacocca so that his legacy can inspire the life of others. Being a cultural icon and a successful entrepreneur, Iacocca reached the top of the mountain several times and has continually looked for other mountains to climb.
Lee Iacocca was born in 1924 in Allentown, Pennsylvania. He received degrees in industrial engineering and mechanical engineering from Leigh University as well as Princeton. The first job of Iacocca was as an engineer at Ford Motor Company. Being a self-made man, Iacocca recognized his true potential within Ford Motor Company and was able to move up the ranks due to several successful initiatives. Ultimately, the son of immigrant was crowned as the president of Ford Motor Company in early forties. During that time, the leadership skills and abilities of Iacocca resulted in the introduction of Ford Mustang and Lincoln Continental Mark III. The inevitable success of Ford helped Iacocca to create his worth in the automotive industry mostly due to immediate and enduring success of Mustang.
Being fired from Ford, Iacocca did not lost hope and was soon hired to head up Chrysler. The utmost determination, diligence and selflessness helped in turning around the vulnerable company from bankruptcy. The superior leadership qualities of Iacocca resulted in some serious decisions that included immense relief of 100,000 workers, selling off the European division along with the closure of several plants. In addition, the thorough planning resulted in the loan of $1.5 billion from congress. During the time at Chrysler, Iacocca realized that the Chrysler had to rethink its strategy regarding the market. The thorough analysis of the market led by Iacocca provided crucial insight regarding the simultaneous need of two different vehicles. The first was more fuel efficient vehicle and the second was comfortable cars. Under the leadership of Iacocca, Chrysler was able to introduce its first ever minivan. The creation of minivan resulted in the elimination of red ink that was constantly pressurizing the company. The outcome of minivan resulted in the significant customer’s confidence that eventually played an eminent role in the success of the company in the forthcoming years (Lee Iacocca, 2007).
During the tenure at Chrysler, Iacocca took 4 dominant steps that resulted in the recovery of the Chrysler between 1979 and 1982. The implicit steps that resulted in the recovery of Chrysler include;
- The dire situation was taken as an advantage to convince the stakeholders that the Chrysler could only survive if it moves away from its traditional operation approach. This helped Iacocca to form ‘brink management’; an opposite of ‘crisis management’. To gain stakeholders’ attention, Iacocca publicized the negative impact on the American economy due to the failure of Chrysler. The sense of patriotism eventually resulted in the success of Iacocca as the company was provided with sufficient loan to turn the company around.
- Iacocca challenged the affiliation of the top 3 leading automotive companies with the government which eventually helped Chrysler to gain further attention. Being a free enterpriser; Iacocca was able to navigate complex networks that resulted in convincing dozens of state, local and foreign governments. As a result, Chrysler won several contracts from local and national government along with foreign government. By challenging the affiliation, the leader of Chrysler managed to get all levels of government on his side.
- The creation of marketing and communication strategy that revolved around Iacocca resulted in communicating the crisis situation of Chrysler with top level politicians, along with employees and stakeholders. In addition, Iacocca leveled with the American people and honestly informed them about the serious conditions of the company. The effective utilization of marketing skills along with the natural charisma resulted in the unimaginable comeback of the company (Lee Iacocca, 2007).
The passion to overcome obstacles and to make a difference resulted in the recovery of Chrysler. Despite challenging situations at Chrysler, Iacocca transformed a dead weight organization that was at an edge of failure into the most profitable organization in dire economical condition.
The legendary leadership abilities of Lee Iacocca have provided him with a rank among the titans of the auto industry.
The management philosophy of Iacocca revolved around simple principles like quarterly reviews, information gathering, motivation, teamwork and interpersonal skills with significant emphasis on communication within and outside the organization with crucial stakeholders. The management philosophy of Iacocca had nothing in particular to overcome the crisis of Chrysler. This eventually means that the approach taken by Iacocca cannot be compared with other innovative CEOs as Iacocca had nothing new to offer. In the unique situation of Chrysler, all Iacocca did was massive cost-cutting, laying-off thousands of workers from managerial positions, closing plants that were ineffective and selling off weak infrastructures. The only change that was brought under the leadership of Iacocca was operational innovation to accomplish operational excellence. This was done through shift of assembly north to Canada where the costs were significantly lower and the quality along with productivity was far beyond imagination.
On the other hand, Iacocca made significant contribution in the development of products, but no structural changes was observed during his tenure at Chrysler. Similarly, the financial planning at Chrysler can be undoubtedly questioned in the bailout process. The financial guru that was behind the master planning along with Iacocca was Gerry Greenwald. Although, Iacocca was the coach in the bailout of the company, but ultimately Greenwald was the star player to hit the homerun.
The ability to effectively communicate and market the ideas was truly the area that was excelled by Iacocca without any comparison. The communication of idea to bailout Chrysler can be compared with Alfred Sloan’s hierarchical product strategy. Along with the unique ability to effectively present the company in front of the stakeholders, Iacocca had an ability to look for talent. To turnaround the company, Iacocca got the best people from Ford to work for the better future of Chrysler. In addition, the ability to utilize the skills set and position within the organization allowed him to become a cultural icon in America.
Being a sales person, Iacocca was able to achieve his greatest sale through the sale of Chrysler’s crisis. This reflects that Iacocca’s ability to reach out to the Americans, their government along with other essential stakeholders helped in the salvation of the company while setting it on the path of recovery. The ability was backed by strong will, determination and the force of personality through which Iacocca was able to take such bold steps that none other could have imagined.
The circumstances in Chrysler case were unique but were mastered effectively by Iacocca which eventually made him the living legend and the greatest example in the automobile industry. Despite other success stories, Iacocca’s has been recognized as ‘the savior’ of the automobile industry over Henry Ford II along with other CEO luminaries. With over three decades since Chrysler bailout, the automobile industry has witnessed several bailouts, but none of the bailout was able to create a legend and an American icon that was created through Chrysler bailout i.e. Iacocca. This clearly reflects that Lee Iacocca has a class of its own that cannot be compared with any other ‘savior pretender’ in the automobile industry (Bloomberg Business week, 2007).
The 9Cs of leadership that were excerpted from the latest book of Lee Iacocca – ‘Where have all the leaders gone’ reflects the basic qualities that a leader must have to ensure effective and smooth operations within an organization. The 9Cs of leadership include;
For an effective leader, curiosity is an essential element. This means that the leader should tend to listen to what people have to say. Asking questions from the people can help in gaining variety of ideas. This means that a leader tends to step out of his comfort zone to hear others’ challenging ideas while putting his ideas to the test. This eventually results in the learning of a leader. On the other hand, the inability to listen to others can result in the formation of negative perception in the mind of employees i.e. arrogance. This will provide the employees with a view that either the leader does not even care or the leader knows it all.
The willingness of a leader to try something unique and different plays an influential role in the motivation of employees. A leader tends to differentiate his personality from that of others within the organization by thinking in a unique way and by following what he thinks would be best for the organization. In addition, the ability to think outside the box provides a leader with outstanding results.
In the case of Lee Iacocca, the introduction of Ford Mustang along with K-Cars simply reveals the willingness and ability to think outside the box as well as ahead of others. In addition, the introduction of Chrysler minivan also reveals the ability of Iacocca to adapt to the changing environment of the automobile industry.
Confronting realities even if they are painful is a quality of effective leader. This means that communicating the truth along with devising strategies to overcome the circumstances plays a dominant role in making a leader effective. Talking to people while facing realities and telling the truth eventually results in positive outcomes.
As Abraham Lincoln said, “to test a man’s virtue, give him power”. The ability to judge between what is right and wrong, while having the guts to do the right thing matters the most for effective leader. The moral and ethical strength of an individual eventually results in an effective leader.
Being a first generation American, Lee Iacocca stood strong after the demise of his wife and began to support innovative diabetes research nationwide. In addition, Iacocca accepted the Chrysler’s failure in earlier years in front of the stakeholders to stand what he believes in. This reflects that even with all the power in his hand, Iacocca did what he thought was best for the company, and ethically and morally right.
Having the guts to do something unique is critically important for a leader. This means that the leader must have to ability to take personal responsibility while defending what is right even if it is considered unpopular among others within the organization (Prive, 2012).
Lee Iacocca definitely had some serious courage when he took the decision to immensely relief more than 100,000 blue and white collar employees to help the organization turnaround from the verge of disaster. In addition, the ability to take personal responsibility can be clearly witnessed when the famous Dodge ‘Main’ plant in Hamtramck, Michigan, the symbolic heart of Chrysler was closed down.
Conviction reflects the leader’s ability to passionately believe in their goals and the desire to get the job done. The passion to get the thing done while believing in the goals in an effective quality of a leader.
The ability to articulate the goals and objectives can be clearly witnessed when Iacocca joined Chrysler in dire situation. His goals were crystal clear i.e. to make the dead-weight organization into most profitable organization in the automotive industry in America. In response to accomplish the goals and objectives, Iacocca took four simply outstanding steps that provided him with an ability to accomplish the goals set by him for the company.
Charisma, in short, can be defined as the quality that inspires people to follow. It is essential for a leader to have charisma as it ensures trust and loyalty from the people. The ability to motivate people relies highly on the charisma of the leader that makes people adapt the good in their heart rather than falling prey to their evils. Charisma is highly concerned in making others feel good about a person than a person feels about himself.
In the light of Lee Iacocca’s success story at Ford and Chrysler, it was clearly observed that Iacocca’s dominant charismatic leadership gave the company a hope to live on. Not only had the management at Chrysler accepted the leadership of Iacocca but also the employees that worked day and night to change the future of Chrysler. In addition, the salary of Iacocca became a sense of inspiration for others working within Chrysler. Iacocca was committed to salvage Chrysler due to which he accepted $1 annual salary which resulted in the motivation of employees. As a result, the employees accepted drastic losses in wages with just one goal in mind; to save Chrysler and to help in the drastic recovery of the company.
The competency of a leader can be reflected through the ability of being surrounded by people that are aware of what is being done. Being a competent problem solver is critically important for a leader as it reflects the ability to be held brutally accountable for the decisions.
The four steps that Iacocca took into consideration after becoming in-charge at Chrysler clearly reflects his competency level. In addition, the ability to inform the stakeholders regarding the inevitable failure of the company resulted in the creation of ‘the savior’. Chrysler’s survival was not basically due to the efforts of Iacocca but with the efforts of the people that were well aware of their work and the capabilities.
- Common sense
According to Charlie Beacham, ‘the ability to provide logical reasoning can result in the creation of super human-being’. To have a common sense is a dominant pre-requisite of a leader which can be witnessed through the quote of Charlie Beacham; the mentor of Lee Iacocca (Suresh, 2010).
Being a source of inspiration to millions qualifies Lee Iacocca as one of the greatest leaders in the history of man-kind. Chrysler that once lacked organizational structure and discipline was transformed into most-profitable organization, while other automotive organizations were dripping red-ink in the discouraging economy in America.
The saga of Lee Iacocca from Ford to Chrysler can be viewed as an inspiration to man-kind. The bold decisions and risk-taking abilities of Iacocca distinguished him in the cluster of leaders. His ideas were crystal clear from the day he started working at Chrysler. He was well aware that every product has its own associated risks that must be overcome to achieve success. Being a visionary leader, he was able to see far beyond the day-to-day activities that eventually allowed him to become ‘the savior of Chrysler’. His time at Chrysler reveals it quite clearly that Iacocca was not afraid to take unpopular decisions to solve the problems that could put the survival of business at stake. His qualities and characteristics allowed him to mold and adjust in any given situation.
This indicates that Lee Iacocca is the best suitable leader that must be nominated for the “Chairman Leadership Award”
Bloomberg Business week. (2007). A Blast From Iacocca. Retrieved September 30, 2013 from http://www.businessweek.com/stories/2007-04-22/a-blast-from-iacocca
Integratis. (2012). The 9 C’s of Leadership by Lee Iacocca. Retrieved September 30, 2013 from http://integratis.com/leadership/the-9-cs-of-leadership-by-lee-iacocca/
Lee Iacocca. (2007). My Life. Retrieved September 30, 2013 from http://www.leeiacocca.com/my-life/index.aspx
Prive, T. (2012). Top 10 Qualities That Make A Great Leader. Forbes, Retrieved September 30, 2013 from http://www.forbes.com/sites/tanyaprive/2012/12/19/top-10-qualities-that-make-a-great-leader/
Suresh, R. (2010). Lee Iacocca'’s 9 C's of Leadership. Retrieved September 30, 2013 from http://www.avtarcc.com/newsletter/nl_oct_10/Lee_Iacocca_oct10.htm