Wow, what a contest.
When we started our search for General Motors' next CEO, we knew the Foolish community would bring the goods. It was clear we’d struck a chord, with more than 90 readers telling us how they would turn around the struggling automaker, helping to make the contest the most popular article on our website for the entire week. Of course, the chance of winning a year's free subscription to Motley Fool Pro (our prize for the best comment) was a good incentive for readers to take a stab at fixing GM.
And boy, were there some good comments.
It's clear that Ford's
There were entries that made us laugh, such as the South-Park-underpants-gnome-inspired "1) Take [over] as CEO of GM. 3) Profit!" And, of course, MrSucrose's plan to promote a line of wind-propelled cars using sails inspired this punch line: "Lets see Tiger Woods sail that into a tree. Green Jackets, Green Technologies, Green Trees...the marketing potential is endless."
Common themes found throughout the comments included focusing on quality, increasing efficiency, giving each of GM's brands its own unique style, and getting labor costs in line with those of Japanese rivals like Toyota
However, there can only be one winner. As determined by a panel of editors, the subscription to Motley Fool Pro goes to no other than ihtfp92. Here's our winner's proposed strategy for returning GM to its former glory:
1) Drastically reduce the number of management layers -- this is a competitive industry that needs global scale to be profitable, it cant be run like the Post Office.
2) Eliminate all the artificial barriers between management and labor -- no more separate elevators, parking lots or bathrooms with executive grade toilet paper.
3) Put the engineers closer to the production lines -- if you design it you ought to know how its going to be assembled (and used).
4) Everyone, from the CEO on down, works one day per year on the shop floor. This is a manufacturing enterprise, not a spreadsheet abstraction.
5) Eliminate all perks not available to everyone.
6) Adopt a salary plus long-term "excess created wealth" stock option program for senior management. "Excess created wealth" means any gain in the stock price above the market average (i.e. a floating strike price). This only pays off if the company does better than average, and it works in a down market. Long-term means you cant cash in until 2 years after you leave and then over a 4-year period. Using derivatives to reduce risk would be prohibited.
7) Adopt the Japanese compensation structure for hourly employees: 30% of annual pay comes in the form of twice-yearly profit-sharing bonuses.
8) Adopt a base salary plus bonus for all non-senior management, bonus paid only if the company is profitable that year. Long-term incentives are the same excess created wealth stock options.
9) Adopt say-on-pay.
This entry hit on several business concepts that the Fool has long identified as critical to a company's long-term success. It features a flat management structure that promotes increased communication, while at the same time aligning incentives toward sustainable gains rather than short-term results. We think that even if GM doesn't hire our winner, whoever does become the company's next CEO should pay close attention to this plan. Doing so would serve both the automaker and its shareholders well.
Congratulations again to ithfp92, and thanks to everyone for their entries. Not only did all this make for a lively contest and fun reading, but each contestant's comment resulted in another $0.10 donation to the Thurgood Marshall Academy via our Foolanthropy campaign.
Thanks for participating!
Google is a Motley Fool Rule Breakers selection. Apple is a Motley Fool Stock Advisor pick. Microsoft is a Motley Fool Inside Value selection. Motley Fool Options has recommended a diagonal call on Microsoft. Try any of our Foolish newsletters today, free for 30 days.