A Fresh Coat of Paint

By Bob Gariano

Robert Cumberford, writing in the May 2008 issue of Automobile Magazine, describes his recent road test of the new Bentley Brooklands. He calls the coupe a magnificent absurdity, as incongruous as “the ballerina hippos in Disney’s Fantasia”. Nevertheless, in this article, he gives the designers of this automotive behemoth their due.

This new luxury automobile, which weighs close to three tons, can out accelerate and out handle many sports cars that are less than one third as heavy. The big coupe can reach speeds over 180 miles per hour on the tires and suspension that it arrives with in the showroom. The fit and finish of this remarkable vehicle are exemplary. This luxury comes at a price. It appears that the vehicle will have a retail price of over $350,000, that is, if a potential buyer can find one to buy at all. The yearly production of Bentley Brooklands coupes will total only 550 vehicles for the entire global demand. For the first year of production, 500 cars have already been assigned to committed buyers.

What impressed me even more about this description of a car which few will ever see, let alone own, is that two of this limited supply of vehicles will not be sold at all. These two production cars are reserved for use by the senior management inside the car company. One is for Martin Winterkorn, head of the Volkswagen Group, the current owner of Bentley, and one is for Franz Josef Paefgen, the head of the Bentley Group itself. It is clear to Cumberford that one reason that German engineered automobiles are revered throughout the world is because the senior executives of the companies who own the brands drive the cars themselves. No limousines and drivers for these car company executives. As Cumberford writes, “Most of the reason for the impressiveness of German cars is because their executives drive their products and drive them hard.” This gives the executives a first hand view of the products they are sending into the market place.

The ability to see through the haze of everyday business activities and to find out the real characteristics of people and products in an organization is a crucial skill for CEO’s and other business leaders. As companies get bigger, there are more and more barriers to the flow of accurate and timely information whether intentional or not. There are myriad motivations to tailor what arrives at the CEO’s desk. The well, and sometimes not so well, intentioned information doctoring creates an atmosphere of uncertainty and incomplete information which makes decisions significantly more difficult. Implementation of management decisions is then again altered as the decisions are relayed through out the organization for action.

In 1986, I was Director of Planning for GE’s European businesses. My responsibility was to prepare briefings and investment proposals for several important GE businesses on the continent. It was a plum foreign service assignment and it allowed me inner access to the workings of several of GE’s most impressive businesses in Europe. The proposals and reviews that we assembled were presented to GE’s iconic Chairman and CEO, Jack Welch, when he visited our European production facilities on a regular basis. On one such visit, we scheduled Jack to meet with the plastics group business team and hear the review at the magnificent new GE plastics manufacturing plant at Bergen Op Zoom, the Netherlands.

On two square kilometers of Dutch reclaimed land or polder, GE had invested over two billion dollars of plant and equipment that would produce engineering plastics for the European and central Asian market. This was done right in the backyard of German competitors Bayer and BASF. The factory was indeed a testament to modern engineering as the entire plant was built on land that the Dutch had reclaimed from the North Sea. From the second floor of the central office building, we could see several hundred meters past the earthen dikes to the surface of the sea that was 3 meters above the ground floor level of the plant. Only these dikes separated all this expensive chemical processing equipment from becoming so much rusty and submerged debris at the bottom of the blustery North Sea.

As I was leaving the meeting room after the presentation that day with the entire entourage, on our way to a plant tour, I found myself walking out onto this imposing plant site right next to the Chairman himself. Jack Welch was obviously proud of the hard work and courageous investment decisions that had been behind the facility. As a graduate chemical engineer himself, I knew that he was appreciative of the complexity of making sophisticated polymers of high quality in such a demanding environment. Nevertheless, I wanted to probe into the perspective that Jack Welch brought to these meetings and particularly to the plant tours themselves.

I turned to him and asked an obvious question. “GE makes aircraft engines, plastics, washing machines, locomotives, and light bulbs. We make them at many different factories around the world. What’s the common trait in all the GE plants that you visit?”

I wanted to hear how the GE culture of meritocracy and quality was built into every GE facility around the world. Or I wanted to hear about the pride of GE manufacturing people who belong to a world class organization and who share their stories with each other at management conferences at Crotonville or Boca Raton.  I wanted Jack to tell me that the GE way was firmly embedded in all our facilities, regardless of local culture or national requirements.

Instead of such an articulate and complex observation, Jack’s answer was more pragmatic. “What’s common about all the GE plants that I visit? The smell of fresh paint.” He smiled and then took off on his tour surrounded by his phalanx of advisors and operating executives.

With this brief answer, Jack Welch gave me a glimpse into the real challenge of running a far flung global enterprise with facilities and people on every continent. It was a lesson of great value to any young person who aspires to be a business leader, even if not at the scale of running GE. Jack had concisely conveyed to me how hard it is for the boss to see what is really happening on the ground and in the market. Everyone is preparing the site, painting the equipment, or massaging the numbers right before they are presented to the Chairman. It is the rare business leader who can dig through to the underlying facts and who can peak around the curtain to get a real sense of what is going on in the business.

The executives who run the Bentley organization get their look at the real world by driving two of their very limited number of production coupes. These car enthusiasts want to see exactly what they are asking their customers to pay a third of a million dollars to buy. Jack Welch understood the difficulties of getting such accurate information about the products that a diverse company like GE was offering throughout the world. The skill to dig below the surface and see real business situations without the fresh coat of paint is an invaluable ability. Every young aspiring business leader should practice and develop the ability to uncover the real business facts in their company.