'HOW I WOULD TURN AROUND GM' In the unlikely event that GM decides to invite its best friend and toughest critic back to revitalize it in a hurry, here are 13 things he would do. They wouldn't cost a cent.
By Ross Perot

(FORTUNE Magazine) – When GM acquired Electronic Data Systems in 1984, it also acquired a singular executive as a board member. Too singular, as it turned out, for Ross Perot's unbridled energy and zeal were more than the company could stomach. GM bought his stake and sent him packing, but Perot has forgotten neither what he saw nor what he hoped to change. As visionary about the potential of inspired leadership as GM Chairman Roger B. Smith is about the promise of high technology, Perot recently responded to FORTUNE's invitation to spell out what he would do if GM asked him back. The proposals are radical. Perot is convinced that GM cannot be the world beater it should be without an utterly new management system. His manifesto calls for GM to undergo a capitalist counterpart to Mao's cultural revolution. Chairman Smith quite naturally sees things differently, and his response is on page 50.

THIS IS what I would recommend. Many of these ideas have been considered at GM, and many are incorporated into the GM-Saturn personnel philosophies. But talking about them won't produce results. The key ingredient is to put these ideas into practice throughout GM -- execute, execute, execute!

1 CALL TOGETHER the top officials of the company and announce: -- GM has more talent, more money, more research capability, and more manufacturing facilities than any other carmaker. Logically it should be first and best in building the finest cars in the world. It is not. GM has failed to tap the full potential of its resources, especially its people. This must be changed. -- Starting today, GM is going to become the finest car manufacturer in the world. -- Every GMer must understand that there are too many car plants in the world. GM is playing all day every day in an economic super bowl. It is a harsh game -- the losers lose their jobs and their companies. GM doesn't have to lose to the Japanese, Germans, Ford, or Chrysler. GM can win and keep its people at work only by being the best -- by building the best cars in the world. -- From this point forward, GMers will fight in the marketplace -- not with one another. GMers will no longer waste energy on divisive internal struggles for power and turf. This energy must be focused, like a laser, to make the finest cars in the world. -- Starting today, the historic power struggles between the financial staff and car builders will not be tolerated. Financial people will be responsible for maintaining accounting information. People who know how to build cars and serve customers will make the product decisions. Accountants will not sap the productivity of car builders with guerrilla warfare -- a GM trademark that has gone on for decades and seriously damaged GM's effectiveness. -- Starting today, GM's relationship with the United Auto Workers will be a team relationship, not an adversarial one. GM and the UAW must recognize that they can build the finest cars in the world only by working closely together. With 800,000 jobs at stake, GM must win. GM's suppliers, with millions of jobs at stake, depend on GM to win. The U.S. economy is counting on GM to win. -- Starting today, in order to build the finest cars in the world, GM will listen to its customers, listen to its dealers who sell the cars to customers, listen to the men and women who assemble its cars in the factories, and listen to the engineers who design its cars. The watchword will be: ''Listen, listen, listen'' to the customers and the people who are actually doing the work. Their ideas, fresh from the marketplace, will make GM the best in the world. -- Starting today, any commitment made to GM people and customers will be kept. GM can earn their trust and respect only by honoring commitments and standing squarely behind its products. -- Starting today, customer problems with GM cars will not be looked upon as legal problems but as service problems that must be solved immediately. From now on, the customer is king! -- Focus the $4 billion GM spends annually for research and development on projects to build the finest cars in the world. The first priority will be to fix every single substandard item on the existing cars being sold today, including leaking gaskets, faulty transmissions, faulty engines, and a host of other things that must be fixed quickly. -- Historically GM has pushed its ideas with tens of billions of dollars of capital expenditures and frequently failed to reach its objectives. Starting today, GMers are going to work together, using brains, wits, creative abilities, and initiative as substitutes for money. In the future GM will use money like a scalpel -- not a bulldozer. The serious problems facing GM have little to do with capital expenditures and everything to do with tapping the full potential of the GM team. If spending money were the answer, GM would already be first and best at everything it does. -- Eliminate all waste, starting at the top and working through every level of the company. This includes items such as chauffeured limousines, heated garages, multitiered layers of executive dining rooms, and a vast array of other relics from the past that have nothing to do with building the best cars in the world. The 25th floor of the GM Building in New York, used one day a month by the board of directors, will be closed and leased to another company. Huge staffs, now in place, act as buffers shielding the people running the company from reality. These staffs will be abolished, opening up lines of communication. After eliminating all waste at the top, GM will start working its way down to get rid of waste wherever it is found. -- Replace all current outside members of the board of directors. Although it includes several outstanding people, this group collectively owns virtually no GM stock (approximately 19,000 shares out of 30 million) and was effectively chosen by the management of GM. A committee of major GM shareholders will prepare a new slate of outside directors for approval by all stockholders. These people will be chosen for their demonstrated abilities to design and build excellent products and to lead and motivate people. They must be substantial stockholders of GM so that they have a significant personal business stake in GM's future. They will provide the necessary oversight for GM's owners. -- Close the 14th floor in Detroit, where the senior executive offices are located. All executives will move to car manufacturing plants and other production facilities. The leaders will be brushing up against real people building real cars, eating with them in the cafeterias, and talking daily about what GM must do to build the finest cars in the world. -- GM leaders will resign from any activities that take them away from their responsibilities at the company, such as serving on boards of other companies and attending endless meetings with trade associations and business groups. Total commitment will be required. It must start at the top. GM's leaders must be visible, at work, and listening directly to the customers, dealers, and GMers who are actually doing the work. -- Starting today, words like ''management,'' ''labor,'' ''bonus-eligible,'' ''salaried,'' and ''hourly'' will no longer be used. -- From this day forward, everyone is a GMer. Everyone will be a full member of a tightly knit, unified GM team. -- Starting today, every person on the GM team will be dealt with as an individual, not a commodity. Every person will be treated with dignity and respect. Every person is equal and will be treated as an equal. -- As of today, all people who manage in an authoritarian way will be fired. GM cannot tap the full potential of the people with a manager whose philosophy is ''I had to eat dirt for 30 years, so now it is my turn to make the other guys eat dirt.'' -- All bonuses and financial incentives will be determined by a single set of rules. All GMers will win or lose together. Never again will the GMers who do the work be told one day, ''It was a bad year and profit sharing will not be paid,'' and on the next day see the senior officials, whose bad decisions caused the problem, receive millions in bonuses. In military terms, the new philosophy will be: ''First feed the troops, then the officers.'' -- From this point forward, the primary financial incentive offered will be GM stock. There is only one way to make the stock go up: Be the best. Build the finest cars in the world and sell these cars profitably at competitive prices. This focuses every GMer on the same goal. -- Starting today, as GM goes through the transition to build the finest cars in the world, all sacrifices will start at the top. In the future the people who work in the factories will be the last, not the first, to be affected. The people who make the decisions determine whether GM wins or loses. They, not the people who do the work, will be the first to pay for mistakes. -- Starting today, the word ''management'' will no longer be used at GM. Leadership will be required to build the finest cars in the world, not management. Inventories can be managed -- people will be led. -- A leader in the new GM must earn the trust and respect of those who work with him. -- The leaders of GM, starting today, accept full responsibility for the design and engineering of GM cars. They understand and publicly acknowledge that after a car has been designed and engineered, there is little that can be done in the assembly plants to make it better. From this day forward, GM's leaders will not blame their mistakes on the people working in its factories. -- Starting today, most committees will be scrapped. The old system gets so many people involved that nobody can be blamed for failure, and nobody makes a decision. That system must be junked. -- No longer can a person rise to the top of GM by simply keeping his nose clean, or ''not doing anything wrong.'' Starting today, the future of GM belongs to people who are willing to step out in front, make decisions, accomplish great things, take risks, make mistakes, and accept responsibility for their failures. The days of having lower-level GMers take the blame for mistakes of senior people are over.

2 AFTER EXPLAINING THIS to the top 500 people in the organization, the CEO of GM would break them into groups of fewer than 50 and meet with each group for several hours to listen to their ideas and recommendations. He would then: -- Fine-tune the plan based on their responses. -- Take this plan to the leadership of the UAW. After explaining the plan, he would listen to their ideas and suggestions and fine-tune it again. -- Put together about ten groups representing a cross section of the entire organization, from senior executives to newly hired trainees in the factory. Then present this plan to each of these groups and fine-tune the plan further according to their responses. -- Immediately organize a leadership training program for every leader in GM and the UAW and work out the logistics for training thousands of people quickly. During this training program, GM must leave absolutely no doubt that any GM leader who does not deal with others according to the spirit of this plan will not be a leader on the new GM team. The CEO will personally lead all of the activities listed in Item 2. GM's leadership will then:

3 TAKE THIS PLAN to every person in GM so that each will understand the new rules for success, understand that GM is going to become the best in the world, and understand the vital importance of making these changes now.

4 IMMEDIATELY SEND several hundred senior leaders to the field for several weeks to visit the factories (these visits must be in depth -- not superficial plant tours), visit with and listen to the people, learn their reactions, and communicate to them that these changes are real -- not just more public relations talk. While at the factories, GM's senior people would spend evenings visiting with second- and third-shift workers.

5 ASK THE DEALER network to put together a cross section of GM customers. The top leaders will attend meetings around the world and listen to the customers who own GM cars.

6 ASK GM DEALERS to meet with them in small groups, and spend a great deal of time listening to the dealers' ideas about how to improve GM cars.

7 VISIT WITH MECHANICS who repair GM cars and listen to their ideas.

8 ORGANIZE A SERIES of meetings with GM stockholders to listen to the company's owners.

9 IN ALL OF THESE meetings the leaders of the corporation will be joined by leaders from product design and engineering, leaders from the UAW, and others who actually build the cars. The end result of this firsthand exposure will be to give every member of the GM team great sensitivity about what must be done to build the finest cars in the world.

10 GM'S LEADERSHIP will keep these new communication lines wide open as it builds the new GM. Timely, firsthand field knowledge will become GM's road map for success.

11 AT ALL TIMES during this transition the leadership of GM should be in the field, living with the troops, sharing victories and defeats, and solving the problems as quickly as they occur. Above all, the GM leaders must be out front. They must learn by direct experience and lead by example.

12 THE LEADERSHIP must reward excellence while those who won are still sweating from the effort. Celebrate victories. Learn from defeats. And then get back in the ring and win!

13 FINALLY, the leadership must work night and day to make GM such an exciting, rewarding place that GMers look forward to coming to work. They will relish taking on all competitors and beating them fairly.

Little if anything I have proposed is original. These leadership principles are timeless -- they are as basic as human nature. Some of America's finest companies have been built on them. Tapping the full potential of the GM team is the answer, not billions in spending. Nothing would please me more than to know that GM's finest years will be in the future -- not in the past.