The Right Leader at the Right Time

This week the business world lost a remarkable leader, Sergio Marchionne, chief executive officer of Fiat Chrysler. I remember writing about Marchionne shortly after he was appointed CEO of Fiat Chrysler in 2009. I wrote in 2010 (though my book was published in 2011), “It’s difficult to tell whether he will succeed, though most would agree with his statement about the auto industry: ‘A serious restructuring of the automotive industry is now absolutely necessary if it is to be economically viable.’”

At the time Marchionne had been widely praised for turning around troubled automaker Fiat in just two years. When an even more troubled automaker, Chrysler, emerged from bankruptcy protection with Fiat holding a 20 percent stake, many expected the merger to fail, and Marchionne with it. After all, the Obama administration seriously considered liquidating Chrysler, and the government had considerable difficulty finding a buyer. An article appearing in USA Today stated, “Many believed Chrysler was doomed to fail.” At the time, auto industry expert Rob Golding said of the Fiat Chrysler merger, "I think it's madness." Industry analyst Max Warburton said of Marchionne’s chances of succeeding; “It’s a moon shot.“

The rest, as they say, is history.

Though we should not judge a leader’s skills by the results she or he obtains (some skilled leaders never produce results and some leaders succeed despite themselves), it is appropriate to judge whether the leadership was effective by the results. And produce results Marchionne did. The figure below shows the relative increase in stock price for Fiat Chrysler, Ford and General Motors from a common starting point when was first traded (June 7, 2010).

In an even more impressive measure of how Fiat Chrysler performed under Marchionne, consider that since 2010, the stock appreciation for the Big 3 automakers is as follows:

* General Motors was standardized from 11/15/2010, its first week out of Chapter 11.

But Marchionne was about more than results. Bob Kidder, former chairman of Chrysler who helped lead the company out of bankruptcy and is an exemplary leader himself, told me a few appreciative stories of Marchionne’s leadership. It is true that Marchionne was uncompromising in his drive to achieve results. But he also knew that when an organization is in crisis, hard decisions cannot be avoided if the organization is to survive. "The essence of leadership, when all is said and done, is the personal assumption of the moral duty to be proactive in building our future," Marchionne once said. "It is this that makes leadership a privilege and a sacred trust."

Here in the Fisher Leadership Initiative, we have developed a model of leadership that emphasizes that leadership involves many skills. Marchionne is a beautiful example of mastering many of those. At both Fiat and Fiat Chrysler, he worked to delayer management and make leaders (including himself) more directly accountable for the decisions they made and the results they achieved. He will also be remembered for his astute insights into the auto industry, his direct and unadorned style (his blunt talked matched his causal wardrobe of sweaters and jeans) and his ability to think about business from both a strategic and a detailed perspective.  Marchionne was equally known for his passion and charisma – as well as his fearsome work ethic. His news conferences were true events, where he would regale reporters with references to everything from frank talk about his company, his competitors to pop culture to history. When asked about Tesla’s effect on his industry, for example, Marchionne quipped, “‘I don’t make iPhones. I make cars.”

I’m saddened by Marchionne’s passing. I’m about to go visit Colorado’s mountains in a Jeep Wrangler – one of few vehicles still made that is tough enough for Colorado’s legendary mountain roads. When I climb into that Wrangler, I’ll think about Marchionne and his own tough, passionate style of leadership.

The business world is a less interesting place without Sergio Marchionne, but the millions of those who use or make Fiat Chrysler’s products can reflect on their good fortune to have had the right CEO ¾ right when one was needed.

References

“Chrysler Group Chairman and CEO Sergio Marchionne Awarded Global Leadership Award by Business Council for International Understanding.” News provided by Chrysler Group LLC (Dec 06, 2011).

1. Lambert, (June 13, 2016) “FCA CEO Marchionne doesn’t understand Tesla’s model but claims he could copy it,” Electrek, 

Robbins, S. P., & Judge, T. A. (2011). Organizational Behavior (14^th ed.). Boston, MA: Prentice Hall.

Bomey, N. (July 24, 2018). “Sergio Marchionne dead: 5 ways he saved Chrysler,” USA TODAY.

Lyndon, N. (May 5, 2009). “How many people will fit in a Fiat?” The Telegraph.

Schwartz, N. D. (April 25, 2009), “Would Detroit Sound Any Better in Italian?” New York Times.