Bob Lutz spent many years as the No. 2 executive at big car companies, working closely with the CEO. He learned how to get along with his bosses while correcting their blunders.
As Chrysler’s COO in the mid 1990s, Lutz reported to CEO Robert Eaton. Like many leaders, Eaton got himself into trouble when he expressed opinions about things he didn’t fully understand. When he toured a Chrysler assembly line, for example, he chastised employees for allowing “way too much inventory” to pile up.
“Next time I come down, I want to see inventory no more than 12 inches high,” he proclaimed.
Eaton didn’t realize the aging plant lacked sufficient loading docks, so piles appeared high even though the just-in-time inventory was low. Yet plant employees who heard Eaton’s remark drafted plans to spend $45 million to add loading docks.
When Lutz learned about the potential $45 million expenditure, he raised the issue with Eaton.
Adopting a low-key tone, Lutz told the CEO, “You know that excess inventory you commented on during your plant visit? Well, you won’t be surprised to hear this but, once again, people took it way too literally.”
Lutz explained that the plant was preparing to spend $45 million needlessly, adding tactfully, “It just shows how careful you and I need to be when we make suggestions.”
As a result, Lutz succeeded in getting Eaton to rethink his imperious approach—without bruising his ego. The key was using the phrase “you and I” when he really meant Eaton alone.
Reflecting on the incident, Lutz says that a better CEO would have asked, “Why is the inventory so high?” instead of declaring, “That’s too much inventory. Reduce it!”
— Adapted from Icons and Idiots, Bob Lutz, Portfolio/Penguin.
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