Words from a Motley Fool Genius

By Ron Pereira Updated on August 12th, 2007

I have not blogged on the whole Nardelli taking over Chrysler topic mainly because so many people already have and I have grown bored of the topic… that was until I read this article on The Motley Fool.

The article takes the most common (and easiest) angle and punishes Nardelli for past sins including his large HD pay package (which was clearly stated in his contract so why the surprise by so many… but I digress). I am not here to say this dude is a good leader. I don’t know him and only know what the press says. But one thing I do know is six sigma. And when I read things like what I am about to share I want to pull my hair out.

Nardelli’s real challenge will come from implementing real change in the automaker. But let’s just hope that his focus on restoring Chrysler quality doesn’t resort to the Six Sigma ideas he implemented at Home Depot, which ultimately hobbled the retailer. Sometimes, ideas that work well in certain companies, as Six Sigma did at General Electric (NYSE: GE), don’t translate well to others. Yes, hundreds of companies have instituted the Six Sigma approach, but Home Depot was one of the apparent failures.

OK, so six sigma is the issue here I guess. I mean this Motley Fool genius seems to think so. Give me a break. Oh but there is hope says Mr. Genius.

So far, Nardelli has yet to refer to Six Sigma; he’s stated that his restructuring plan calls for cutting 13,000 jobs. The layoff isn’t only for cost-cutting purposes; it’ll also allow Nardelli to bring in new talent.

Whew… that was close. Instead of implementing that crappy six sigma stuff we are going to whack 13,000 heads. That should work. Sadly this is the kind of crap people on the street seem to think businesses need.

If you want to read more from Mr. Motley Fool Genius click here.

Ron Pereira

Ron has more than 20 years of experience in various manufacturing, supply chain, and senior leadership roles. Ron has held the titles of process engineer, engineering manager, master black belt, and director of manufacturing & continuous improvement. In 2002 Ron was the first American to win the Nokia Global Six Sigma and Overall Quality award in Helsinki, Finland. Ron holds a bachelor's degree in automated manufacturing and an MBA in technology management.

John Hunter
August 12, 2007 - 5:47 pm
Reply

I think it is perfectly fine to criticize “wall street thinking”. But too often people excuse stupid thinking with the idea that it is wall street’s fault. Who is responsible for deciding on the layoffs? They are to blame if that is the wrong strategy not some wall street analysts liking or not liking that move. I have seen too many people acting as though CEO’s don’t make the decisions. They do. Wall street can exert influence but in the end the CEO, boards… make the decisions. Blame them if the decisions are bad.

You don’t let the CEO off the hook, but I just want to express my concern to those reading that we should look to who is really to blame for short term thinking – executives.
Ron Pereira
August 12, 2007 - 7:07 pm
Reply

John,

I agree the buck stops with the CEO. As I said in my post I am not giving Nardelli a pass or saying he some hero.

But when a wall street writer makes idiotic statements about a methodology (six sigma in this case but could be lean tomorrow) they likely know nothing about they should be called on it.