On April 30, 2009, near the bottom of the massive global credit crisis, Chrysler LLC filed for Chapter 11 bankruptcy protection to renegotiate its debt and other obligations. The result was that most of its assets were sold to a new company, Chrysler Group LLC.
Although several groups cooperated in the reorganization, the leadership for Chrysler’s return to profitability came from CEO Sergio Marchionne. Under his watch, they introduced a “World Class Manufacturing (WCM) system, and relaunched products with a focus on luxury and quality. They also completely reorganized their brands and discontinued several models. Two years later in May of 2011, Chrysler repaid $7.6 billion in loans to the US and Canadian governments as well as $13.2 billion of payments received under the US Treasury’s Troubled Asset Relief Program (TARP).
All progress begins by telling the truth.
This astounding recovery was no accident. It began when Marchionne was appointed CEO of struggling Fiat S.p.A in 2004. In an interview on Reid Hoffmann’s “Masters of Scale” podcast, Fiat Chrysler’s Chairman John Elkann attributes this to Marchionne’s abilities as a “truth teller.” Through Fiat’s 2004-2008 turnaround, Marchionne was brutally honest about a multitude of problems plaguing the organization and he made many very tough decisions. Many people were fired, a tighter accountability was formed, and a renewed program of quality control was implemented.
For a 113-year-old family-controlled company, that’s a lot of change! Fiat rapidly strengthened its position ahead of the credit crisis and was ultimately able to buy out controlling interest of Chrysler in 2014 and reform the company as Fiat Chrysler Automobiles (FCA).
Dan Sullivan of Strategic Coach said it well: “All progress begins by telling the truth.” He also prescribes a 5-step process for telling the truth and using it to guide your next steps:
- Describe your vision of where you want to be.
- Ask “What worked in the past and what is working now?”
- Tell the truth about what is not working now and what did not work in the past.
- Knowing what you know now, how could you enhance or refine this experience?
- What are the action steps required that will result in a better experience in the future?
Over the past five years we have applied the same thought to our life and the vision of our business. Although our process was not as radical as Marchionne, it helped us in crafting a philosophy that we can be very happy with.
We had to begin by defining the top three values that must guide our lives and the work we do for our clients:
Against a tide of “fierce independence,” we prefer to stand on the shoulders of giants. We wrote about this in a previous post which you can link to here.
We can all relate to the importance of truth by contrasting with its opposite – dishonesty. Nothing drives us crazier, especially parents, as when we are lied to. Truth is an absolute precondition to future progress. Financial crises always arise in the home and across global markets when we don’t fully tell the truth.
There is no such thing as status quo. We are either moving forward or falling behind. We prefer to move forward!
If you are interested in orchestrating your own financial turnaround, you will need to become a truth teller as well and you will need advisors on board who will tell you the truth, not simply try to sell you something.
If you are interested in scheduling a “truth” session, our Focus Finder conversation is the right place to start. Click below to get started.