Book Review: American Turnaround

American TurnaroundWhitacre, Edward E. American turnaround : reinventing AT&T and GM and the way we do business in the USA. Business Plus, 2013. Also in audiobook format

Former Fuqua Dean, Rex Adams, is a bulldog of a man with a blunt communication style.  He grew up in modest circumstances in rural West Virginia and attended Duke on a football scholarship.  During his long  career at Mobil, he rose through the ranks to the executive suite.  After retirement, he returned to Duke as the Dean of the Fuqua School of Business where he cultivated a talented team of staff members to accomplish his goals.  I thought of Rex often when I read a new book, American Turnaround by Ed Whitacre, the former chairman/CEO of AT&T and later GM.

When this story begins, Ed Whitacre is living in Texas, retired CEO from AT&T, where he worked 44 years.  The year is 2009, soon after the Chapter 11 proceedings and the $50 billion bailout of General Motors.  Car czar Steve Rattner asks Whitacre to serve as chairman at GM and he agrees. When Whitacre gets to Detroit, he discovers a chaotic management structure, with no clear lines of authority or responsibility, and no sense of accountability.  Senior leadership seems unsure about their roles in the company.  There is no sense of urgency, no teamwork toward crafting a solution.  Whitacre holds senior management completely responsible for the bankruptcy and he immediately institutes changes.  After simplifying the organizational structure, he replaces top management, but because salary caps under TARP are uncompetitive in the industry, he taps talent from lower levels in the company. Then he fires the CEO and assumes that position himself.

Whitacre takes steps to change the culture at GM.  He goes on “walkarounds” to talk to employees throughout the company, and to union leadership as well.  He presses his management team to clarify and simplify their communications and presentations to the board.  He begins the process of building confidence in the company with a strong message and a plan for returning to profitability.  As CEO, his role is to articulate a higher vision and to communicate it to the entire organization to get all levels, entry-level to top managers, focused and moving in the same direction.

At the heart of the book is a flashback to Whitacre’s formative years in rural Texas.  While a senior at Texas Tech, he takes an internship at Southwestern Bell, where he rises through the ranks to chairman and CEO.  Under his leadership, the company is transformed into the telecommunications giant AT&T.  Whitacre discusses the people and strategy at the company, and uses this material to explain the development of his management model – to run a lean operation staffed by people with clearly defined jobs, accountability and authority.

American Turnaround is a heartfelt story and an entertaining and rewarding book.  The writing is both personal and blunt, replete with verbal tics, you know?   But like any conversation, the story is subjective.  Whitacre says much about his leadership philosophy but he includes few details about strategy at either AT&T or GM.  Whitacre writes about men by name, but women are invisible, “this lady in a white coat” (at the GM lab) or “this woman” (who managed the Corvette plant).” The only woman manager named at either company is GM’s head of marketing Susan Docherty, but after she conflicts with Whitacre’s heir apparent, she finds herself in Shanghai.  In addition, key details are missing.  Near the end of the book, President Obama meets with Whitacre, but the reader is not told what motivates the President to say, “I hope you will stay.”  And it is puzzling why, during the same meeting, Whitacre decides to resign his position.  He serves at GM for only 18 months.  Yet despite the flaws in American Turnaround, I highly recommend this lens into the mind, views and opinions of American corporate leadership.  Well worth reading.

© Reviewer: Meg Trauner & Ford Library – Fuqua School of Business.
All rights reserved.

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