Saving the “General”

Those of you following the Zeitgeist blog will know that we’ve been keeping an eye on General Motors and their attempts to rescue the ailing giant.  The news this week that Fritz Henderson has “stepped down” from the top role was a little surprising but perhaps indicates just what the level of influence is from those in the Government.  Now, ignoring the Facebook rant of an alleged family member which took up way too many column inches, this decision is one that should concern many companies that were rescued by public funds and the very real impact on attracting and retaining talent at the senior level.
Reports suggest that the replacement individual is likely to have to work for as much as a third of what the current chief was working for with limited opportunities for a bonus.  How realistic is it then to expect to secure a high performing executive capable of returning the former giant back to a solid financial footing?
Upsetting the Russian and German governments would have been a price that a large corporate was willing to pay in pursuit of a viable and sustainable global car strategy but it appears this was not viewed in the same way by the US government stakeholder and consequently Mr Henderson paid the price.  Does this mean that GM has little hope of recruiting anything other than a puppet figurehead to deliver the results required?
The same question must be asked of those other companies like the banks and insurers who too have the issue of hemorrhaging talent.  If you hire mediocre performers you will mostly get mediocre results.  If you pay mediocre compensation you will get mediocre leaders.  No wonder the banks are doing everything they can to pay back the debts owed to the central coffers.
Outside of these executive recruitment issues it seems to be that a number of companies are failing to recognize talent and using the excuse of the recession to not reward talented people.  Leveraging the luxury of limited external job opportunities may be viable now and we certainly understand that companies need to manage costs and not pay bonuses that they cannot afford.  However, having disengaged employees results in a real drag on the performance of the organization so the company is going to pay anyway as productivity will suffer.  In addition, as soon as the job market picks up, the talent will have long enough memories to remember how they have been treated and inevitably will leave for pastures new.  The companies that are mortgaging their future in the short terms will reap the impact of those decisions over the coming few years.
Retaining and attracting talent will be a hot topic for some time to come with continued rhetoric around control over bonuses and pay.  Here at Zeitgeist we would like to see more companies actually understand what talent looks like and more companies rewarding talent rather than lumping them in with the mediocre or even poor performers within the organization.
We await the new appointment at GM with interest.