Saturday, May 2, 2009

Reality & American Auto Companies

The fundamental problem afflicting the American auto companies is that, for decades, they have intentionally cocooned themselves inside a bubble of unreality. As a long-term subcontractor of the Big 3 auto companies, I found it stunning to see how far away from the real world of economics and competition they were, and how strongly they fought to remain in their comfortable fantasy world. As Bossidy and Charan noted, “Though businesspeople like to think of themselves as realists, the fact is that wishful thinking, denial, and other forms of avoiding reality are deeply embedded in most corporate cultures. But what’s been tolerated in the past can’t be tolerated in this new environment. The price for failing to confront reality is simply too high.” Bankruptcy and sale to foreign interests is indeed a high price. Dance icon Twyla Tharp similarly noted the danger of avoiding reality: “Denial becomes a liability when you see that something is not working and you refuse to deal with it. You tell yourself ‘I’ll fix it later,’ or you convince yourself that you can get away with it, that your audience won’t notice the weak spots. This is bad denial. You won’t get very far relying on your audience’s ignorance.”

Honesty begins with corporate executives. As former CEO Max DePree said, “The first responsibility of a leader is to define reality.” Bossidy and Charan noted that this is not always an easy task: “To confront reality is to recognize the world as it is, not as you wish it to be, and have the courage to do what must be done, not what you’d like to do.” Kouzes and Posner have studied the importance of leader honesty to subordinates: “Honesty has been selected more often than any other leadership characteristic; overall, it emerges as the single most important ingredient in the leader-constituent relationship…It’s clear that if people anywhere are to willingly follow someone—whether it be into battle or into the boardroom, the front office or the front lines—they first want to assure themselves that a person is worthy of their trust.” Christians are intimately aware of the importance of honesty and reality, and they join with the Psalmist, “What you're after is truth from the inside out. Enter me, then; conceive a new, true life.” How profoundly sad that the auto executives did not share the same desire.

Dr. Gary Oster
Regent University
School of Global Leadership & Entrepreneurship


Automobile manufacturing, Big 3, honesty, reality, values


Bossidy, L. & Charan, R. (2004). Confronting reality. New York: Crown Business.
DePree, M. (1989). Leadership is an art. New York: Dell.
Kouzes, J. & Posner, B. (2002). The leadership challenge. San Francisco: Jossey-Bass.
Tharp, T. (2003). The creative habit. New York: Simon & Schuster.