Fostering leadership at every level: Story from a US automotive culture change

Don Tracy is a top manager at Denso International, and has been in the automotive industry for more than 34 years. He helped carry out a successful cultural transformation centered on changing leadership practices.

Denso is an originally Japanese company which has become one of the world’s largest suppliers of automotive components and advanced systems, with revenues reaching $40 billion a year. Almost one-quarter of the revenues is generated in the USA where the company employs 14,000.

How did the transformation run and what was the key insight? 

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The transformation took four years, said Don in an interview for McKinsey. Psychologists were hired to do a 360-degree review and coach. Classes on leadership development were held, and top management engaged in multiple discussions. The goal was ownership to be present at all levels.

The hierarchical mentality is obsolete, and operating on a fixed mindset had to go. People needed to be pushed into thinking independently.

And the key insight? Be vulnerable. Being able to say that you've made a mistake can really catalyze changes. Also, engagement and the example set by top managers is crucial. It's also a necessity to establish a common language, so that everyone in the company knows what this is all about.  

HR helped with communication

The leader of HR was member of the strategic leadership team. These people met once a week and talked about strategic directions. HR was necessary, because the leadership transformation was such a crucial part of the overall strategy.

Here's an example: if you really want your staff to adopt a growth mindset, you must first recognize when something isn't working. That can make you feel bad, it's not easy, but you gradually start noticing insights. Then when you adopt some changes, things get better – and you're on the path to growth.

The HR department helped the company to communicate this idea so that everyone accepted it.

How to win over skeptics

Even in large companies with hundreds of employees, the effort can be spoiled by just a few employees who adopt a negative attitude, particularly if these employees have a long history with the company.

How do you win them over? Again, it's about communication. Managers need to engage with employees who have negative views about the changes. Investing some time can really make the difference.

Denso plants in North America are being transformed, and other facilities in the rest of the US, Mexico and Canada will follow. The key objectives are not to fall back into a fixed mindset, to develop talent and give employees more autonomy.

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Article source McKinsey & Company - global management consulting firm
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