If you would have been driving
through the hills of Tennessee
about 40 miles south of
Nashville on I-65 in the 1990s,
you would have come across
a very curious exit called
the Saturn Parkway.
And if you would've taken that
exit and gone a little farther,
you would've come across
something called the Donald
Ephlin Parkway.
That was the entrance to
the Saturn Corporation,
one of the boldest,
most innovative,
new experiments in labor
management relations
and organizations of
the past 30 years.
So let's take a look at
what Saturn was all about
and, unfortunately,
why it failed.
Well, Saturn
started in the 1980s
when a number of innovative
labor and management leaders
said, we've got to adjust
the way in which we work.
General Motors came
to Donald Ephlin, who
was the vice president of the
auto workers union, and said,
we can't build a small
car in the United States
competitively.
We've got to
outsource that work.
Don, in his innovative way,
said, well, wait a minute.
Why don't we take a
look if we couldn't
take a clean sheet of paper,
give it to some folks,
and see if they can come up
with a new way to do this.
In short, they
created what became
known as the Committee of 99: 99
people, engineers, accountants,
front line workers,
union representatives,
working together.
The goal was to go
out and find out
what we could do differently to
build a small car competitively
in the United States.
They came together, looking for
who is doing the cutting edge,
both from a
technology standpoint
and from a people standpoint.
They visited Volvo, BMW.
They went to Ford.
They went to Lockheed.
I think they visited
75 different companies
in the US and abroad.
And through all of this
the overpowering thing
was that there's a different
way of working with people.
They created Saturn as
a new kind of company
and a new kind of car.
We came up with five
proposals, and all three teams
have come to a consensus
that they kind of like
proposal number four.
Saturn was built on the basis
of partnership principles
from the bottom up.
They said, we'll have teams
that assemble the cars.
We'll have co-management
on the front lines
at the first lines
of supervision
with a union and a
management co-leader.
We will do that up through
the manufacturing operations:
even product development
and strategy decisions
will be made in a
co-management way.
Well, Saturn had
a lot of critics.
But some of those
critics were silenced
in the first couple of years.
In fact, only about
two or three years
after it rolled the first
car off its assembly lines,
Saturn rose to the top of the
customer satisfaction ratings.
It was as satisfying
to customers,
in terms of sales experience
and initial product quality,
as any other car built
in the United States.
You might go as
far as to say that,
down to the levels
of turning the nuts
and bolts on the car,
that there was passion
in people for their jobs.
Saturn enjoyed in the '90s a
level of quality performance,
a level of brand loyalty, that
the rest of General Motors
had not achieved.
But what happened?
The traditionalists
within General Motors
and within the auto workers
union really didn't like it.
Don Ephlin had
retired from the UAW,
and Steve Yokich
became vice president.
And he was not
philosophically aligned
with any of these
partnership, joint management
ideas whatsoever.
You didn't have a lot of deep
support both within the UAW
or among General Motors
in Detroit for Saturn.
And so Saturn's sales and
productivity began to decline.
Morale of the
workforce declined.
They felt that they weren't
invested in this company
psychologically.
They weren't going to invest
new products in the company.
I think it's fair to say that
the product was outdated.
The way to kill
any car company is
to delay the introduction
of a new product
because the competition
is innovating.
The competition is
bringing out new products.
And without a new
product, Saturn
was going to lose market share
and began to lose market share.
And basic math rule: If you
have an organization that
maintains employment security
while sales are falling,
your overall costs increase.
You can't do it anything
unless you've got money.
And we were being strangled
by a corporation that
didn't know how to handle us.
We were the outlaws,
if you will.
To make a long story
short, Saturn limped along.
It built a new
vehicle at one point
called the Saturn
SUV, called the Vue,
which was very successful.
But Saturn could not survive.
And in 2008, General
Motors closed down
Saturn as part of its
restructuring activities.
So what lessons should we learn?
I think there are
three lessons that
should influence how
we think about bringing
about innovations and new
ways of working going forward.
First, I want us all to
remember that Committee of 99.
They were an early
form of crowdsourcing.
They said, no
individual could come up
with this innovative
design, but if we all
put our heads together,
and we go around the world
and look at best practices,
we can create something new,
something that no one else could
have imagined in ways that we
can work together.
And it was successful.
So remember crowdsourcing
as an option.
But expect resistance.
Remember those
traditionalists who said,
this isn't the way we
do things around here.
And once the original
champions left,
the traditionalists took over.
And they slowly, slowly
starved Saturn for resources.
And the end was inevitable.
And then finally, if you're
going to try new ideas,
and you're going to create
new ways of working together
and new organizations,
build in a strategy
for sustaining that innovation
right from the beginning
so that it will have legs
that goes on into the future.
There'll be opportunities to
invent new ways of working.
Again, as you go forward,
remember these three lessons
from the Saturn Corporation.
