Home stretch.

Speed, innovation - and angst. Process change can't be accomplished without creating some friction throughout the organization - especially at senior levels. Still, these CEOs report, it's worth the effort, for it may be, they suggest, the real driver on the competitive highway.

At Chrysler, the move to process management dates back to 1987, when the $53.2 billion automaker acquired American Motors. As the two companies were merged, says Chrysler Chairman and CEO Robert J. Eaton, "there were two different cultures and two different sets of processes. And people started questioning everything."

Those questions eventually led to the creation of platform teams - essentially, cross-functional organizations responsible for all the processes that go into designing, manufacturing, and marketing a given type of vehicle. That approach has helped the Auburn Hills, MI, company cut customer-order times by 50 percent and bring new products, such as the recently unveiled Prowler sports vehicle, to market faster than ever.

Three years ago, Chrysler began to extend this approach to the overall management of the company, coming up with overarching processes that encompass the platform groups. "We defined the three fundamental processes that make up the company: product creation, volume production, and customer acceptance. That's all we do at Chrysler. Everything else comes under that," Eaton says. Here, he discusses some of the lessons learned on the road to process management.

On process management at Chrysler: We are trying to systematically and permanently improve the way the organization works, as opposed to simply focusing on results such as product excellence or financial targets. You do have to have some of both, but if you are focused only on results, you are likely to get only incremental improvements - 5 percent or 6 percent a year. You also end up with situations in which everyone gets charged up and goes after one goal - and when it's reached, everybody is kind of let down.

The idea is, if you continually improve the process, that will improve the results and give you a more sustainable advantage. At the same time, the process focus helps you identify opportunities for making big improvements. It lets you get outside the bounds of your current thinking and work toward "stretch goals" - improvements of 50 percent or greater - that require more creative approaches.

On process change: When you're redesigning processes, you have to get senior management involved at some point. That's because as you work to eliminate redundancy and bureaucracy, you are always going to be goring somebody's ox. It's tough for people to believe that what they're doing is not important. And yet a huge portion of what we all do is not important or necessary.

There's a definition that I like: Waste is anything that the customer won't pay for. For example, let's say you're connecting two parts with a bolt and nut. The only thing the customer cares about is whether those two parts are secure for the life of the product. That means the only part of the process that really adds value is the last fraction of a degree that bolt turns, which gives it the torque to hold it in place. Manufacturing and transporting those bolts, warehousing them, delivering them to the line, starting the torque wrench - all that is waste, in terms of what the customer cares about, so it's all open to question. If you look at waste from that perspective, you find that the opportunity for process improvement is infinite.

On the role of the CEO in the process organization: My job is to set the strategy, set the priorities, empower people to do the work, and then get out of the way.

You've got to be focused more on the overall as opposed to individual, specific things. Otherwise, the process approach won't work. For example, in my job, I now focus on the "what" rather than the "how." Through much of my career, I was closely involved in most of the significant product decisions wherever I worked. Now, I'm involved in questions like, "Are we going to do the Prowler?" I don't get involved in how it's going to be done. That's entirely up to the process owners and platform teams. And that's really invigorating for them. They believe the programs are theirs - they're not mine or [Chrysler President] Bob Lutz'. They have pride of ownership.

On keeping it simple: With our process-oriented approach, we actually create a one-page contract at the beginning of a vehicle program that covers things like quality and cost. Once that contract is done, the platform teams don't have to come back to senior management for anything, as long as they stay within the bounds of the contract. So, for example, I don't sign off on appropriations. I buy into this overall contract with the platform team. When large chunks of money come up, the amounts are reviewed to make sure they're within the contract - but not by me. Again, you delegate that down to the people, you give them responsibility, and you give them the authority to do the job.

On maintaining functional skills in the organization: The dominant organizations in this company are the horizontal groups. We don't have departments such as "body design" or "chassis" at all. We keep up the functional expertise across the vehicle platforms by what we call Tech Clubs. A Tech Club might be in electronics or brakes or engine management. In each one, the people with a given set of functional skills come together from all the platform groups. They discuss what they're doing, share best practices, and decide what they each need to be doing in terms of R&D for the future.

On the need for new management skills in a process-driven environment: A senior manager in this type of organization has to change from simply giving directions to being much more of a coach, a communicator, a facilitator. For some people, it's very, very difficult to leave that authoritative role behind. But we've made it clear, in a nonthreatening way, that Type IV behavior - where you get results no matter how many people you run over - is not acceptable here. We haven't gotten rid of all the Type IV behavior, I can assure you. But on the other hand, we have moved people out of the organization who exhibited that kind of behavior, and everyone recognizes why those changes were made. That helps strengthen the idea that you are really serious. Of course, everybody falls off the wagon occasionally, so you just have to keep reinforcing the new behavior.