CIO Of DaimlerChrysler: Sue Unger's Drive to Diversity

Sue Unger defied the odds to become the CIO of an automotive giant despite her gender and status as a technology outsider. Here's how she did it.

Sue Unger did not have much respect for IT when she was a finance executive. Reactive, insular, tactical and unmotivated are just some of the more printable adjectives she used to criticize IT in those days.

Yet now the 54-year-old former bean counter presides over one of the world’s largest IT groups at one of the world’s largest companies, $157 billion DaimlerChrysler. She has survived two waves of management purges since Germany’s Daimler-Benz purchased Chrysler in 1998—purges that saw the only other two female senior vice presidents there leave the company. Indeed, Unger has gained power since the merger in a company that has swept away Americans at its uppermost levels and replaced them with Germans. She is the rare American who rules on both sides of the Atlantic. But she speaks no German, has always lived in the suburban Detroit town where she grew up and has worked for exactly one company since graduating college in 1972: Chrysler. Worldly she is not. And her understanding of IT remains rooted in the conceptual rather than the technological.

This is atypical to say the least. The vast majority of CIOs remain techies who learn the business rather than businesspeople who learn technology. CIO’s "State of the CIO 2003" survey found, for example, that just 14 percent of more than 500 IT leaders had any relevant experience in finance before becoming CIO. Other core business functions, like manufacturing and sales, had even lower percentages, while engineering was slightly better, at 20 percent. In the auto industry, the breakdown is no different. The last businessman to be CIO at a Big Three company, Ford’s Jim Yost, who came from finance like Unger, lasted just a year before stepping aside for a techie. It should come as no surprise that Unger is also the first and only woman to be a Big Three CIO.Unger’s startling success makes her a walking case study on leadership and what it takes for a woman and a technology outsider to become the boss of IT in one of the most competitive, macho industries in the world. How has she defied the odds? Several ways: excellent analytical and people skills honed by her years in finance, and a determination to learn every important aspect of the car business by taking assignments in every major area of Chrysler.

"She broke a lot of barriers by moving around a lot and not being afraid to take on assignments in different functional areas of the company," says Unger’s mentor, Gary Valade, Chrysler’s executive vice president of global procurement and supply. "No matter what the assignment was, she was always able to break it down to its essential elements and deal with those, and not get distracted by a lot of peripheral stuff."

But for Unger and her company, the biggest challenges may lie ahead. Chrysler, perennially third behind GM and Ford, is continuing to lose market share as competitors eat away at the categories that Chrysler’s innovative designers made famous, such as the minivan and SUV. And Mercedes and Chrysler finished below average on J.D. Power and Associates’ 2003 initial quality survey. (In 2003 tests, Consumer Reports’ readers put Mercedes’ reliability in third place of worst-of-all car brands.) Analysts question whether DaimlerChrysler’s quest to shore up a failing Chrysler has caused its chairman of the board of management, Jurgen Schrempp, to lose sight of what made his German gem great.

Indeed, one of the first questions a German journalist asked Schrempp at the company’s annual press conference last fall was whether he was considering selling Chrysler. Schrempp responded with a stern "No!" but the question—and larger issue of the merger’s success—lingers on.

Driver’s Ed

Unger comes from the second most powerful constituency in the car business: the money guys (and at the highest levels, they are still nearly all guys). The car guys (usually engineers) are the most powerful group, and they usually get the CEO jobs, but when you veer off the road into a financial ditch as often as the auto industry does, the money guys are as powerful as bean counters get. Finance in the auto industry has a breadth and depth that few other industries can match. For decades, Chrysler’s promising finance people have been rotated through different areas of the company at roughly two-year intervals, creating executives who understand every facet of the business.

Unger served in several functional areas, from sales and marketing to engineering to warranty, before assuming her IT role. But adaptability was a strength long before she ever came to Chrysler. Growing up, she had wanted to be a civil engineer like her father and grandfather. Her parents helped build her confidence by giving her lots of household responsibility and treating her the same as her brother. "My father expected no more or less of me because I was a girl," she says. But he did not encourage her dream. "He said I could do [engineering], but that I wouldn’t advance very far and I’d be treated badly," Unger recalls. "Women did one of three things in those days. They became nurses, teachers, or they got married."

In her first college computer engineering course in 1968, Unger, the only woman out of 400, was repeatedly humiliated in front of the class by her male professor. The experience drove her out of engineering and into the business school, where the humiliation was less severe and she was still the only woman in most of her classes.

Her sense of isolation continued at Chrysler, where she was one of three women management trainees in 1972’s crop of 50. There were no women in Chrysler’s management at the time either. But Unger viewed the challenge at Chrysler, perhaps a bit naively, as a game she could win.

The game quickly got serious. After a few years of working for finance in the sales and marketing function, Unger pushed to be assigned to the Jefferson North Assembly Plant, one of Chrysler’s oldest, in downtown Detroit in 1977. Her colleagues in finance thought she was crazy to leave the padded carpet of headquarters for the grease and oil of the assembly plant. But Unger wanted to know how cars were built. "I thought it was important to learn everything about the auto industry," she recalls.

But no management woman had ever set foot in the plant (though women worked on the assembly line), and the plant manager was determined to keep it that way.

It took a year of lobbying before Unger got her assignment. Then, she got stuck in "body in white," the section of the plant where, in the days before automated assembly, the biggest, toughest guys muscled the raw, unpainted (hence body in white) panels of sheet metal into place to create the vehicle’s skeleton. Unger’s job was to monitor productivity and help improve the assembly process by meeting with the assembly team and discussing better ways to move materials to the line. Ironically, Unger had an easier time dealing with the tough guys on the line than the managers in the office.

"It wasn’t discrimination so much as they were very worried about having such a refined young lady in such a macho manufacturing environment, and what if someone swore at me—how would I react?!" she says, laughing at the memory. In fact, Unger didn’t care about the swearing—it was the men’s phony, condescending sensitivity that drove her crazy. "In meetings, they’d say, ’I’m sorry to do this in front of a lady, Sue, but expletive, expletive,’" she laughs. "I finally said, ’Look, I’ve heard all this before. What’s humiliating is how you single me out before you say it!’"

The people down on the line didn’t pull any punches with her, Unger says. "I loved the honesty," she recalls. "Nobody was afraid to say how they felt about things. I just thrive in an environment like that."

Unger’s higher-ups in finance were admiring the same traits in her—not simply because they’re signs of good character, but because they serve the company’s goals. "In finance, it’s easy to become aligned with someone that you like or who you think is doing good work or has got a great future," Valade says. "And it’s very easy to take an analysis—say whether to keep a manufacturing plant open or closed—and tailor it to the direction you think the guys or gals would like to see it come out. But to succeed in finance you have to get by that. You have to say, It’s my job to put down the facts as I see them fairly. Not all finance people can do that. Sue has always been able to do it. You could call it integrity."

Managers at Jefferson North had a hard time noticing Unger’s integrity, however. They were more focused on her sex. The year Unger arrived there, the managers decided to cancel the annual management picnic rather than invite her. Similar roadblocks would follow, but Unger approached them with humor and a bit of cunning. For instance, when Unger came to procurement and supply in 1983, a Chrysler manager, Tom Martin, badgered Unger to manage the group’s softball team, knowing she had no knowledge of or interest in the sport. Unger agreed. But when she showed up at the first game and handed out the team uniforms, Martin got a surprise. The uniforms were bright pink and white, with the name "Martinets" scrawled across the front.

A New Word for IT: Yes

Perhaps the toughest assignment for Unger was when Lee Iacocca trumped the other Big Three during the "warranty wars" of the mid-1980s by upping the coverage to seven years or 70,000 miles. Unger was the finance manager who had to figure out whether Chrysler would lose what was left of its tattered shirt on warranty repairs. This was an assignment Unger didn’t choose herself. Warranty and quality were chaotic backwaters. Engineers used dollies to deliver the stacks of paper that quality analysts needed to pore through to generate their monthly quality reports. "The paper was stacked so high you couldn’t even see the analysts at their desks," Unger recalls.

She realized then that she had stumbled on a function that could really benefit from IT. Except there was no IT to depend on.

By law, Chrysler has to keep warranty and quality information on every part and every vehicle going back 15 years. But getting at the information about a part that failed last week was as difficult as finding one that blew up 10 years ago. Unger realized that if warranty and quality data went online, the engineers would be able to fix the quality problems much quicker. Her na¿t¿bout technology may have been a blessing in disguise. "IT said it was impossible to put this much information in a database, much less analyze it," Unger recalls. "So I got a PowerPoint presentation together and said, ’This is what I want.’"

She was asking a lot. Not only did the database need to store vast quantities of information, but Unger herself specced out complex statistical analyses, which required vast amounts of computing power to generate comparative quality reports. As she recounts the story in her big corner office at Chrysler’s headquarters, her annoyance is still fresh. Her foot starts to jiggle with nervous energy.

It’s easy to imagine that foot kicking poor Paul Hsu out of her office—three times, to be exact. Hsu was the IT messenger assigned to tell Unger that her database could not be built. "With all the suppliers out there, you can’t tell me there isn’t someone who has tackled this problem," Unger recalls telling him. "Go figure it out. That’s what I’m paying you guys for."

After IT told Hsu to tell Unger no for the fourth time, he declined the assignment. Instead, Hsu called IBM and pleaded for help. "And that’s when they told him about the new database they were developing," Unger recalls.

Eighteen months later, they had the database installed. Instead of a handful of quality analysts looking at mountains of paper, the new database opened the information up to all of Chrysler’s engineers, as well as those at key suppliers. Quality problems were resolved 75 percent faster, according to Unger, with an overall cost reduction of 25 percent.

IT’s Ambassador

Unger had built a reputation for fixing problem financial processes and repairing bad relationships with business partners, but she had never fixed those problems with IT before. She thought fixing IT’s image might be her biggest challenge yet. So when the department’s top job opened up in 1993, she applied for and got it.

When Unger arrived, she became IT’s front end, its CRM system. In many of the areas where IT built systems—from the shop floor to the showroom—Unger had direct managerial experience, process knowledge and, perhaps most important, contacts. "You can’t underestimate the advantage of knowing people in the various organizations," says Valade. "So if you’ve worked inside the Jefferson plant, you can call the controller and supervisor and just talk to them because you know what their business issues are. You’ve been there. You realize how everything fits together. If someone calls up and says they need something in 24 hours, you know whether they really need it in 24 hours."

IT managers were in awe of Unger’s access. "They’d say, ’You mean we’re going to meet with so-and-so? We’ve never spoken with him before,’" she laughs.

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