Trouble with GM

We all know the troubles the US automakers are having with the press. The LA Times sensational story General Motors moves to shed 1,100 dealers on May 16th was indicative of the problems within GM and with our press. GM’s woes are familiar to everyone by now. Billions in tax dollars spent to resurrect a mature company in a mature industry is generally not a good way to turn things around. Don’t get me wrong, the team at GM is industrious and committed to what they do. They also are encumbered and inhibited by the internal give and take that is indicative of all large organizations. We see this especially in the government, but it is visible in all large organizations. The bureaucracy takes over and has a life of its own. Executives cannot rise into positions of power without negotiating the bureaucracy and thus are shaped by it. GM Europe and GM North America have long been in an adversarial relationship and no one on the board or the executive team was willing or able to take on the challenges to bring the two organizations into alignment. Now that move is unnecessary as GM Europe will be spun off. The move to shed 1,100 dealers is too little too late. By not taking smaller but braver moves 5-10 years ago, the executives are taking the only options left open to them. In a maturing market, they did not start consolidating domestic dealers, and expanding overseas activities, but stayed the course right into bankruptcy. There are many books and business examples that the group could have leveraged, one of the most popular is If it Ain't Broke...Break It!: And Other Unconventional Wisdom for a Changing Business World all talk about how to initiate change and the need for reinvention within organizations. GM got comfortable and the people inside thought things would never change. Chrysler was the same except worse.

The lesson that we need to take from GM is the one Microsoft’s Bill Gates learned early on. All it takes is one new idea and if they aren’t the ones taking advantage of it then they will be out of business, and so will 1,100 dealerships. In order to avoid the same fate as GM, companies must listen to the dissenting opinions within the group. Though politically incorrect and sometimes annoying, they are also the group that brings the ideas and are willing to communicate through the clutter of platitudes and obscure language. Pay attention to the person who says we need to change how we do business, or “this doesn’t make sense”. Even if it is a training issue, the underlying cause could be an opportunity. The world admitted 4 billion additional players to the market in the last 15 years. India’s Tata now owns Jaguar and they are not encumbered by anti-trust legislation or regulatory reporting to anywhere the same degree as US companies. We have to be better, quicker, more adaptable, and much less comfortable, unless we want to be GM, a company of great people, wanting to do the right things, but not willing or maybe not able to look at the consequences of their actions.