When Bad Things Happen To Bad Strategies

Crafting (and especially implementing) good strategies in our chaotic, fast changing 21st century world of markets, networks and organizations is tough work. It’s why the folks who head organizations get paid the big bucks. Still, even a Forest Gump could glimpse this about strategy: somehow you’ve got to make sure that you direct your company’s resources and talent at providing customers what they need at a price that keeps your resources and talent in business. It’s a ‘both/and’ challenge — one of matching answers to internal questions (who are we and what do we need to be good at?) with responses to external questions (where’s this market headed and what does that tell us?).

As noted in a previous post, GM recently confirmed it would be firing 30,000 employees and shuttering a dozen auto plants. That’s 30,000 familes who will not see 2006 as a happy new year. I also noted that GM’s own press releases indicated the giant auto maker was investing in the flexibility to be more responsive to customer needs by putting itself in a position to create 15 entirely new cars/trucks each year — and then promptly announced they’d use this new found capability to produce ‘more than a dozen’ brand new versions of gas guzzling SUVs, large cars and large trucks.

Do the math. “More than a dozen” out of 15 leaves somewhere between zero to two alternative offerings to the marketplace.

30,000 employees and their families (and the local economies of where they live) have been put on the altar of GM’s future for this strategy.

So, here’s a couple of updates on GM’s strategy:

GM’s November sales were off nearly 8% from a year earlier — helping to drag US automakers’ total share of the US market down to historic lows. The Japanese, who have led in the production and sale of hybrids and other smaller vehicles, picked up most of the gain.

GM’s response?

First, to announce a ‘red tag’ sale in which buyers of it’s largest SUVs will get as much as $10,000 off the purchase price. Excuse me? Why is GM directing it’s new found flexibility for entirely new and different vehicles at producing new versions of SUVs that it’s got to put ‘red tags’ on in order to sell? Does that make sense to you?

Second, to shutter part of GM’s most famous auto plant — the Saturn plant in Spring Hill, Tennessee where, some decades ago, GM was going to re-invent the auto industry with a bet on small, quality cars made and sold differently.

As Gump says, “Stupid is as stupid does.”

Performance in our crazy world is helped through learning from others. Suggestion: Take a look at how your organization’s resources and talents line up against the evolving picture of customer needs. Then evaluate your efforts against a “NOT GM” scale. The better you do — the more your strategy is unlike GM’s — the better your organization’s future and performance is likely to be.

Posted by Doug Smith on December 2, 2005 12:39 PM | Permalink

Trackback Pings

Listed below are links to weblogs that reference When Bad Things Happen To Bad Strategies:

» The Stupidity of GM from ChristianSarkar.com
“Performance in our crazy world is helped through learning from others. Suggestion: Take a look at how your organization’s resources and talents line up against the evolving picture of customer needs. Then evaluate your efforts against a “NOT GM” scale… [Read More]

Tracked on December 3, 2005 07:56 AM

» Ford to GM: Me Too!! from Douglas K Smith
According to the Boston Globe, bad strategy and thinking inside the box catch up with Ford: “Ford Motor Co. is reportedly considering the elimination of 30,000 salaried jobs and the closing of 10 North American factories. The news follows colossal… [Read More]

Tracked on December 8, 2005 12:29 PM

Leave a Reply

Your email address will not be published. Required fields are marked *