4.132009

gm is driving by looking in the rearview mirror

U.S. News & World Report’s interview with Susan Docherty, North American Vice President for General Motors provided some valuable insight into the troubled car company.  Her comments made it clear that GM is operating from a reactive, backward looking stance.

Here are 5 things she said and the problems they point to:

  1. “If [new CEO] Fritz [Henderson] says he’s giving a press conference, we all stop work and put on the TVs. Then we do a debrief and make sure everybody understands what the message is.” — So the Vice President of one of the company’s largest divisions is getting direction from her new CEO via the press conferences he gives?  It’s concerning that the information any CEO covers in press conferences would be new news to any companies’ employees — shouldn’t they be involved in crafting those announcements?  Not only should the people who are running the business be driving the strategy, but also they should be initiating news that is press conference-worthy in the first place. (n.b., I recognize there was probably a lot of confidentiality surrounding the leadership change, so it’s understandable that that announcement would have been a surprise — but Docherty’s comments seem to indicate this is a regular occurrence now.)
  2. After President Obama announced the company’s leadership change, “Fritz Henderson held his press conference, and he said that what we’ve provided is not good enough…Then right after that we launched Total Confidence.” (Total Confidence is GM’s version of the Hyundai Assurance program.) — So it took a shocking management shake-up to get the company to realize it needed a bold promotion like Total Confidence?  It seems the company should have introduced consumer confidence-building strategies and tactics back in November when it first went trolling for bailout money.  Also more wholesale changes have been needed for quite awhile now — but the company has waited to a breaking point to seriously considering them.
  3. “It’s too early to see if interest in our brands has dropped off completely from all the news…The buyer behavior data come out quarterly, and we don’t have the first quarter’s data yet.” So the company is relying on slow, standard methods to evaluate what’s going on with consumers?  As a reminder, the interview with Docherty took place on Friday, 04.10.09 — and she’s saying she doesn’t have data to gauge consumer reaction from January?!  In today’s environment, such a time lag is unacceptable.  The company needs to implement methods that allow it to keep its finger on the pulse of the consumer and to respond quickly to the learning from the research.
  4. “The real wake-up call for us was the Congressional hearings in December. It was very clear from the questions they asked, and also from the questions the press asked, that the perception of our company and our brands was at least a decade old.” So prior to the Congressional inquiry, the company didn’t have an accurate view of the public’s perceptions of its brands?  Like it would have been that hard to figure out.  A company like GM has to have on-going, in-depth brand tracking research that monitors consumer sentiment towards its brands, right?  So was their research wrong?  Or were they just not listening to what the research was telling them?   Or??
  5. “I had tickets for my husband and I to go the Final Four…on the day we were supposed to leave for the Final Four, we got a request from the team in Washington…I called my husband and said, ‘you need to find a friend to go with you.’” and “I was at the Detroit opera with my daughter and husband that Sunday afternoon [when former CEO Rick Wagoner resigned.]  And I looked at my daughter and my husband and said, ‘I have to go.’” So Docherty uses the stories of her sacrificing the Final Four and leaving the opera early to demonstrate how seriously she’s taking the company’s recovery plan and how emotionally impacted she’s been by the management changes.  Her comments seem to suggest that the company’s answers to the crisis are to ensure everyone understands how serious it is and to put in long hours to respond to requests from Washington.  Not quite the positive, proactive, productive stance the company needs to adopt.  (Also I must point out that any savvy media-trained leader should know to use an interview like this to talk about new innovation processes they’re developing or even ways they’re managing their teams through a leadership change — instead of relaying anecdotes about sacrificed personal luxuries that may be offensive to folks who are personally struggling to simply keep a roof over their heads.)

If I didn’t know any more about GM other than what was covered in this interview about how it’s “fighting for survival,” I would be skeptical about the company’s chances.  Docherty’s comments alone reveal some of the systemic changes that the company must address in order to survive, including:

  • robust, two-way internal communication
  • more proactive, forward-facing posture in developing turnaround strategies and programs
  • up-to-the minute metrics, including a system for monitoring brand perceptions and responding to issues

The problem is, I do know more — and it doesn’t assuage my concerns.

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  • This an awesome post about a tragic situation; I’d say they are worse than reactive, they are (as happened with the congressional hearings, I think) defending their previous and current behavior and looking for reasons not to change, articulating to us (and each other), even as the ship sinks, that they are in fact, right. Really sad.

  • Ah, where to begin with GM? I’m not sure they’re driving with an eye in the rear view mirror. Yes, they might be looking in the rear view mirror, but it appears they’ve been in “Park” for years now. Too many years of trying to avoid going in reverse maybe? Customers push changes in the marketplace much too quickly for that. It’s an interesting business story with deep roots in politics – and getting deeper by the week. If nothing else, the next month will be an interesting study of the dialgoue between debt holders, equity holders, politicians, and voters. I suppose it’s much too late to call a mulligan on this thing and start with a “do over?”