Posted tagged ‘GM’

Lesson 8: Rethink…and Rethink Again

April 17, 2009

Clearly, companies are beginning to use social networking in unprecedented ways.

The Wall Street Journal in its April 8th edition reported that the Ford Motor Company has “picked 100 young, Web-savvy drivers” to get behind the wheel of its new Fiesta for the next six months and report on what they think about this car on sites such as Twitter, YouTube and Flickr. Ford is giving them the use of the car and covering their gas and auto insurance costs – all in exchange for online reports of their involvement and experiences with the Fiesta.

One of the most interesting elements of this campaign is that while it will start later this month, the Fiesta will not be available for purchase for about a year!

Ford’s trying to create buzz and attract attention. They also want to reach a new, younger, sophisticated consumer. They selected the 100 participants from 4,000 video submissions. These submissions were graded based on how many followers the participants had, how many platforms they worked across and creativity, video skills and the ability to “hook the viewer” in the first 5 – 10 seconds.

Ford will have no control over the content or the posts. Talk about “driving without a net.” Ford views this as an acceptable risk since most consumers seek out Internet reviews before purchasing a car anyway.

But Ford is not alone in this effort.

Toyota is working to create an online community for its Scion. And in March 2008, before it received a government bailout, GM allocated $1.5 billion dollars to digital and one-to-one marketing.

Closer to home, Intel contacted my 16 year-old son last week. Much like the car companies, Intel is looking to leverage a less traditional form of opinion leaders. Eli writes a blog for teens on technology and Intel wants him to evaluate two computers for them. They’re looking to find out what the next generation of users like or dislike about computers.

It’s clearly a new world and such a new world requires that each of us step outside of our traditional ways of thinking.

And in the end, that may be the most interesting and greatest challenge of all.

Courageous Leadership? On the Line at GM

February 23, 2009

After a recent session that I presented on success measures, I was asked by one of the participants about the fiscal crisis plaguing our three major United States automakers, Ford, General Motors and Chrysler. The person was wondered why these three manufacturers, with all of the many intelligent and professional leaders in their employ, continued to build cars that the American public did not want to buy.

I responded by explaining that the automakers knew what they were doing and how their cars were being received.  In fact, the problems plaguing the car manufacturers were not one of knowledge but rather of courage.

Paul Ingrassia, Wall Street Journal writer and bureau chief, articulated this issue as it relates to GM beautifully in his Journal opinion column on February 19th.

According to Ingrassia, there are several issues that have created this predicament. Here are two.

(1)   The car manufacturers agreed to let auto workers retire with full pension and benefits after 30 years, This means that it is very conceivable for an employee to be paid for thirty plus years and not contribute to the end product. Couple this scenario with greater life spans and rising costs in health care and the cost structure take a painful hit. Add in the nation’s desire to have smaller cars with smaller price tags and competitive margins and the problem is exacerbated. One can only surmise that new and fresh ideas and the investment in R&D was limited because of these cost factors.

(2)   GM continued to keep two losing brands alive – Saab and Saturn – even though it was costing them money to do so. This was done because the company had spent $1.3 billion dollars to shut down its Oldsmobile brand in a way that allowed them to comply with state-dealer franchise laws.

Could this crisis have been averted? Very possibly but it would have required courageous leadership to take on the unions early on and absorb the short-term losses inherent with shutting down a failing brand early on.

Some weeks ago, we spoke about the concept of false kindness and the consequences of putting off uncomfortable decision s regarding staff. The car crisis today is yet another example of the need of leaders to be willing to do unpopular things, when they need to be done.


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