Why Change May Kill The Car Company

Notice I didn’t say “The Big 3″ or “GM.”  There’s a reason.

With change being one of the biggest factors in new purchases, even in these economic down times, as well as truly “new” and “innovative” products, I think the car company as we know it is dead.

If anything, the recent success of Toyota is more timing than anything.  The automotive development cycle takes years – what, five? six? – to come up with something new.  And in general, although there are “new models” every year, as far as true innovation, the same platform may exist for a decade or more.

Toyota was more fortunate than anything to be in the right place at the right time (I won’t take away credit from them for that, they deserve it).  However, they haven’t addressed – nor has any big 3 company – that market tastes have become more fickle across the board in all consumer-bought products.  The public wants innovation in almost everything they buy, and they want it now.

Seth Godin likes to say “The Factory is Dead” in his latest book, “Tribes.” He might be right in this country – and in order to succeed, the current structure of “manager says this – I do that” needs to end in order to speed up innovation.  The current union/company structure with a large dose of animosity just is failing completely (as evidenced by continuously declining market share), and it’s shown in what Americans continue to buy.  “Made in America” alone is not an applicable marketing angle in most areas of the country anymore; but stylish and hip are, even though many times people have been paying more for the “foreign” brand (many foreign cars are 50%+ US content now anyway, except for oddballs like the Audi).

The companies that are going to succeed in these tough times are the ones who are able to innovate and use varied strategies.  Kudos to Ford for bringing on Scott Monty to work in Social Media; and General Motors’ blog and other outreach programs have been decent, too.  However, as much as those guys are sharp, it’s more than just the marketing, the core culture has to change.  The first car company to crack the innovation problem and start doing truly new (or enough change to be perceived as new) models in two years or less when there is a demand shift is going to be the one who is going to be able to succeed and adapt accordingly to these whiplash shifts in market demand to have product ready.

I know it’s easy to say that, and more difficult to implement.  But that challenge should be taken up – I hear from auto folks a pervasive  “I can’t” and have for a long time, be it management or union employees.  That attitude is very destructive for any organization.

This is the same with a lot of other businesses, if not all.  Being nimble is very important; and you even can be if you’re a large company and work in teams that are small enough to collaborate.  We’re working with a company to unite their “tribe” so that there is a common sense of purpose as well as the ability for the different work groups to share their successes with eachother.  But the negatives of hierarchies need to be addressed at many companies in this region because no longer can you succeed with workers being a “cog” in the wheel; after all, what I’ve seen is most companies reliant on “cogs” send them to India or China because those cogs are cheaper and do the close enough to the same thing to make the cost savings way worth it.