Saving one of the world's biggest brands
GM. General Motors. Other than perhaps McDonald's and Coca-Cola, there probably isn't a better known brand in the world. But for the last 20 to 30 years GM has been making cars and trucks the people don't want. In the U.S., its marketshare has fallen from 49% to 19% and now it has filed for bankruptcy. Can this great iconic car brand be saved?
The answer is yes. Other car brands have suffered in the U.S. Audi, for instance, was almost destroyed 20 some years ago by evidence that it had chronic transmission problems causing the car to suddenly accelerate. The investigative TV show, "60 Minutes,"did a segment on it that was devastating.
But Audi took certain deliberate steps to rescue its good name. First it investigated the charges and, though the difficulty occurred in only a few cars, it up-engineered its transmissions and engines to insure that the problem wouldn't re-occur. Second, it conducted a careful, well-orchestrated PR and advertising campaign to re-assure Audi drivers that Audi was one of the best-engineered cars on the road. And finally it didn't give up.
It took years for Audito recover but today most car buyers don't even recall the kerfuffle. Audi receives one of the highest ratings by J.D. Power for car owner satisfaction. And Audi has continued to refine its engineering and develop new models that can give others in the luxury class, brands like BMW, Mercedes and Lexus,a run for their money.
GM must follow a similar route at the brand level. Cadillac, Chevrolet and GMC must protect their good names and dealer networks by building on the equities they already own. GM has to invest in R&D to assure that these marques will have access to the best new low-mileage, post-fossil fuel technologies. It must bring out new models that excite the marketplace. And at the holding company level, it must continue to re-assure the marketplace that it is capable of managing costs and tracking demand, so that it can become profitable again and repay the U.S. and Canadian government investments.
Damaged brands can be turned around and regain lost equity. IBM did it. Hewlett Packard and Xerox did it. Johnson & Johnson did it with Tylenol. But it is a tortuous process. Unless the new GM board and its management are committed to the long haul, they'd be better off collapsing the company. It will take anywhere from five to ten years for consumers to decide whether GM can be trusted again to make great cars. This will be one of the most exciting corporate brand rescues ever and it will be closely followed by the business school and consultant communities who teach and preach good governance. It all starts with remaking the GM culture that created the slide in the first place. Lou Gerstner called his best selling account of his turnaround of IBM, "Who Says Elephants Can't Dance?: Leading a Great Enterprise through Dramatic Change."
Can GM CEO Fritz Henderson make his elephant dance? Time will tell.
The answer is yes. Other car brands have suffered in the U.S. Audi, for instance, was almost destroyed 20 some years ago by evidence that it had chronic transmission problems causing the car to suddenly accelerate. The investigative TV show, "60 Minutes,"did a segment on it that was devastating.
But Audi took certain deliberate steps to rescue its good name. First it investigated the charges and, though the difficulty occurred in only a few cars, it up-engineered its transmissions and engines to insure that the problem wouldn't re-occur. Second, it conducted a careful, well-orchestrated PR and advertising campaign to re-assure Audi drivers that Audi was one of the best-engineered cars on the road. And finally it didn't give up.
It took years for Audito recover but today most car buyers don't even recall the kerfuffle. Audi receives one of the highest ratings by J.D. Power for car owner satisfaction. And Audi has continued to refine its engineering and develop new models that can give others in the luxury class, brands like BMW, Mercedes and Lexus,a run for their money.
GM must follow a similar route at the brand level. Cadillac, Chevrolet and GMC must protect their good names and dealer networks by building on the equities they already own. GM has to invest in R&D to assure that these marques will have access to the best new low-mileage, post-fossil fuel technologies. It must bring out new models that excite the marketplace. And at the holding company level, it must continue to re-assure the marketplace that it is capable of managing costs and tracking demand, so that it can become profitable again and repay the U.S. and Canadian government investments.
Damaged brands can be turned around and regain lost equity. IBM did it. Hewlett Packard and Xerox did it. Johnson & Johnson did it with Tylenol. But it is a tortuous process. Unless the new GM board and its management are committed to the long haul, they'd be better off collapsing the company. It will take anywhere from five to ten years for consumers to decide whether GM can be trusted again to make great cars. This will be one of the most exciting corporate brand rescues ever and it will be closely followed by the business school and consultant communities who teach and preach good governance. It all starts with remaking the GM culture that created the slide in the first place. Lou Gerstner called his best selling account of his turnaround of IBM, "Who Says Elephants Can't Dance?: Leading a Great Enterprise through Dramatic Change."
Can GM CEO Fritz Henderson make his elephant dance? Time will tell.
posted by Andrew at Compass Consulting at 8:16 AM
1 Comments:
Audi was one of the classic comebacks of all time. GM, on the other hand, is not just trying to overcome a defect in one of its cars but it's the poster child of all major companies that have brought down our economy. How do you make a comeback from that?
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