Good Deeds

Pride and conceit often go before falls, and we’ve seen this at auto companies in the past, after all, in reviewing the careers of any number of exec’s – please place any of your favorites here – we know well that that the auto industry is historically an ego-driven business.  It is not that people running the business aren’t intelligent or accomplished, but they often try to help by imposing solutions on a very complex and varied industry, and end up as ineffective as some of the examples Mr. Zaslow mentions in his piece.

There were the people of Massachusetts-based Beyond Good Intentions who were going to aid a Peruvian village by building public toilets.  They ran out of money and time partly through the project, and they left gaping holes that had to be covered to prevent children from falling into the pits.  Villagers told the group that if they had been asked, they would have said they needed irrigation for their fields and repairs to the local bridge, so they could go to market and sell their goods.

In this country, in Chicago’s City Hall Green activists said they were going to save 50,000 gallons of water a year by installing new waterless urinals.  But without enough water per flush, copper pipes corroded and urine collected to the bathroom wall.  A stench permeated City Council chambers.  New, but regular, urinals are now installed.

These examples might be distasteful, and on a small scale, but they’re no different than “experts” parachuting in to business situations with preconceived, trendy notions and throwing out various babies with all the bath water.  GM and Chrysler dealerships that represented a competitive advantage in rural areas are a classic case in point.  Yes, the Detroit 3 were over-dealered, but not everywhere and in every case.  The directed result approach to supply chain management has been another case.  

It is trendy and simple to determine that costs can be cut by merely directing suppliers to reduce their prices.  It is certainly easier to simply inform suppliers of their new obligations than it is actually work to reduce costs systemically and share in discovered savings, enriching both parties.  


Let’s just take a moment to review the parlous situation of an automaker.  Auto companies cannot afford to set up their own distribution chains.  Even if they were once able to do so, laws in all 50 states have entrenched the dealer body.  Further, even in the days of vertical integration, OEMs needed a strong, profitable and robust supplier network.  That need is amplified these days, as OEMs are more assemblers than manufacturers and suppliers not only ship parts, but do the design, engineering and development work as well.  I’m amazed when I hear a buyer or purchasing representative talk about “commodities”.  

What, pray tell, is a fungible commodity in the automotive world?  Paint?  Tell that to PPG or BASF.  Tires?  Hardly, as Ford and Firestone found out.  Brake calipers?  How much is the paint and word “Brembo” worth?  We only need to go to today’s headlines and see how embattled Toyota to see that nearly anything on a vehicle these days is the result of exacting customer demands and resulting engineering specifications.  

Every OEM would be well served by not antagonizing the very entities they are dependent upon for their livelihood.  We’ve seen adversarial relationships with dealer bodies and suppliers by the Detroit 3, and only those who have reversed those courses have any remaining chance at survival.

As the Four Points that are at the beginning of this piece show, micromanaging these key relationships is not the way to go.  
 Problem statements are more helpful than imposed solutions.  
 The “recipients” of your wisdom might be better treated as sources of answers and insights.
 Brainstorming might yield more effective ideas.  
 And it is helpful to be so self-confident that you don’t have to impose your will onto others.

And, by the way, this “humble” approach might work in the other major stakeholder community, the OEM’s employees as well as the dealer and supply bases.

Back when Ford was tearing chunks of market share from GM in the late 1980’s, they had an excellent relationship with the UAW, based on the personal friendship Pete Pestillo had with the UAW’s Stephen Yokich.  That relationship helped pave the way for Ford’s quality initiatives and how “Quality” was made to be “Job #1”.  Chrysler, under Tom Stallkamp’s SCORE supplier savings sharing program, was propelled to profits sufficient to elicit M&A interest worldwide, including Daimler.  Of course, once these valued relationships either withered, as they did for Ford, or were forcibly cancelled, as they were when Daimler acquired Chrysler, the benefits dried up as well.

There are many keys in strategy.  One is to not lose sight of what made you successful.  Let’s call that lesson “Toyota”.  Another is to leverage the advantages and relationships you have.  What you think may be weaknesses – supplier costs, dealer agreements, employee skills and attitudes – might be hidden strengths.

There once was a boy born without a right arm.  He was bright and successful at school, but he wanted, like so many of us, to compete.  He settled on judo.  His parents told him he might try to look elsewhere, but he persisted.  Finally he signed up at the local tae kwan do dojo, and the instructor agreed to work with him.

The instructor trained the boy on one judo move.  He drilled the young man for months.  After a year and a half, the instructor entered the boy into a regional competition.  When it came time to compete, the boy won his first match.  He won the next, and the next, and wound up winning the entire tournament.  The boy was excited, but he knew of his limitations as well, and asked the instructor, “How was it that I was able to go all the way and win the entire tournament using only one move?’

The instructor told him, “Yes, I only taught you one move, but it is the most difficult move in the entire martial art.  It is so difficult and effective, the only way for an opponent to stop it is to grab your right arm.”

So often, what is thought to be a weakness is a hidden strength.