Beyond Viability: Conceiving a GM strategic identity for the 21st Century

(c)2009 Joshua Davidson
by Joshua Davidson
Publisher, MyYearsWithGM.com and the GM Centennial AUDIOBOOK Edition of My Years with General Motors

VIABILITY IS ONLY THE FIRST STEP IN GENERAL MOTORS' EFFORT TO RETAIN ITS POSITION AS A LEADING AUTO MANUFACTURER. LONG-TERM SUCCESS DEMANDS A VISIONARY STRATEGY IMPLEMENTED THROUGH FORWARD-LOOKING POLICIES, WHICH TOGETHER WILL EXPRESS A 21st CENTURY STRATEGIC IDENTITY.

Most historical analysis concentrates on the mistakes GM has made since the 1970s, and attributes them to policies established in the 1920s. While those policies’ obsolescence did indeed fail to meet the dramatic changes that arose five decades after their conception, the fault lies preponderantly in the failure since 1958 to effectively act from established principles of policy creation and recreation – one element of a solid core of timeless enterprise principles originally developed by GM, and which endure as the framework for successful business around the world. Unquestionably, it is imperative to keep a spotlight on past mistakes and guard against their repetition. But focus on avoiding its past failures has also prevented GM from appreciating its own historical success, and obscures the philosophy from where that success originated. Indeed, the great value of GM’s history is less in ensuring vigilance against past mistakes than in illustrating the principles that fueled GM’s success through such volatile times as the Great Depression. General Motors is unique in having the history of its long success captured in Alfred Sloan’s universally admired memoir, My Years with General Motors. While the details of GM’s advance are fascinating as history, the true value of Sloan’s book to GM’s future is its crystallization of the techniques for creating a current culture of enterprise. In explaining how he and his colleagues approached General Motors’ emergence from its 1920 existential crisis, Sloan writes:

“Thus [we] took the opportunity that comes rarely in the initial stage of a business, to stand back and review aims and deal with the matters at hand, both in particular and with a considerable degree of generalization. It was not going to be easy to get willing agreement on specific and immediate issues … I believe it was for this reason that we first idealized the problem. We started not with the actual corporation but with a model of a corporation for which we said we would state policy standards.”

From that perspective evolved the strategies and policies that catapulted GM from a near-bankrupt also-ran in the 1920 automobile industry to its undisputed leader, characterized by these durable principles:

Rendering a service to the community of customers
- Escaping the “Transaction trap”
- Industrial efficiency serving individual expectations

Devising a concept of today's automobile industry
- Distinguishing GM from other manufacturers
- Approaching the market through value, not price

Creating event-proof policy
- Aligning efficiency with market demands
- Responding to circumstances, not acting on them

Consenting to creativity
- Mass-marketing the genius of Kettering and Earl
- Shaping dissent into initiative

In the current crucible, GM must appreciate that it is once again at that rare “initial stage of a business,” and that management is newly obliged to “stand back and review aims.” The Plan for Viability should properly focus on freeing GM from government support for its survival over the next several years. But for that plan to work even in the short-term, GM must project a long-term basis for succeeding in a new era, and in the face of changes yet to come.

Examining the strategies of the past for this purpose doesn’t portend their resurrection; looking through them as a lens into the conception, implementation and evolution of successful enterprise philosophy provides a singular resource in devising a 21st Century strategic identity that will propel General Motors in a new, lasting era of success.