The Challenge facing GM

Earlier this week, GM launched a new TV commercial featuring Ed Whiteacre the new Chairman as its spokesperson.



In the commercial, Ed launches GM’s new 60 day satisfaction guarantee programme and makes reference to how he thought there were issues with GM too – before he joined the company.

If you go to the company’s website, the story is continued and you can read about how GM is reinventing itself.

But that’s where the problem lies. It doesn’t appear to be.

On the website, Chairman Whiteacre talks about how the first step on the road to revival is about “people taking pride in their jobs.” He spends a whole three minutes talking about how people at GM should be so lucky they have a job in these times and can put food on their table. He goes on to say that GM is a great company and has always had great products – it just wasn’t able to communicate that fact properly to the public.

The problem with GM’s response
It doesn’t address the key issue – the resentment American taxpayers feel towards the company for using its money to prop them up (67% of Americans oppose the bail out according to the Rasmussen Reports as featured on Liveleak.com June 2009).

It doesn’t acknowledge the fact that many people in America believe it was inept management and not economic circumstance that brought GM to bankruptcy.

It suggests GM will keep doing what it always has (after all according to Chairman Whiteacre the company makes great products it just hasn’t communicated that properly to the public).

Finally, GM’s response doesn’t detail a list of concrete steps that the company will undertake to ensure it never finds itself in the same mess again.

How GM should be responding
As a first step, the company should acknowledge its failure so it can move past it.

A simple commitment to developing a strategy that ensures it will never rely on public money again could do a lot to rebuild missing trust and credibility.

Once this is done, and the slate wiped clean, the company needs to develop a clear strategy for the future. It needs to define who it is, who it might be, what it will stand for and most importantly how it will compete.

In short, it needs to define its position and stance to the market.

The problem with GM today
It stands for so many things, it stands for nothing.

On the other hand, smaller but infinitely more vibrant competitive brands like Mercedes and BMW have adopted positions that are extremely distinct and have stayed focused to the concepts that have made them successful.

Mercedes for example is about engineering – it always has been; BMW – is about sheer driving pleasure. Both brands operate in the luxury car market which they have stayed resolutely focused on.

GM of course is a corporate brand. However, it still needs to find a position, one resonant with its audience and adopt it long term. More importantly, once this position has been adopted, it needs to create an enabling infrastructure that will allow the brand to live it.

Let’s say for example GM decides that its focus will be on making “the world’s best designed cars” (it’s not a goal that can’t be achieved – Apple did it in computers, portable music devices and phones). Its next step will be to look at its capabilities and figure out if they’re adequate or not to achieve the goal in question.

It’s at this time that the real work in activating the brand will begin. To ensure an enabling infrastructure in line with the vision, all aspects of GM’s operations will need to be reviewed – everything from people, process, partnerships, performance and more.

I’d be surprised if GM would not have to let go of a number of people to achieve a vision like the one above. It’s usually the case when a new direction for any business is set.

Therein the brand will face its biggest conundrum - and its solution – Government - could become its problem. That’s because the Government bailout was designed to keep people at GM in jobs. It wasn’t designed to make GM more efficient. So here we have a classic case of competing priorities – Government wants GM to improve but is unwittingly working against this happening. GM wants GM to improve but has to make this happen with one of its key sponsors (Government) constantly working against it (Governments do that – its part of their DNA)!

A classic challenge for a CEO
Not one that can’t be overcome, but definitely one that requires managerial skills of the highest kind.

Ever wondered why Ed Whiteacre is paid so much? It’s to solve problems like this one; problems where GM must align brand with business to achieve success. It’s a problem not unique to GM but all brands.

For GM, the battle for revival has only just begun. The company has a new CEO, they have the cash they need to make a fresh start, all they now need is a bit of impetus to gaze hard into their brand, their direction - and ensure it doesn’t take them where it did before!