Most reporting about the government's auto industry bailout describes highly conventional restructuring plans: limit executive pay, eliminate “golden parachute” severance packages, sell corporate jets, reduce debt, make wage and benefit cuts, close factories. Not surprising, given the stranglehold that old-school financial engineers have had on corporate strategy.
And as military historians point out – current generals are best prepared to fight the last war, or Harvard philosopher George Santayana: Those who cannot remember the past, are condemned to repeat it. As the New York Times reported after former President Bush announced the first round of auto company cash infusion: “a visibly relieved (GM head) Rick Wagoner added he had no plans to step aside: Do you think I would have gone through the past two months if I didn’t want to stay?” It is folly to hope current auto executives and their cost structure-obsessed management consultants will lead what’s truly needed: a market-focused revolution that catapults these dying companies into the new consumer markets era.
Outside-in transformation – fighting the new marketplace wars - happens only when an industry taps new thinking, fresh ideas, and courageous strategy. It means letting go of familiar levers - efficiency, scale, acquisition, discounting - in favor of more vigorous and defensible long-term advantage through differentiation.
It's time for marketing engineers to pick up where the number crunchers have failed.