Now Reading: Car Guys vs. Bean Counters: The Battle for the Soul of American Business

Lutz Bob. Car Guys vs. Bean Counters: The Battle for the Soul of American Business. Portfolio Hardcover 2011.( link on amazon )

I have said many time that if someone in another industry is doing something a better way, I would like to know about it. The desire goes the other way as well, that if someone is doing something in a not better way, good to know about that as well, too.

The serendipity of the DC Public Library holding the wrong title for me (it was supposed to be a book on design thinking) caused me to spy this one instead. Since I have known Bob Lutz’ work through his very early blogging as an executive at GM, I wanted to check it out.

Lutz actually started blogging professionally around the same time I did, and I used him as an example many times. GM has since “retooled” the Fastlane blog, but thanks to the way back machine, I grabbed a screen shot of the blog the week I started blogging, around April, 2005.

This is a very entertaining read from the perspective of a person who has studied LEAN and the Toyota Management System. It has always seemed mysterious as to why American car companies could not duplicate Toyota’s success, given that they have access to the knowledge to replicate the system and in many cases have received hands-on instruction.

I’ve read several reviews of the book that touch on Lutz’ character/personality. I don’ know him so I’ll focus on what intrigued me. And I was intrigued!

Innovation: What works for toothpaste may not work for cars

I’m very curious about this because so much of the innovation literature focuses on consumer products, and I have internal misgivings about the applicability in other industries. Lutz brings those out into the open and amplifies them a few notches – comparing the cost of new vehicle development (millions – billions – the scope is astounding) to the cost of a new shampoo (thousands – hundreds of thousands).

A Designer is focused on pleasing the customer, not necessarily on positioning a brand

Lutz talks about the focus on “brand management,” which caused designs to be adherent to a series of checkboxes, and the role of “Vehicle Line Executives,” whose list of objectives included, cost, quality, warrant cost, etc., but not to create “the world’s most appealing sedan in the segment.”  Designs that went through this process often failed in “product clinics,” which compared prospective designs with the competition…yet still went to market, with disastrous results, predicted by the product clinics. He gives an example at Chrysler, that resulted in the creation of something the market never wanted – a convertible pickup truck.

More than process control and analytics

I have always felt/been taught that LEAN is not process control; it’s respect for the customer and those who serve them. At the same time, I have seen LEAN deployed as strict “process control” of as a series of kaizen events without the “r” = respect for the customer and those who serve them. I suspect that’s part of the answer to GM’s challenges, since Lutz points out that the GM production system extracted as much knowledge as was possible from its rivals and put it to use.

He broadens this to all of business, in answering the question of why the Virgin’s and the Apple’s of the world have succeeded:

The simple answer is: they have a blissful lack of awareness of the analytical science of business. Uninfected by the MBA virus, they simply strive to offer a better product, one that delights the customer….the focus is on the product or the service, thus, the customer.

Communicating openly in today’s world

The second major area for me in Lutz’ story is his emphasis on open, transparent leadership. His own social media history conveys his experience, and he eloquently replays the standard GM approach, which actually parallels a lot of what I still see in health care:

Instead of a welcoming, open “let me help you” attitude toward the press, there remains a level of shyness and caution, and unwillingness to grant the media access to senior leadership who, for the most part, consider it a waste of time and a distraction from their real job. Rick Wagoner was fond of saying, “All we need are good results, that’ll take care of everything.” But what if the positive engagement of the CEO and the top people drives results?

and

Many senior executives experience a sense of guilt about being “media personalities.” While such self-effacing modesty may be a commendable trait from a human standpoint, it is, in today’s world, wrong from a business perspective.

As usual I see many analogies to health care and I would substitute “physicians” for executives above, and “medical” for business. There is a spectrum of involvement that physicians can have in media and social media, starting with talking about what their results are, and listening for ways to make them better.

My conclusion

I ended up learning about design thinking, as I mistakenly found my way to this story on my journey to learn more about design thinking. As I understand it, this discipline focuses on listening to the customer and developing the solutions they want. It’s very compatible with LEAN, if LEAN is seen as a philosophical journey as much as a tactical one. As I see parts of health care work to adopt some of the innovations in other industries, we should learn the lessons of industries that are post-adoption-and-with-regrets, too.

If you are fascinated by cars and the car industry, you’ll also appreciate a lot of what happened behind the scenes during the 80’s and 90’s , too. Remember the Cadillac Cimarron? I do. Good to see some reflection on what went wrong there….

 

2 Replies to “Now Reading: Car Guys vs. Bean Counters: The Battle for the Soul of American Business”

  1. “The simple answer is: they have a blissful lack of awareness of the analytical science of business. Uninfected by the MBA virus, they simply strive to offer a better product, one that delights the customer….the focus is on the product or the service, thus, the customer.”

    Yeah, I was really with this review until I read that quote. I believe you might be paraphrasing the sentiment of the author. I am not sure I understand the phase-ology of MBA virus, but I am pretty sure that my initial reaction is to disagree…. Apple has done, is doing, will do many things that displeases customers. The company is in a favorable light now, and I also remember when most of my peers in Tech (including myself) weren’t interested in their products (think pre-BSD supported OS aka pre-OSX)… The critique at that time was you pay twice as much for half the technology and non-compelling software. Why not buy the lastest sony or toshiba and install linux instead?

    And while that basic critique still holds true today (especially at the singular hardware device level), a few critical things have aligned well for the company since that time.. They completed a B/D deal with Microsoft. Completed a tech refresh on open source OS (does an existing in-house enigneer actually make that call? I’d love to know – but its sure not your mom, aunt, grandma type customer they have in droves today). They simplified their product mix to an extreme in that their customers could organize themselves into a product segments very easily. Outsourced manufactoring – check. Globablization – check. Digital Distribution contracts secured to help prop up failing music/Book/tv/movie businesses – check. I mean really – Where would apple be without their iPOD moment and along with a few favorable studio deals where the execs were afraid of that Napster thing?

    They defined their products via the standards of fashion and tapped into customer’s psyche benefits. Their constant PR drive to “produce a show”, this semi-annual activity gave the appearance of innovation at first, until it was really really happening – across many types of easy- to- use (at least that’s what they tell us), inter-operable (while still priced at a premium) devices. Which is the last thing that completely captivates me about their journey:

    They had a strategy/vision about an Apple-PC centric driven, device enhanced Apple Branded experience and committed to it fully. All IN. And then he, Mr. Jobs, told us the vision attributes over and over and over and over again with each new product introduction. And they also were not afraid to let their actions speak louder than words. Missing a favorite type of port on your machine?- – Sorry, not part of our plan. Where is my floppy/ROM/CD disk? —Yeah, that not what we are about. Want to find drivers for remote back up devices from Frys? – -Are you sure you aren’t intersted in our Time Machine / Time Capsule enhancements? We don’t do flash! You want your mac mini to be a set top box (circa 2006)? Yeah, we may want to actually build an integrated TV for you in 2013, 14, 15, so NO! etc. etc.

    I am huge fan of Apple, but take more inspiration from their turn-around journey than bevealed edges of my macbook pro. And yet as I reflect on just of some of the critical milestones they have enjoyed in the past 10 years, I suspect they may have had a few MBAs help in the Product Marketing / Development, Finance, Branding, Business Development – Contracts – Partnerships, Strategy Articulation/Feedback, Globablization, international talent sourcing, Vendor / Supply Chain management tasks, etc, etc. that contributed to this company transformation.. Like all great artists, this company has pushed the boundaries of available technology (remember the iMac? Yikes. Cube? Double Yikes), inspired many to adapt their view of the world, and executes with fervent / focused attention to detail ( mostly their own I think?) . Its Apple’s world, we are just their customers, and along for the ride (well at least until Google hires more European Industrial Design rock stars). 😉

    1. Hi Chris,

      I think you’re right about Lutz’ sentiment – read a little about him and it all fits – I alluded to this at the top of the posts.

      Apple makes tons of mistakes as does GM. One company has incredible loyalty, one does not.

      I think everyone is necessary, maybe these companies are extremes of a spectrum, thanks for adding to the conversation,

      Ted

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