General Motors' CEO Rick Wagoner, had a rather whiny piece in the Wall Street Journal yesterday, blaming G.M.'s problems on, well, pretty much everybody except G.M.'s management.
I talked about this with a friend the other day. He's no foreign-car snob: He drives a Dodge Ram pickup. But he said that he'd had it with lousy G.M. products, and probably would never go back.
General Motors finds itself in the same position as Schlitz beer. Once a top brand, Schlitz gradually lowered the quality of its product, through a series of individually imperceptible cost-cutting moves, until one day consumers woke up and said, "This beer tastes lousy," and abandoned it. The brand has never recovered, despite a couple of campaigns aimed at telling consumers (in more polite terms), "Hey, we don't taste like watered-down horse pee anymore!"
Quality slippage is too common and I think it comes from the short-term thinking linked with mobile executives and stock options. If companies offered stock options that weren't redeemable for 10 years, you'd see a lot more long-term thinking. It would have to take a board of directors insisting on it.
1 comment:
I forget where I read it, but there's a story in some well-regarded business book of a restaurant owner who starting watering down his famous chowder in order to stretch the profits, and when his customers figured him out, they left and never came back. That has always stuck with me and serves as constant reminder not to let quality slip. There IS a substitute for quality - it's called someone else's product.
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