GM must overhaul marketing

Today, a respected former auto colleague, Mike Jackson, wrote an article that was published in the Automotive News. I have attached it here because I could not have described Old Detroit better. Mike’s situation mimics my own at Chrysler. Granted, when I was at Chrysler I did not have the same level of leadership as Mike did at GM but I can tell you that when I arrived and Dieter Zetsche, Wolfgang Bernhardt, Jim Schroer, Jeff Bell, Ann Fandozzi and myself were asked to be part of the “change” movement, we felt very much the same way that Mike did when he arrived at GM. We had some great successes and even made money. Then, management shifts occurred and things went south in a hurry. Additionally, no one made the hard decisions necessary, at Chrysler or the other two Detroit OEMs to change the labor agreements, reduce capacity/shut down plants, reduce the dealer body so that they could be more competitive with Toyota and Honda instead of each other, and make vehicles that people really WANTED!

Mike’s recipe for success is spot on but I would add that the consumer needs to have even more of a voice than he suggests. I would say that with the socially connected world today there is no reason not to get feedback, real time from real consumers on everything from features, to incentives. The time has come for a “different kind of car company” and that means run by different people who understand that the OEM’s are NOT manufacturing companies, they are CONSUMER COMPANIES.

ARTICLE FROM AUTOMOTIVE NEWS:

Mike Jackson, former vice president of North American marketing and advertising at General Motors

Mike Jackson, former vice president of North American marketing and advertising at General Motors

Mike Jackson
Automotive News
June 8, 2009 – 12:01 am ET

If a new and vibrant General Motors is to emerge from the ashes of mismanagement and neglect, it must change its culture radically. The company intends to focus on developing vehicles that consumers want, but the new GM also must have a leaner, fresher, more focused way to market those vehicles.

Much has been written about what caused the demise of GM. Most accounts fail to acknowledge that the cancer that drove the company into bankruptcy lies within the culture created by the GM lifers in the U.S. sales and marketing organization. It is a culture so bureaucratic it stifles all passion and creativity.

At GM, there is a bias against outsiders, especially those without automotive experience. But to do what is needed, GM again must look outside the organization.

Ten years ago, I was brought into GM as part of a major reorganization led by Rick Wagoner and Ron Zarrella. Wagoner was a great leader with global experience committed to lead a new GM. Zarrella was a visionary marketer committed to making GM brands relevant to American consumers.

It was a strong team. Also recruited from outside were such executives as Paul Ballew, Roger Adams, CJ Fraleigh and Debra Kelly-Ennis. We were charged with revitalizing U.S. sales and marketing efforts.

Gaining momentum

At first things went well. We earned the respect of those in the organization who embraced the vision and yearned to create a different culture. Veteran leaders such as Bill Lovejoy, Kurt Ritter and Lynn Myers provided support, guidance and experience. Under Lovejoy’s leadership, there was passion and enthusiasm, and we seemed to be gaining momentum.

We were close to changing the culture and achieving outstanding business results. But when Lovejoy retired at the end of 2002, the GM lifers once again assumed control.

Immediately there was talk of returning to the good old days of a command-and-control culture in which a chosen few made every decision. Their tactics were simple: focus on getting dealers to take inventory and launch an incentive program every month. Programs such as Employee Pricing for All and Standards for Excellence infuriated the dealers and alienated consumers.

Eventually, many of us who were supposed to be agents of change got frustrated and left GM and the auto business.

Change the culture

That must not happen again. With the right changes in the organization and the culture, GM’s storied brands and great people can rise from the ash heap. Here are some things that ought to be done:

— Streamline the organization structure. Get rid of the cancerous GM lifers. The new GM must be nimble and evoke emotion and passion. Have the leaders of the divisional brand teams report directly to the office of the CEO, rather than through four layers as they have done.

— Hold sales and marketing leaders accountable for revenue and profit performance.

— Change the image of the company. For too long the image of GM — and the Detroit 3’s leaders — has been one of old white guys. Diversify marketing leadership teams to reflect the organization and the face of America in 2009.

— Target young, well educated, multicultural consumers who live in the smile states and don’t consider domestic brands. Build emotion into the marketing communications.

— Challenge American consumers by being inclusive and give them the cars and trucks that they want.

— Treat dealers, ad agencies, media companies and suppliers as partners, not vendors. The days of big, bad GM and the old our-way-or-the-highway attitude are over. The new GM must value and leverage its partners or replace them with partners who embody the new culture.

This is not as complicated as it might seem to those who worked at the old GM. President Barack Obama has provided a lifeline from the American taxpayer. The automotive task force is addressing the difficult and painful structural issues. The UAW and the dealers have made major concessions. American consumers have been patient and supportive. Now GM’s senior leaders must seize this opportunity to overhaul the culture once and for all.

With fresh leadership, a new GM will emerge and prosper.

8 comments

  1. This is an excellent article! Both you an Mike make keen observations based upon being on the inside. Front row to the freak show. Can GM and Chrysler pull it off – remains to be seen.

  2. Mike Jackson a respected colleague?

    He was basically fired from GM because he was more concerned about hanging out with celebrities and his “GM Style” event and schmoozing media titans, than he was about the hard, daily blocking and tackling that needed to be done. The man was lazy and didn’t want to get his hands dirty.

    Ron Zarella…almost drove GM into the ground with his naive approach to “Brand Management” whereby individual nameplates were brands, not the Divisional marques….that was a totally ill conceived idea put forth by John Smale and Ron was the enforcer. Let’s not forget how much Ron hated and ultimately alienated GM’s dealers, and falsified his resume with an MBA he never earned.

    Paul Ballew, Roger Adams, CJ Fraleigh and Debra Kelly-Ennis…none had the tenacity to stay through the tough times.

    Mike’s “prescription” is so full of “cliches”, not true actionable and realistic ideas. “Diversify marketing leadership teams to reflect the organization and the face of America in 2009″…what about all the women and multi-cultural GM team members already there?

    “Being inclusive and giving them the Cars and Trucks they really want?” Consumer Reports just named 7 of their top 10 models are GM. Malibu and CTS Cars of the Year, and on. What does “inclusive ” really mean…? Nothing it’s BS.

    “Get rid of GM’s cancerous lifers”….the best thing they did was get rid of a cancer named Mike Jackson.

    Finally Julie, when at DCX you, Jim, Jeff, et al were management….why didn’t you push for “the hard decisions necessary, at Chrysler or the other two Detroit OEMs to change the labor agreements, reduce capacity/shut down plants, reduce the dealer body so that they could be more competitive with Toyota and Honda instead of each other, and make vehicles that people really WANTED!”

    Your mentor Schroer had the stripes as EVP Sales & Marketing….his answer: Celine Dion. Brilliant!

  3. Thanks for your candid reply to this blog. I understand both your passion and your frustration, believe me, I felt them both while at Chrysler. I am not here to say that you don’t have some valid criticism or reason to question my support of some of these people and also of some of the ideas but without having been in my shoes, facing the day to day push back that is encountered in a company where marketing is NOT valued, its a bit unreasonable to suggest that the whole lot of us were a bunch of useless talking heads. Sometimes, you have to look past the press to see what was really going on inside. I can’t speak nearly as much to Mike or the GM crowd but I CAN speak to the Chrysler group.

    The fact that we were able to launch Grab Life by the Horns and develop and market cars like the 300C were ALL a testimony in no small part to the red-headed stepchild group of marketers finding a way to be successful. Even as you say, Jim Schroer, who fought until the end when he too was unable to win the battles and had to leave.

    I agree that the Detroit co’s need people that are not of the old ilk with old baggage. One of the blessings of being out on my own for these past 3 years has been the ability to get in the trenches in other industries and see just how much more successful we could be in Detroit. My hope is that the “new” GM will do that as will the new Chrysler. I would like nothing more than to see a vibrant US auto sector to compete with the imports, which will now include the Indian companies.

  4. Just read the article in Fast Company. I have to say, I greatly respect your fortitude and integrity.

    I think the business press did you a real disservice a few years ago. I think part of it must have been resentment: you know, too successful, too different, etc, etc.

    Kudos to you for bouncing back with your wits and family intact. I’m a partner in a small (but growing) Santa Monica agency. We run across new branding and marketing opportunities all the time –- perhaps one will come for which we can recommend Backslash Meta.

  5. Thanks Joel! I appreciate the comments. Its a small world and you never know how our paths may one day intersect.

    Appreciate the support. Best of luck to you as well!

  6. GM has a unique opportunity to revolutize the global car industry, much like Amazon.com is revolutionizing the global book industry.

    Through bold moves, especially related to how cars are designed, priced, and distributed, GM can not only take out costs. It can also, as you note Julie, co-create cars with consumers. That will mean cars which fit with what consumers in every demographic category want.

    Out of the loop will be those value-subtracing middle men such as dealers, public relations/advertising agencies, and other vestiges of a pre-digital economy.

    For the strategy and execution of this paradigm shift, GM or one of its global comptetitors need you Jule. I have a hunch your name is on plenty of short lists for full-time jobs or consulting assignments at the major auto players.

  7. hate to say it but GM will flounder with the mid-mgmt “lifers” still in place. the guys at the top are above the fray.

    the CRAP mid-mgmt suck the life out of every good idea come their way or steal it. thus, the doers and vendors get frustrated ‘mail it in’ at the RenCen.

    it’s tragic to see firsthand. i (from the tech not auto industry) was stunned to see how many folks call long meetings and get nothing accomplished.

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