What if Steve Jobs was GM’s CEO?
In the continuing General Motors saga, Thomas Friedman, author of The World Is Flat
Now, I don’t really know what Jobs would actually do. But interestingly, when he came back to Apple he made some great decisions, many of which were actually very “startup like”. I was working at Apple in the early 90′s and can attest to the fact that the place was in a world of hurt. ”Rumor” had it that at one point Apple was teetering on bankruptcy as well so the comparisons to GM are reasonable if not at least instructive.
To start, the Apple turn around is an amazing success story and Steve Jobs did a few startup things to get Apple back on track. They include:
- Focusing on people
- Leveraging Apple’s strengths
- “Keeping it simple, stupid” aka KISS
- Made a few key bets
Focusing on People
Soon after Jobs returned, he started rebuilding the team with some great Apple Alumni and also lots of new people. And he invested in keeping some of the great talent already there. By the way, he also got rid of lots of the non or under performers. Here are a couple of examples on the executive team.
Jonathan Ive joined Apple in the early 90′s. I had the pleasure of working with him on a few projects including one code named “Lindy” which became the Newton MessagePad 110. He (and others that get less limelight) are incredibly talented designers and deserve credit for giving Apple the distinctive look and feel of todays products -- iMac, ipod, iPhone, you name it. He is an example of retaining an incredibly talented person who has truly delivered in Apple’s turn around.
Steve also recruited new people that filled gaps and holes in the team. Some were alumni from Apple, such as Phil Schiller, and others were new such as Timothy Cook, now Apple’s Chief Operating Officer. Cook brought years of manufacturing and operating experience from IBM and Compaq’s hardware business. This is something that Apple desperately needed in order to re-invent its supply chain for the 21st century. There is a great article about Cook in Fortune if you are interested in learning more. Fortune is suggesting that he is the likely internal candidate to become the next CEO of Apple… But replacing founders and CEOs is a topic for a future post.
So if Steve Jobs were CEO, my guess is that he would first focus on people and figure out who is great and should be retained and who should be brought in, either GM alumni or other folks, to fill in needs and gaps. This includes who should be replaced within the existing leadership team. And he would push this process deep into the organization to go beyond the executive team and focus on the whole company.
Leveraging its Strengths
When Jobs became at first interim CEO and then full time CEO, Apple had its share of challenges and lacked many of the strengths it has today. It did not have an iPod, or an iPhone and its computers did not have the cache they have today. But Apple did have some strengths and Steve played to them. Interestingly, many of its strengths were what many people thought were its weaknesses. One key strength to start was simply that it was different and its loyal user base was graphic designers and non mainstream PC users. It was not a Windows PC. Apple strengthened then built off of that position. It did this both in advertising and then in its products. Remember its ad campaign, “Think Different”? Read the text of its introductory ad which reaches out to those who challenge the status quo and don’t like rules. This was all about leveraging its strengths in its core customer base.
A key startup trait is don’t try to be all things to all people. Leverage your strengths and dominate one area profitably. This is what Apple did to start. They went back to their roots and leveraged that strength.
If Jobs were CEO of GM, he would do the same thing. Leverage a key strength. Without knowing all the details, my guess is that Jobs would focus on strengths of a few key brands -- Cadillac for high end luxury sedans, GMC for the best trucks you can buy, Chevrolet for mainstream affordable cars and Corvette for sports cars. And then the question is what to do with the rest…
Keeping it simple, stupid (KISS)
One of the other things Jobs did was to simplify and GM needs to do the same thing. When he came back there were lots of Macs with lots of configurations and Apple was still funding Newton which was bleeding money. I promise more detail on Newton later… What he did was focus and keep things simple. Apple simplified its product line by focusing on the high end graphic designer and workstation market and also the education and home market with the launch of the iMac. And it killed Newton and the whole effort to have other companies manufacturing Macintosh clones.
GM needs to do the same thing and cancel or sell off a lot of the stuff that is not making money. Start by killing Buick and Pontiac as they are simply re-labeled cars from other brands. Kill Hummer as it was a nice fad car but not a long term profitable market. Sell off Saab. Shut down or sell off Saturn as allegedly it has never turned a profit even though it has a pretty good brand.
Get back to a core strength and dominating 1 or at best a few key markets. Downsizing will be tough as lots of people have something to say about it (see previous post about GM and the friction in its infrastructure) but if GM does not then it will simply continue on its decline and eventually go completely bankrupt since after the US Government, no one else will step in to help… Now if it did all this, then what would be next?
Make a few key bets
Once Jobs got Apple healthy again, he started making a few key bits though not all at once. They included launching its own direct sales channel -- both apple.com and the Apple stores. This was a big bet because it had relied on others to sell its products and now was going to compete. It then launched the iPod and as it famously delclared, “Hell Froze Over”, and had the iPod support Windows. (GASP!). Apple too had to think differently and by supporting Windows with iTunes, it greatly expanded their market for the iPod. That one decision not only made the iPod a success but got many people that had never purchased an Apple product to consider a Mac and has driven sales of the Mac too.
If Jobs were CEO of GM, after making sure it had the right people, leveraging its strengths, keeping things simple, he would likely bet on just a few things -- a break through new product such as the Chevy Volt and maybe a new distribution channel.
The Chevy Volt is an attempt to make an electric car that works with today’s electric and gas infrastructure and is affordable. You can read more about the Chevy Volt here. It has the potential to be the kind of breakthrough product GM needs.
With respect to sales and distribution, isn’t it about time that I can go online, configure the car I want, give my credit card for a deposit and have the price be $1000 over their manufacturing costs, and then have the car delivered to my garage?
And of course, I am sure if Steve Jobs was CEO of GM, the cars would have amazing industrial design and be a delight to both drive and simply admire. GM could use some pizzazz too.
I don’t know if this is what Steve would actually do, or if it would even work, but it is fun to dream. Isn’t it about time that GM started to think different? Very differently? Let me know what you think…
There are no shortage of opinions and perspectives on GM. I’m not an expert on the auto industry, but they clearly need an injection of new thought leadership. Their last comeback driven by SUV was to a large extent driven by tax credits (http://www.hybridcenter.org/hybrid-vs-hummer.html). It’s interesting that they seem to rely on Government assistance, whether tax incentives or financing, as a core strategy.
Ironically, the roots of the success of the auto industry are tied to Henry Ford, an extremelely a charismatic, innovative leader. The parallels to Steve Jobs and Apple are interesting. The Model T is a relevant analog to the Mac or ipod. Ford’s concept and implementation of the “living wage” also parallels the use of stock options as an incentive to knowledge workers in Silicon Valley. Alan Greenspan touches on both of these concepts in the Age of Turbulence, where he argues the living wage ushered in the age of the great middle class, and options driving the tech era.
Lee Iacoca was also a charismatic leader, who helped lead Chrysler out of their last round of trouble. He focused on developing a quality product at a reasonable price.
So, I guess my point is that I agree with your points about focus, KISS, leveraging strengths, and the “right people”. However, the later may be the most important, and almost certainly the place to start. As far as i can tell, it’s unlikely that Steve Jobs will ever be the CEO of GM. However, an innovative and charismatic leader would be the first step in getting the right people in place. Tax incentives may help as a temporary catalyst for a given product, but they don’t drive customer satisfaction or loyalty. Interestingly enough, Apple seems to figure those out about as well as anyone. That’s true leadership.
steve would either break the unions or they would break him. GM needs a “labor reboot”.
I believe GM first and foremost died on the CAFE standard absurdity which requires your total fleet average to be a certain number (and rising. Simplified, the Japanese can meet the average because they can build smaller cars cost-effectively in their non-unionized non-legacy-super-healthcare cost burdened factories. The foreign luxury car makers (Porsche, BMW etc) can afford to pay the CAFE penalty and pass it on to the US consumer.
What can GM do to meet the standard? NOTHING, so they are likely doomed for good. The VOLT, by the way, is considered even by the task force as not viable.
The ability of this country to follow proven wrong policies for decades amazes me time and again.