Well meaning promotion compromises GM product innovation…
Posted by steven_spear | Under Auto Industry, Business Strategy, Innovation, high velocity organizations, organizational learning, process excellence, toyota Thursday Mar 26, 2009NPR’s Frank Langfitt reports on GM’s program of providing new cars to several thousand executives with free gas, maintenance and trade ins as part of the package. Started decades ago, this program probably had the best of intentions behind it: Provide employees with an appreciated perk, have shiny new product out and about as rolling advertisements, and have a way to provide compensation–the value of which is greater to the recipient than it costs the company to provide.
The problem? It has to suppress the cycle of innovation and feedback essential to success in hyper competitive markets.
Why?
When rivals abound, companies depend on discovering market needs faster, developing products and services quicker, and creating delivery systems more rapidly and with greater certainty. What is the problem with this program? It takes key employees (lots of them) out of the sales experience, disconnects them from the service experience, and removes them from experiencing product reliability and long term problems. It is as if the company entered the competitive freeway with blinders on and ear plugs in.
The irony? What was probably once a well intentioned program has to have such negative unintended consequences.
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- MIT News 3 Questions with Steve Spear: Toyota Troubles–Pace of business growth and product and process complexity overwhelm learning and people development capacity
- Toyoda to Run Toyota–Stoking the Innovation Engine
- Would you buy a car from GM or Chrysler?
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