Just thinking about something that came up in class today.
In my Latin III class, we've been talking about the rhetorical device called ekphrasis. That's a somewhat obscure method of using drama or narrative to tell the story of a picture or art work... and sometimes vice-versa.
So, the day before, I'd asked the students to write short stories demonstrating abundant use of ekphrasis. Today we read the stories.
And it wasn't the 'demonstration of abundant use of ekphrasis' that caught my greatest notice.
It was the fact that a third of the students had written short stories that in each of which had at some point slammed Toyota.
Really.
Afterwards we laughed about it and had a candid discussion and the majority of students came to the agreement that Toyotas were deathtraps.
Really.
And they readily shared this opinion of the car company on their blogs, on Facebook, et al.
Which got me thinking: could Toyota wind up being another casualty of the digital age? And not for any reason but that their tarnished reputation is the digitally-shared laughing-stock of the next generation of car buyers?
Showing posts with label Toyota. Show all posts
Showing posts with label Toyota. Show all posts
Wednesday, February 24, 2010
Saturday, February 13, 2010
The World's Most Respected Companies - Apple is #1
Show a Little Respect, Please..."In our (Barron's) sixth annual survey, money managers indicated the degree to which they respect—or don’t—the world’s 100 largest companies (by total market value as of Dec. 31, 2009). The most-respected companies tend to retain that distinction, though some of the least-respected names might surprise you."
Top 10 Most Respected companies in the world, according to Barron's, include:
Apple (NASDAQ: AAPL), Johnson & Johnson (NYSE: JNJ), Procter & Gamble (NYSE: PG), IBM (NYSE: IBM), Berkshire Hathaway, Toyota Motor (Japan), McDonald’s (NYSE: MCD), Google (NASDAQ: GOOG), Cisco Systems (NASDAQ: CSCO) and Amazon.com (NASDAQ: AMZN).
There were more than 50 global companies that are highly respected (outside the U.S.A.). These include:
Toyota Motor, Honda Motor, Nestlé, Novartis, Bayer, GlaxoSmithKline, InBev, Roche Holding, BHP Billiton, Siemens, BASF, SAP, Samsung Electronics, Unilever, BP, Daimler, Sanofi-Aventis, LVMH Moet Hennessy LV, Royal Dutch Shell, L’Oréal, Banco Santander, Suncor Energy, Statoil, Petroleo Brasileiro, Commonwealth Bank of Australia, AstraZeneca, Telefonica, Westpac Banking, Vodafone Group, Credit Suisse, HSBC Holdings, Total, Rio Tinto, Deutsche Telekom, Vale S.A., Allianz, China Mobile, E.ON, NTT DoCoMo, BG Group, BNP Paribas, Anglo American, Electricite de France, ENI, Mitsubishi UFJ Financial, Banco Bilbao Vizcaya, GDF Suez, Reliance Industries, ArcelorMittal, France Telecom, Industrial & Commerce Bank of China, UniCredit, British American Tobacco, CNOOC, China Construction Bank, UBS, Sberbank Rossia, Rosneft and Gazprom.
The Complete List of Top 100 Most Respected Companies:
’10 ’09 Company Mean-Score HighlyRespect Respect SomewhatRespect Don’tRespect1 4 Apple 4.22 67% 26% 4% 1%
2 1 Johnson & Johnson 4.07 59% 34% 6% 0%
3 3 Procter & Gamble 3.82 46% 47% 3% 1%
4 14 IBM 3.7 49% 37% 11% 1%
5 2 Berkshire Hathaway 3.69 54% 30% 11% 4%
6 8 Toyota Motor (Japan) 3.67 47% 33% 13% 1%
7 7 McDonald’s 3.67 41% 43% 10% 0%
8 23 Google 3.66 50% 34% 14% 1%
9 10 Cisco Systems 3.65 43% 39% 10% 1%
10 NR Amazon.com 3.55 40% 43% 9% 3%
11 NR Honda Motor (Japan) 3.52 36% 39% 13% 0%
12 5 Wal-Mart Stores 3.49 41% 41% 17% 0%
13 9 Coca-Cola 3.48 31% 54% 9% 0%
14 16 Intel 3.48 31% 56% 9% 0%
15 13 3M 3.48 33% 54% 7% 1%
16 19 Nestlé (Switzerland) 3.44 29% 53% 9% 0%
17 12 PepsiCo 3.43 31% 50% 11% 0%
18 6 Exxon Mobil 3.43 37% 50% 10% 3%
19 11 United Parcel Service 3.39 31% 50% 13% 0%
20 20 Walt Disney 3.29 29% 56% 11% 1%
21 26 JPMorgan Chase 3.26 39% 36% 20% 3%
22 22 Microsoft 3.26 36% 44% 14% 4%
23 24 United Technologies 3.25 29% 46% 17% 0%
24 15 Abbott Laboratories 3.25 27% 50% 16% 0%
25 17 Hewlett-Packard 3.18 29% 46% 17% 1%
26 27 Schlumberger 3.09 29% 43% 21% 1%
27 30 Novartis (Switzerland) 2.9 20% 46% 19% 3%
28 53 Qualcomm 2.81 17% 46% 26% 0%
29 25 Amgen 2.78 20% 44% 24% 3%
30 NR Goldman Sachs 2.76 39% 24% 19% 16%
31 45 Bayer (Germany) 2.69 14% 44% 24% 1%
32 42 Visa 2.69 19% 44% 27% 3%
33 32 Merck 2.64 16% 50% 27% 3%
34 NR Royal Bank of Canada 2.58 14% 43% 30% 1%
35 31 Chevron 2.55 14% 49% 27% 4%
36 38 GlaxoSmithKline (U.K.) 2.53 6% 56% 23% 1%
37 NR Anheuser-Busch InBev (Belgium) 2.48 17% 29% 36% 1%
38 41 Roche Holding (Switzerland) 2.47 11% 43% 29% 3%
39 39 Oracle 2.39 11% 49% 29% 6%
40 51 BHP Billiton (Australia) 2.39 10% 37% 31% 1%
41 64 Siemens (Germany) 2.38 6% 50% 23% 4%
42 NR BASF (Germany) 2.36 6% 49% 27% 3%
43 54 SAP (Germany) 2.34 13% 34% 31% 4%
44 48 Samsung Electronics (S. Korea) 2.33 9% 44% 29% 4%
45 35 Unilever (Netherlands) 2.33 10% 37% 31% 3%
46 28 ConocoPhillips 2.32 10% 40% 37% 1%
47 62 BP (U.K.) 2.28 7% 46% 37% 1%
48 NR Daimler (Germany) 2.28 16% 26% 37% 4%
49 21 Wells Fargo 2.24 11% 43% 37% 6%
50 67 Sanofi-Aventis (France) 2.13 4% 44% 33% 4%
51 47 Verizon Communications 2.1 10% 43% 33% 10%
52 NR LVMH Moet Hennessy LV (France) 2.05 3% 41% 33% 4%
53 61 Royal Dutch Shell (U.K.) 2 6% 34% 43% 3%
54 55 Pfizer 1.99 9% 40% 37% 10%
55 75 L’Oréal (France) 1.98 7% 33% 39% 6%
56 77 Banco Santander (Spain) 1.97 9% 33% 40% 7%
57 NR Suncor Energy (Canada) 1.97 9% 26% 46% 3%
58 66 Statoil (Norway) 1.95 3% 36% 36% 4%
59 57 Petroleo Brasileiro (Brazil) 1.93 6% 34% 40% 6%
60 NR Commonwealth Bank of Aus. (Australia) 1.93 1% 39% 36% 4%
61 52 AstraZeneca (U.K.) 1.9 3% 37% 37% 6%
62 60 Occidental Petroleum 1.89 9% 29% 43% 7%
63 59 Telefonica (Spain) 1.85 3% 31% 49% 1%
64 NR Westpac Banking (Australia) 1.82 3% 31% 41% 4%
65 70 Vodafone Group (U.K.) 1.8 1% 36% 44% 4%
66 NR Credit Suisse (Switzerland) 1.77 7% 27% 47% 7%
67 63 HSBC Holdings (U.K.) 1.75 9% 24% 51% 7%
68 65 Total (France) 1.73 4% 30% 44% 7%
69 56 Philip Morris Intl. 1.72 11% 26% 33% 17%
70 NR Rio Tinto (U.K.) 1.71 3% 30% 46% 6%
71 78 Deutsche Telekom (Germany) 1.7 3% 30% 41% 7%
72 NR Vale S.A. (Brazil) 1.68 3% 24% 50% 3%
73 83 Allianz (Germany) 1.67 3% 27% 46% 6%
74 43 General Electric 1.64 11% 29% 39% 20%
75 68 China Mobile (China) 1.58 4% 27% 41% 11%
76 73 E.ON (Germany) 1.56 1% 23% 49% 4%
77 80 NTT DoCoMo (Japan) 1.55 1% 24% 47% 6%
78 NR BG Group (U.K.)* 1.54 3% 20% 46% 6%
79 NR BNP Paribas (France) 1.52 3% 24% 40% 10%
80 NR Anglo American (U.K.) 1.48 0% 21% 53% 3%
81 91 Electricite de France (France) 1.43 0% 20% 57% 3%
82 87 ENI (Italy) 1.41 0% 21% 50% 6%
83 82 Mitsubishi UFJ Financial (Japan) 1.39 0% 24% 49% 9%
84 58 AT&T 1.38 4% 26% 51% 16%
85 88 Banco Bilbao Vizcaya (Spain) 1.36 1% 19% 51% 7%
86 94 GDF Suez (France) 1.33 1% 21% 43% 11%
87 92 Reliance Inds. (India) 1.29 0% 20% 51% 9%
88 NR ArcelorMittal (France) 1.21 0% 20% 49% 11%
89 90 France Telecom (France) 1.18 1% 14% 56% 10%
90 96 Indust. & Commer. Bank of China (China) 1.11 0% 21% 37% 17%
91 NR UniCredit (Italy) 1.11 0% 11% 59% 7%
92 89 British Amer. Tobacco (U.K.) 1.11 3% 17% 41% 19%
93 98 Bank of America 1.06 6% 19% 44% 27%
94 93 CNOOC (China) 1.04 3% 14% 44% 19%
95 97 China Construction Bank (China) 1 0% 19% 44% 19%
96 99 UBS (Switzerland) 0.93 4% 16% 39% 27%
97 NR Sberbank Rossia (Russia) 0.4 0% 6% 41% 29%
98 NR Rosneft (Russia) 0.32 0% 7% 36% 33%
99 100 Gazprom (Russia) 0.07 0% 4% 36% 43%
100 NR Citigroup -0.21 0% 4% 30% 63%
NR=Not Ranked.
Source: Barron's
"John Cregan, veteran money manager at Hotchkiss Associates, a unit of United Capital Financial Advisers, says he admires Apple because the company "is at the top of the list of seeing around corners. They aren't out there trying to find out what their customers want, but saying rather, 'Look at this advancement in technology. It enables us to do this. You might not want it yet or know what to do with it, but you will want it and we are going to build it."
Learn about Apple's innovation strategy... How does Apple innovate, and what makes it the #1 innovative company in the world? Learn more...
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
References:
Barron's: http://online.barrons.com/article/SB126601896024845345.html
Tuesday, May 5, 2009
How do we know we have a good idea?
I was reading the new book by Bas Vodde and Craig Larman recently. Recommended.
In the beginning of the book, they give lots of ideas about "how to think". At first, I found this curious, although the suggestions were very good.
Only today did I connect it to what I think is our biggest problem.
This is how Yogi Berra (and Nancy V) put it:
"In theory there is no difference between theory and practice. In practice, there is?"
Or -- how do we know any idea is really any good?
We could assume, but as we know, that can have bad consequences.
In other words. In my mind, my ideas (and your's and your's) are always perfect. But only in reality do we find out they are always less than perfect.
So, how do we discover the stupidness in every idea? More quickly.
So, this applies each Sprint.
And this applies in changing from waterfall to Scrum. (Yes, Virginia, even Scrum will be a little rough around the edges when applied in real life.)
So, Vodde and Larman, at a high level, are helping you discover all the stupid "truths" you currently think are right. And helping give you a means to gently convince others that their strongly held truths are just plain wrong.
A respected colleagues says: Assume half of what you "know" is wrong. Seems good advice.
I think: There will never come a day when we are finished rooting out stupidity. In ourselves (so be a bit compassionate), in any one person, and certainly in the whole team and the larger firm culture. Toyota has gone further: they are rooting out stupidity in the flow of value from one firm to another.
Taiichi Ohno started implementing Lean at Toyota in the 1940's. He was not finished when he retired in the 1980's. I am thinking with Agile, while we can be a bit impatient, we also need to take a longer view. But maybe I'm wrong.
In the beginning of the book, they give lots of ideas about "how to think". At first, I found this curious, although the suggestions were very good.
Only today did I connect it to what I think is our biggest problem.
This is how Yogi Berra (and Nancy V) put it:
"In theory there is no difference between theory and practice. In practice, there is?"
Or -- how do we know any idea is really any good?
We could assume, but as we know, that can have bad consequences.
In other words. In my mind, my ideas (and your's and your's) are always perfect. But only in reality do we find out they are always less than perfect.
So, how do we discover the stupidness in every idea? More quickly.
So, this applies each Sprint.
And this applies in changing from waterfall to Scrum. (Yes, Virginia, even Scrum will be a little rough around the edges when applied in real life.)
So, Vodde and Larman, at a high level, are helping you discover all the stupid "truths" you currently think are right. And helping give you a means to gently convince others that their strongly held truths are just plain wrong.
A respected colleagues says: Assume half of what you "know" is wrong. Seems good advice.
I think: There will never come a day when we are finished rooting out stupidity. In ourselves (so be a bit compassionate), in any one person, and certainly in the whole team and the larger firm culture. Toyota has gone further: they are rooting out stupidity in the flow of value from one firm to another.
Taiichi Ohno started implementing Lean at Toyota in the 1940's. He was not finished when he retired in the 1980's. I am thinking with Agile, while we can be a bit impatient, we also need to take a longer view. But maybe I'm wrong.
Saturday, March 14, 2009
How can GM turnaround the business? Is Innovation the answer?
General Motors - GM - was ranked a top 20 innovative company in the world according to the BCG - Business Week 2008 survey. In early 2008, everyone was bullish about GM's future. However, in just over a year since this review was published, the big question on everyone's mind today is: "Can GM survive?" If you answer this question with YEA, then you ask the next question: "How can GM turnaround?" General Motors is really close to going bankrupt. Were it not for the federal loan in late 2008 to the tune of a whopping $13.4 billion, GM would have bellied up by now.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
And to make matters worse, GM made this announcement on Friday, March 13, 2009:
"General Motors dealers in the United States delivered 127,296 vehicles in February, down 52.9 percent compared with a year ago, driven by a 75 percent reduction in fleet sales." On surface, this is a recipe for bankruptcy! When sales go down more than 50% year over year, you better have enough cash to survive, or get ready for a fire sale.
How can GM turnaround in 2010 and beyond?
GM emerged out of bankruptcy courts in 2009, reestablished as a new company in July 2009, and began turning around its business in 2010. GM went IPO again in November 2010, and it was the world's largest IPO. On February 24, 2011, General Motors reported its first full-year profit since 2004. Equally amazing is this fact: The automaker suffered $103.7 billion in losses from 2005 through 2009 (not sure if any other company can match these staggering losses). GM avoids paying taxes on the $4.7 billion it earned in 2010, and on future profits for years to come, because of a favorable government ruling in 2010 on previous losses. The Wall Street Journal estimated the tax break, including credits for costs related to pensions and other expenses, can be worth as much as $45 billion over the next 20 years.
Household nameplates such as Pontiac, Saturn, Hummer, and service brands like Goodwrench were discontinued. Others, like Saab, were sold. Daewoo brand in South Korea has been replaced with Chevrolet.
GM recently introduced the all new Chevrolet Volt, or Chevy Volt, the marquee plug-in electric car that makes GM a real innovator. The Chevrolet Volt is an electric vehicle with back-up generators, powered by gasoline. The production Chevrolet Volt was available in late 2010 as a 2011 model with limited availability. GM delivered the first Volt during December 2010. Volt may perhaps become the best-selling GM car. Even if Volt does not become a best seller, Volt will provide GM an innovative edge in the auto industry that will have a huge halo effect. Of course, GM needs to make sure that Volt is a profitable brand from day one. Volt gives GM a new launchpad for plug-in vehicles. Volt looks great on the street, and I am looking forward to my first test drive.
GM Turnaround is for real... And Kudos to GM management for making this happen!
Originally published March 2009
Updated April 2011
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
And to make matters worse, GM made this announcement on Friday, March 13, 2009:
General Motors Corporation Recalls More Than 276,000 Vehicles For Gear Fix
"Reuters reported that General Motors Corporation is recalling 276,729 passenger vehicles to correct a problem in certain cars that could cause them to roll when parked, the U.S. government said. The National Highway Traffic Safety Administration (NHTSA) said in a recall notice that a suspected flaw in the transmission cable system may not allow gears to fully engage when the vehicle shifter shows the driver that car is in 'park.' The vehicle could roll away after the driver has exited, NHTSA said in its notice. The 2009 Models affected include the Chevrolet Cobalt, HHR, Malibu, Traverse and the GMC Acadia, Pontiac G5, G6 and the Saturn Aura and Outlook."
On a positive note, GM reported 127,296 Deliveries In February. Is that positive?
But there is a positive - a faint light at the end of the tunnel: "GM's car sales compared with January were up nearly 23 percent, and crossover sales increased 6 percent, as financing availability continued to improve and slightly more fleet orders were able to be filled."
The biggest problem facing GM today though is: The Cash Burn. GM's operating costs are very high, and unless GM finds a meaningful way to bring these costs down, it will need another cash infusion from the government - very soon! Or file for bankruptcy, and push the time-table for turnaround back by a few years. Or, GM has to find new ways to sell lots of cars at very high profits - but in this recession and tough economy, this may be a very steep uphill climb. So, we go back to the central question: What can GM do in order to survive in 2009, and then plan forward for a possible turnaround in 2010 and beyond?
First things First: A matter of survival
In order to survive 2009, GM must first clean out the closet!
Let's say, as a dual-income working family, you are planning your monthly budget:
Husband's salary = 47.5% of total
+ Wife's salary = 47.5% of total
+ Interest income from savings = 5% of total
--------------------------------
Total Income = 100%
Your Total Expenses are typically divided into Fixed, Discretionary and Unplanned Expenses.
Fixed Expenses would include home mortgages or home rentals, car payments, insurance, utilities, groceries, taxes, gas, etc.
Discretionary expenses would include shopping, eating out, travelling, movies, education, buying a new car, etc.
Unplanned expenses would include emergencies, healthcare, legal, something breaks down, etc.
In general Total Income should be at least equal to Total Expenses for you to live comfortably. It is recommended though that Total Income should be at least 20% higher than Total Expenses for you to save for the future, and build out a nest egg. In tough economic times such as what we are facing today, families reduce their Discretionary Expenses considerably including buying a new car to alleviate for a lost or reduced salary (or fear of losing a job), and hope that they do not get burdened by Unplanned expenses.
What does this have to do with GM?
In the case of GM, on the one hand, it is losing revenue (salary) owing to reduced sales of its automobiles by more than 50% year over year (in part, due to reduced Discretionary Expenses by consumers, in large part due to non-competitive product mix), but it is also suffering from high fixed costs (expenses) owing to very large manufacturing workforce, higher pension and union costs, and many non-performing divisions.
Let us look under the hood ->
GM Revenue has been declining rapidly since reaching a peak in 2006. From over $200 billion in 2006, total sales are down to under $150 billion in 2008. A decline of over 25% in total revenue. And 2009 promises a potential 50% decline from 2008 revenue (unless we see some turnaround in second half), so this could mean total revenue in the neighborhood of $75 billion for all of 2009.
GM Gross Profits have been been falling even faster since 2006. The slide in Gross Profits is even steeper than the fall in revenue, and this shows management misdirection. While the revenue was falling, GM management did not take adequate measures in 2007 to reduce the operating costs. And the climbing operating costs suddenly became a huge burden in 2008.
GM Gross Margins are in low single digits, and shrinking further. This is another way to look at how well GM is operating - or Not! Lower sales and higher operating costs are a recipe for huge losses! And this is exactly what happened at GM. The margins were constantly pressured not only due to lower sales and high operating costs, but also owing to increased competition on key market segments, and forced reduction in prices on major GM brands.
Resulting in huge operating losses for GM in 2008. Losses are accelerating further in 2009 owing to higher operating costs (GM has still kept many of the plants open), non-performing assets, higher salaries and retirement provisions, 50% reduction in sales, increased competition from brands with superior, innovative products, and lack of innovative products launching in 2009.
How can GM turnaround in 2010 and beyond?
If GM were to survive 2009 (most possibly with another government aid), GM first has to cut back massively - every non-performing division, every loss-making operation has to be cut. These are hard decisions. But there is no reason to continue making automobiles that lose money even before they are shipped! GM knows today what cars make money, and what cars don't. Start with every car that does not make money, and scale back everything with that car. This also means that for the cars that are making money today, it may make sense to invest further in these initiatives. This should give GM some breathing room in 2009.
Next, GM must innovate! GM has to go back to the drawing board. After all, this is the company that made automobiles mainstream using the assembly line. Incidentally, Toyota surpassed GM as the world's largest maker of automobiles in 2008. Toyota is facing major challenges as well owing to the current economy, and may post its first annual loss in over 50 years in 2009. Just look at how GM compares versus Toyota in 2008.
However, Toyota's total revenue exceeded GM's by about 50% in calendar year 2008.
And Toyota remained profitable in calendar year 2008 as well, albeit considerably less than its 2007 profits.
But the key difference is Gross Margins - Toyota maintained double-digit gross margins in all of 2008. This is huge considering that GM's gross margins shrunk to low single digits, while Toyota had closer to 14%. This means Toyota runs it operations with considerably less expense than does GM. Call it Toyota's operational and innovation excellence, or GM's management hibernation, Toyota delivered vehicles that mattered to consumers. And consumers bought a lot of hybrids in all of 2007 and 2008.
Finally, GM's return on equity investment (stock performance) vis-a-vis Dow Jones (of which GM is a component) and Toyota Motors is terrible.
But the key difference is Gross Margins - Toyota maintained double-digit gross margins in all of 2008. This is huge considering that GM's gross margins shrunk to low single digits, while Toyota had closer to 14%. This means Toyota runs it operations with considerably less expense than does GM. Call it Toyota's operational and innovation excellence, or GM's management hibernation, Toyota delivered vehicles that mattered to consumers. And consumers bought a lot of hybrids in all of 2007 and 2008.
Finally, GM's return on equity investment (stock performance) vis-a-vis Dow Jones (of which GM is a component) and Toyota Motors is terrible.
GM's Turnaround Plan
If GM were to turnaround its business in 2010 and beyond, it has to be grounded on business innovation. Open innovation driven by excellence in products, creativity in design, change in business model and streamlined operations. Process Innovation driven by change and leadership.
GM gave up the leadership position it once enjoyed to the likes of Toyota, Honda, BMW, Nissan, Volkswagen, Ford, Tata, and even Hyundai. How does GM become a leader again? It is going to be hard for GM to be many things to many people in 2010 and beyond. It simply does not have the fire power to create so many products. So, GM must compete on its own turf in specific markets. GM must first take the markets where it is profiting today. If Chevrolet Malibu is performing well, GM must go all out, and conquer this segment of the market outright. Easier said than done, but GM must out-market the competition in this segment, and do so profitably. A fine line indeed.
GM must find similar brands that are winning with today's consumer. What are these car brands? And GM must invest smartly in these brands. This is where GM has to invest for the future. GM must not focus on hitting a home run with the Chevy Volt in 2010 and beyond. What if GM fails in this venture? Chevy Volt cannot be the "save all" of GM strategy. Rather, GM must innovate with the brands that are making money today, and invest in a meaningful manner with these brands. GM knows it is very hard to build a brand, and much harder to create winning models. As for divesting brands, now is the time. Every non-profitable brand must go. This could mean closing down operations outright for all loss making divisions.
GM must make products that matter to today's consumer. This means taking a page out of Apple's innovation strategy: Make cool cutting-edge advanced technology products that sticks, create the cool marketing and cool brand that resonates with young buyers, provide excellent customer service and experience that matters, capture the emerging landscape of demand and trends such as hybrids and alternative energy, and execute! GM has to capture the imagination of the young buyer in the twenties and thirties. GM has to be appealing and sexy to these buyers. GM has to become a brand that is fresh and modern.
GM Dealership Experience
I visited the local Power Chevrolet GM dealership in Irvine, Orange County along with my son to check out the latest Chevy Malibu. Whereas the car salesman was great to talk with, and eventually helped us with a test drive of the Chevy Malibu LT2 (in between, he began helping a new customer), the manager of the dealership was not as friendly. I wanted to test drive the Chevy Malibu LTZ that had full leather seating and offered the highest performance. However, this particular Chevy LTZ was located inside the showroom. The car salesman asked the manager to check if he can take the car out of the showroom for me to test drive. To which, the manager replied: "Why don't you find something similar from the lot outside?" And there was not any LTZ in the lot. So, I ended up driving the LT2 instead. LT2 is no LTZ. I did enjoy the spacious interior, and the LT2 gave a spirited ride. The acceleration was spotty, and the engine sound was noticeable as I stepped on the pedal. The car was also running on empty gas, so I had to cut short the test drive. I think Chevy Malibu offers a good value, and I am going to hold my judgment until I test drive the LTZ (hopefully, second time will be a charm).
Where would be GM in 2011 and beyond? I for one will be watching as GM's management tries to steer it out of a shipwreck for a safe landing.
GM in 2011 - Mother of all turnarounds!
GM in 2011 - Mother of all turnarounds!
GM emerged out of bankruptcy courts in 2009, reestablished as a new company in July 2009, and began turning around its business in 2010. GM went IPO again in November 2010, and it was the world's largest IPO. On February 24, 2011, General Motors reported its first full-year profit since 2004. Equally amazing is this fact: The automaker suffered $103.7 billion in losses from 2005 through 2009 (not sure if any other company can match these staggering losses). GM avoids paying taxes on the $4.7 billion it earned in 2010, and on future profits for years to come, because of a favorable government ruling in 2010 on previous losses. The Wall Street Journal estimated the tax break, including credits for costs related to pensions and other expenses, can be worth as much as $45 billion over the next 20 years.
Household nameplates such as Pontiac, Saturn, Hummer, and service brands like Goodwrench were discontinued. Others, like Saab, were sold. Daewoo brand in South Korea has been replaced with Chevrolet.
GM Turnaround is for real... And Kudos to GM management for making this happen!
Originally published March 2009
Updated April 2011
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Learn how Top Innovators Lead with Innovation
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1. Benchmarking and Leading with Innovation
The Business Case for Innovation
2. Unblocking Creativity and Innovation
The Essential Processes and Skills
3. Unleashing Team Innovation
Great Teams Deliver Great Innovations
4. and 5. Business Innovation Case Studies
Learn how Top Innovators Lead with Innovation
6. Building an Innovation Factory
Create a sustainable, scalable Innovation Process
Or, download my leading eBook on Creativity and Innovation in Business used by professionals, faculty and innovators at educational institutions and businesses all around the world including EDS, Ericsson, Center for Sales Strategy, IdeaChampions, Acara Global, Byrne Dairy, Cleveland Clinic, Magpie, DOJ/FBI, HP, Hewlett Packard, Intervista Institute, Fryett Consulting Group, Satellite Shelters, ProductVentures, Speakeasy - a Best Buy company, Jarden Consumer Solutions, Hallmark, Infinium, DeakinPrime - Deakin University, Lucas-TVS, McCann Worldgroup, S.P.Jain Center of Management, Suffolk University, RiCoMan, AmpControl, Craig Rispin, Momentive, Champion Laboratories, University of Phoenix, University of Washington, SFR - Neufbox, Attwood as Edison, Academy of Sport, Ideogenesis, Principled Innovation, Meridian Partners, Ananzi, Tangibility, Syngenta Global, Speedy, The Business Lab, Deloitte, Lane Management, University of California at Irvine, Wharton Business School, Babson University, Larsen & Toubro, Nokia, Credera, Pfizer, Bilkent University, Indian Institute of Science and many more.
This eBook is a 212-page collection of over 50 best practices, case studies, and insights on the current state of Innovation in Business at Top Innovators including Apple, Google, Netflix, 3M, Proctor and Gamble, Johnson and Johnson, Toyota, GE, BMW, Deloitte, Frito Lay, IBM, Nike, Starbucks, Southwest Airlines, Microsoft, Dell, Intel and more. With pertinent articles from the award-winning Creativity And Innovation Driving Business Blog, this Faculty eBook provides real-world examples on how the Top Innovators innovate and grow their business successfully time and again, especially during economic cycles. Creativity And Innovation in Business is a definitive guide that will help you unblock creativity, uncover and create game-changing innovations, and make exponential business growth a reality. Learn more...
References:
GM Press Releases, Yahoo Finance, Google Finance, Toyota Press Releases, Reuters, Wikipedia
Thursday, March 15, 2007
Customer Value & Lean
To discuss Lean and Lean Software Development is a long task. Permit me to start slowly, with background, and to start with some digressions.
There has been a lot of talk lately of the auto business. What will happen to Chrysler. Is there something there we can learn. (Hint: Lean is being used outside the auto industry.)
Lean, as you know, is mostly closely associated with Toyota and two men: Taiichi Ohno and Shigeo Shingo. They of course were strongly influenced by Deming and Henry Ford. When asked a question, Mr. Ohno famously said, "Oh, I got it all from reading Today and Tomorrow by Henry Ford". The story of the people and their courage and inter-relationships is interesting. I doubt that you can read too much by Ford or Deming. Or by Ohno or Shingo. (For myself, my grandfather was a GM man quite some years ago now.)
What has all of this to do with Agile & Business?
In my mind, the first principle of Lean is this: Value is defined in the eyes of the end customer. See Lean Principles at the LEI. This from Lean Thinking by Womack & Jones:
In Lean Solutions, Womack and Jones speak for all of us (as customers) when they say we want our problems solved. We don't want a product, we want our problem solved:
And, if you are younger, you might add: "And give me something that is waayy cool to be involved with."
When we are doing Agile, we are already trying to get close to the customers. To get frequent feedback from the customers. Even to collaborate with them. In Scrum, we have the Product Owner (and she with the whole team must be asking how well is she representing all the end customers).
The customers are changing fast. Are you working at it enough in your project today?
In the Agile Community, Mary and Tom Poppendieck are the ones most closely associated with Lean Software Development. See their site, here. I will be talking more about these Lean ideas in future posts.
Joe Little
There has been a lot of talk lately of the auto business. What will happen to Chrysler. Is there something there we can learn. (Hint: Lean is being used outside the auto industry.)
Lean, as you know, is mostly closely associated with Toyota and two men: Taiichi Ohno and Shigeo Shingo. They of course were strongly influenced by Deming and Henry Ford. When asked a question, Mr. Ohno famously said, "Oh, I got it all from reading Today and Tomorrow by Henry Ford". The story of the people and their courage and inter-relationships is interesting. I doubt that you can read too much by Ford or Deming. Or by Ohno or Shingo. (For myself, my grandfather was a GM man quite some years ago now.)
What has all of this to do with Agile & Business?
In my mind, the first principle of Lean is this: Value is defined in the eyes of the end customer. See Lean Principles at the LEI. This from Lean Thinking by Womack & Jones:
"The critical starting point for lean thinking is value. Value can only be defined by the ultimate customer. And it's only meaningful when expressed in terms of a specific product (a good or a service, and often both at once), which meets the customer's needs at a specific price at a specific time."
In Lean Solutions, Womack and Jones speak for all of us (as customers) when they say we want our problems solved. We don't want a product, we want our problem solved:
"Solve my problem completely."
"Don't waste my time."
"Provide exactly what I want."
"Deliver value exactly where I want it."
"Supply value exactly when I want it."
"Reduce the number of decisions I must make to solve my problems."
And, if you are younger, you might add: "And give me something that is waayy cool to be involved with."
When we are doing Agile, we are already trying to get close to the customers. To get frequent feedback from the customers. Even to collaborate with them. In Scrum, we have the Product Owner (and she with the whole team must be asking how well is she representing all the end customers).
The customers are changing fast. Are you working at it enough in your project today?
* * *
In the Agile Community, Mary and Tom Poppendieck are the ones most closely associated with Lean Software Development. See their site, here. I will be talking more about these Lean ideas in future posts.
Joe Little
Tuesday, October 17, 2006
Toyota's Innovation Factory
How does an organization implement one million new creative ideas each year? And become a perennial top ten profitable companies of the world. And achieve market leadership while relentlessly pursuing perfection and delivering some of the best new innovations the world has ever seen.
Welcome to Toyota’s Innovation Factory. The world knows Toyota as the car maker that produces such great brands as Camry, Lexus, Prius, Scion, Rav4 and more. For example, the introduction of the Hybrid car back in 1997 when other car makers had not even put together a design for a hybrid car, much less a concept car.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
References:
Matthew E. May: “The Elegant Solution: Toyota's Formula for Mastering Innovation”. Free Press. 2006.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
Welcome to Toyota’s Innovation Factory. The world knows Toyota as the car maker that produces such great brands as Camry, Lexus, Prius, Scion, Rav4 and more. For example, the introduction of the Hybrid car back in 1997 when other car makers had not even put together a design for a hybrid car, much less a concept car.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
Matthew E. May, a senior University of Toyota advisor, and the author of “The Elegant Solution: Toyota's Formula for Mastering Innovation” puts forth a passionate perspective on how Toyota creates new innovations at the breakneck speed of over 2,500 new ideas implemented every day. How is this possible? Innovation at Toyota has to do with the history, foundation, guiding principles and practice.
Foundation of Elegance and Innovation
Toyota was founded by Sakichi Toyoda as a handloom company. In 1898, Toyoda created Japan’s first steam-powered loom. Toyota Motors began as Toyota Automatic Loom Works, a company whose looms were of the “highest quality, lowest cost, and easiest to use.” Sound familiar. Hence the term “Elegant Solution” which according to May is about “finding the aha solution to a problem with the greatest parsimony of effort and expense.” And May argues that at Toyota, you get elegance from creativity, simplicity, intelligence, subtlety, economy, and quality. Further, May lays the groundwork for the term Innovation, which according to David Neeleman, founder and CEO of JetBlue means: "Innovation is trying to figure out a way to do something better than it's ever been done before." Indeed. This has become one of the guiding principles at Toyota.
Guiding Principles for Driving Innovation
Three guiding principles drive Innovation and create elegant solutions at Toyota, which were originated and finessed by Toyoda:
1. The Art of Ingenuity
May asserts that in order to succeed in an ever complex business world with competing pressures to innovate amidst competitive pressures and yet manage risks and uncertainty, an individual has to be both an artist and a scientist. Ingenuity creates images of cleverness, resourcefulness, initiative, originality, inventiveness, creativity, skill and even cunning – resulting in innovation. Sound contradictory. The key is to continually ask the question: “Is there a better way?”
This is possible if the individual fully leverages their domain knowledge and expertise, continuously pursues every possible way to innovate and perfect, challenges opposition tactfully, does not accept the status quo, and uses organizational efficiencies to drive new ideas and methods. Toyota has made ingenious vehicles such as Camry, RAV4, 4-Runner, RX which have become perpetual favorites in the market place.
2. The (relentless) Pursuit of Perfection
May argues that for a business to succeed at innovation, it has to rigorously search for an optimal solution – one that yields low-cost, low-risk, high-impact breakthrough. Innovation happens at Toyota through systematic pursuit of perfection at every level, every department, in everything Toyota does. Perfection equates to excellence, precision, flawlessness at Toyota. And it is this chase for perfection that creates better processes, products and services for tomorrow, today. It takes many small steps (Collins - Built to Last) to create sustainable innovation. For example, the Lexus cars made by Toyota epitomize perfection in the form of car design, function, performance, service and total satisfaction.
3. The Rhythm of Fit
May propounds that great innovation has to fit – fit the innovator, the times and the larger system. How can a great innovation shape and then change the attitudes and behaviors of people, the way they think, they work, they live? A change that fits in the current time and environment. For example, the Toyota Prius car. A hybrid car that provides plenty of room in the inside, shows solid performance on the highway, provides all the safety features, and gives great gas mileage and range. Toyota envisioned the changing environment of higher gas costs and pollution that wanted a car which is economical to drive, is environmentally friendly (green innovation), and does not sacrifice the inherent need for roominess, safety and performance.
The three principles create both the policy and framework at Toyota for driving innovation and creating elegant solutions. How would you find and drive innovation at your organization? Here are six ways to find innovation. If you are a technology company, read about how Intuit creates innovations and achieves market leadership using similar principles. May asserts that these three principles are non-negotiable and must be adhered to by everyone at Toyota.
Blocking Innovation
May also talks about the obstacles that hinder sustainable business innovation which Toyota has tactfully avoided through out its history. He calls these innovation blockers “temptations”, which are about taking short cuts, trying to hit a home run every time, creating products too complex that are top loaded with extra dressing, and without a real understanding of the innate customer need.
Here are the three Innovation blockers (does your organization block creativity and innovation? Here are some tips to unblock creativity and innovation) that Toyota has avoided over the years:
1. Swinging For Fences
High risk. High reward. NOT. When a company only focuses on trying to go all out for home runs every time at bat, you will strike out more often than not. The key is to build a sustainable batting average -- lasting innovation, and not just go out swinging every time at bat.
2. Getting Too Clever
Every product manager at one time or the other is guilty of adding all those extra "bells and whistles" that the customer does not care about. This happens when you bow in to competitive pressures, or needs of specific customers that are not indicative of the mass market. The company ends up creating products that customers actually run away from.
3. Solving Problems Frivolously
May calls this the "brainstorm" trap, which is creating something that is out of line with the company’s core values, not serving customer’s true needs, and worse yet, something that is created hastily without rigor and analysis.
Ten Practices for Making Innovation
May showcases the following Ten Practices that Toyota has adopted on its core principles towards making Innovation happen:
1. Let Learning Lead
“Learning and innovation go hand in hand, but learning comes first.” Education and Learning can drive substantial innovation.
2. Learn to See
“Elegant solutions often come from customers -- get out more and live in their world.” The key is to unearth the latent needs of the customers, and perceive the emerging needs.
3. Design for Today
“Focus on clear and present needs, or your great ideas remain just that.” Innovation that drives business in today’s market is likely to get funded and succeed.
4. Think in Pictures
“Make your intentions visual -- you'll surprise yourself with the image.” In Six ways to find innovation, we talked about the need for visual imagery.
5. Capture the Intangible
“The most compelling solutions are often perceptual and emotional.” This is where the product manager needs intuition and the ability to read their customers’ minds.
6. Leverage the Limits
“Restraining forces rule -- resource constraints can spur ingenuity.” It is critical to know what you can deliver, how you can deliver and by when.
7. Master the Tension
“Breakthrough thinking demands something to break through.” In Failures and Stumbles driving innovation, we talked about the five takeaways stimulating innovation. Accept that mistakes will be made.
8. Run the Numbers
“Think for yourself -- temper instinct with insight, focus on facts, and do the math.” A sound technical analysis is critical before you begin a new product innovation. This should take into account such factors as risks, probabilities of success, and lessons learned from past projects.
9. Make Kaizen Mandatory
“Pursuing perfection requires great discipline -- create a standard, follow it, and find a better way.” A process is a must have. Think Six Sigma. Think Rigor at Intuit.
10. Keep It Lean
“Complexity kills -- scale it back, make it simple, and let it flow.” Innovation happens when you can simplify the intended application and make it so easy-to-use that it becomes a no-brainer.
Bottomline:
Toyota has become the dominant car maker today based on large part due to the Innovation Factory. A Factory based on a foundation of creating elegant solutions through three guiding principles, avoiding three “temptations” and driving ten production practices.
"Toyota is becoming a double threat: the world's finest manufacturer and a truly great innovator . . . that formula, a combination of production prowess and technical innovation, is an unbeatable recipe for success."
* Fortune, February 2006
Foundation of Elegance and Innovation
Toyota was founded by Sakichi Toyoda as a handloom company. In 1898, Toyoda created Japan’s first steam-powered loom. Toyota Motors began as Toyota Automatic Loom Works, a company whose looms were of the “highest quality, lowest cost, and easiest to use.” Sound familiar. Hence the term “Elegant Solution” which according to May is about “finding the aha solution to a problem with the greatest parsimony of effort and expense.” And May argues that at Toyota, you get elegance from creativity, simplicity, intelligence, subtlety, economy, and quality. Further, May lays the groundwork for the term Innovation, which according to David Neeleman, founder and CEO of JetBlue means: "Innovation is trying to figure out a way to do something better than it's ever been done before." Indeed. This has become one of the guiding principles at Toyota.
Guiding Principles for Driving Innovation
Three guiding principles drive Innovation and create elegant solutions at Toyota, which were originated and finessed by Toyoda:
1. The Art of Ingenuity
May asserts that in order to succeed in an ever complex business world with competing pressures to innovate amidst competitive pressures and yet manage risks and uncertainty, an individual has to be both an artist and a scientist. Ingenuity creates images of cleverness, resourcefulness, initiative, originality, inventiveness, creativity, skill and even cunning – resulting in innovation. Sound contradictory. The key is to continually ask the question: “Is there a better way?”
This is possible if the individual fully leverages their domain knowledge and expertise, continuously pursues every possible way to innovate and perfect, challenges opposition tactfully, does not accept the status quo, and uses organizational efficiencies to drive new ideas and methods. Toyota has made ingenious vehicles such as Camry, RAV4, 4-Runner, RX which have become perpetual favorites in the market place.
2. The (relentless) Pursuit of Perfection
May argues that for a business to succeed at innovation, it has to rigorously search for an optimal solution – one that yields low-cost, low-risk, high-impact breakthrough. Innovation happens at Toyota through systematic pursuit of perfection at every level, every department, in everything Toyota does. Perfection equates to excellence, precision, flawlessness at Toyota. And it is this chase for perfection that creates better processes, products and services for tomorrow, today. It takes many small steps (Collins - Built to Last) to create sustainable innovation. For example, the Lexus cars made by Toyota epitomize perfection in the form of car design, function, performance, service and total satisfaction.
3. The Rhythm of Fit
May propounds that great innovation has to fit – fit the innovator, the times and the larger system. How can a great innovation shape and then change the attitudes and behaviors of people, the way they think, they work, they live? A change that fits in the current time and environment. For example, the Toyota Prius car. A hybrid car that provides plenty of room in the inside, shows solid performance on the highway, provides all the safety features, and gives great gas mileage and range. Toyota envisioned the changing environment of higher gas costs and pollution that wanted a car which is economical to drive, is environmentally friendly (green innovation), and does not sacrifice the inherent need for roominess, safety and performance.
The three principles create both the policy and framework at Toyota for driving innovation and creating elegant solutions. How would you find and drive innovation at your organization? Here are six ways to find innovation. If you are a technology company, read about how Intuit creates innovations and achieves market leadership using similar principles. May asserts that these three principles are non-negotiable and must be adhered to by everyone at Toyota.
Blocking Innovation
May also talks about the obstacles that hinder sustainable business innovation which Toyota has tactfully avoided through out its history. He calls these innovation blockers “temptations”, which are about taking short cuts, trying to hit a home run every time, creating products too complex that are top loaded with extra dressing, and without a real understanding of the innate customer need.
Here are the three Innovation blockers (does your organization block creativity and innovation? Here are some tips to unblock creativity and innovation) that Toyota has avoided over the years:
1. Swinging For Fences
High risk. High reward. NOT. When a company only focuses on trying to go all out for home runs every time at bat, you will strike out more often than not. The key is to build a sustainable batting average -- lasting innovation, and not just go out swinging every time at bat.
2. Getting Too Clever
Every product manager at one time or the other is guilty of adding all those extra "bells and whistles" that the customer does not care about. This happens when you bow in to competitive pressures, or needs of specific customers that are not indicative of the mass market. The company ends up creating products that customers actually run away from.
3. Solving Problems Frivolously
May calls this the "brainstorm" trap, which is creating something that is out of line with the company’s core values, not serving customer’s true needs, and worse yet, something that is created hastily without rigor and analysis.
Ten Practices for Making Innovation
May showcases the following Ten Practices that Toyota has adopted on its core principles towards making Innovation happen:
1. Let Learning Lead
“Learning and innovation go hand in hand, but learning comes first.” Education and Learning can drive substantial innovation.
2. Learn to See
“Elegant solutions often come from customers -- get out more and live in their world.” The key is to unearth the latent needs of the customers, and perceive the emerging needs.
3. Design for Today
“Focus on clear and present needs, or your great ideas remain just that.” Innovation that drives business in today’s market is likely to get funded and succeed.
4. Think in Pictures
“Make your intentions visual -- you'll surprise yourself with the image.” In Six ways to find innovation, we talked about the need for visual imagery.
5. Capture the Intangible
“The most compelling solutions are often perceptual and emotional.” This is where the product manager needs intuition and the ability to read their customers’ minds.
6. Leverage the Limits
“Restraining forces rule -- resource constraints can spur ingenuity.” It is critical to know what you can deliver, how you can deliver and by when.
7. Master the Tension
“Breakthrough thinking demands something to break through.” In Failures and Stumbles driving innovation, we talked about the five takeaways stimulating innovation. Accept that mistakes will be made.
8. Run the Numbers
“Think for yourself -- temper instinct with insight, focus on facts, and do the math.” A sound technical analysis is critical before you begin a new product innovation. This should take into account such factors as risks, probabilities of success, and lessons learned from past projects.
9. Make Kaizen Mandatory
“Pursuing perfection requires great discipline -- create a standard, follow it, and find a better way.” A process is a must have. Think Six Sigma. Think Rigor at Intuit.
10. Keep It Lean
“Complexity kills -- scale it back, make it simple, and let it flow.” Innovation happens when you can simplify the intended application and make it so easy-to-use that it becomes a no-brainer.
Bottomline:
Toyota has become the dominant car maker today based on large part due to the Innovation Factory. A Factory based on a foundation of creating elegant solutions through three guiding principles, avoiding three “temptations” and driving ten production practices.
"Toyota is becoming a double threat: the world's finest manufacturer and a truly great innovator . . . that formula, a combination of production prowess and technical innovation, is an unbeatable recipe for success."
* Fortune, February 2006
Selected references:
Creativity And Innovation in Business Definitive Guide is a 185-page collection of my handpicked 48 Creativity and Innovation best practices, case studies, articles, interviews, and insights on the current state of innovation in business. The eBook provides real-world examples on how the Top Innovators including Toyota, Apple, Google, GE, Proctor and Gamble, Yahoo, Netflix, BMW, Deloitte, Timex, Frito Lays, Johnson & Johnson, Starbucks, Southwest Airlines, Microsoft, Intel and more innovate and grow their business successfully time and again, especially during trying times. Use this eBook as a guide to find and create game-changing innovations, unblock creativity, and make innovation successful at your business. The Innovation eBook is used by over 300 organizations all over the world including HP, Pepsi, EDS, major universities and business professionals.
References:
Matthew E. May: “The Elegant Solution: Toyota's Formula for Mastering Innovation”. Free Press. 2006.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
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