Great Marketing Books – Car Guys vs Bean Counters by Bob Lutz

Reading this book was Nirvana for me.  I am obsessed with cars.  I am a career marketer.  And I find the whole issue of what goes on in organisations – the politics, the posturing and the crazy bureaucracy all totally fascinating. Car Guys vs Bean Counters’ by  Bob Lutz, one of the last real “car guys” at GM,  is so on target that everybody should read it – whether you care about cars or marketing or not.   All that matters is whether you have worked in an organisation!

Who is really in charge of an organisation?

Lcar_guys_imageutz describes the disempowering of “the product guys” and transfer of power to the finance guys in painful detail.   Sound familiar to anyone reading?  He calls out how the  “Empire” of finance, accounting, law and order, “the way a sound company is run”  and how they put design in its place claiming the designer was   ‘no more important than the guys who design shampoo bottles at Procter & Gamble”.  Design was to become “part of the system” and would no longer originate a product. From now on, products would be initiated by Product Planning (a department composed of recycled finance types) and how the system created ‘research-driven, focus-group guided, customer-optimised transportation devices’ to achieve ‘order, discipline, predictability, ease of manufacture, affordable investment, low cost’ . Of course, this caused GM to be on its knees and destroyed the company’s ability to compete and conquer. Why? Because what the buyer is buying IS the design!

Customers are the centre of our business. Really?

Whilst many a CEO mouths platitudes about the ‘customer being the centre of our business’, very quickly this translates into the (correct) idea that the business is primarily in the business of making money, but then starts to come unstuck by extending this idea too far and believing companies must minimise cost and maximise revenue – and the company assumes (incorrectly) that the customer desire for the product is a given.  As Lutz puts it, ‘without a passionate focus on great products from the top of the company, the “low cost” part will be assured but the “high revenue” part won’t happen.

The demise of SAAB

A great example of not understanding brands comes from the story of SAAB.  The stripping of the “personality”, “soul”, unique appeal or unique connection with a customer tribe from a product(s) or company is illustrated by GM’s ruination of SAAB.  Every effort to expand the appeal of SAAB by making it more mainstream and less quirky ended in failure.  The lack of insight into what SAAB was all about, and, worse, the lack of interest in what SAAB was all about by those into whose hands it fell by GM’s acquisition is a great cautionary tale. Every effort to expand the appeal of Saab by making it more “mainstream” and less “quirky” ended in failure.

Why bother talking about what is important?

The common affliction of ignoring the one essential and critical key to success or failure for a business – because it is difficult – and instead busying everybody with everything imaginable is described in painful detail.  Disturbingly, in this case, Lutz is talking about top level management meetings: ‘a salient feature of these top-level meetings was the notable absence of any focus on the thing that matters most: the company’s products.  When they were on the agenda, it was always in a highly abstract form: ‘a description of category, size, investment level, cost and profit targets, and other financial measures’.  And the discussions were invariably devoid of visuals –‘no photographs, no design renderings, nothing that would convey any emotional content or any compelling reasons why this particular vehicle would win against the competition’.  And then GM would wonder why the cars had no appeal.

Brand strategy and agencies

Pages 85 and 86 take you inside a “brand strategy” meetings that Lutz fingers “unmitigated hogwash”. There were endless presentations on the quintessential character of, say Buick or Saturn, including the “brand pyramid,” containing profound (but painfully obvious) information on the customer and why he or she would buy this brand.   The  “brand pyramids” were rarely, put together by the actual marketing people for that make and instead were farmed out to advertising agencies, whom Lutz rightly questions as why they should be seen as repositories of “brand knowledge”.

On why GM produce generations of automobiles that met internal targets yet fell wide of the mark in sales 

Lutz believes that GM’s Business philosophy got too mired in the belief that the power of analytical intellect can solve all business problems. He calls it the ‘the deliberate intellectualising of a very simple take; creating and selling a meaningfully superior product or service to the public’. He blames the academics in business schools and their desire to garner the respect of the “true” academics.  He points the finger at the Department of Defense head,  Robert McNamara (later to become president of Ford Motor Company) using  quadratic programming, dynamic programming, game theory to schedule bombing raids, and generally bring order to a fairly chaotic environment.  This eventually led to MBA types (hmm, I have an MBA!) who could put together verbal pearls such as ‘we’ll need to get the data, analyse it at a granular level, prepare a set of possible alternative approaches, weigh them against probably future scenarios, and then stress-test each.”  He believes that ‘business needs to throw the intellectuals out and get back to business!’

Reading my book review from 2015 shows how quickly things have changed in the car world.
The automotive industry is going through major transformational change to a world of connected cars, shared driving, electric cars and autonomous vehicles is upon us. The stuff of sci-fi a few years ago is now a reality. Last year,  Henrik Christensen, the Director of the Contextual Robotics Institute in San Diego made a bold claim that “my own prediction is that kids born today (2017) will never get to drive a car,” he said. “Autonomous, driverless cars are 10, 15 years out. All the automotive companies, Daimler, GM, Ford, are saying that within five years they will have autonomous, driverless cars on the road.
PWC publish a report called ‘Five Trends Transforming the Automotive Industry’ followed on in the same vein. In it, the company’s forecasts suggested that by 2030, more than one in three kilometres driven could involve sharing concepts. Think Uber, Lyft and MyTaxi.
During this change, there are many technological advancements that you may have become familiar with, without fully appreciating their significance. One such term is “telematics”. Although we are coming to terms with concepts such as connected cars and driverless vehicles, the word “telematics” won’t mean a whole lot to most people. However, in the overall scheme of the automotive revolution, it plays a major role. As an addendum to this article, I strongly suggest you read this article about what is telematics software and how this is going to change the nature of the car business.


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