Thursday, June 4, 2009

GM Needs a New Baby, Not A Re-Birth Announcement

I've received emails and comments from friends, some in the business, praising the television spot lauding the "new GM." Feedback has ranged from, "very American," "they're coming clean" and "powerful message." I too agree with those sentiments.

However, what so many are overlooking in this decades-in-the-making, historic mess, is a lesson for any brand: This should have never happened. GM shouldn't be having to manufacture a positive spin. It chose to be in this place by expanding and contracting in wrong ways. And when it comes to its rebirth as articulated in the commercial, why should we believe them now? More on that in minute.

First, Al Ries suggested years ago that GM needed to reduce its brands and models. GM chose not to listen. It continued expanding in the wrong ways like adding brands (Saturn, Hummer) and more models within each brand, ignoring Ries's "Law of Contraction." All the research I've been a part of for clients always supports "less is more." Brands that try being all things to all people get very little credit for anything and own very little market share. Brands that are laser focused on a distinctive idea, concept or approach, get major attitudinal props not only for their one thing, but for things they don't even do or focus on! It's called brand halo. Despite just focusing on safety, consumers believe Volvos are also durable, reliable, even though it doesn't tout these attributes. If you're good at one thing, you must be good at other things, goes the thinking. Conversely, if you try to be all things, you're good at nothing, goes the thinking.

Where GM contracted wrong was in making platforms and designs virtually ubiquitous. In the short run, sharing tactics reduced costs and saved money. But, as always, when you go from brand to bottom-line focus, it will catch up to you. Why aren't Honda, Volvo or Toyota filing for bankruptcy? While every automaker has been hurt by the recession, they are examples of how being brand focused helps weather tough patches much better than bottom-line driven companies.

If you have a powerful brand, you don't need to be bottom-line focused. Rather, bottom line sensible. In fact, your brand and business strategies should be one in the same. And the strongest brands are always better positioned to reclaim lost ground and grow faster when the economy does turn around. Can you say that about your brand?

Back to rebirth campaign. GM says it's changing. Oh, really? I'm seeing these spots everywhere, and at least three times in prime last night. A national buy of this magnitude can't be cheap for a company that is broke...and broken.

More importantly, and predictably, GM is taking an outside-in approach by running the birth announcement before the new baby is even born. For all we know, it could end up being as ugly as the old one. I'm not surprised because companies generally attack similar situations or new launches by talking-the-walk before walking-the-walk, anointing before it can back it up. This can create an expectation that so often falls short in the minds of consumers. Inside-out strategy would have GM reducing, retooling, redesigning and rebuilding internally and quietly before ever uttering a word externally. It could learn a lot from Staples, which successfully orchestrated its turnaround in the early 2000s via inside-out strategy.

If GM were to take this inside-out strategy to heart, but was worried about disappearing off consumers' radar screens, while re-engineering itself, it could engage a carefully-planned and timed information leaking strategy to give it "presence." The right chatter could also ensure that when the new GM is born, it's everything the birth announcement says it is and much more.

These are my Guts feelings.


  1. Here's a good read from Al Ries about math vs. marketing:

  2. I agree with your assessment.

    And, the commercial is insulting. They should have ended it with "Thank you, America, for giving us $50,000,000,000 to undo the mess we created for ourselves and you."