Learning from the 'Malaise Era' of American Car Makers
- Of all the terrible ideas American carmakers ever had, their worst were in the 1970s.
Ford’s worst idea was, obviously, the Pinto, which earned a reputation for exploding after a simple rear-end collision. Even worse, Ford’s Mustang II wasn’t a Mustang at all; it was just a Pinto with a new logo. I could go on...listing cars like the Maverick and Zephyr. Ford couldn’t help themselves. Even their commercials were awful:
Other U.S. carmakers also forgot how to innovate in the 70s. General Motors’ 1971 “X-body” compact car stayed the same the whole decade but continually got new, cosmic-sounding names, like “The Buick Apollo”, “The Pontiac Ventura”, “The Phoenix”, “Oldsmobile Omega”, and “The Chevy Nova.” It finally ran out of gas as the 1979 Buick Skylark. The American Motors Company finished off the decade with the Gremlin (a shortened version of the Hornet).
The entire industry couldn’t get out of its funk. Historians call this the “Malaise Era” of American car building. American buyers started to prefer Japanese cars over American autos, and by 1980, Japan finally passed the U.S. to become the world's biggest car producer.
In his classic 1982 management book,Out of the Crisis, W.E. Deming gets so frustrated with American business managers from that decade that he repeatedly says they “rooked” (or cheated) consumers; they chased short-term profits and failed to understand how their businesses worked. And he would know. He’d helped Japan’s industry rebuild itself from scratch after World War II, without all the habitual management practices that plagued American car companies.
Unlike their American counterparts, Japan’s car companies were prepared to deal with global changes, like the 1970s oil crisis and the growing environmental concerns of American consumers.
Guaranteed Non-Innovation
American business leaders were blinded by decades of inertia, and they lazily repeated solutions from the previous forty years. Deming writes, “What is the competitive advantage of merely managing the way your competitors are managing?” Managers who don’t understand how their business works fall into this trap, relying on “best practices” to make safe and easy decisions.
Have you heard of these popular “best practices” in the data world?
You should outsource data management work.
- Moving data to the cloud will help your company make better decisions.
- You need more sophisticated software to analyze data.
Here’s a more subtle example: most companies purposely avoid using their core systems to connect products or services with financial data. Instead of configuring their transaction systems to do this, they build elaborate solutions using their data platform and reporting systems to connect them. Consulting firms even tell them to do this.
As Deming says, following “best practices” like this guarantees that you won’t innovate. You should avoid that at all costs.
If those assumptions sound familiar to you, instead, you should try to think outside the box, like this:
- Moving your data to another data storage location doesn’t improve your decisions any more than parking your car in a new garage makes it drive faster.
- Excel is the best data analysis tool known to mankind.
- You need deep knowledge about how people in your company think to help them make better decisions with data.
Starting From Scratch
Like Deming says, the innovative Japanese carmakers weren’t tied down by the traditions of the American car companies. I had the same starting-from-scratch experience when I worked at Broadcom, where innovation was the norm.
We synchronized financial master data with product master data, creating far-reaching visibility into business decisions. Almost no chip company does this today because they assume the speed of corporate acquisitions and product data will make that relationship difficult to maintain. But we didn’t know any better back then. We connected these core data sets across every system and acquired 51 companies over their first decade.
Here’s some practical advice: Start with the master data, like I did. That’s a real strategic project nobody will ask you to do. It’s also free. Understand the purpose of the master data, the business processes that manage it, and the data strategies that make it more valuable.
Carve your own path and avoid best practices at all costs.
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