The recent post on GM’s turnaround puzzled me for a while.
G.M., Days Away From Stock Offering, Posts $2 Billion Profit:
http://www.nytimes.com/2010/11/11/business/11auto.html
A colleague of mine pointed me to this article that exposed me to some other view points:
Steven Rattner and the rescue of General Motors:
http://www.newyorker.com/arts/critics/books/2010/11/01/101101crbo_books_gladwell
For now, my high-level summary is that GM had a good core at the center of its business which the top management should be acknowledged for. However, the top management didn’t do all it could with regards to financially managing the business. The management should have managed their finance with a sharper focus on removing liabilities and with stronger attention to economy and market, which could have saved the top management team from being in a position to be short on cash and ultimately to be taken over by the government.
I think part of it might also be related to deep organizational structure that could have filtered all the bad news and the top management might have been receiving reports that are more removed from day-to-day operation and market reality.
Numbers can’t lie. Numbers tell a lot of story. Top management should have pushed for breaking down the numbers many, many times till the numbers started to hit the ground level. The level at which it starts to tell the story of customers.
It will be also a good idea to remove yourself from corporate environment and get out there – mingle with people outside of the business and hear what people say about your business.
My homework is not done. I will look into consumer reports of recent GM cars. GM’s story is far from being over. We’ll have to keep an eye on it for the next five years to see if the turnaround was a true turnaround.