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Detroit's Six Deadly Sins (And How To Avoid Them)

Umair Haque at Havas Media Lab gives six new rules for 21st century businesses to replace the old ones that he says tanked Detroit.

1. Choose good (not evil). According to Haque, Detroit chose an "evil" business model: pushing costs onto others to maximize company benefits, "lobbying, marketing wars, and low-cost hardball", and fighting public transportation tooth and nail.

Instead of this, Haque argues, choose a "good" business model and reap the benefits: Tata built cars for the less affluent, BMW and Porsche invested in "talent, people, and imagination" and Honda and Toyota invested in energy savvy vehicles and "partnership with the public sector". And guess what? These "good" business strategies continue to succeed.

2. Purpose is self-interest (selfishness is not). As early as this year, according to Haque, Detroit's lobbyists have been fighting against higher fuel efficiency standards, underscoring a self-destructive myopia and selfishness that's been endemic to Detroit for years now.

Haque argues that selfishness isn't self-interest, but purpose is, and that a true purpose is characterized by businesses looking beyond short term gains and truly considering the effects that their strategies will have on society, people, and the environmentthat in doing this, businesses can "radically change the world for the better".

3. Get Constructive (not destructive). Detroit's MO has been one of destruction: ""destroy the ability of others' to imitate or commoditize youpatenting, trademarking, and litigating", destroying the competition by controlling distribution, spending vast amounts of revenue on marketing and advertising, creating entirely new brands to take advantage of market niches, and using strategy "as an exercise in exclusion, isolation, and barrier-building."

Haque's new 21st century business model calls for constructive and cooperative strategies: ". . .let demand spark and fuel co-creationco-produce from a pool of shared resources. . . value activities be co-managed. . .cooperate."

4. Seek difference (not differentiation). According to Haque, Detroit offered the same products under different names and the public wasn't fooled. "True difference is built by making different choices from the ground up - different in the very essence of the value activities that make the wheels of production and consumption spin."

5. Seek crisis (not agility). Detroit's MO was to avoid crisis, to wheel n deal and duck n dodge. Detroit, Haque argues, cocooned themselves from economic pressure and right into economic oblivion with the "agility" game.

The new MO is to face the music head on, and in doing so, fostering the innovation that would otherwise be the opportunity cost of trying to avoid crisis.

6. Advantage happens for (not against).
Detroit sought advantage against "suppliers, dealers, consumers, and society alike", and the result was an adversarial relationship among everyone concerned that undermined constructive business.

Haque's new rule is to seek advantage for "suppliers, dealers, consumers, and society alike." He argues that seeking advantage against is "simply bullying" and that this is no different than economic "musical chairs". (In other words, seeking to put people out of businessin the long runisn't good business.)

So there you have it: a new paradigm for a 21st century business model, and one that sounds remarkably like the manufacturing version of the golden rule.

TAGS: Innovation
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