TrueDelta

Edmunds AutoObserver Michelle Krebs, commenting on the termination and replacement of Cadillac’s leadership, concluded, “If GM is going to change and is going to succeed, it must change people.” Paraphrasing Eistein, she added that “Doing the same thing over and over again with the same people in the same positions and expecting a different result is…insane.”

Michelle Krebs is far from the first to suggest that, to survive, a struggling company must replace the executives that oversaw its decline. And she won’t be the last. But this is a superficial solution that, if it is the entire solution, will fail.

A key reason for the popularity of this solution is that it’s easy to observe and easy to comprehend. But it’s based on a very shaky assumption: if an executive didn’t achieve the desired result, then that executive either lacked ability or lacked the proper intent. The latter is addressed through demands for “accountability,” which Krebs also suggests.

But what if these are good, talented people placed in an unwinnable situation? What if the structure and culture of the organization prevent them from doing what they know should be done, and would otherwise do?

This has very much been the case within General Motors. I essentially lived within the GM organization for over a year back in the late 1990s, observing it as an anthropologist would. I encountered, over and over, people who knew the right thing to do, and who wanted to do the right thing, but who were unable to do it because GM’s structure and modes of operation placed endless barriers in their way. As a result, the predominating mood within the organization was one of frustration.

Putting different people in the same organization and expecting a different result is insane.

Actually, the outcome could well be different–but worse. Developiing and building cars in an intensely collaborative exercise. For people to do well within it they must both be experts at what they do and know those they work with very well. Place an expert among strangers, and they will likely discredit and ignore his or her suggestions. You cannot really know who knows what they’re talking about by listening to them for the first time. Knowledge of the extent of others’ knowledge, especially if they’re in a different field than you are, can often only be gained through repeatedly working together.

Bring in new people, and they will know neither their new jobs nor the expertise of those they must work with. This is proven recipe for either indecision or, when the pressure for results is intense, bad decisions. GM and many other companies have gone through this cycle over and over. While GM hasn’t often fired executives outright, as they did in this case, they’ve switched people around many times before, but rarely with the intended results.

Now, perhaps GM’s new leaders aren’t merely changing people. Perhaps they’re also making fundamental changes to the way the organization is structured and the way it operates. Maybe these changes simply aren’t being reported in the press because they are much more difficult to comprehend and communicate than personnel changes. Maybe they’re even the right structural and cultural changes. If so, then changing people might be necessary to keep the new organization from reverting to the old one. As one piece within a much larger solution, personnel changes might make sense.

But, if they’re the entire solution, personnel changes are bound to fail. To repeat: putting different people in the same organization and expecting a different result is insane.

The suggestions I offered to GM nearly a decade ago:

Executive summary of report to GM

An article in this week’s Advertising Age and Automotive News (they’re sister publications) investigates why the family in the new hit sitcom ‘Modern Family’ “still drives Toyota product.” The author found it “jarring” that the family “chatted happily while traveling in, of all things, a Toyota.” The answer: Toyota paid for product placement, the contract runs through the end of the season, and many of the episodes have already been shot.

The implication: if the show were realistic, the family should be scared to death to be in a Toyota, and only placement dollars are keeping the show from replacing the Toyotas in question with truly safe cars. Overlooked: that even now the problem hasn’t been replicated or definitively identified, and at any rate affects a very small pecentage of cars. Anyone with a sense of probability would be no more concerned about driving a Toyota than any other car.

The article states that, in the past, when a company was hit by a crisis, such as a plane crash, all of that company’s ads were usually pulled as soon as possible. The author doesn’t seem to realize that this was done for the sake of the advertiser, in case it wanted to alter the message sent or wait until the crisis was over to resume advertising. It wasn’t done to distance the network from the advertiser, as the author assumes when asking why the network has risked “negative rub-off” by linking its hit show “to the brouhaha.”

It makes more sense to ask, as the article also does, why Toyota hasn’t requested that its cars be removed from the show. The answer in this case is obvious: the last thing Toyota would want to do is imply that its cars are too unsafe to drive by pulling them from the show.

Ultimately there’s no conflict, and so no real point to the article. The network wants the Toyotas in the show because they get product placement money and they don’t want to reshoot any scenes. Toyota wants to keep its cars in the show because it’s effective advertising and to do otherwise would increase generally unfounded suspicions about their safety. And there’s no valid reason the cars shouldn’t still be in the show, except that the scattered explicit product references can be mildly irritating.

What I personally found “jarring:” in the most recent episode the family let its oldest daughter, who just got her license on her third attempt and who is clearly not a safe driver, go off by herself in their brand-new Sienna minivan. Having drivers like this girl on the road without any supervision–now that’s unsafe.

Back in 1983, when I first became strongly interested in cars, I saw Consumer Guide’s annual guide to car prices on a newsstand while on a family trip from Virginia to South Carolina, and bought it.

There have been a number of printed car price guides over the years, but I always strongly preferred Consumer Guide’s format, which printed all trim levels on the same page. I bought this guide every year from 1983 through 2009. Still have them all on my bookshelf. Whenever I need to look up some quick specs or pricing for a past year, this is what I use.

Then I went to buy the 2010 edition, and could not find it. So I called the company, and apparently the 2009 edition was their last in print. The online version was sold to howstuffworks some time ago. It has much of the same format, but they’ve been steadily drifting away from that format.

So, is there another print publication with the same information, or is print simply dead?

Motor Trend has announced that the Ford Fusion has won its Car of the Year award.

The Fusion isn’t a particularly exciting car. So why the win? Probably because the Ford Fusion has become the poster child for Detroit’s ability to build a good car for the average person. It’s the car that car enthusiasts now recommend to their aunt or their non-enthusiast friends when they don’t want to recommend a Toyota Camry or Honda Accord.

Why recommend the Fusion? Because it does everything fairly well, and nothing badly (except, in my experience, the comfort of the rear seat cushion). The Ford Fusion Sport variant, with a 3.5-liter V6 and optional AWD, is even fun to drive, if not quite a blast. (If they offered the new EcoBoost V6 in the Fusion, that WOULD be a blast.) Meanwhile, the Ford Fusion Hybrid earns the best EPA ratings in the midsize sedan class.

It also helps that the Fusion how has four model years with proven reliability.

Another finalist, the Camaro, as good as it is for what it is, is too much a symbol of the old Detroit way of doing things to win an award like this.

Finalists have been announced for the ICOTY (International Car of the Year) award. Winners will be announced at NAIAS (the Detroit auto show) in January. A few dozen leading auto writers from various publications and websites vote, so advertising is not a factor in this one.

The car finalists:

1. Chevrolet Camaro

2. Ford Taurus

3. Hyundai Genesis

The truck finalists:

1. Chevrolet Equinox

2. Ford Transit Connect

3. Volvo XC60

I learned a few years ago, when the Saturn AURA won, that voting is heavily based on the significance of the car for its manufacturer and for the car market, and not just on what the car is like to look at and drive.

In the car category we have:

1. The first car Hyundai has produced that enthusiasts would want to drive.

2. The symbol of Ford’s (hoped for) resurgence. Journalists love to boost Ford these days. (Which will also help the Transit Connect.) The Taurus has been receiving so-so reviews, but so did the AURA.

3. A niche product that, while stylish and powerful, doesn’t point the way to the future of either GM or the car market in general.

So I think the odds of winning run in the above order.

Over in trucks, I see no chance for the XC60. The question, then, is whether a revolutionary (for North America) cargo can get the nod over a mainstream crossover that is far better than the one it replaced. Tough call, but if I have to pick one it’s the Equinox.

I used to think that journalists would avoid giving one manufacturer both wins. But then GM won both two years ago, so this isn’t a factor.

“Prius headlamp troubles could dim Toyota brand’s reputation,” writes Jean Halliday in today’s Advertising Age and Automotive News. I’ve suggested that manufacturers pick up the cost of common problems out of warranty. That said, this story seems driven more by an agenda than by the facts.

The issue: the optional HID headlights of the circa-2006 Prius are prone to turning off at random times, usually not at the same time. When this happens, they must be turned off, then on again. To fix the problem, Toyota dealers sometimes recommend replacing the entire HID system, at a cost of $1,700. Owners are launching a class action suit to force Toyota to cover these failures out of warranty.

I checked responses to TrueDelta’s Car Reliability Survey for any additional information they might provide. Quite a few owners have reported this problem, yet the Prius still has among the lowest repair frequencies. In all but one case, replacing the bulb seems to fix the problem. Non-OEM bulbs can be purchased on eBay for $90 per pair.

So why do we have an article in Automotive News? Many car models suffer from common problems, and there are plenty of class action lawsuits begging for coverage. Yet I cannot remember the last time AN covered such a problem.

And if they’re going to pick one common car problem to cover, why this one? These headlight failures don’t appear to have left anyone stranded, much less caused an accident. While dealers might try to charge $1,700, it is possible to fix the problem for as little as $90.

The allure appears to be Toyota’s quality reputation, and the widespread desire to take them down a notch or two. A quick read of the comments suggests that some people would like to use this problem as evidence that Toyota’s quality is no better than anyone else’s.

Should Toyota pick up the cost of replacement bulbs? Yes, if they’re smart. The biggest story here is that they didn’t respond more quickly–a sign that their customer care needs improvement. The facts do not support the extent to which AN calls Toyota reputation into question, much less singling them out for this treatment.

A few weeks ago it was rumored that Consumer’s Union, publisher of Consumer Reports, would purchase The Consumerist, a blog covering consumer issues and giving voice to consumer complaints. Now these rumors have proven accurate, and this purchase has been completed. 

Operating TrueDelta.com, I’ve learned quite a bit about the media. One of the most difficult lessons: journalists often won’t write about what you’re doing if it even partially competes with the activites of their employer. At least a few of them have told me they couldn’t write about TrueDelta’s unique vehicle information for this reason.

Consumer Reports is just one example. Though ostensibly putting the interests of consumers first, will they cite TrueDelta as a source of information they personally cannot yet provide? Of course not. I’ve personally been told I cannot mention the site when posting to their forums. Consumer Reports’ competitive interest comes before the interest of consumers. 

Now that they’ve bought The Consumerist, the same will likely apply to that site.

So, from where I sit media consolidation isn’t a good thing. Each media outlet has its own interests, and these come before the interests of readers. The larger these outlets get, the broader their interests get, and the more delimited their reporting gets.

Luckily, word-of-mouth remains beyond media control, and more and more people have been learning of TrueDelta from their family and friends.  

Every time Consumer Reports or J.D. Power releases the results of a reliability survey, much of the press rushes to reduce the message to a single question: are Detroit’s cars as reliable as Japanese cars?

The same answers have followed in all recent years: the gap is closing, and some domestic cars now score as well as the imports, but on average, or if you sum up the category winners, a gap remains. So we see the same oversimplified headlines and articles over and over.

Why the rush to reduce the issue of reliability to Detroit vs. Japan? Does the press or reading public try to similarly oversimplify acceleration times? No, in that case people expect test scores for not only a specific model but a specific powertrain.

The same should be done for reliability. The fact of the matter is, the reliability scores for a make’s models often vary widely. Some require few repairs, some require more repairs. Looking up individual model scores does require a bit more work from everyone, but not much more. Well, when such scores are provided. (TrueDelta provides them.)

The focus on Detroit vs. Japan not only misleads some people into buying Japanese models that are actually unreliable, but makes it difficult for those Detroit car models that do score well to get the consideration they deserve. This is the perception gap Detroit complains about–because it is one thing threatening the survival of an entire industry.

In defense of oversimplification, some things do pertain to the manufacturer as a whole, if not a nationality as a whole. Most importantly: customer care. How well the customer is treated when a problem occurs will be fairly constant for all of a make’s models. And, as I’ve written before, Detroit’s customer care needs to be much better. Too often these companies, when forced to choose between covering an early failure out of warranty and losing a customer, choose to lose the customer.

That’s a separate if related issue, though. When it comes to the number of problems a car is likely to have, car buyers, car manufacturers, and the people the latter employ would all benefit if consumers stopped trying to oversimplify reliability and at least looked at the scores for individual car models. And it wouldn’t hurt if the press took the lead on this one rather than “giving the people what they want.” After all, isn’t this the same line Detroit uses to defend its overdependence on SUV sales?

Just a few months ago seemingly everyone was criticizing Detroit for failing to foresee $4.00 gas and develop fuel efficient cars accordingly. Even today we hear that these companies should refocus on alt fuels.

But how many of those who claimed that Detroit should have spent billions of dollars to develop more fuel efficient vehicles predicted that fuel prices would fall by more than 50 percent in just a few months?

If gas remains below $2.00, or even below $3.50 (which seemed to be the tipping point), who will buy these alt fuel cars? After all, they’re going to cost a lot more than conventional cars, especially at first.

Talk is cheap, hindsight is 20/20, and when events move too quickly even for hindsight, there’s always amnesia. Has anyone who chided Detroit a few months ago for not offering fuel efficient cars stepped forward and said, “Well, I was wrong. Fuel prices are back down, and then some, so the solution isn’t as simple as it seemed?”

In reality, with fuel prices so unpredictable and currently low, investing in fuel efficient and alt fuel cars is much more like buying health insurance than the core of a viable business. Now, health insurance is always good to have. But Detroit has been like a family just barely scraping by–keeping up with insurance payments takes a back seat to paying the mortgage and putting food on the table.

What do people do when they haven’t paid for health insurance, then get sick, and can’t work enough to pay the mortgage? They ask for government assistance, of course.

We’ve got the system in place to provide the most up-to-date, most ”real world” vehicle reliability information. Now we just need more participants. The 35,700 vehicles signed up so far are a great start. But 100,000 would be better. How to get there? Well, media coverage would help. But it has proved surprisingly difficult to obtain this coverage.

A major source of this difficulty: much of the media believes that the best possible mousetrap has already been invented as far as vehicle reliability research is concerned. So there’s no point–and no story–in what TrueDelta has achieved. As much as I’d like to “run my own race,” this belief must be directly challenged if we’re to grow like we need to grow.

Perhaps some in the media are aware that Consumer Reports could do a better job. But this has been overridden by the integrity of that organization. That Consumer Reports doesn’t accept advertising apparently places them above critique. I also hear that Consumer Reports simply has so many survey responses–they emphasize this point themselves–and they’ve been around for so long. But being big and old hasn’t placed General Motors and Ford above critique. So why should these be the end all with regard to Consumer Reports?

Consumer Reports’ refusal of advertising and other such entanglements is admirable. As is their independence and integrity. For similar reasons, TrueDelta solicits no ads from anyone with a stake in our results. (We have no control over the ads supplied by Google, and no direct contact with those advertisers.)

But should this refusal to accept advertising be everything? Shouldn’t the timliness and transparency of the information also matter? I’ve never called Consumer Reports’ integrity into question. Instead, I’ve focused on two major shortcomings that led me to develop a better research process, because I personally wanted better information.

The result: TrueDelta posts actual repair rates, not just dots, to make the size of the differences between clear. And it posts this information as much as 14 months sooner than Consumer Reports.

For example, we had initial reliability information on the Jaguar XF in August, and will have a full result in November (with a preview already available for members). Consumer Reports won’t have a result for the car until October 2009.

Consumer Reports recent release of its latest results was covered by hundreds of media outlets. None of the stories I’ve seen have stepped outside the bounds set by Consumer Reports’ press release. None have noted the age of the data on which the results are based or that only relative ratings are provided.

Many journalists enjoy nothing more than having a story first, to have a “scoop.” For some, if they’re a day late, they might as well not publish the story at all.

So I’ve often wondered why TrueDelta doesn’t receive recognition for being not just a day or two ahead of any other source of vehicle reliability information, but months ahead, even a year ahead. The message: if Consumer Reports doesn’t have a result yet, then car buyers should simply wait until they do, or simply do without reliability information when buying a car.

Does the media even help Consumer Reports in the long run by not taking a close look at its research and reporting process, and by ignoring alternatives? History makes it quite clear what happens to an organization when it is left uncritiqued and unchallenged. The outcome is rarely good for organization, much less those it serves.

At some point, we’ll get large enough that at least some media coverage will follow. Until then, TrueDelta’s growth depends on word-of-mouth. Anyone who wants the better, quicker vehicle reliability information TrueDelta’s process provides: we’re counting on you to help make it happen.