Did Trickle Down Business Process Kill the US Automobile Industry? Can Enterprise 2.0 help save Detroit?

gm-ten.jpgLast month I wrote about trickle down business strategy HERE.

That post turned into an article on business agility in the post modern economy that published May 18th in the Business Solutions Group InfoWeek Special (in German only, link on lower right). The post itself is part of a much larger forthcoming white paper on business agility that covers Enterprise 2.0 technology, crowd sourcing in the enterprise, communication paradigms, social transmission of information and value, as well as information management and re-use.
Then comes a timely article in Wired Magazine on the demise of the US Auto Industry. What do they blame? The "Top Down Model". It's trickle down business strategy strangling agility in the crib of innovation. The "Manufacturing, Retooled" image (HERE) is most telling. This is not only an interesting take on what the automakers SHOULD do vs. what they have done and continue to do today. Based on the past success of other companies like Toyota and Honda, the comparisons are stark and not unfamiliar. The first question is, can any of the Big Three US Auto Makers move with enough agility adopt a new business process that breaks or at least enhances / sits next to / augments the "Top Down" model? The second question is what are government regulators, bond holders and shareholders doing to demand this kind of agility?

The Wired article states:

Automakers will need to transition from a vertical, proprietary, hierarchical model to an open, modular, collaborative one, becoming central nodes in an entrepreneurial ecosystem. In other words, the industry will need to undergo much the same wrenching transformation that the US computer business did some three decades ago, when the minicomputer gave way to the personal computer. Whereas minicomputers were restricted to using mainly software and hardware from their makers, PCs used interchangeable elements that could be designed, manufactured, and installed by third parties. Opening the gates to outsiders unleashed a flood of innovation that gave rise to firms like Microsoft, Dell, and Oracle. It destroyed many of the old computer giants but guaranteed a generation of American leadership in a critical sector of the world economy.
This is not really different than embracing and facilitating the cultural shifts inside the enterprise presumed and hastened by Enterprise 2.0 social technology. The "Not Invented Here" syndrome has no place in an agile business or in agile teams within and between departments, partners, and the extended network.

The opposite of the "Not Invented Here" syndrome is crowd sourcing, collective intelligence and the ability to tap the enterprise "brain" in order to generate and consume better quality signaling if not better and more efficient decision making. But as you suspect, simply buying and installing some Enterprise 2.0 technology is not a panacea. The technology enables wide ranging contributions and idea incubation. The technology facilitates expertise identification, information re-use, contextual analysis and topical aggregation. It still takes people, driven by purpose toward clearly defined goals to power the Enterprise 2.0 technology on the rails of innovation. There is no crowd sourcing technology without first the crowd. This should be obvious since the Big Three were no strangers to technology. GM's FastLane Blog has been around since early 2005 yet, if the Wired article even comes close to the truth, the love of technology did not help translate into the kind of business agility that is helping other auto manufacturers survive the global economic downturn.

This is a time when the Big Three US Automakers are being forced to rethink the way they make cars, address the market, adopt mechanical innovation from outside the organization and incorporate ideas from everywhere into a salable asset - the new cars of the next several years. Widespread Web 2.0 adoption has clearly demonstrated that people are eager and willing to participate, sometimes for as little as "street credibility", recognition, and bragging rights. Enterprise 2.0 technology is designed to tap that desire to participate within the organization and then channel, strain, combine and deliver better information, more quickly to people more equipped than ever before to make immediate and accurate decisions.

We'll see what happens in Detroit < fingers crossed >.

A very special thanks to my colleague Jason Zolzcynski for his great work helping me with this article.


Jinx! Buy me a Coke! http://bexhuff.com/2009/05/how-one-bad-business-process-doomed-gm I think GM is the poster child for how not to run a large business... I don't know if they can be salvaged. They have too many cultural problems to have it all be solved with new technology. It might be best to split them up, and sell off the divisions that actually work properly.

Posted by bex on May 31, 2009 at 06:30 AM CDT #

I agree with bex. GM has taken it upon themselves to show the rest of the business world, big and small, what not to do. But it leaves me wondering: if a big business like GM that has been around for a few years can crash like this, how do I keep my small business alive? Articles like this help me out! Another web site that posts some great articles dealing with small businesses, employees, money, and everything in between is http://www.wbsonline.com/resources/ . Check it out!

Posted by Sara F. on June 05, 2009 at 12:35 AM CDT #

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