During the GM Q1 2019 earnings call in April, GM CEO Mary Barra received some interesting questions from Brian Arthur Johnson, an analyst at Barclays Capital. Johnson’s first question surrounded product desirability, GM vehicle design and the effectiveness of its marketing efforts. After Barra’s response, Johnson followed up with another question about GM’s ability to remain creative as an organization.
“Let’s get back to the design process. You talked about discipline and focus groups, but how do you create enough room for off the wall creativity, the classic Apple scenario, where people don’t know they want it until they see it?”
2019 GMC Sierra 1500 MultiPro Tailgate
GM CEO Mary Barra’s response shed some light on how much flexibility is given to GM employees.
“I think this applies more on the technology side. Super Cruise is exactly that, the fruit of our team being creative. That’s the feedback we’re getting from customers. But we also let creativity forge our designs.
One of the things we do at GM is every time there’s advanced design, almost any designer in the company can participate in putting ideas forward. We allow every designer in the company to provide input.
The GMC Sierra MultiPro tailgate was a great example of this. It came through creativity and innovation from our workforce and manufacturing shops. This allows an innovation process where everybody can participate.
We have what I like to call a shark tank where we’ve organized competitions where people all over the company bring in creative ideas. Of course, our chief engineers and designers are there to approve the ideas.”
Concepts such as the Cadillac Ciel show just how creative GM designers can be
The GM Authority Take
We agree with Barra concerning GM’s creativity for technology and engineering. We’ve seen great new features such as the aforementioned MultiPro tailgate on the 2019 GMC Sierra, the Rear Camera Mirror, or the clever technologies integrated into the MyLink, IntelliLink and CUE infotainment systems, such as Teen Driver, Valet Mode, as well the new trailering camera systems found on the 2020 Sierra HD and 2020 Silverado HD. We’d even add that the Chevrolet Volt and Chevrolet Bolt EV are engineering marvels that remain competitive even years after their release.
2020 Cadillac CT5
But from where we’re sitting, GM’s ability to let its hair loose to develop game-changing new products is still lacking. We can only imagine the massive bureaucracy of management these ideas had to go through before seeing production.
The situation is further exacerbated when considering that GM has shown significant levels of inability or disinterest in finding and capitalizing on niche segments. By comparison, rivals such as the Kia and Hyundai have carved out niches with vehicles likes the Soul and Veloster, respectively. Meanwhile, German automakers such as Mercedes-Benz, Audi, and BMW, have found ways to create niche segments with “four-door coupe” versions of their sedans and crossover SUVs, creating desirable, value-packed, and – most importantly – profitable products. GM is absent from those spaces.
Buick Avista Concept
At the end of the day, GM most certainly has capable and creative designers and engineers, and the automaker’s processes have allowed it to bring fresh new ideas to market, as Barra explained. But the issue at hand is that GM remains a top-heavy company that seems to stifle creativity, resulting in lost opportunities and – ultimately – a competitive disadvantage.
Comments
Promises, promises.. promises as Mary Barra said there would be 5 new Electric Vehicles by 2020 and it’s May 2019 yet there still aren’t hints on when the 5 EVs will be introduced; the EUV doesn’t really count as it’s built off the Chevrolet Bolt architecture as Barra promised 5 totally new EVs, what is the use of being creative when none of the concept cars are brought to production as it’s pretending masturbation is the same as the real thing.
You’re right. Every car manufacturer delivered on every promised car. Except Mary Barra. Who is Evil. Because she makes you think of masturbation. Something like that.
(Waiter? I need more butter for my eyerolls.)
I find it hilarious to read about all these preachings from her about so many “soft” topics. Sound inspirational, sounds amazingly contemporary. But the fact remains, her company’s stock hasn’t gone anywhere in nearly a decade now, and under her tenure it has even declined, all during the longest bull market the US has ever seen. She can talk as much as she wants about creativity, or cultural change, or women in science/engineering etc.. if she can’t grow GM then she has to go.
As a shareholder, I disagree that she is the problem. I believe that Wall Street is. Wall street demands bigger dividends, stock buybacks, $6 billion in free cash flow, but they continue to punish the new company for the sins of the old, long after they would punish us for a bankruptcy.
Its been ten years now. Get over yourselves, Wall St.!!!
Yes I agree, hire me as CEO ??? ?? ?. This is not hard ! Lmao you go by the market and what people want and where. Then you build it, far as selling it well.. looks at what being sold and why, then copy it and make it better. That’s it
There are things that automakers face today that are much different than the past. Most stable companies are very Conservative in their actions as they do not want to create undo risk and or incur major loss with a major mistake.
Toyota and Honda are prime examples of very low risk with few niche models or risky products. Boring yes but few mistakes economically.
When a company is struggling and is in need of attention they tend to take more risk or do projects for attention. GM was like this about 10-16 years ago when they did some fun cars. But it was too late to do them much good.
Cars like the Soul, Cube and other niche vehicles are put out in a try to gain attention as in the two listed here one worked the other not. At least it did well in japan.
Doing niche cars today is difficult as if you make a mistake you can lose several billion dollars that could go into development of features that would increase the ATP of the product you have.
In a perfect world a good company will do both. They will be fiscally smart and conservative but still allot money for some fun programs. But today even just a single fun program can cost billions that they can not afford to lose should it fail.
The auto makers have some major challenges pending and those who financially have their houses in order will still have to claw through it while those struggling now some may not make it.
The future faces with EV development cost , Tougher Emissions, Ever higher cost and prices. The threat of Cheap cars from China etc….. It is the perfect storm.
Today it is not so much the size of your company as it is the efficiency of that company,. Controlling cost is key and cutting waste. Today it is about growing profits not the size of the company as much.
If you can not make money at the size you are now making more cars is not going to fix that. We saw that leading up to the bail out.
I still wish Mark had a little more Lutz in him to step just a little over the line now and then just to make what we have a little better. Mark is only a 9 to Lutz 11 on a ten scale.
Go to my twitter page @ccaplanis
If GM were to get really creative with their terrific Rear Camera Mirror, they’d have the rear view on a small screen in, say, the windshield area in front of the steering wheel (like the heads-up display) — immediately above the dashboard or hanging down from the top, below the sun visor. There’s no reason to have a TV view of what’s behind the car on the rear-view mirror stalk, which is positioned because of the angles and optics of — wait! — a MIRROR; the Rear Camera display should be right in front of the driver.
when GM decided to cut sedans and close plants ,sales have decreased and also did their stocks . their decisions have pissed off many buyers ( I know of many who do NOT want SUV’s) congrats Mary but your going in the wrong direction