Space oddity - in the long run we're all dead

I have less sympathy for GM than for Blacks. Some crimes of strategy are less forgivable than others. The latest part of GM to break is Saturn which is closing down. My original impression of Saturn was formed not as a car buyer, but as a marketing case study - an example of a skunkworks project, which were rather trendy at the time (10+ years ago). Turns out not to have been such a smart idea in this case since not only were the cars not awfully good, they sold at a loss.

There's a very simple lesson here. It may (or may not) be smart to isolate little groups of innovators in order to break the corporate cultural assumptions about what might or should be done. The jury's out, but my judgement tells me there are times this is very smart indeed. What is clearly - inexcusably - dumb is to build a completely parallel production capability (so sacrificing all your efficiencies of scale), and to stick the new products out in a separate brand so that if there's any equity to be gained, you fail to capture it where you need it. The threat from Japan was to GM itself. A retailation brand (which is all Saturn was) was doomed. The arrival of Japanese manufacturers was the first big unheeded warning that the whole of Detroit needed to revamp its capabilities and its offer.

This mistake took so long to play out that Roger Smith, on whose watch it happened, didn't live to see the wheels finally come off. A small personal mercy. I hope I die too, before my mistakes get found out.

Falling trees. Shaping contingency strategies.

After a short lull (the media even rallied with a few 'green shoots' stories), another cascade of financial awfulness. It seems unlikely that the car makers will all survive without massive subsidy - which governments appear unwilling (probably wisely) to provide.

Detroit's problems are multi-fold. Cars are expensive capital investments, not an appealing idea for worried consumers. And most car purchases in markets such as the UK are really discretionary - product performance means that the old one probably still works (mine just sailed its 7year MOT). On top of that the big 3 made some truly terrible strategic choices, such as too much emphasis on Chelsea Tractors, and being distracted by vanity brand acquisitions (Jaguar, Volvo...) when they should have been more worried about their own failing product development capabilities. Not to mention the lack of stakeholder insight demonstrated by the infamous private jet trip to Washington. (The day which surely sealed Richard Wagoner's fate?)

But not all of their problems are unique. For example, other industries depend on purchase finance loans ('buy now pay later') to close the sale - and these are now both less appealing and less easily provided. It can be little more fun right now selling sofas than it is selling the apartments to put them in.

And there are plenty of other ways consumer spending behaviour is changing - as any fashion retailer will tell.

It is not even necessary to be a failing company. Being a supplier to, or customer of, one may be enough. Zavvi were undone by their dependency on Woolworth's logistics. Bad news for sheet metal suppliers today is bad news for the customers of sheet metal suppliers tomorrow.

It isn't always possible to avoid falling trees. But a little contingency planning could mitigate some risks - such as reducing dependency weaknesses through diversified supply chains. It could even create opportunities. Where might gaps in the canopy open near you? What are your competitors' weaknesses? And how could you exploit them?