READING CIRCLE #1
Group 4:
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CONTENTS
INDIVIDUAL PAPERS ............................................................................... 3
Samantha Hughston ............................................................................. 3
Karsyn Slack ........................................................................................ 6
Quyen Dinh .......................................................................................... 8
Benjamin Martin ................................................................................ 11
Nicholas Tornow ................................................................................ 14
Michael Rumbough ............................................................................ 16
DISCUSSION QUESTIONS ...................................................................... 19
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INDIVIDUAL PAPERS
Samantha Hughston
The book Car Guys vs Bean Counters by Bob Lutz has opened my eyes to what managerial,
executive, and leadership roles look like within a company. These positions are not easy to say the
least. Not only do these roles come with many responsibilities but you are also held liable for the
products that are created under you. Being held accountable for any product is one thing, but in
particular, cars are a whole different world. As seen in Bob Lutz’s situation, he was held liable for
the many decisions that GM made. Although not all of his executive decisions were successful, a
majority were and this helped lead to the rebirth of GM. Lutz has provided readers with many great
business insights that stemmed from his willingness to step off of the beaten path and create his
own path when running a business. These insights are ultimately what led to great success within
the company.
For instance, one of the biggest business insights that I learned from Lutz in the first few
chapters was the importance of setting a good tone at the top. At times setting a strong tone at the
top is easier said than done for most large companies. Generally speaking, this means that the
collective group of management and executives act ethically and honestly, and when doing so it is
assumed that it will trickle down to the other positions within a company. However, before Lutz’s
return to GM, this was not the case. The leaders in this company were finding ways to cut corners
and they were not fulfilling their ethical responsibilities. Many of the executives were prioritizing
cost-cutting and the time it takes to get a car out on the market, rather than taking the correct
measures to make sure the vehicles are produced well. However, once Lutz made his return to GM,
this all changed. Lutz made it a point to change the tone at the top at GM and in doing this he was
able to create a much more profound culture at the company. Some of the ways Lutz was able to
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impact the culture of the company was by enforcing strong communication among all departments
within GM. This meant clearly communicating with marketing, design, sales, and the development
team in order to convey ideas and thoughts to be well executed. He also strictly enforced the ethical
side of running a business. For Lutz, this meant doing what is best for the customer and placing
them at the center of all decisions. This change of perspective at GM allowed for the company to
function in a much more efficient manner and also created a better culture starting from the top
and working down.
Another business insight that I found to be very important was that of creating a business
process that would be understood by the whole company. Before Lutz’s return, the leadership at
GM created and enforced a highly complex business process that made production and the creation
of new products seemingly difficult to execute. Oftentimes, even when these products were
produced, their failed business process would likely lead to the vehicle reaching way below the
targeted sales. It was with the return of Bob Lutz that the format of the business process would be
called for a renovation, or in others words a complete demolition of the original. Some of the
problems Lutz addressed with the original process was its lack to consider the needs to the
consumer and the over-emphasis it placed on the financial models. With the reconstruction of the
model, Lutz made large efforts to stray away from the reliance on financial models and to take the
needs of the consumer into consideration instead. In doing this, the company was able to recreate
its business model to best cater to both the needs of GM and the consumer. Having a sturdy
business process allowed for the ideas of one department to be easily executed in another and
helped the company get closer to reaching its targeted goals. It is due to the unique perspective of
Lutz that allowed GM to persevere in its challenging times and stay afloat despite its many
previous failed attempts in the company.
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Peer Review - Karsyn Slack
One of the key things I noticed in the book was how tone is extremely important to maintain
a successful company. I appreciate how you talked about this important topic brought up multiple
times during the beginning of half of the book. The author wrote about multiple insights when it
comes to running GM but the tone is one he wanted the reader to pick up the most. I also loved
how you used an example of Lutz putting into action the insight he argued in the book. In the
second insight you touched on was on of the biggest challenges GM was faced with before Lutz’s
return. In order to create big change into company you must start at the top and your point created
a great argument for this. Overall, I love the insights you focused on when reading the book
because it helps me look at different topic in a more complex way.
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Karsyn Slack
Bob Lutz gave more insight not only into the car industry but also into how giant corporate
companies work. One of his insights that took my interest was how marketing in the car industry
is sensitive to the customer because they view the value of a car on this. At one point during the
book, he points out how the colors of the cars are dull and unappealing to the eyes. The bean
counters retorted that the paint color has the least amount of chips than any other make and model.
The best response Lutz had that resonated with me was how restaurants do not advertise for the
fewest reports of food poisoning or complaints. A company needs to have marketing that brings
value or a unique experience to the customer above focusing on having a small complaint margin.
This event also brings up the problem of measuring and interrupting data that is not relevant to a
firm’s success. Almost like smoke and mirror, this data brought by the bean counter had the
company focusing on the wrong design for the cars it produced. Letting go of this idea of car
minimizing complaints and focusing more on the idea of value for customers will help the
company gain more profit. It is important to reduce the cost of firms’ goods, but it should never
be at the expense of what the customers perceive as important. Overall, this insight helped me
think more about marketing and its importance to profits than reducing complaints. Fewer
complaints do not equal customer satisfaction.
Another insight from Lutz that I learned from him was Performance Management Process
and how to properly implement it. Lutz would have just outright gotten rid of the program because
it didn’t add any value for the customers. In my opinion, I don’t believe the process was bad with
unifying a vision for the company but tying the success of a company for one objective across all
departments makes working constrained. Lutz argued that a senior executive should never need to
have a list of objectives that they must complete to properly do their job. I agree with this point of
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view because the world is a dynamic place, and a hard set of objectives will only devolve the
company. The goals of the company should change with the external environment around it and
companies that cannot adapt tend to go under. Lutz pointed out how these objectives were about
improving performance but after multiple periods of results, this process show little to no
improvement for the company. Overall, this problem showed that just because something looks
good on paper doesn’t mean it will benefit the company. Always dig deeper and ask for data before
modeling your company after a new model.
Peer Review - Samantha Hughston
I really enjoyed reading your paper and learning more about the business insights that stood
out to you in the novel. The insights that you described are ones that I too find to be very important
in the business world. For instance, I think that marketing plays a large role for many companies
and in order to successfully conduct your marketing strategies you must cater to the customer. At
first, I think GM was not able to grasp a good understanding of what successful marketing looked
like, however, with the return of Lutz to GM he was able to make the changes needed within the
marketing department. I also thought the business insight of the Performance Management Process
and how to implement it is an important component to bring to the readers’ attention. As an
executive I think you think dynamically in order to lead the company to success, however,
following a list of objectives would limit this. Even though the Performance Management Process
sounds good in theory I think changing the layout of this process to allow for more free-thinking
and risk-taking would ultimately allow the company to reach its goals. Overall, I think this is a
very well-written analysis of the business insights that Lutz described in the first few chapters of
the book.
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Quyen Dinh
Throughout the first seven chapters of Car Guys vs. Bean Counters, Bob Lutz explains
many obstacles that General Motors (GM) encountered and his efforts of turning the business
around. Two important business insights that I picked up from the text are that long-term planning
decisions should not be based purely on metrics, which lack any relation to the real motivations of
consumers; and a common misunderstanding of business that the absence of complaints equals
customer satisfaction.
Lutz started off by emphasizing the importance of determining business priorities and how
over-analytical thinking was one of the main factors that led to their downfall. He stated that if the
leaders are primarily motivated by maximizing today’s profit and place it into the business plan to
navigate all other variables to “hit that number”, they most likely sacrifice the firm’s very future
to do so. GM was too focused on reducing costs, increasing market shares, and achieving earnings
goals that they did not realize the consequences that this mindset of treating their cars as merely a
means of making money and assuming the customer desire for the product as a given was the
reason why GM lost its way.
The author’s point of view continuously contrasted the “bean counters”, who were
replacing common sense with their excessive interest in controlling expenses and revenue when it
came to product excellence and customer service, which caused GM’s decades of producing a
stream of mediocre and uninspiring cars. Highlighting that marketing and quality are all about the
customer, he wanted to return the responsibility for the creation of the right product to the “product
guys”, who indeed understand quality design and have a passionate focus on their products and
customers. As a result, GM's creativity and commitment shift to product perfection boosted their
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productivity and success. Lutz once again had his opinion proved that the accountants should play
the role of advisor and evaluate the designers' judgments, not making the critical design decisions.
Personally, his thinking makes complete sense to me as “Passion and drive for excellence will win
over the computer-like, dispassionate, analysis-driven philosophy every time,” said Lutz and it
was fascinating to watch how a small change in perspective might have a significant impact on a
company's performance.
Another interesting takeaway is at the end of chapter 7, he mentioned an extremely
common confusion that all the businesses usually have is putting customer satisfaction on the same
par with an absence of complaints. Simply put, a business with the lowest quantity of defective
goods or negative feedback does not equal the one having the best quality products or services.
Under scientific measurements, GM was considered as the worst performance regarding
paint brilliance, image clarity, and reflectivity, but surprisingly having low complaints, which
completely proved his standpoint. To illustrate, he describes the way the GM car paint was meant
to be purposefully dull in order to not reveal flaws such as runs or drips with zero desire to excel
or develop a “smash hit”, so the customers would just accept it to some extent but never completely
satisfy. Fortunately, Lutz was always a product-centered executive, by upgrading their paint type
and methods of application, GM ended up bringing their business from the bottom to parity with
Lexus. It is also evident that companies need to measure what matters to customers, not just
measure for the sake of measurement.
Overall, the first seven chapters of “Car Guys Versus Bean Counters” point out what went
wrong with GM, who used to dominate the market, producing stylish and desirable cars. But then
GM’s leadership began to put its faith in numbers and spreadsheets. With the “bean counters” in
charge, carmakers, and most of the American industry particularly, lost their single-minded focus
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on product excellence and their competitive advantage, leading to expected demises. Moreover,
it is interesting to learn about the biggest misconception of the business that quality is determined
by the absence of defects as defined by management, instead of the existence of value as defined
by customers.
Peer Review – Benjamin Martin
I liked the mention and discussion of the confusion among GM employees conflating lack
of complaints with customer satisfaction. This was something that I found interesting but didn’t
bring up in my two insights. While reading I did, in my head, make the same mistake that Mr.
Lutz’s employees did of thinking that the lack of complaints is a good thing. This was a bit of an
eye-opener and definitely caused me to reflect on the way I think about these types of situations.
The change in GM towards a solely analytical mindset from top to bottom was also very
interesting and I’m glad that you noticed it as well. In order to succeed, you need a healthy mix of
both a more creative and analytical approach. This seemed to be what GM had in their early
successful days, but they shifted away from this harmony when the company felt that the design
sector had become too big of a focus in the public eye. I liked that you brought up Lutz’s quote
about passion and a drive for excellence always winning over dispassionate computer-like thinking.
As an analytical thinker myself, I always have to check myself to make sure that I am not slipping
into auto pilot.
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Benjamin Martin
Two business insights that I gained from reading Car Guys vs. The Bean Counters were
the importance of loving your field of work and maintaining product excellence as the primary
focus.
As the famous quote goes, “Choose a job you love and you will never work a day in your
life.” While I believe this is overstating it a bit as any job can have some tough days, there is
definitely some truth here. Doing something that you genuinely enjoy doing will simply produce
different levels of intrinsic motivation than doing something that you are indifferent to or, heaven
forbid, dislike wholeheartedly. I would have a harder time succeeding in an artistic role for the
same reason that Mr. Lutz would have a tougher time in a more analytically-focused role: we are
wired differently.
Mr. Lutz, in this case, is definitely in the right field of work. He is very knowledgeable
about automobiles which he proves multiple times throughout the book. For example, on page 28
Mr. Lutz states, “GM… transformed every one of its passenger cars from ‘framed’ construction to
weight-saving unitized, from rear-wheel drive to front-wheel drive, and from V8s to V6s and four
cylinders…” While this sentence may just seem like a bunch of car mumbo jumbo to someone
who isn’t truly a car guy, it does demonstrate great knowledge about the history of the automotive
industry and thus that he cares enough about this history to take it to heart. This is something that
I have thought a lot about when trying to find an industry that I would like to eventually work in,
because while I will most likely start my career crunching numbers in a bank or something of the
sort, toiling away with something that I don’t truly care about will not provide me with the career
satisfaction I hope to achieve.
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One of the major reasons that Lutz believes that GM fell from its pedestal was due to people
only being interested in the numbers taking over management positions within the company. As
Lutz states on pages 87 and 88, “... the VLE’s list of objectives … [included] assembly hours per
vehicle [and] percentage of parts reused from the prior vehicle.” While Lutz has a lot to say about
the VLEs in this section of the book, one of his main grievances is that GM’s system rewarded
them for focusing on objectives that had a detrimental effect on the quality of the products that
they were producing. There isn’t anything wrong with reusing parts for vehicles as this is a way to
cut costs, but when producing cars quickly supersedes producing cars that the customer wants,
there is a problem.
This is restated later on page 131 by Lutz when a VLE comes to him and shows Mr. Lutz
that “he had met or beaten every single target…” but later admits through Lutz’s questioning that
the car isn’t selling all that well. This is more proof to Mr. Lutz’s point about the size of the
problem that he inherited by taking on a role at GM. Many of the employees had become satisfied
with just meeting the standards set forth by the company without questioning why success on the
market didn’t follow. This led to the output of a number of vehicles quickly that weren’t up to the
perceived standard and performed poorly in sales, so while the company was supposedly saving
money by getting the cars out quickly, they were ultimately hurting their bottom line and reputation.
I believe that this point has a lot in common with what we discussed in chapter one about learning
and reflection. Essentially, in order to determine if our methods are working we need to take a step
back and look at the bigger picture like Lutz did. Getting one good grade on a test doesn’t mean
that your learning methods were solid.
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Peer Review – Quyen Dinh
I am really amazed at how you were able to connect the details from the story to the
concepts that we have learned so far from the course as well as your real-life experience. I like
how you concluded that it is always important to step back and look at the big picture to ensure
that our learning strategies are working, just like how GM hit every target they set but it still ended
up failing.
The major insight that interested me the most is the importance of having a passion for
your own field of work, which I did not get to emphasize in my paper. As another business major,
I will also become a number-cruncher, your point of view reminds me that I need to consider my
personal feelings just as much as other external factors so I can truly be satisfied with my career.
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Nicholas Tornow
One business insight from the novel is that “the best corporate culture is the one that
produces, over time, the best results for shareholders” (Lutz 98).
Lutz lists this as one of his strongly held beliefs. He criticizes GM’s lack of constructive
disputes as they design and produce vehicles. If everybody is agreeable, then it stunts the creativity
and growth of the business. This is one of the reasons why GM struggled for many years. Their
designs had lost their creative fire. All that remained were the dying embers of customer
satisfaction. GM was relying on the safety of conformity rather than taking risks and breaking
barriers. To improve sales, GM would have to realize that “tension and conflict are necessary
ingredients of a successful organization” (Lutz 98).
The importance of doing what is best for the shareholders is also expressed by the statement
that “much of today’s content is useless in terms of triggering purchase decisions” (Lutz 99). Lutz
explains that most consumers want a vehicle that excites them. They are not looking for a product
that simply checks the boxes, they want one that makes them reconsider what a vehicle can be.
For too long, GM settled for mediocrity, and they suffered for it.
This insight inspires the prioritization of creativity over profits in all forms of American
business. An “enterprise that is focused on excellence and on providing superior value will see
revenue materialize and grow and will be rewarded with good profit” (Lutz X). In other words, let
profits be the effect, not the cause.
A second business insight from the novel is that “design’s role needs to be greater” (Lutz
100).
Lutz explains how GM’s power structure has contributed to GM’s lack of innovation.
Corporate leadership sends their uninspired designs to the Design department and forces them to
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use them. Lutz describes meeting the vice president of GM Design, who shows him several
projects that the Design department is working on. He explains that GM has vehicle line executives,
who are usually engineers. This system is flawed within GM because “the VLEs were given
responsibility for design”, meaning that they oversaw aesthetics (Lutz 77). There was too much
emphasis on getting new designs done in a timely fashion rather than making a product that
consumers would love.
Lutz advocates for companies to not prioritize speed. Speed prevents innovation and
produces lackluster products. Companies throughout America should let visionaries and product
lovers be responsible for design-related positions.
Overall, Lutz’s goal is to explain that companies must focus on creating incredible products
and keeping the customer’s desires in mind. That is how this country can continue to be a leader
in innovation.
Peer Review – Michael Rumbough
1. “If there is no one to question the decisions, then there is no one to bring new
perspective/alternatives. Given how poorly the designs ended up over the years, this
makes sense.”
2. “‘Tension and conflict are necessary ingredients of a successful organization’” is a really
good quote to use.
3. “I also said ‘design’s role needs to be greater’ as one of my insights.”
4. “A person who actually loves the product will have daydreamed about designs in their
free time already and know the difference between good and bad design.”
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Michael Rumbough
One thing I have learned from this book is that running a successful business is not just
about being good with numbers. It is also about having a good product and business model.
The first lesson I gained from this book is that when you reach the top, make sure to keep
the values that got you there. When reading this book, one of the group discussion questions rung
loudly to me every time Lutz criticized GM. “Is the car better than it needs to be?” To me, the
answer was a resounding no. Their top brand Cadillac was literally known for being the best, as
said by the common expression “It’s the Cadillac of [name of product category]” to describe
something elite (Lutz 42). The selling point of a Cadillac is that it will be the best car you can buy.
Once the bean counters start to take more focus on the product their values changed. By allowing
a product’s main selling point to be unprioritized, it deprioritized it in customers’ minds. Once the
market was flooded by an excess supply of the “best” it simultaneously lost its ability to be special,
the best. People were shifting to brands that were “in limited supply and therefore exclusive” (Lutz
43). So, it was GM’s own unthought-out decision that hurt them. GM commonly wants to make
major decisions without contemplating all the possible consequences, which is not something that
a top brand would do. That shift in the culture at GM to being all about speed was another loss in
their values. The VLEs would rather proceed with their errors than “go back for a redo because
that would blow timing” (Lutz 78). Speed and quality do not go hand in hand. It is not possible to
be the best in everyone’s minds when you have quality issues. Once again, GM was prioritizing
the wrong values instead of striving to be overachievers in the car market like they did when they
were at the top. Therefore, I learned to stick to the values that made you successful without looking
for shortcuts.
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In decision-making, it is important to remember the qualitative aspects as well. The design
has just as major of a role as the specifications do. From a car guy’s perspective, a car is also art.
Even the design that you cannot see, the exhaust, is an important piece that not everyone
understands. I was excited to read that part as a car guy because the new Corvette Z06 coming out
this year finally sounds like a Ferrari, as Mitchell imagined, even though it is still V8. The design
is what gets cars on my personal radar. The metaphor is true that “shoemakers should be run by
shoe guys” essentially saying that businesses should be run by those with “passion and drive”
(Lutz xiv). If you are designing something you know nothing about, the passion and drive piece is
taken away, and the results are noticed by the public. GM’s VLE’s were at fault for creating such
ugly cars that further soiled GM’s reputation. They all had “quantified objectives” and there was
no objective regarding looks (Lutz 77). The result of disregarding the looks of the car was failed
car lines that were jokingly bad. One design team’s mission was to have no design at all. Their
target market was to go for non-car guys that did not care for anything but their transportation use.
What’s to learn from it is that even no design still gives off an impression. The impression is like
how “a person wearing an ill-fitting burlap suit” looks (Lutz 71). Therefore, no matter what target
market a business is going for, it needs to have an appealing aesthetic to it to be successful.
In order to have a successful business for the long term, it is important to remember what
makes that business successful. It is different for different organizations, so it is important to do
what works for you. What worked for GM was their design and quality, both of which went away
along with GM’s reputation. There was a heavy emphasis on how important design can be for a
product. No matter what the spreadsheets say, it is important to look at what they can’t tell.
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Peer Review – Nicholas Tornow
1. ‘” Speed and quality do not go hand in hand. It is not possible to be the best in everyone’s
minds when you have quality issues.’ This was one of my favorite insights from the
book. There’s a moment where somebody says they need to finish the design quickly or
else they will lose money and Lutz says the entire project will be a bust if they rush it. It
is important to recognize that is usually better to do something right than it is to do it
quickly.”
2. “GM’s decision to take design decisions out of the hands of the Design department was
absurd to me. GM had lost its ability to innovate because the people designing them did
not love cars or see them as art.”
3. ‘” If you are designing something you know nothing about, the passion and drive piece is
taken away, and the results are noticed by the public. GM’s VLE’s were at fault for
creating such ugly cars that further soiled GM’s reputation.’ I couldn’t believe that GM
did not realize this before Lutz came into the picture! It should have been obvious that the
public was dissatisfied with GM’s mediocre designs.
4. ‘” No matter what the spreadsheets say, it is important to look at what they can’t tell.’
Love this. There are always things that numbers can’t tell you. In a lot of ways, quality
cannot be measured.
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DISCUSSION QUESTIONS
1. On page x of the Preface, Bob admitted that he was "a good product guy, but he's not
bottom-line focused, not a sound businessman." Do you agree with this assessment in
your reading of the first 7 chapters? Why or why not?
Yes, we do agree with Lutz in his statement of being “a good product guy”. Throughout
the first seven chapters, it is evident that Lutz places an emphasis on creating a good product for
the consumer. He proves himself to be focused on doing what is best for the customer. He
expresses that when you do what is best for the customer you will ultimately achieve was is best
for the company. Therefore, Lutz is not a leader that is bottom-line focused nor is he what is
considered to be a sound businessman due to his willingness to take risks. Some of the risks Lutz
took dealt directly with the financial stability of the company and many leaders who were
considered to be bottom-line focused often strayed away from these financial hits. He knew that
taking these risks was necessary in order to create a vehicle and a company that was well perceived
by the public.
2. On page xi of the Preface, Bob contended that "...there are factions who complain
that "we overachieved"; the car is "better and richer than it needs to be," so let's
"correct back to the centerline with the next model."What is your group's take on
such statements? Do they make you shriek in disbelief or do you agree that a product
can be better than it needs to be?
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We believe that the statements made about the company “overachieving” with the vehicle
are invalid and ultimately draw concerns as to what these people consider a good quality product
to be. In our generation, we perceive good quality cars to be the ones that did overachieve and
accomplished beyond what was expected of them. A company that performs in this way is typically
the company that will be perceived well by the public and does the best financially in the end.
Considering that this vehicle was likely one that was well designed, high performance, and had
good safety standards, it is safe to say that this should be the standard for all cars and a company
should not regress back “to the centerline with the next model”.
3. Outline your choice of 3 compelling causes of GM’s downturn, as mentioned in
chapter 3. Comment on your perception of the difficulty of Mr. Lutz’ job in
attempting to right the ship, knowing what he did about the car industry and GM’s
problems.
The biggest cause of GM’s downturn is after Mitchell retired in 1977, GM executives were
replaced by people with purely business backgrounds and all decisions started to be made based
on complicated mathematics rather than emotional touch, leading to the first failure. The second
reason is when the fuel crisis in 1973 ended, the government’s new rules to conserve petroleum
placed a burden on only the American automotive industry and forced them to go down in size and
performance in all their products, while other competitors from German and Japan never suffered
due to their targeted markets’ preference on smaller cars already. Lastly, once again, the
acceleration in healthcare cost only affected American manufacturers when other car-producing
nations have available insurance included in general taxes on businesses and individuals. In our
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opinion, it was a much more difficult challenge than Lutz had anticipated facing since this
turnaround required him to basically restructure the entire product development system. It was
also a tough transition for Lutz, who preferred to be the executive in charge rather than a mentor.
4. Please turn to page 54 and explain why Mr. Lutz has commented on the Outside
Speaker Effective Analysis Group within chapter 4’s title A Failed “Culture of
Excellence.” Can you find any other examples of the failed culture of excellence in
this chapter? What’s your group’s take on his examples: is he believable?
We suppose that the reason why Mr. Lutz considered the Outside Speaker Effective
Analysis Group as a group of overly educated people that aggressively targets unnecessary things
is that their statistics regarding scores and standard deviation neither contributed any constructive
feedback to the speech nor achieved any specific goals. Another example of the failed culture of
excellence in chapter 4 is that a misunderstood drive for excellence to focus on improving every
detail no matter how trivial was negative, detail-oriented, and customer-distant. We believe in his
judgments as his efforts to instill into the organization a motivation for perfection and customer
delight was eventually successful, but we also doubt that it lasts, because it was still a question if
Lutz changed the core of product development culture permanently or might have temporarily got
what he wanted due to his significant influence on other people.
5. Comment on the role that networking played in Mr. Lutz being hired back to GM.
Lutz has always considered himself to be a “car guy” and has been in the industry for multiple
years while being involved in multiple different companies. He was a CEO of a troubling company
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when Rick Wagoner first approached Bob with the problems GM was having at the moment. Rick
continued a few weeks later to offer Bob a consulting job with GM which Bob ended up declining and
led to a new offer of a full-time position. Bob knew a lot of people in the car industry that wanted his
influences to overturn GM and potentially redo the whole company. For example, J.T. Battenberg a
partners and components supplier for GM wanted to use his backdoor influences to put Bob Lutz as
the new CEO. Bob’s new approach to his job was to use all of his external influences to improve the
products and streamline the communication between people.
6. “Product excellence” was one objective in a 5x5 box (or 6x6!) performance matrix,
thus competing for attention with other objectives, like “number of parts reused.”
Arguing that such a performance matrix created the mediocre products that GM
became known for, which type/format of performance metric does Mr. Lutz suggest
would better capture the most important goals of GM? Explain your answer.
Unlike the overly complex 25 to 30-cell matrix he is presented with, Mr. Lutz suggests that
product excellence should be the central focus of the company’s goals in a matrix akin to a
sunflower with product excellence taking up the vast majority of space within the matrix with the
other less important corporate priorities relegated to the less important petals of the flower. We
thought that this was sound judgment as the organizational reliance on meeting the status quo of a
flawed system was a major issue that Mr. Lutz faced when he took over in his second stint at GM.
We also felt that this was very emblematic of what had gone wrong with GM culturally and showed
that it would be no easy task for Mr. Lutz to right the ship.
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7. At the outset of his tenure at GM, Mr. Lutz spent time observing operations and
strategy sessions before determining the focus of his efforts. In chapter 6, what did
he establish as his focal point? What are your views on this choice?
He was interested in strategy from the very beginning as he attended meetings for NASB
and ASB almost immediately. The strategy that was his focal point was product excellence.
He wanted to make every strategy break off from the fact that their products were to be superior.
Lutz wanted to do away with the focus on speed to focus more on the quality of the cars. By
taking a moment to direct a redo that no one else was willing to do, it fixed the direction that
many car lines were headed down. Individual risks caused by the setup of the corporation
prevented VLEs from making the correct decisions. We agree with Lutz’s strategy because
putting out attractive, excellent products is the strategy change that turned the company around.
8. In chapter 7, Mr. Lutz describes a pervasive problem with the company that caused
him to give out hundreds of “Sez Who?” stickers to GM employees. Concisely outline
the problem he observed with GM’s culture.
The problem was the fact that the Product Development department was too willing to
conform. There was not enough of a fight being put up against unnecessary processes and
regulations that stunted creativity and resulted in mediocre products. As Lutz states on page 98,
“tension and conflict are necessary ingredients of a successful organization.” If the Design
department continued to allow the VLE’s to control everything about the vehicles, they would
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continue to attract customers and generate sales. It is better to break the mold and be creative
than it is to conform to a flawed norm.
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