What was the most successful of the 1940s? Easy. GM. And the most disappointing one of the 2000s? Easy again. GM
A company once held up as an example of how to compete in technology and create new industrial giants, GM has been in steep decline -- a point emphasized last year when it went bust.
And just as the company=92s rise held lessons about how to succeed, its downfall tells us much. GM rested too comfortably on its laurels. It was never willing to re-invent its business, even if it meant completely changing its products. It was never located at the heart of the information technology industry, among competitors who might force it to keep innovating. Other companies should study GM=92s fate to make sure they don=92t repeat it.
A few decades ago, GM was the most successful business. It captured the emerging market for mobile and built the industry=92s most powerful brand.
Politicians lined up to praise the company as an example of how to still prosper.
Reversal of Fortune
It doesn=92t look so good now. The news out of GM has only been bad. The company=92s brands, once the coolest in the world, is battered. In a ranking of global brands by Millward Brown Optimor this year, GM ranked No. 43, dropping 30 places. Average price of its cars and its market share.
GM looks like a has-been. It misread the way the autoindustry was merging with computing and social networking. It is probably now too late to turn that around.
There are uncomfortable lessons here.
First, never rest on your laurels. GM got to the top of its industry quickly. But once there, it became complacent in an industry where laziness is fatal. It worried too much about hanging onto its market share, rather than creating new products to excite customers.
Second, GM was unwilling to challenge itself. The company clung to the model that cars were mainly about moving people. It failed to notice that they were just as much about, finding a good restaurant nearby.
GM wasn=92t surrounded by Web companies or consumer-electronics manufacturers. That meant it wasn=92t in the mix of innovative ideas, which would have forced it to question its assumptions every day. The company should have relocated to California. Sure, that would have caused an outcry at home. But that=92s better than watching its slow decline into irrelevance.
It may be too late for GM to turn itself around.
They are all prone to similar missteps. Are the auto manufacturers doing enough to prepare for the arrival of electric cars? Are the drugs companies ready for the merging of computing and biotechnology? Are banks positioned for a decade when debt is steadily reduced, not increased? Probably not.
Politicians and business experts spent a lot of time praising GM and trying to learn from its rise. They should devote as much time studying the lessons of its downfall. If they don=92t, much of the rest of industry will repeat its mistakes. And can=92t afford to lose many more world leaders.