Rendered Fat Content

A Post-Modern Parable

Toyota and General Motors decided to have a concrete canoe race on the Missouri River . Both teams practiced long and hard to reach their peak performance before the race.

On the big day, Toyota won by a mile.

GM, very discouraged, decided to investigate the reason for their crushing defeat. A strategic management team, made up of senior management, was formed to investigate and recommend appropriate action. They concluded that Toyota had 8 non-union guest workers rowing on a twelve hour shift and 1 person steering, while the GM team had to include 4 pensioners who couldn’t row, 4 union employees who were restrained from rowing for more than four hours without a break (and had to comply with union rules limiting latitude for individual judgment), and 8 people steering: administering health plans, pension benefits, and compliance with union and government mandates, and maintaining narrowly-focused shareholder relationships.

Feeling a deeper study was in order, GM management hired a consulting company and paid them a large amount of money for a second opinion. They questioned the strategy that insisted upon competing with so many people steering and riding on the boat, and not enough people rowing.

Toyota prepared for a second race by conducting a joint rower/steerer retrospective, while GM rearranged deck chairs. GM lost the second race, too.

Destiny is the accumulation of choices interacting with DNA.

Toyota chose to populate its plants with cheap, non-union guest workers, GM chose to populate theirs with domestic, union workers. The Japanese government chose to provide universal health care, pension benefits, easy guest-worker immigration, and hefty corporate give-aways (and look-asides). The US Government chose to require corporations to also be in the health care and pension businesses and discourage non-union, guest-worker immigration that even hefty give-aways and look-asides couldn’t counterbalance.

Toyota focused upon economy of resource and quality of rowing while GM included deck chairs to hold quality of life on board.

After losing the second race, GM took a deep, long-range look at their business model and chose to stop racing Toyota in little boats. So, GM expanded their financing business (even helping Toyota finance their canoes), expanded their position in off-shore markets by forging joint manufacturing and marketing agreements (with, among others, Toyota), negotiated with their union to assume partial responsibility for administering their pension system, and (finally) started spending some serious lobbying money to support domestic universal health care and more progressive guest-worker laws. They chose to expand, broaden, and deepen their business. Direct manufacture and sales of automobiles fell as a contribution to gross revenue. Profitability eventually soared.

In business, it’s a good idea to drop out of competitions that don’t serve your purposes and change the game to something that balances the conditions you face and the aspirations you desire. If GM could divorce itself from its DNA, it might successfully compete in concrete canoe racing. Since it’s unlikely to lose its DNA, it’s wise to choose a strategy that holds the promise of delivering the quality of life it aspires to. Even if that doesn’t involve manufacturing as many cars or racing concrete canoes.

In any competition, success depends upon choosing not to compete where you cannot win. You might have to lose a canoe race or two before you figure out where you should be competing.

Success almost never comes from collaboratively improving the processes by which you create what you don’t want.

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