How I discovered GM’s Planned Obsolescence

I have just encountered firsthand experience of GM's planned obsolescence. It seems there is a bulb burned out in behind my speedometer in my instrument cluster creating an area of darkness in the dashboard while driving at night. I can't see how fast I am going, which I have found, completely eliminates all conviction when I seem to be going really fast. Ignorance really is bliss.

In my attempt to solve this problem, I discover that it cannot be fixed. I have to replace the entire instrument cluster. What used to be a $2 bulb and minimal amount of time will now cost me around $600.00, not including labour . . . for a burned out light bulb. The old one? Garbage. One would think that environmentalists would be all over this and have had speedometers tattooed on their foreheads by now. I haven't noticed a picture of my Instrument cluster on the list of returnable / recyclable items.

Planned Obsolescence is the practice of intentionally making a product obsolete after a relatively short period of time so that the consumer is obliged to buy yet another product at the end of the original product's lifespan. It did work. Consumers were obliged to buy another vehicle. However, for obvious reasons, they decided to buy from a different manufacturer.

If the plan of obsolescence is to replace a product with a must-have better product with more features and advanced technology – great idea. But, how does a group of talented people come up with the idea to build stuff with limited life, that breaks and cannot be fixed, so that people will have to replace in a short period of time?

I didn't have to work at or with GM to know the answer to that question. They have certainly not cornered the market with this phenomenon that conceives and births really dumb ideas.

I know that there were people within GM advising against this idea, suggesting to the senior leaders that this was a bad idea and bad business, predicting and forecasting the potential problems with a plan of this nature. I know this because that is what good leaders do – they stand by their convictions – they do the right thing.

Unfortunately, I also know that there were leaders inside GM who allowed their title and the power that comes with running a large corporation, to go to their head. I know that they didn't listen to what people inside and outside their organization were warning them about.

. . . and, we think is was the recession that brought GM to bankruptcy.

If you don't agree with me on this, then you are either one of those former, close minded leaders in GM, or you don't have a burned out bulb in your instrument cluster that is going to cost you $600.00.

How I discovered GM’s Planned Obsolescence

Don’t let your lunch get stolen

I suggested to my wife that we should check out "mail order DVD rental." "Oh yes, we have a free night so let's go rent a movie - to watch . . . in three days," was her sarcastic response. Hmmm, I guess that's out – at least for us anyway.

She had a good point. I don't think watching a movie is something that most people generally plan in advance. Most (mail order rental schemes) do have streaming options but my TV is nowhere near my PC and curling up in front of the computer monitor with a bowl of popcorn is not very appealing.

There is no dispute that many are using this system, but why? Could it be that it is currently a better alternative?

The convenience of brick and mortar DVD rental outlets is still a big advantage, but they do still need to compete in every other area.

How?

• Instead of punishing those who return late with extra fees, reward those who return early.
  
• Simplify checkout – set up on-line reservation so that I know the movie I want is there and waiting for me.
  
• Drive through return drop off (pick up) so that I don't have to burn extra calories getting out of my car.
  

Why not just ask the customer – they will tell you.

Or . . . just keep trying to copy the new competition – but Red Box (not yet in Canada – see photo), is going to be a real problem.

Sometimes leaders that once exercised compelling vision become complacent. They get comfortable with success – lose their edge. This allows others to "eat their lunch and pop the bag!"

RedBox DVD rental - At McDonalds, 50 miles east of Houston on I-10. Photo by Adam Melancon

Don’t let your lunch get stolen

Throw out customer opinion surveys

Who determines what is important? The boss? The CEO? The Board? The shareholder? I believe in most enterprises, it is one of the previously mentioned that determines what is important and what forms the basis for decisions. But, shouldn't it be the customer? At the end of the day, isn't the customer the one that really counts? And ultimately, shouldn't an organization focus on meeting their [customer] needs?

Of course ... umm ... yes ... the customer is the most important. So, let's do something to show that we really do believe this. Let's ... umm ... oh I know, create a survey that the customer can take. We can offer it to them to fill out afterwards to rate us on our service. Wow, we could even tie performance bonuses to the outcomes of these surveys ... what a great idea.

Then a lengthy survey is developed with questions around the decisions, strategies and tactics that the organization has already determined the customer wants. There is almost never an opportunity for the customer to provide opinions on what the organization could to more effectively satisfy their needs outside of those strategies and tactics, and if there is, in my experience the decision makers never see the comments. Since these surveys are filled out after the customer experience, they often have little impact on that customer's potential return, and if your business only serves a customer once a year, or once in a lifetime, this is less than ideal. Certainly, you could make changes for the future, that is, if you actually had a survey that could capture useful data and reacted to it. But people talk and market your business for you – hopefully in a positive way – but sometimes negatively.

Most organizations offer "The Customer Survey" as a necessary evil - kind of like a fuel station offering public washrooms – an inconvenience, often messy, but a necessary part of the business.

"Multiple choice," "on a scale of..." and "yes or no" kinds of questions cannot capture customer opinions in a way that will help you to effectively adjust your business. More often than not, these surveys end up becoming just another metric that is used to internally evaluate. Has your enterprise ever made a decision to change strategy or tactics based on the answers to the questions on these surveys? One only has to view the questions to see that it is impossible to get any information that is useful for changing or developing strategy.

Why not ask your employees. Throw out the "we feel customer opinions are important" hypocritical surveys, and start asking the people that work for you, have allegiance to and are interested in helping the business that they work for. Why not ask those who are in many companies – your best customers – and those who deal with and talk to every customer that provides revenue to your organization. They hear and experience the feedback every day, and if you are truly interested will tell you about it. Since they are in a unique position, closer to the customer than anyone else in the organization, sometimes they even come up with some profound ideas – ones that if heard and implemented could propel your business into the stratosphere.

One effective method to capture the ideas of employees is an "Employee suggestion system", which I will explore in my next post. What stories of famous employee suggestions which have significantly increased a company's results have you heard about?

Related Posts:

Listen to those that are closest to your customer

Profit is NOT your #1 priority

Photo by: boltron-'s photostream

Throw out customer opinion surveys

Profit is NOT your #1 priority

Why are some business decision makers so oblivious to some things that are so obvious to the customer? My wife and I Went out to see a movie the other night. At Galaxy (Cineplex / Canada) theaters, and probably like any theatre, the signing above the concession stand shows various "combos" (i.e.: lg popcorn & sm drink, 2 lg popcorn & 1 lg drink, etc). However, something was different. The signing did not show any of the usual abhorrently high prices, but only listed what I could save on the combo, save $1, $1.50 etc. Save $1… off … what, how much is it? I couldn't find the price on any combo – only how much I would save (and that's funny – save money on the purchase of popcorn at a movie theatre – that is oxymoronic). I ask people around me in the line – they don't know either.

They [business decision makers @ Galaxy] have removed the total combo price from the sign – most likely because customers have complained about the horrifically high prices. Now the customer does not find out how much they are going to pay until they have stood in line for 10 minutes and they likely won't leave without spending. In order to figure out how much you have to pay, you will have to add up the price of each individual item in the combo – which are listed somewhere else in near bottom-line-eye-chart-font. The prices are not nice round even numbers and I didn't bring a calculator. Yeah, I could have added them in my head, but I didn't come to the movies to think – I came to relax. Please keep that previous admission in mind as I explain the next point. It was during this mental exercise in theatre combo decoding that I realized: You don't have to buy a combo! You can actually just buy what you want. The combo signs had me convinced, for years, that there were only four choices and I had to pick one of them. I never wanted the candy item that typically comes with a combo, but my thinking (or lack of) was; it must be cheaper overall if I get the combo. It's not. It never occurred to me that I could just get a bag of popcorn, or a drink – separately. I ended up only getting what I wanted (not the extra bag on candy for $3.50 that I don't want) and spent less at the concession stand than I ever had.

I expect that this organization had received some heat from customers on their inflated and infinitely increasing prices. In response, they decide to try to deceive people with some ambiguous signing and trick them into continuing to pay those high prices. If this organization's focus was on providing customers with a premium movie going experience as their corporate strategy suggests, they may have made different choices.

Instead of driving the public to "wait until it comes out on DVD" with increasing prices, they could try a different strategy. Lower the prices as an understanding to the recessionary realization. Reduce the average time per sale at the concession by a minimum of 50% (really, how many buttons on that cash register have to be pushed to sell some popcorn – they are not launching the space shuttle, and couldn't there be one runner in the background fetching the popcorn). Finally, as a side note, why am I paying all that money to watch 20 minutes of advertising? Once the movie finally started, my wife whispers in jest, "I can't even remember what movie we came to see."

This is a typical case of a company forgetting their purpose; the reason that they exist. Hint for [business decision makers @ Galaxy]: It is not just to make money – read your website – the answer is there. If profit supersedes everything else in a business – it is the beginning of the end.

With DVD, high definition TVs and surround sound systems, the experience of watching a movie at home is very comparable to the theatre. Making going to the movies more affordable, reducing the time consumption and simplifying the experience would leave only one hurdle for theatres to overcome. How do you compete with the ability to pause the movie to go to the washroom?

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Profit is NOT your #1 priority