Don't Ignore What GM Forgot: Product Design
April 17, 2006,
The television news magazine “60 Minutes” did a segment earlier this month on General Motors' attempts to revitalize its business — a business that is performing very, very poorly.
To redress that problem, GM recruited 74-year-old Bob Lutz, a renowned Detroit design guru who once ran Chrysler. Think of him as the Lester Gribetz of the auto industry. Here's what Lutz had to say about GM's long march to irrelevance: “During the period of GM's greatness in the '50s and '60s, design ruled, and the finance people ran behind to try to re-establish order and pick up the pieces. We just lost the focus on design.” The answer to saving GM, he added, is “Product, product, product, product, product.”
By now, the hairs on the back of your neck ought to be going up. Because GM's fundamental strategic challenge from a consumer standpoint is the same as the one bedeviling far too many businesses in this industry – on both the buying and selling sides.
To frame the point in home textiles terms, let's consider Williams-Sonoma. If traditional big box and department-store retailing is Detroit, Williams-Sonoma is Japan.
What does it say about the importance of merchandise and merchandising in “Detroit” that Williams-Sonoma has managed to create Williams Sonoma Home, West Elm, Pottery Barn, Pottery Barn Bed + Bath, Pottery Barn Kids – and continues to roll them out in three channels?
What does it say about the consumer's willingness to spend money on well-designed merchandise that the Pottery Barn franchise added $200 million in home textiles sales between 2002 and 2004? What does it say about the state of design leadership in “Detroit” that Pottery Barn now feels confident that it can start opening bed and bath stores?
What does it say about the competitive horizon in the home furnishings field that Williams-Sonoma believes the two-year-old West Elm brand will one day be larger than any of its others?
Product, product, product, product, product.