(530) 467-5690 Chris@TeachU.com

I am taking a very interesting class from Michael Roberto. This came up recently and I thought it worth posting here.

The take-away is to look closely at our thinking today to be as certain as possible that it is valid for, at least, tomorrow morning. Chris Reich

USC Professor James O’Toole once identified the core assumptions of the management team at General Motors in the 1970s, when they were on top of the world. He developed a list of sort of the 10 fundamental shared basic assumptions at General Motors, c. 1972. Now, it’s a bit of a stylized list, it may be a little extreme. I’m sure that some of the managers at General Motors would quibble with some of these, but it’s illustrative. He said:

One: GM is in the business of making money, not cars. In his belief that was sort of one of the fundamental shared basic assumptions, one of the fundamental facets of the mental model-driving behavior and decision-making at GM.

Two: Success comes not from technological leadership but from being able to quickly adopt innovations successfully introduced by others.

Three: Cars are primarily status symbols. Styling is, therefore, more important than quality to customers, who, after all, are going to trade up every other year anyway. That was the model in the automobile industry in the ’60s and ’70s: Get people to trade up as incomes rose in the post-World War II era.

Next: The U.S. car market is isolated from the rest of the world. Foreign competitors will never gain more than 15% of our domestic market.

Energy will always be abundant and cheap