Planning For Value Instead of Planning For Survival
As we all continue to read about Chrysler, GM, Citi, Bank of America and other large corporations receiving government funding while going bankrupt or continuing on their downward spirals, you have to wonder if any amount of money will matter when a company’s strategy is focused on survival and not adding value or changing the market they’re in.
If GM gets all the money they’ll ever need, will it really change anything or just drag out the inevitable? If I was a supplier, I wouldn’t be any more content knowing they’re still in business as is then if they went bankrupt. I’d still be praying that they start building automobiles people want in a profitable manner. If they get more money and buy my parts but continue to deliver so-so products unprofitably with the goal of merely existing, I’m just experiencing a slow and painful twisting of the knife that will continue to stress me out and sooner or later, result in a painful end.
From an entrepreneur’s point of view, I can’t imagine starting or building a company with the goal of just surviving. Who would go through all of the hard work, lack of pay, and pain, just to survive? As a matter of fact, no startup with that goal in mind would survive and nobody in their right mind would invest in them.
While one could argue that some people now are not buying GM cars because of their current financial situation, the vast majority are still not buying the cars because they’re not the best value out there and they haven’t been for years. If they were, they wouldn’t be in the situation they’re in. That won’t change with more money. The banks having issues are coming out with any additional fees and rate changes they can to improve their financial situation and as a result, educated, long term customers are leaving in droves. It’s not because we’re worried that we’ll lose our money if they go bankrupt. We know we’re protected under FDIC. It’s because theses banks obviously don’t have “adding value to the customer” in mind right now and probably won’t for some time to come. They’re constantly coming up with more fees and ways to charge people for keeping their money with them. What kind of strategy is that?
Regardless of our personal or emotional ties to any of these companies, we need to take a step back and recognize that if these companies are focused solely on surviving, they’re done anyway. Whether it’s sooner or later is yet to be determined.
