Monday, July 28, 2008

What we can learn from GM

GM is madly scrambling to regain its footing, as the bottom falls out of its SUV business. Oil prices are through the roof with no sign of ever coming down again, and American consumers are taking note. GM is quickly ratcheting back its SUV sales projections and laying off workers and shutting down plants in the face of the new reality.

Sound familiar?

It's exactly what newspapers are going through. Environmental conditions change. Things that an industry previously could count on to drive its business are no longer there. The industry has to figure out a new model going forward.

The question, then, is: What can the newspaper industry learn from how GM's handling its situation?

I don't know what the answer is. I haven't done the digging to figure out what their strategy is and to evaluate how likely I think it is to succeed. But here's my point: There is something to learn. It might be that their strategy offers a roadmap for our industry. They may have insights on how you reprioritize initiative and reallocate resources. They might have insights on how to extract productivity from a reduced workforce. They might have insights on how to identify untapped value within the existing system.

Alternatively, the lesson could be that there is no hope. There is no strategy that's going to take one model that was so dependent on certain conditions into a new world where those conditions no longer exist. It may be that GM won't survive, that instead, smaller auto manufacturers that are designed to exist in the new conditions to rise up and take its place. Similarly, it may be that there is no future for the newspaper model and that newer models, like TalkingPointsMemo or CBS Marketwatch will rise up to take its place.

Maybe GM has figured out how to cross over to the future. Or maybe they're figuring out that there is no future. Who knows. But the folks looking for answers in the news business could do worse that looking under the hood at GM to see if those folks, those business folks, have any useful insights.

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