Chrysler is in trouble. Again
Robert A. Lutz was the former President and Vice Chairman of Chrysler Corporation.
The story of Chrysler's financial problems, Lee Iacocca, and the $1.2 billion US federal loan guarantee is well known.
A lot less well known is the story of Chrysler's second crisis and recovery in the early 1990s.
Guts is Bob Lutz's story of how he dealt with Chrysler's second crisis.
It's an interesting story, with a lot of implications for the software development industry.
Chrysler versus Honda,
and what it means for software marketing
One of the big differences between Chrysler and Honda, Lutz observed, was the way in which each company dealt with stakeholders.
Honda fostered trust throughout their company, while Chrysler's relationships were built on lack of trust.
Honda trusted suppliers and dealers. Chrysler treated these communities as the enemy.
Honda empowered its workers to make decisions. Chrysler micromanaged its workers.
Lutz turned around these attitudes.
For example, before Lutz took over, Chrysler didn't have a good relationship with its suppliers. Every year, Chrysler would demand cost reductions from suppliers, without working together to figure out how these cost savings would come about.
Lutz brought the suppliers into meetings at Chrysler, and worked with them to figure out how they could eliminate waste that was raising costs for both parties. Chrysler agreed to let the suppliers keep half of the cost savings that they were able to squeeze out of the system. Attitudes got better, too, when Chrysler treated suppliers as valued partners.
Software marketing and Chrysler's lessons
There's a lot to be learned from these stories. The software industry does not have a great track record of developers and vendors getting along well. Everybody would benefit if stakeholders got along better.
Lutz believes that all of these ideas helped Chrysler heal. But the main reason that Chrysler was able to get strong again was their focus on the four P's of marketing - price, place, promotion, and product.
It was solid products and solid business fundamentals that brought Chrysler back to life. Again.
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