Big Isn't Better


Thanks to Ben and Jackie over at Church of The Customer, I recently learned that GM spent around 2.8 billion dollars on advertising in 2004. If that’s even close to being accurate, that’s insane! On top of that, they plan to spend an additional 10% this year to hopefully reverse declining sales.

I won’t go into why they shouldn’t throw that kind of money away, why I wouldn’t buy their cars or what they should do instead. Number one, it’s not rocket science. And, number two, a number of very good alternatives are already listed on Ben and Jackie’s site.

What I do offer is a theory on why companies like this never change, why they rarely choose a path that’s obviously so much better to the rest of us. They won’t do anything new, meaningful or effective because they’re too big. Most big companies like GM can’t make quick or radical changes no matter how sensible the new ideas must seem. They have spent loads of energy, years of time and huge dollars getting the “machine” moving in a certain direction with a certain purpose. Along the way a bureaucracy and political infrastructure was created to manage the process, and ensure its success. So, anything or anyone that comes along and threatens the livelihood of what took so long to create is immediately debunked, voted out or studied until the results say what the fathers want to hear. Another way to say it…It’s too risky to make wholesale changes brought forth by the few (or outsiders), and huge companies typically don’t take these types of risks.

Smaller companies have the edge when it comes to change. They are nimble, quick and able to react to criticism, environmental change or new ideas almost instantly. Some big companies act like small ones. They minimize the superstructure, instill a culture of customer and employee centric thinking and have way fewer managers and consultants to consider every time someone throws a curve ball. Sure, sometimes they crash and burn. But, it’s much easier for them to get back up, dust off and move onto something else.

GM can’t do that. There are too many jobs and egos at stake.