Monday, April 03, 2006

When PR Goes Too Far 

This opinion piece from yesterday's The New York Times contains a lesson for CEOs and PR practitioners alike. There is a time when public relations can go too far. In this case, the desire to build a relationship with the United Auto Workers went too far at General Motors and is contributing to the decline of the firm. The writer notes that Caterpillar's hard-fought battle with the union in the 1980s and 1990s positioned that equipment maker for the future. General Motors bought labor peace with concessions that are ruining the firm.

The lesson is a valuable because it is easy to forget what one should be doing in an effort to make numbers for the present, as GM did. After all, economists and accountants tell you that money now is better than money in the future. But, like all cliches, it is only partly true. GM and Ford, for that matter, both forgot that productivity now and in the future were essential when there is a competitor that is more efficient as Toyota was and is.

There are other instances in which in retrospect one wonders why managers made the decisions they did. It's too easy to criticize in hindsight, as Harry Truman noted often enough, so I won't add my small voice to those piling on GM's managers. But, I won't forget the lesson.


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