I Hate to Say It, But…

Writing “Lives Per Gallon: The True Cost of Our Oil Addiction” in 2005, I predicted that by 2010 the Detroit automakers would be in bankruptcy and reduced to selling foreign-made cars under their once proud nameplates. As GM and Chrysler careen toward the Chapter 11 cliff (and Chrysler frantically begs Fiat for a product line), I’m compelled to point out something I hate to say - - I told them so.

There’s no point to focus on old predictions, either mine or Rick Wagoner’s, except to use these economic earthquakes as teachable moments to reinvent our future. As the leaders of the G20 meet in London, the protests, changing climate, shrinking natural resources, and collapsing auto industry should signal both the need for change and the opportunity it presents.

So in five or ten years, what will we be saying, “we should have done” back in 2009? Here are a few places to start:

1. Waste Not, Want Not - - When was the last time you worked overtime to complete an inventory of your company’s products? Probably within the last few weeks/months. When was the last time you took any time at all to inventory your company’s waste? Probably never. If you identify waste of all types, you can reduce or eliminate it and, in inverse proportion, save money at the same time. Do a detailed audit of office or factory waste (what’s really in that dumpster?); emissions from machines or vehicles; and supply chain materials that aren’t really needed. Once you know the specifics, you can find creative ways to reduce the waste and I assure you, you will save money in the process. Waste disposal costs money and chances are that some of the materials you pay haulers to take to landfills can actually be converted to cash. OK, the recycled materials market is in the tank today, but as the economy rebounds, the demand for raw materials will also grow, so position yourself today to capture the recycling revenue stream. Emissions are another sign of waste - - look for ways to reduce fuel consumption or substitute processes/fuels that reduce the output of pollution. Using emissions reduction as the metric, you will find cost-effective ways to change practices that yield cost savings and a return on any investment needed to make the changes.

1. Smart Outsourcing - - Laying off employees and doing work with contractors has gotten a bad name in recent years, especially if those jobs go overseas (think about that call to tech support you made yesterday and the guy that had a distinctly Mumbai accent!). But think about outsourcing things that keep people working and make you more profitable, like videoconferences. Instead of flying people around the globe to meetings, invest in the best broadband internet connection and high-quality equipment to attend meetings virtually. The investment will payoff after a few meetings, not just in airfares, hotels, and carbon offsets, but in terms of time and productivity of staff. You may need a bridging service to help different video services “talk” to each other, but it is well worth getting ahead of this technology and using it to your competitive advantage, especially by hiring the outside firms that can make this work seamlessly for you. If your counterparts in other companies don’t have the technology, those service providers can set up temporary equipment and get you started.

1. Fire Your Lobbyist - - Perhaps the biggest lesson to be learned from the demise of Detroit is that spending millions to buy “protection” in DC only delays the inevitable. Congressman John Dingell should be retired to wherever Rick Wagoner is headed. Between the two of them, and the lobbyists who were paid to persuade others to prevent Congress from mandating fuel economy and greenhouse gas emission standards, foreign automakers were given a path as wide as K Street to capture the US auto market for decades to come. If GM had to compete in the real marketplace, instead of the gilded and greased halls of Congress, they might have developed products that we need/want. You can’t blame the lobbyists (although many of them promoted the foolish path that GM and others pursued with the promise of false riches), but if you eliminate the crutch, the patient is likely to get stronger.

So do it - - inventory/eliminate your waste; find ways to do smart outsourcing; and fire your lobbyist. Don’t make me say, “I told you so” in another five years.