5:26 General Motors is in a position in the market that if they made a minor mistake, they really wouldn't show up too bad. 6:06 Xerox, Kodak, General Motors. And a little agency known as US Census Bureau 9:38 Ronald Reagan, we got deeply involved in...
5:26 General Motors is in a position in the market that if they made a minor mistake, they really wouldn't show up too bad. 6:06 Xerox, Kodak, General Motors. And a little agency known as US Census Bureau 9:38 Ronald Reagan, we got deeply involved in that and got to know him and his family. [He didn't want to say what he was going to be helpful to him. He wanted to say, what he knew to be true. And what he wanted to do. That was a that was a really important insight to me.] 14:04 OnStar was really quite an undertaking. 17:51 Issues at Kodak 21:40 the key element in improving the decision making process is to record the process. 23:00 assumption 24:49 a good decision takes into consideration what the expected outcome is, and then lists the assumptions that have to be made, to create that outcome, and then to measure as best you can, with the extent to which those assumptions are true. 26:38 Following World War ll, GMs factories are making you military equipment. And so therefore, after the war, since there were no new cars during the war, there was an incredible increase in demand for vehicles. 30:00 automotive companies have always had what's called decision friction between engineering push, and consumer pull 37:44 inputs that research provided for OnStar 38:39 Kodak: digital versus silver halide 41:24 Vince's latest book, A SYSTEMS THINKING DECISION MAKING PROCESS. ...key takeaways for automotive professionals making decisions? 43:15 Avoid Burnt Toast. 46:21 When the shuttle exploded...it was time to prepare the president's speech 52:57 GE was a very engineering push firm.
Unknown Speaker 0:02
Jeff Sterns connected through cars, if they're big wigs, we'll have him on the show. And yes, we'll talk about cars and everything else. Here he is now, Jeff Sterns
Unknown Speaker 0:19
let's take take this as a little bit of a background. Okay? Pence and I were hired up the same day that General Motors needed a lot more before he gave to GM. And he'll tell you about that. He was my boss for six months. And I keep on telling him that and that's kind of hard to believe. Because in that six months, I learned quite a bit. And I continue to learn by reading his book. And, and, and the articles that he does. Two of the things that I continue to use today was his original teaching me of a concept called Lancaster's law, which is a a theorem, which says the person that brings the most artillery and men to the battle at the point of contact will typically be the victor. And I have used, I have used that to explain the Japanese president on the each of the coasts as their entry strategy. In a number of pieces that I've done, I have used that theory to explain caspers dominance on the West Coast, and why they don't do so good in Minnesota. And I've used that in gambling, where I've come to learn that the person who gets the most money at the beginning of the game, typically is the one with the most money at the end of the game. So that has applicability for autos, and gambling. But I also learned about the difference between good decisions and good outcomes. And that the best way to ensure a high chance of good outcomes is to go through a process to make good decisions. Not the boss wants this. And it's it's the favorite topic of the boss's wife until we have to do this. There's a whole bunch of stuff that Vince will explain. And I have really used that in a lot of my consulting with suppliers. And then finally, the, one of the most, He lives, He lives in a lovely community of Capitola. It is a beautiful place. And the last time I was there, Vince and I took a ride out to see a navigation firm, which General Motors was thinking about buying. And it was 1985 1985. Yeah, San Francisco base, nobody was called Etek. And we took a car from San Francisco to Capitola. II tax instructions on how to get and we wound up in his backyard of his going to be soon to be or future to be out there was going to be built. Okay. So look, he has, if a sergeant has three stripes on his sleeve, Vince would fill all asleep on both sides. Okay. He's not a doctor. Okay. And the reason for that is he didn't have time because he actually did this. And he doesn't remember this. But he always enjoyed going back to Harvard, and all of these other high educational institutions, because it was always good to go back and explain to those people that would never have him as a student, what the real world was like. So with that, with that introduction, and I respect him. Like I said, I only worked for him for six months. He was always on my mind inside of GM whenever I had to do stuff that required a little more than just surface thing. And so with that, I turn it over to Vince Beretta.
Jeff Sterns 4:56
Vince, great to have you on Jeff Sterns connected through cars. I used to be here a distinguished career in understanding what customers want and ensuring that management understands the implications prior to spending serious money. Now you it's clear that you understand that. But what kind of experience do you have with General Motors? Applying that?
Unknown Speaker 5:22
Well, it took a while. Because General Motors is in a position in the market that if they made a minor mistake, they really wouldn't show up too bad. made a major mistake, it showed up. But there was such resources in the enterprise, that things were just kind of, say we shouldn't do that, again, kind of thing. But as competition got more difficult, it became clear that we were not going to be in a position to make those kinds of mistakes. Because make a mistake early in the development process of a vehicle, it takes a long time to find out how bad the mistake was. And so you got to fix that thing early.
Jeff Sterns 6:06
Got it. Now, in your background is also Xerox, Kodak and, of course, General Motors.
Unknown Speaker 6:17
And an agency called the United States Census Bureau.
Jeff Sterns 6:21
Excellent. Now, I'm sure you were born with all these philosophies. And you were just a child prodigy. But along with that, I'm sure you've had some things happen to you along the way, or some bosses and mentors along the way that help instill and what you later were able to crystallize, with this decision making my right.
Unknown Speaker 6:45
But really, the essence is, when I graduated from college, I was hooked up with a very strong political campaign management firm. And they turned me loose in providing information to political campaigns. The important part of that was it all happens very fast. So you, in essence, get information you provide it, it's either used or not used. And you quickly see the result. So when you do this across the country, as I did, and campaigns all across the country, from congressional to assembly, to state senate, and presidential campaign, you learn a lot in a hurry. And you see the results of the decision process that you were using. And you find that strengths as well as limitations. And I would say it was that background and the political activity that gave me insight into how to improve decision making.
Jeff Sterns 7:45
Got it? And I'm looking at my notes. You started understanding consumers by understanding voters?
Unknown Speaker 7:54
Well, you had to find out why. What a consumer was expecting to do. And and if it was the right decision, you reinforced it. If he was expecting to make a decision that your team didn't want, you had to find out what information would change that person's mind. And then provide that information. Or you would find out there was nothing you're going to say that was going to change that person's mind. So you didn't use any resources to try to change something that was not going to change. And so it was a way of identifying what you could do to cause the right decision.
Jeff Sterns 8:34
You sound so objective about it, you sound so removed from the outcome.
Unknown Speaker 8:40
Oh, no, you couldn't be removed, because you had to get inside of it. And you had to understand the decision makers, as well as the people that they were attempting to impact. And, and that was where the learning took place. Because you had to translate to each other. What was going on? So he could not be removed, you had to be involved in the activity.
Jeff Sterns 9:04
Okay, so when I say removed, I'm talking emotionally, you're saying like, Listen, if they need if there's some piece of information that will change that decision makers mind. If it's accurate, of course, we need to provide it if they're not going to change their mind. Either way, we don't need to spend any time on the analysis or coming up with the data. So you're kind of like this fork or that fork. Were you ever attached to the outcome? Emotionally?
Unknown Speaker 9:35
Wow. Well, in the case of Ronald Reagan, his gubernatorial campaign, we got deeply involved in that and got to know him and his family. And so I was kind of deeply involved emotionally in that campaign. Also, I would say that my first campaign with Enrico who was running for Congress in Michigan? Not only that, I get engaged with him, but the team that was supporting him. That's how I made a bob Reagan who was running the Buick motor car division in Flint, which paid off for me later. And, and others up became friends. And we and we communicated, you know, throughout my whole career. Of course, I'm getting old enough now that not a lot of them are left.
Jeff Sterns 10:28
What was it going back to Reagan? What were some of the things about getting involved? So you are objective, little by little you got I don't want to say less objective, but you got more emotionally involved you, you cared about the outcome, you cared about the outcome? Because you got to know the Reagan family. So, of course, I can only know him as a politician or only know him because of the news or because of one of his speeches. And I'm a Reagan fan. Don't get me wrong, but I don't know Ronald Reagan. So you were involved with his family, what was it about him and his family that moved you towards wanting him to win or prevail?
Unknown Speaker 11:11
I think one episode probably tells the story. For most candidates, we had the sides do what they should say. And so we had prepared a speech for him. And, and presented it he said, I don't want to say that. He says, I'll write my own speech. Because I know what I wanted to say. That was the first time that happened in any campaign. And that told me a lot about the personal integrity of the individual. He didn't want to say what he was going to be helpful to him. He wanted to say, what he knew to be true. And what he wanted to do. That was a that was a really important insight to me.
Jeff Sterns 11:53
I'm happy to hear that about Ronald Reagan. He's I wasn't ready to get my fantasy crushed about what a great guy I thought he was. So I'm happy to hear that. Now, Nancy, was the driver. Is that right?
Unknown Speaker 12:09
She was very influential. Yes.
Jeff Sterns 12:12
She knew what she wanted. Now until Oh, three, you are gm of corporate strategy and knowledge development at General Motors. And you also what you did you conceive OnStar.
Unknown Speaker 12:26
Now let that there were a lot of very creative people inside of GM. And they were always working on things. The problem was is that the to get something done in a vehicle requires the engineering organization to accept the concept. And to install OnStar was going to really have a big impact on the engineering of the vehicle. And the other thing that was kind of interesting is that we laid out to the engineering organization one day, the importance of what OnStar meant, relative to making revenue on the vehicle after it was sold. And when engineers said, Oh, I get it, we're gonna put a cash register in the car. Every time somebody uses that service, that money comes back to GM. I said, I wish I would have thought of that. But that's exactly what it is.
Jeff Sterns 13:29
And because of the subscription services or whatever, like card item they might need.
Unknown Speaker 13:36
Again, another aspect of it was, GM was able to monitor aspects of the vehicle while it was being used, and they would learn things about how the fuel consumption was, and things of that nature. So in essence, it was really a way of keeping in touch, not just with the customer, but with the product that you provided the customer, and how that product was actually performing. Well, in
Jeff Sterns 14:04
looking back, Vince OnStar was really quite an undertaking. It was really quite a feature. I was a General Motors dealer at the time. And I mean, nowadays with everything built in your cell phone and more microprocessing than a 747 in your phone. It would be obviously an easier undertaking. There's a million apps that will do all of that stuff. But OnStar at the time was a analog mobile phone. Big handset thing in the center console of in my case, I'm remembering like Cadillac Cutera days. Okay, sorry, folks. I started to lose half my audience Cadillac cutter. That of course, had to use navigation, etc. But if I recall, couldn't OnStar get involved in like a stolen vehicle situation both from a locating?
Unknown Speaker 14:57
Oh, yeah, no, actually it was used that way. And also as an example, there was a car was in a crash, which was recorded at the OnStar offices. So they called the police to go to that location. The police arrived at a location and said, there's no vehicle here, there is no evidence of a crash. And the answer our operator said, they're definitely there. He's another nice as an outsider said, Would you wait just a second, she went in access the vehicle and honk the horn. And if they heard the horn, they looked over the ridge, and the vehicle was on a railroad track down below, and number three people might have already dead, but to alive. And it was a train about to arrive. And so they were able to stop the train and save the two people. Now, when we talked about answer, we never had that in mind. But it was those kinds of incidences that really identified the value beyond the original concept. It actually saved lives. And and that was, in my mind, that was, when that happened. I just said, Well, I'm glad we pulled that went off.
Jeff Sterns 16:20
Well, so I remember that. So of course, if you couldn't find your car, they can honk your horn. Now, this was used for thank God a life saving situation, I of course, location services. But couldn't they also like if cops were chasing a stolen car? Couldn't they slow it down? Or apply the brakes or make it pull to the right or am I in Fantasyland?
Unknown Speaker 16:49
You know, I'm not 100%? Sure, but I think things like that actually occurred. But I don't know the specifics of any particular case back it kind of have a recollection of that. Yes.
Jeff Sterns 17:02
Yeah. I mean, that's really genius for the technology that was available. Now. I'm going to put in the notes on YouTube. I'm looking at my notes, the publications that you've authored, or co authored tons of books and articles. So I'm going to put that for the listener down in the notes. And, you know, Warren says, you know, our good friend that introduced us that this will be a master class in decision making. So my first note says, joining GM, the desire to bring the voice of the consumer into the company, and improve the decision capability of the top management. And then you got to Bob O'Connell and Jim smail story.
Unknown Speaker 17:51
Now, when I was working at Kodak, there was a big issue relative to moving from Silver, hey, light technology, to using electronics to capture images, and make prints. And, and you can only imagine that the scientists in the Kodak research labs, who were who knew more about silver halide than any other place in the world, and they were kept fundamentally in a secret area. They had no desire to talk about moving to a silver electronic camera. So I gave it I was asked to give a talk to the Board of Directors, which John smail was on the board. And I pointed out the likelihood that so that the electronic technology would soon not soon but with over the next decade, start having an impact on the business and that we really had 10 years to prepare for using a different form of image capture, and presentation. And it was interesting presentation to the board. But I think members of the board understood it better than some of the senior executives at Kodak who were really silver elite people. And but that's caused them to start thinking about it. And I was contacted by GM. And it was interesting that I believe it was Ismael, who arranged for me to give a talk at GM, because he was on the board of GM as well. So I went get fundamentally the same presentation about how to start thinking about the future and move from what you're currently doing to what you need to do. And so I went to GM and I gave that presentation. And I'm fairly well received, in fact that John Smith eventually became the chairman was it was in the room at the time. So when I got there, I was a little bit nervous about, you know, coming into a place and not knowing anybody or anything. So I, I went to, to Philip a bob O'Connell, who was in charge of planning. And I, I said, I really need to talk to different people. And he said, Well, I've arranged for you to, to visit everybody that I think would be relevant, which I then went on a day long series of meetings with different people. And I came back to, to him, and I started pointing out the questions that were raised. While I was there, he said, You know, I know those are the questions, but you know what the result is, they all said, hire you. And at that point, I knew, that's where I wanted to go.
Jeff Sterns 20:57
Nice. So this is what you're famous for. This is what our mutual friend Warren? Well, what you're famous for, to me, brings up a lot is about your decision making, and good decisions versus good outcomes. They're often isolated, unrelated, and shouldn't go that way. And what can happen is good decisions, good outcomes, good decisions, good outcomes, and then a good decision with a bad outcome. Can you expand on that?
Unknown Speaker 21:31
Well, the all of those things happen, by the way, but the key element in improving the decision making process is to record the process. Now, most of the time, at least at that time, when I got started, a decision was made, and it was implemented. And then it either was successful, or it wasn't. But if it was, nobody went back and found out what about the decision led to its excess. And more importantly, they never went back and looked at the underlying assumptions. That proved not to be correct. So that led me to come to a belief that, in addition to making the decision, it needs to be recorded in such a manner, so that you could learn from the decision that you made, not just that you benefit by the decision that you made, but you learn as an enterprise, what what is working and what is not working. And once that hit home, to me, that's when I started working on designing systems that allowed you that required that you list the assumptions you made to make this decision, including assumptions that were questionable, that you identified as questionable. And then after the decision was made, even though the decision may have moved on to another assignment, or wherever the record was there, and there was a group of people within our organization, who were constantly checking the underlying assumptions. And if an assumption didn't turn out the way it was expected to, we were then able to identify that. And then if you have the records of all the assumptions that are part of all the decisions, if a major assumption changes, you can go all back to all the decisions which that assumption had an effect on and say you should be aware that something is different and be prepared for some change. That was the the essence of my learning.
Jeff Sterns 23:45
Can you give a an example of an assumption? Is it like, we know all consumers want x, or I'm sorry, we assume the assumption is all consumers want to act.
Unknown Speaker 23:55
Now you go and you do a study, okay? And you question people about what they want, what they don't want, and how they feel about things. And then that becomes some people believe to be a fact, I say it's an assumption because you're talking to a sample of the population at a point in time. It's not, you know, there forever. So you'd have to list it as an assumption, not a fact. And then constantly review the assumption. And that's, that's the hard part of a large corporation, to say that something that everybody thought is a fact will be questioned later. And in the case of the automotive industry, that was very, very true.
Jeff Sterns 24:38
Sure, a sample so I love that a sample of people at one point in time. That's a moving target. So what makes a good decision?
Unknown Speaker 24:48
Well, a good decision takes into consideration what the expected outcome is, and then lists For the assumptions that have to be made, to create that outcome, and then to measure as best you can, with the extent to which those assumptions are true. So it's not about should we do this? Or do that we've had to find out? Why should we do this? And why should we do that? And understand those underlying assumptions, and then constantly monitor changes happening. Now, when I started in this area, you know, back in the in the 70s, and 80s, things were not changing very much in society. Today, what is the fact yesterday isn't a longer effect tomorrow? These things are changing so fast. So it's very important that you're constantly monitoring the changes that are taking place in society, and what effect those changes have on an existing decision, and on future decisions as
Jeff Sterns 25:59
well. So I assume that it's important to make good decisions by your definition of what a good decision is, and sometimes good decisions have bad outcomes. Yes, I'm trying to think of a ratio. I mean, it makes sense to me that a hand played right? Every time by the rules, with using the big numbers would prevail. But do you have any data that points to the good outcome against the bad decision, the good outcome against a good decision to support that a good decision needs to be made.
Unknown Speaker 26:38
So following World War Two, the GMs factories are making you military equipment. And so therefore, after the war, since there were no new, no new cars, during the war, there was an incredible increase in demand for vehicles. And based on that increase, GM put a lot of resources into RE establishing their factories, and producing an awful lot of vehicles. And that was good for several years. But once the marketplace had the new vehicles, then people were not no longer looking for any vehicle they wanted. Now, they're kind of vehicle. And so because they were successful in what they were selling, they put aside a lot of the market research, which by the way, a GM actually started back in 1930, when it felt like maybe a buck weaver who actually started marketing research. And they ignored all that for a period of time, which led to its eventual decline. So the that was, I would call a a bad decision, that led to a bad outcome for that period of time. Got it.
Jeff Sterns 27:54
So I mean, you're obviously sold on the concept. And it's not a hard one for me to accept. I was just wondering, since you had teams measuring everything, if the decision made the right way, you know, to your parameters without getting into that, again, versus the wrong way if the outcome was a good outcome twice as often 10 times as often, like, was it no contest.
Unknown Speaker 28:22
The other example comes to mind is in the 70s, late 70s, she they made a decision driven by the accounting department to reduce the cost of development. And one of the ways to do that was to use a basic platform and make them a vehicle slightly different. But that no matter what you did, they were off the same platform. So there were four brands that were basically on the same platform. Interestingly, a Fortune magazine, I think it was an 83 at a cover of the four vehicles all lined up, and you could not tell the difference from the angle in which they took the pictures. And those vehicles did not sell well, because they were not reaching the web specific customers wanted. So it was an economic decision to reduce costs and had a significant impact on the revenue side, but did they test it? No, because everybody knew that they were going to reduce the cost. That was that was the driving force.
Jeff Sterns 29:36
Okay, but I didn't know if it had checked the good decision boxes along with
Unknown Speaker 29:42
that, but that was before before I was there. And my guess is that the research if it had was there, they would not have had effect because the pressure was on to reduce costs.
Jeff Sterns 29:58
Got it. So automotive companies have always had what's called decision friction, right? Between engineering push, and consumer pull the communication environment leading decisions needs to understand both right? Can you expand on that? Mount when
Unknown Speaker 30:21
I first got there? GM was in the process of redesigning the Camaro and the Firebird. And and we were going to go do research on it. And I was contacted by an engineer by the name of Harvey. And Harvey said, can I go along and do your research? And I said, Well, why would you want to do that? He said, Well, I just like to hear what the customers are telling me telling you and how you present it to us. So it's for sure, you know, and so he went along with us. And we were talking about stopping distance. And our case, stopping distance was the length of time it took the amount of space it took for you to hit the brakes, and actually come to a stop. And so Harvey asked me what we had heard. And I guess I talked to him a while they looked like this amount of stopping space. He said, That's not what I heard. I said, Well, what did you hear? He said, they wanted to be in control, while they were stopping. And the feel of the break, is what was really going to be important to them. And I said, Harvey, I don't understand what you're talking about. You say, Well, I've done a lot of work on how to apply pressure to a braking system. And I would like to go back and see if we could do something. Well, he designed a braking system, I think I've got a copy of an article here that by anyway, it was put into the car. And one of the reviewers of the vehicle from one of the paper in Pennsylvania, pointed out that he was absolutely amazed at how effective the braking system was not that it stopped in time, but that he was in control while the vehicle was stopping. And he ran an article about that in the local paper. And it just was such a good example of how somebody listened. And because of his experience as an engineer, he heard something that a market researcher wouldn't understand. And that's when it became very clear to me that we had designed a system that engaged the engineers, and the researchers, scientists, so that they really heard what was going on, rather than our interpretation of what we heard. Great case.
Jeff Sterns 33:03
Thanks for sharing that. Now, what about the value of information collected from the consumer being in its use?
Unknown Speaker 33:11
Well, you know, if you are going out and you're doing research, and then you find out that consumers want something, and somebody in a financial organization said, that's going to cost too much. And we will never be able to make any money on it. Then you got to get everybody together. And you have to say, I understand what the finance guy said, in the engineering department, is there a way in which we could get this done with less expense. And that's where when you create that dialogue, and the engineer sit down, instead of designing the most ultimate of all designs, they say, oh, you know, we could drop that. And it would not have a lot of effect on the quality of this performance. And so in that dialogue that took place between what the customer wanted, what we could afford to provide, and what we could do with the resources that were available, so that we can still make a profit, that lead to really much better discussions. Got it.
Jeff Sterns 34:16
So what about tracking decisions and results like having to face reality?
Unknown Speaker 34:22
That's the hard part. Because normally in most companies, and somebody makes the decision, by the time the outcome hits, that person moved on to another job, or been promoted or whatever. And that's why having a a decision record in which the decision is made, and all the assumptions were made to it is an important document because you can go back and say, Hey, why didn't this product do as well as we thought? And when you do that analysis, you check those assumptions and you say, oh, you know, that assumption we made about how people feel about braking systems. That's not what they were actually hitting, they were talking about something that we didn't do. In this case, we did it. But that would be an example. And so maintaining a record of consumer information, broken down by very important assumptions, that lead to a decision is really the important thing to do. And to keep that record, and available in a way that people can access it, based on products they're developing, that might be close to what you've already done.
Jeff Sterns 35:37
Interesting. What about the best inputs, research provided a GM management, like OnStar, and full size pickup responding to ram.
Unknown Speaker 35:53
Now that was a an interesting mind, because GM was in a very tight spot economically. At the time, it was time to redo the trucks. And we did an analysis of the market. And it was clear that the demand for trucks, including as SUVs was increasing, and that what Ram was doing was reaching some of those customers. So as they were developing the CK truck platform, we did a large research study. And we presented the vehicle in, in different forms, from very small cabins, which were not expensive and worked very well, to much larger caption cabins, which were much more comfortable for everybody, and had a lot of utility, because we found out that most people originally always thought that a truck was something that a person drove. And it was only that person in the vehicle. As we were doing our research, it was clear that a person driving a truck always had people with him. And if the vehicle was uncomfortable, then he was having a hard time getting him to come along. And so we did that study, and it became clear that the vehicle that we were going to develop was more likely to not do well, because it was going to be a single person vehicle. So we designed the trucks that were ended up coming into with this third door. So people get in and out without any moving a lot of people around. And that program went very, very well, it was very successful. I remember that third door,
Jeff Sterns 37:42
what about what input inputs that reach research provided for OnStar
Unknown Speaker 37:48
customer really was much more of an idea that you felt needed to be presented, because it was hard to describe it in the way that a customer could tell you whether they liked it or not. You haven't actually demonstrated and and person had to feel it and go through it, to really appreciate the fact that they'd be willing to spend more money to get that kind of capability in their vehicle. So we did research after pretty much after it was decided we were going to do it as to how to present it based on the experience we had, and having people actually drive it. And so that research was more how to present it rather than whether we should
Jeff Sterns 38:37
do it. Got it. And then what about Kodak like digital versus silver halide?
Unknown Speaker 38:46
Well, that was a tough one. Because there wasn't a lot of ways to demonstrate the difference. At an early when I was there at least and because I left there in 83, I believe. And But in talking to the people in the research labs who were working on the digital, we were able to identify what the advantages might be, like for example, not having to buy film, and and constantly replacing the film back. And then to what extent would watching a an outcome on his television screen be versus a hold and holding a picture in your hand? Although you could do both. So we had a did a lot of research on whether people would perceive that as being valuable. At the beginning. It sounded like it might be but it wasn't very clear. And so we continue to do research and when it became clear that what they were doing was really breaking through to a whole new concept. Take It only be valued by its actual use. That's when they decided to go with the digital. And it was interesting because it also applied to other kinds of photography, like X rays and things of that nature, because the doctors found it to be much more efficient than having to take a picture and then wait for everybody to develop a mechanism. So because of the nature of the of the end product, it was very difficult to to research, it was done, and indicated there would be a benefit. And so the decision had to be made as to whether to take that chance.
Jeff Sterns 40:44
So what was the level of concern on losing the ongoing sales of film?
Unknown Speaker 40:51
Well, that was more of a concern with the distribution network than it was with Kodak, because it Kodak was gonna get the money by by these cameras. But we're going to put a lot of people out of business. And that was a big concern with management who grew up with these people. But the question was, if we don't do it, what if somebody else does, and it was clear that the, particularly the the camera makers in the Orient are going to go down that path. So the decision was made, but I have to do it. Now.
Jeff Sterns 41:22
Your latest book, a systems thinking decision making process. So what are your key takeaways for automotive professionals making decisions?
Unknown Speaker 41:34
The key takeaway, as I discussed earlier, is making sure there's a process to to identify and make absolutely clear the underlying assumptions. But more but as importantly, is after the decision is made. Instead of just looking at the outcome, find out what led to the outcome by going back and checking which of those decisions held up. And which of those decisions didn't read reason it becomes a problem for some people or some companies is nobody wants to write down everything about his situation. Because you know, now you now you're holding me accountable? Well, it's about time to get held accountable. And what this document does this book, guys, it talks about the history of my involvement in decision. And what led me to realize that although I spent a lot of time improving the decision making process, I didn't spend any time learning from the decisions. So this book points out that not only do you make the decisions, but you should have a process in place. So that you learn about from the decision that you made. And that's not done very much. Because when most companies are organized, people are moving on all the time. And nobody likes to write down everything that happened. But I think it's an important thing to do. Because in today's world, things are changing so fast. That what was a reasonable assumption yesterday, may not be a reasonable assumption tomorrow.
Jeff Sterns 43:20
Interesting. So what do you mean by how to avoid Bert toast?
Unknown Speaker 43:27
I asked him to rely on the Edwards Deming. That's because that's the first time I ran into it. And the guy he, by the way, was a really interesting person. Fundamentally, what he said is that burnt toast is what happens when you don't have all the facts of the decision, right? And you go ahead and do it. And instead of golden brown toast, you end up with burnt toast. And then you take the burnt toast, you scrape off the bad part. And then you have toast. That's acceptable. And Demings point was, you should be doing a lot of stuff to understand the effect of the decision and what things you are doing that affect the decision, so that you avoid burning the toast. So it's really more about avoiding burnt toast is having a decision process that lessens the chance of making a mistake. Interesting, and damning, by the way, was one of those really major contributors to the well being of understanding how to do things I, he was he I never met him, when while he was at the Census Bureau, but as I was at the Bureau, he came in a couple of times, and we had nice chats. And then he came and visited us. And how's that GM as well. He was one of the most interesting people I've ever met.
Jeff Sterns 45:21
No kidding. Now, this is by memory, not from my notes. But weren't you in a meeting in GM, like down in the bowels in the basement when the shuttle blew up? Or do I have that messed up?
Unknown Speaker 45:36
Labor? Dick Wirthlin, who was my partner, when we formed, our market research company was called. It started out with data medics and it became decision making information. And and after a while that while we that's when we did all I did all the clever campaigns, but in its 70, mid 70s, I went to the Census Bureau, and to kept the company going. And so we were doing, going to do some research. And I invited Dickon, to talk to our group, about how we might go about doing it. And he was in the process of talking about some of the things that he was looked into when the phone rang. And somebody picked it up and said, Mr. Wirthlin, this is the White House calling. And they all are aghast. And they got on the phone. And he found out that the shuttle had exploded and that President Reagan wanted him to come to Washington to help prepare his statement about that accident. So thank us for taking the time he left the meeting, flew off to Washington and Caden prepared the President's speech. It was a it was such a sad moment for the to have that whole thing happened. It was also kind of interesting to be in the room. And somebody who you knew all you know, for your whole career was being asked by the President to go do something. And Warren, I think we've identified that everybody in the room was really held back by that one.
Jeff Sterns 47:17
Well, I'm most proud that I was able to recall something from a recorded conversation I had with Warren like over a year ago. So what do you think of that one? So Vince, what is something we'd be surprised to know about you?
Unknown Speaker 47:32
I'm a woodworker. Woodworking is my hobby. And I love it. Because once I get there, I forget everything else.
Jeff Sterns 47:47
So you're really able to get in the moment while you're doing your woodworking. Oh, yeah, hold on, just second. What a sweetheart.
Unknown Speaker 47:59
When you're doing this, you don't want to think about anything else. So that's nice. That's my candle holder.
Jeff Sterns 48:07
That must have been really hard to find a stick twisted around like that for you to polish up.
Unknown Speaker 48:11
You're right. I think everybody needs something to take them away from their day to day stuff. And to me, woodworking is one of those things and because you have to involve yourself because it's first of all, that pay attention because it could be dangerous. We know that park women and I was the beneficiary of acquiring some ancient Sequoia wood from a tree that fell down and it's a quiet forest in 700 BC. And so I've got this incredibly beautiful wood that keeps me busy as well. Wow.
Jeff Sterns 48:52
Unknown Speaker 48:56
you look at the grain, it's so tight. You can hardly barely see the grain. It's so tight. It's not petrified. I mean, it's not like a rock. No, they it fell just in 73. And so it was cut. And then it was cut up in the box. It's a good dry. And when it's finished, it's one of the strongest and the second lightest wood out there. It's almost like I mean, it's a very lightweight. And so you could do all kinds of things with it because it carve it do whatever you want and it keeps me busy.
Jeff Sterns 49:38
What would you what would you want us to know about you? You know,
Unknown Speaker 49:43
it's interesting. I was I was born in Chicago. And my father was a an Italian immigrant. And my mother's parents were Italian immigrants. And my father was a laborer, and beheaded I have an elder brother, former Marine Corps member. And we were a very tight family. And unfortunately, my father died when he was relatively young. So my mother kind of took over the reins, and she made sure I got through college and things of that nature. And so, and married a wonderful woman. And we have two children. So the family is the thing that they I think, is something you have to kind of keep in contact with. Because it's, it brings back great feelings, great memories, and allows you to want to do more for each other. Beautiful. And my wife's an artist, so I get to enjoy that too. In fact that thank you can see that painting back there. That's one of her paintings.
Jeff Sterns 50:55
Nice. Now, how far are you from the car week? You know, Pebble, okay, because I can barely afford the ticket. But I definitely can never afford a hotel. So
Unknown Speaker 51:10
we haven't we have a deck that you call me back.
Jeff Sterns 51:13
There's a half an invite. Right, Warren? If I find you sleeping on my deck, I won't call the police.
Unknown Speaker 51:19
Okay. It is interesting. Yeah, that one? Well, I guess there's one important part. Before I left, we did a major study about the future of the
Jeff Sterns 51:31
enterprise for you love General Motors, General Motors. Yeah.
Unknown Speaker 51:34
And one of the things we came up with, after we did some studying was that there was much more profits to be made. And after the car is sold, than the actual making and selling of the car, between insurance, and financing, and all those other things. And we did a study, and it was very clear that down what we refer to as downstream revenue was an important concept. And I just find a FET. And by the way, Mary Barra at that time was working with the planning organization. And she's done an incredible job of creating that downstream revenue. Whereas GM today is into all kinds of businesses that are related to the vehicle. But it's after the vehicle has been made and sold. And, and that brings them into a an atmosphere of more creativity, because you're doing things that haven't been done before. And it causes them because they're a car company, they can say, you know, what, if we change the car company, if it won't change the car, can we do more things? And that's what we're starting to see happen. And she should be commended for, for making sure that that has occurred,
Unknown Speaker 52:57
beautiful. GE was a very engineering push firm. You know, car guys don't need to listen to us. Just we're inherently born with it. We know how to make cars. And I would put dents at the top of the list that not only question that assumption, but made them think harder that engineering push and demand pull out a role in the company. And they better start listening. That was no small nut to crack.
Unknown Speaker 53:44
It's interesting too, because at the time I was coming in, Bob Lutz was also company that GM and and at that point, though, he had a record of understanding the use of consumer research since it was part of his master's degree at UC Berkeley, that his idea that an engineer will decide what's going to happen. And it was took a lot of dialogue to make sure that we we kept the information from the customer flowing into the process.
Jeff Sterns 54:13
Bob Lutz was great for consumer poll.
Unknown Speaker 54:23
Not quite but he was he understood it.
Jeff Sterns 54:26
Now. He was like if if my gut likes it, that's the product.
Unknown Speaker 54:30
We had some interesting conversations.
Unknown Speaker 54:33
I don't know if you talked about it. But Vince put the research group inside of the design studio at the building. That's just one indicator of influence that he had on the organization.
Jeff Sterns 54:55
Was that hard to pull off? It
Unknown Speaker 54:57
was interesting when Chuck Jordan was the In charge of design, I used to have to get permission to come into the building. Because I had to get permission, because the doors were locked. When and then Wayne cherry came in from Europe, to head of design. He called me in one day. And he said, I'd like you to move your office into the design center. And I said, Sure. And so we did. And then one day, he said, I want one of your guys to be an employee of the design center. And he hired whenever I had to who wasn't getting that name right now. Anyway, and but that person went in, and we learn more about what the designers needed to know, to make better decisions. And they had these 20 foot boards, which was where their decision process was. And when he got down there, there was none of our information on the boards. And after several months, he walked down and looked at the boards, which I was allowed to do fine. There was already information was on the boards as well. So I would say that when cherry did a incredible he took a lot of heat for doing it. But I think after it was shown what could be done. He got a lot of credit for it as well.
Jeff Sterns 56:32
Interest. That's interesting.
Unknown Speaker 56:34
The final thing that I'll say about character is when I events was my boss. He gathered up a couple of us and and said I want you to go up to Rochester. I think he called it Raj Cha Cha and I want you to go to Rochester and go to Kodak. There's a number of things that you folks can learn up there of what we've done. So you will be smarter when you come back here. And my indicator of character. Remember this was early on when I was his employee. One of the one of the metrics of character was when we went to Kodak. They took us back and showed us everything. The secrets, the stuff and they said, Well, if Vince says it's okay. We'll show it to you. He didn't work there anymore. But he installed that sense of character to me in his old organization. And that was a that was a real tell for me that I don't know if I've ever told him.
Unknown Speaker 57:50
No, he never did. Thank you.
Jeff Sterns 57:53
That was leadership with or without the title without with or without the position. You got it? Yeah. Yeah, absolutely. That's it. That's nice. That really is I'm glad I got to be here. For you to hear that Vince. And Warren took you too damn long to say it.
Unknown Speaker 58:10
I gotta tell you that. There was a lot that needed to be done at GM when I got there. But Warren had already started and so therefore my job was more doable. Thanks.
Unknown Speaker 58:27
Okay, well, I'm
Jeff Sterns 58:27
gonna start crying. So it's very sweet like no bullshit.
Unknown Speaker 58:34
That's the biggest but it's very honest
Jeff Sterns 58:37
to god it's like sincere sincere sincere it's very sweet. Yeah, I got goosebumps to see the you know, let's just say it affection that you guys have for each other and admiration. It's I love it. So I appreciate it.
Unknown Speaker 58:59
This has been Jeff Sterns connected through cars
Transcribed by https://otter.ai