The morning news on CNN today is all about the crumbling auto industry (at least, the part of the news I watched).
With a rising unemployment rate and plummeting car sales, auto giants like GM are burning through cash so quickly that they won’t be able to operate past the end of the year.
That’s scary stuff. How did they get into this mess?
I think it’s because of the Lack of Foresight problem. Business is inherently focused on short-term interests, often to a fault. And in a group situation, it’s easy to drink the cool-aide, go along, and ignore the long-term trends.
Housing prices will go up forever. The internet will never become mainstream. Americans will always buy SUVs.
There are obvious problems with these sentences. Here they are: “forever,” “never,” and “always.”
Consumer habits are rarely stable. The technology landscape hasn’t been stable for 30 years. The only reason Microsoft is still around and doing well (very well, actually) is because Bill Gates had the guts in the late 1990′s to take the entire company on an about-face, and start taking the internet seriously.
American auto companies could have been developing something besides SUVs years ago. That run was not going to last forever.
Newspapers could have seen, as early as 2003 or before, that news consumption was moving to the internet, and they could have built up appropriate web departments and started working on systems to monetize their internet properties.
If big, lumbering Microsoft can do it, so can you.