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Lesson from GM: Decisions > Processes


Syndicated from ebizQ

Gary Comerford posted about Bex Huff’s identification of How one bad business process doomed GM. Like Gary I appreciated the analysis. However, the title is all wrong. This is not about a business process – I am prepared to bet that GM’s PROCESS for selecting and acquiring parts, signing up vendors etc was essentially identical to their competitors. What was different was the DECISION they made. Same process (analyze part performance, determine parts needing replacement, seek new supplier, sign up new suppiler, get new parts) but a completely different set of decision-making criteria.

And this is something I see a lot – people think their processes are important or differentiating  but they are not really. A single decision within those processes adds (or removes) all the differentiated value. To take another example, insurance companies don’t have different underwriting processes from GEICO (at least not very different) and yet GEICO dominates because it makes better, more fine grained, more precise underwriting decisions.

So before you assume a process is your differentiation, consider the possibility that it is a decision that really matters…