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Can We Learn Something From The Auto Industry?

I've always thought coaches and business leaders are fed a raw deal, with everything focused on the now rather than the future. In both cases, while much is beyond their control, they will keep or lose their job based on whether they win.

Looking at the U.S. auto industry, one needs a scorecard to keep abreast on the upper-level management, where changes come fast and furious. But while management changes are many and quick, the firms themselves haven't changed. In fact, they've become more entrenched, focusing almost solely on cutting costs.

Without question, their cost structure wasn't competitive, but as Forbes columnist and auto-industry expert Jerry Flintin writes: "That's why they were always cutting costs and never bringing inspired products." He also uses the analogy that the traits needed in a great peacetime general aren't the same as those needed in a great wartime general.

The same probably could be said of the cattle industry -- the skills needed to keep a business successful in the glory years may be considerably different than those needed in a cycle downturn. Cutting costs is a great answer when facing record price levels and a largely commodity pricing structure. Creating value and gambling a large percentage of one's net equity on a bold, innovative marketing plan and business model may be the skill set required.

The U.S. beef industry is transforming from production to product. Some are transitioning away from product quality (efficiency and meeting market specifications consistently) to creating value through new marketing models. The ability to manage this shift in emphasis is crucial, as the point of differentiation is shifting.
-- Troy Marshall

TAGS: Beef Quality