The Detroit Auto Show recently announced that it is moving to a summer event in an effort to boost attendance after a string of automakers such as BMW and Mercedes Benz decided to no longer participate. No doubt that visiting Detroit in June has more appeal than January, but will warmer weather be a fix for what has been the premier auto event in the world? Perhaps it’s not the weather, but a shift in consumers’ attitudes about cars in general.
Automakers are increasingly looking to find new ways to be relevant to their target audience and are now showcasing their latest models at places like the Consumer Electronic Show. Something that would have not been believable less than a decade ago. Is Detroit listening or are they stuck in an old mental model and just can’t see how the world is changing around them?
1962 was a peak year in market share for GM, with 52% of the U.S. car market. Today they stand at 18%.
The decline was not sudden nor should it have been unexpected. There were rumblings of change all around them, beginning with the rise in oil prices in the 1970’s, but they were ignored. By the 80’s they finally realized that the Japanese could not only make better cars, but also make them more efficiently, and they were popular with the U.S. market. What took the leadership so long to realize this? Part of the answer is the mental models they operated within.
In his book, The Fifth Discipline,Peter Seng defined mental models as “deeply ingrained assumptions, generalizations, or even pictures or images that influence how we understand our world and how we take action.” Very often, we are not consciously aware of our mental models or the effect they have on our behavior.” This is not new. The idea of mental models was first introduced by the American philosopher, Charles Sanders Peirce in 1896.
The assumptions under which GM functioned were never written down, but the following were obtained from interviews with retired former senior GM executives:
GM is in the business of making money, not just cars
Success flows from rapid adaptation, not technological leadership
Cars are primarily status symbols - people want to upgrade
The U.S. car market is isolated from the rest of the world
Fossil fuels (oil) will remain cheap and abundant
The government is an enemy and so are unions
Planned obsolescence works (quality less important)
Efficiency of mass production beats other approaches
Bigger is better – we can manage anything
Imagine how these filters and perceptions of the world affected the decisions GM was making. Mental models are subtle, yet very powerful. And not all models are bad, in fact they help us organize and navigate our lives. For the most part, they have helped us survive. The issue is that they can influence our behaviors without us even being aware. And, they can at times cause a collective herd mentality that in the case of GM had disastrous effects.
What are the unwritten rules or mental models in your company?
It’s the stuff you talk about that is not in your employee handbook, or the bits of wisdom you provide to new employees to help them adjust to your culture. Are the mental models of your most senior executives different from the rest of the staff? How are your individual or corporate-wide mental models affecting your decision making? How are they possibly blinding you from growth opportunities, competitive threats, or changes in your target audience purchase patterns?
What to do
Take the time to reflect and write down your unwritten rules – whether in your company or in any other aspect of your life. Question them. How do you know them to be true? Are they helping or limiting beliefs?
Share your mental models with others in your company and look to get to the data behind them. See if they can really stack up or if they are just assumptions that filter your thinking and actions.
Get real insights. Has your company taken the time to complete a thorough customer journey path to help reveal exactly why your customers are buying your product or service? Do you understand not only what they are doing through each of the pre, during, and post phases of a purchase, but also what they are thinking and feeling?
Being consciously aware of your mental models and intentionally managing them can not only free up your thinking to new possibilities, but also uncover your blind spots. It’s important to push assumptions to the side and acquire the insights to shed light on models that may be steering (sorry, couldn’t help with the pun) your company in the wrong direction.