Cerberus Should Use Design To Revive Chrysler, Not Just Cut Costs.

Posted by: Bruce Nussbaum on May 14, 2007

I have some advice for the private equity firm Cerberus that appears likely to buy Chrysler from DaimlerChrysler—don’t just cut costs, the way you always do and then flip the company back out to the public. Instead, use Chrysler’s deep tradition of design and innovation to reshape the company into a 21st century consumer-driven, adaptable and cool auto giant.

You folks at Cerberus probably don’t know this but Chrysler used to have one of the best contests, the Chrysler Design Awards, that celebrated design everywhere. People in architecture, industrial design, auto design, graphics were all celebrated. Burt Ruton, who designed SpaceShipOne got one of the last awards. The program was ended when Daimler bought Chrysler.

More to the point, Chrysler itself has a rich history of wonderful design. The Crossfire is but one example. Getting Chrysler back to understanding why people buy cars and designing them with excitement and beauty may be a better—and even faster—way to turning the company around.

Reader Comments

jens

May 14, 2007 4:30 PM

also for a german it is more interesting to look at chrysler now than at daimler. - what will happen? do the cerberus people have a firm grip on the steering wheel and will they eventually shift up towards design and innovation?... they could. they could really "risk" something as they are in that business anyway.- ideal cultural conditions for I&D - if you can blend trust into it.
- we'll see...
interesting case.

Pete Mortensen

May 15, 2007 8:11 AM

The thing is, great design at Chrysler never stopped. The awards went away, but the company has continued to come out with hot vehicles in the years since the Daimler take-over, including the Crossfire, the PT Cruiser, the 300, the Avenger...

Chrysler is working at the leading edge of design and innovation. We have had the privilege work with them at Jump, and they are very clued in to the cutting edge of this stuff. The problem here is not necessarily lack of interest or commitment to design or innovation. Many, many people in the company were ruthlessly committed to such notions.

But there are many parts to a business, and great, attractive products aren't everything. In all likelihood, they really do need to get leaner in their operations and innovate some processes of the business that I'm frankly not privy to. This isn't irrelevant in terms of turning the business around. Cliche as it might sound, it is critical that Cerberus tighten up the bottom line. The supply chain might be the problem. Design as you've talked about it above isn't going to fix that.

On the other hand, it is also extremely important for Cerberus to make sure that the company continues to move the top line as well as the bottom line. And this speaks to the role of designers to make connections between disparate groups and build consensus and move ahead on the vision-oriented strategic side of things. It's the toughest skill a designer or design manager can occupy, but it's significantly more important than great-looking products.

Any time new leadership comes, there will be a re-evaluation of priorities. We'll soon see if Cerberus is there to just pump Chrysler up and resell, or whether they're committed to making the company great again. And that greatness will surely involve design, but it will likely be the designs the public never sees -- organizational structures, supply chains, strategy sessions -- that will hold the biggest impacts.

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Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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