In the first part of 2018, General Motors signaled changing times. The automotive manufacturer ended its long-standing habit of issuing monthly sales reports.
This was big news for a lot of reasons. First of all, monthly sales reports have been an important way for the auto industry to do everything from validate existing marketing campaigns to projecting revenue.
The news media uses sales reports to report on relative growth among automobile manufacturers.
The very existence of car dealerships and supply chains are closely tethered to monthly sales numbers. What would this change mean to them?
Perhaps the biggest question on most peoples’ minds was: How will GM monitor sales, if not monthly?
To fully appreciate this major shift in how General Motors does business, it helps to know more about what caused them to consider sales reporting alternatives.
It’s also useful to look back to a time when GM did not report sales on a monthly basis. It turns out we live in changing times all the time.
What’s better than monthly?
Of course, a lot of smart people were in on the decision to eliminate monthly sales reports at General Motors.
This brain trust did a lot of research and decided that reporting sales on a quarterly basis made a lot more sense. It’s expensive to generate sales numbers every month. Issuing quarterly reports would save valuable time and energy.
Best of all, reporting sales every quarter would be more accurate. The experts became convinced that it doesn’t make much sense to compare December, a month with so much holiday down-time to January, a month when nearly everyone is back to their normal schedule.
It also didn’t make sense, they reasoned, to compare January–a 31-day month–to February, which only has 28 days. To further complicate matters, February has 29 days about every four years.
Using a three-month rolling average seemed like it might work better.
But if GM reported sales differently than its competition, how would anyone be able to perform comparison analysis? Will Ford and other domestic competitors change their sales reporting? How will auto manufacturers in other countries respond?
Will sales managers in other industries stop monthly sales reports and follow suit?
Perhaps the most interesting question of all was–what if General Motors is wrong about this change?
Changing times, again (still)
So the largest automobile manufacturer in the world was literally changing times.
They announced that they would deliver their final monthly sales numbers in March of 2018. After that, everyone from journalists to dealerships would have to wait three long months for updated sales reports.
Change is a funny thing. It seems like many good ideas are first vilified and then glorified.
Most historians credit the invention of the modern automobile to Karl Benz in Germany around 1885 or 1886. At first people hated the noisy, ugly contraptions. Horses, after all, were a lot more dependable.
When Henry Ford invented the automotive assembly line in 1913, he was essentially borrowing an idea from the meatpacking industry. People were enraged that someone had figured out how to make even more of the contraptions they hated.
The monotonous labor of working on an assembly line caused extremely high turnover, which led to an important change in how workers were compensated. The effects of these changes rippled through nearly every industry.
So maybe the world will get used to GM’s new method for reporting sales.
And here’s what most people forget. In the early days of the automotive industry, GM used to report sales every 10 days. Then they started reporting every 20 days before they started issuing monthly reports.
Change seems weird, then we get used to it
And so the cycle of change continues.
New concepts are first vilified, then become the gold standard.
Self-driving cars have stirred quite a debate. Is this trend for real? Are they safe? What will happen to the auto industry? A small group of first-adopters are very excited about the concept, but most people are still unsure what to make of this development.
First vilified and then glorified. Change seems undesirable and even impossible.
And then, we get used to it. Or do we?
Interested in change? Want to lose a bad habit? Read Michael’s article, Success Comes From Good Habits.