Marginal: The Power of Focus
For years, whenever a new Honda Accord was launched, the reviews in the automobile consumer press (a.k.a., "buff books") tended to be remarkably laudatory in all respects but one. After rhapsodizing about the ride and handling, the interior, the packaging, the color palette, the color of the tires, the...there was always a "but." A big BUT, in effect. A but that undoubtedly plagued the people in Marysville, Anna, and Tokyo. A but that had the effect of, all the adulation notwithstanding, kicking them in their collective butt. In effect, the Accord was a fantabulous car...BUT IT DIDN'T HAVE A V8.
Funny thing: There was no Acura with a V8 (not even the NSX). And no Honda. It wasn't until 1995 that the Accord became available with a 170-hp V6. Not an eight. A six. But six was enough so far as Honda was concerned. (The next model change, the 1998 fifth-generation Accord, was offered with an all-new 200-hp engine.) Competitors continued to offer eights because they, like the buff books, know that eights are in the very genetic makeup of Americans. The sales numbers told a different story, as once the Taurus lost its way, it was either Camry or Accord at the top of the sales charts, and you couldn't get an eight in either. It's not that Honda couldn't. Its racing involvement is legendary-from the exhaulted F1 series to the down-to-earth IRL. But for consumer products, fuel efficiency has always been one of Honda's development principles-even when it comes to things like the NSX. As is often said, Honda is an engine manufacturer that packages those engines in a variety of ways, one of which happens to be cars and light trucks.
Speaking of trucks, Honda has never really offered a bona-fide pickup truck in the U.S. There is the Ridgeline, which was launched in March 2005 as an '06 model, but (1) it only has a 5-ft. long bed and (2) it has unibody construction. Everyone knows that (1) a truck needs at least a foot-and-a-half more in the back and (2) it should be body-on-frame, not what Honda calls a "unit body frame with an integrated and fully boxed ladder structure." Oh, and one more thing: the Ridgeline is available with a 3.5-liter, 250-hp VTEC engine...a six. Real trucks get eights, right?
Nowadays, the executives at Honda could be perceived to be veritable Kreskins, seers of the future. With the price of gas going through the roof, they have a lineup of vehicles that are thriftier than they are thirsty. Other vehicle manufacturers may have more cars with at least 30 mph ratings; none has a higher fleet average fuel economy.
Richard Colliver is the executive vice president of American Honda Motor Company. He's had an automotive career since 1962. He joined Honda in 1993. Colliver is a self-described "sales guy." During his presentation at the 2008 CAR Management Briefing Seminar, he candidly admitted that his first job was with GMAC: "I was the 'repo king' of Kansas City. Talk about getting close to the customer! I used to sit out on the street, waiting for customers who had defaulted on their loans to come home. As soon as their front door closed, I was firing up the engine and driving away. I can remember once when I repo-ed three cars and a truck in the same day to the same dealer." Those skills would probably be in big demand today.
Some of Colliver's observations about Honda are worth pondering over. Consider:
- "Honda's success is the result of careful planning, based on our core values, that begins with a total focus on the customer." Honda just didn't wake up to the notion of importance of the customer: in 1956 its company principle includes the term "customer satisfaction." (American Honda was established in 1959.)
- "In our view, customer satisfaction is more than just a good sales experience or a free car wash when you service your car. Customer satisfaction is about a relationship with the customer that begins with developing products that fit their needs and forms into a bond based on their trust in those products and the brand." For a long time, the products trumped the dealer experience. But they never lost focus on the products. And they understood what the customer needed, not what others were telling them the customer needed (e.g., the V8).
- "At Honda, we have consistently rejected the types of short-term financing deals and marketing tactics that attract customers but diminish the brand. We've never done fleet sales-and that's not a brag point, it's a strategic decision. We have higher resale value as a result." They may lose the #1 sales championship, but their customers win when they sell their Hondas.
- "Our belief is that survival in good times and in bad is a function of the ability to maintain a clear focus on a long-term vision, core company values, and the customer." Opportunism is a short-term tactic, not a long-term approach.
Sticking to what you believe in is hard. Not trying to be all things to all people is similarly demanding. But those who persevere, like Honda, can achieve success that's earned, not promised, sustained, not fleeting.