GM--Cut out the incrementalism and make the hard choices

Implications: GM cut the cords on the Academy Awards. While it seems newsworthy, it's really only the latest move in a decade long trend of budget cuts that correspond with their decade long market share decline.  And the loss of the Academy Awards, while a glittering star in the media plan, will not negatively impact brand image or positively impact sales.  But given the dire market situation they are in, they did not go far enough. They need to cut deeper. To the bone. In fact they should institute a zero-based budgeting approach. This was the approach Ignacio Lopez took with suppliers in 1992 when GM was on the verge of bankruptcy and the company's world class procurement function was born.  Protect nothing and eliminate the remaining bloat.  And build back the marketing plan one building block at a time investment spending on growth products and markets, new media and more profitable services. Come on Rick, cut out the incrementalism, it has never worked. What more do you have to lose? 

Analysis: When I was running global brands at IBM, we were confronted with similar budget challenges by Senior Management.  But rather than piecemeal cuts, we looked hard at the business opportunities and made the decision to dramatically shift support to the new services arm and emerging markets and away from the declining businesses.  We cut marketing fees and invested in advertising.  We further consolidated work at fewer agencies...these were hard choices internally, but they protected the brand and share growth in the areas of the business that needed support. The result, IBM is still on a growth trajectory even confronted with the same economic issues that confront all the giants. Coke, Home Depot and others have recently announced goals in reducing spending...I would be watching their moves closely right now to see the impact on sports, entertainment properties and Agencies.