Car Talk: Bob Lutz and Malcolm Gladwell Talk Innovation, Branding and Bean Counters

June 22, 2011
At the closing main room event at Consumer 360 in Orlando, which focused on innovation and branding, Fortune’s Adam Lashnisky moderated a discussion between, Bob Lutz, retired Vice Chairman of GM, and author Malcolm Gladwell. Using Lutz’s book “Car Guys vs. Bean Counters: The Battle for the Soul of American Business,” as a jumping off point, the duo discussed the tension between the creative types that value the consumer’s emotional response and the bean counters who tend to focus on cost and the bottom line.

Lutz recalled that problems at GM increased when finance was moved to the same space as operations and began to overshadow the engineering and operational departments. In perhaps the snappiest line of the session, Gladwell floated the idea of a “bean counter island” where finance departments of every company could be kept far away from the innovation teams.

Lutz and Gladwell were in agreement more often than not, especially when it came to branding and customer value. Lutz noted that many cars in the luxury category were basically constructed of the same material as lower priced vehicles, but the true differentiator was brand value and perceived customer value. That “intangible thing” (as Gladwell called it) that separates brands tends to be the domain of the creative and Lutz agreed, noting that when you want to elicit an emotional response with the buyer, that’s where you defer to the creative types. The emotional distinction is also notable when it comes to research. Lutz relayed anecdotes of GM research, downplaying instances where they asked consumers about their preferences and favoring research that measured consumer responses against the competition. The visceral response of a consumer, especially when it came to perceived price, was incredibly valuable, and often the most accurate according to Lutz.