OEMs at the Crossroads Part 5 | How to Thrive in the New Normal
Written by Jason Craker on
The trouble with predicting the future is it never stands still. Yes, consulting models neatly depict straight lines from current state to future state, but the real-life experience is less like driving a car from A to B and more like piloting a sailboat, constantly tacking back and forth to navigate changes in the wind and the tide. Technological innovations that seem like the Next Best Thing in the moment seem almost comical when viewed with the benefit of hindsight, as any early adopters who bought a 3D TV, a Sinclair C5, or a Betamax video player know to their cost.
Making a bad bet is one thing, but missing a wave of change is arguably far worse for organisations. Back in the early 1990s, when the World Wide Web was in its infancy and only just becoming available to the public, how many of us foresaw the rise of online shopping, media streaming, social media, augmented and virtual reality, smartphones, Amazon, Facebook, Twitter, Uber and cybercrime? Who would have guessed this nascent technology would have such profound economic, political and societal impacts? The graveyard of previously successful companies is well populated and well reported, each with “missed the Internet” on their death certificate. And the last three years have hammered home the fact that geopolitical events can appear out of nowhere with consequences as wide-reaching as they are long-lasting.
As I mentioned at the start of this short series of articles, I believe the automotive industry is at a tipping point, buffeted by environmental, technological, economic and societal pressures. The way people view ownership is changing. The way they want to purchase (if that’s even the right word anymore) is changing. Cars are becoming more like software than hardware, and new market entrants look more like tech companies than traditional manufacturers. Roles within the industry are changing, and traditional OEMs must either actively redefine their position in the new value chain or be prepared for someone else to do it for them.
Initially, my plan for this final article was to look at the current trends in the automotive industry and make some predictions (such as autonomous pods, micromobility transport hubs and new green energy transportation models). But then I decided it would be better to talk about how best to achieve competitive advantage in a world where the only constant is change. So here goes…
In my previous article, “Surfing or Drowning”, I argued that one of the most important things OEMs can do is cultivate an agile leadership mindset. They should also adopt a corporate culture of constant learning in which they don’t hold onto dogma or outmoded ways of doing things but are happy to learn lessons from other industries and apply them to their own. As I described in the earlier articles, the building blocks for success already exist and are rapidly evolving. OEMs need to embrace them now. They must:
- Get as close as possible to our customers and understand them as more than just a homogenous mass.
- Become adept at scanning and interpreting consumer demands.
- Scan specific trends (social, political, environmental and technological) and look for niches to exploit.
- Learn to think fast, turn plans into actions quickly and pivot rapidly when circumstances change.
- Create a culture of experimentation, embracing failure as an opportunity to learn rather than something to be avoided and punished. We must design our companies so that failed experiments aren’t fatal.
- Collaborate and become experts in building ecosystems that broaden and deepen our capabilities and experience.
If OEMs master all of the above, perhaps they'll go beyond delivering incremental improvements and start delivering products and services that redefine the market and accelerate change. Steve Jobs didn’t produce a thinner, lighter, more portable way of listening to a CD on the move; he created a product that enabled you to carry all your music around with you. Then streaming changed the game again by allowing you to listen to any CD, podcast or radio station.
When betting on the car of the future, until very recently, many people would have said it was a one-horse race - and a battery-powered horse at that. Then, the German government successfully lobbied the EU for a stay of execution for internal combustion engines if they could run on e-fuel. Then you have big-name OEMs like Toyota, Nissan and BMW, who are still investing heavily in hydrogen fuel-cell technology. So, will the future be electric, or will it be some combination of alternative green energy sources? Electric vehicles seem like the obvious choice, but so did Blockbuster Video when it had more than 9,000 stores worldwide and had just declined the chance to buy a startup called Netflix.
If the current growth in congestion continues, we’ll be in global gridlock within a decade or so. The arguments for 5 km cities, integrated mobility systems and communal car-sharing seem irrefutable, but that future only exists in the broadest of brushstrokes at present. Competitive advantage lies in defining the details. What will be the impact of Apple’s recently announced entry to the VR market? Will it be another Google Glass? Is it the jolt Meta’s floundering Metaverse needs to become a commercial reality? How will advances in online shopping, food delivery services and the rise of delivery drones affect our living habits? Will we even venture outside other than for recreation?
If the sixteen years since the release of the iPhone have taught us anything, it’s that trying to second guess what the world a decade from now will look like is a fool’s game. I’d argue that the better strategy for successful leaders is to build a data-driven organisation and develop the skills and capabilities necessary to identify change and capitalise on it faster than the competition.
I hope this short series of articles has given you food for thought. At changemaker, we support organisations and individuals in delivering sustainable and lasting change, especially during pivotal times of transformation. If you want to learn more about us, take a look at our website or email me at jason.craker@changemaker.org.uk.
Catch up with the full series...
Part 1 | Customer Intimacy and the Rise of the Agency Model
Part 2 | Who Wants to Own a Car?
Part 3 | Are Cars the New Smartphones?
Let’s connect
Stay up-to-date with our OEMs at the Crossroads Series on LinkedIn.