Implementing strategy and reducing organizational complexity

We keep hearing it, it is the struggle that most automotive brands face and a significant hindrance when reducing organizational complexity. But why has implementing and operationalizing strategy become the number one pain that no one seems to be able to relieve?

In however way this issue is looked upon brands always seem to stumble across the same answer; An unavoidable difference in perspectives between the importer and dealerships remains a divide, parting strategy and execution.

So, what is the trap that so many fall into? Assumptions that heavy-weighing trends within the industry are the established path towards success leaves little room for diverse approaches. What really must be comprehended is that strategy is one thing, whereas being the direct point of contact with customers brings a whole other dimension into play. And so, leaving dealerships with “one-size-fits-all” strategies is somewhat problematic, when they lack tangible objectives and fail to take everyday execution into consideration.

Not only do these strategies not account for the geographical differences influencing customer behavior, they also demand immense amounts of energy, when having to be translated and integrated into the culture and employee mindsets across dealerships. Successfully implementing strategy very much depends on whether employees are successfully onboarded and recognize the benefits of the path ahead. Failing to ensure alignment throughout an organization will result in reluctant employees, and consequently driving execution through behavioral change becomes an impossible challenge to overcome.

At the end of the day employees must see the value of carrying out new initiatives — and therein lies a crucial job: refraining from adding to dealer complexity. If anything, having to make a detour in order to solve a task, is one of the most frustrating things anyone can think of. Take this example; today more than ever before dealers are required to stay ahead by adopting new systems and IT-platforms. Yet, new systems become a burden, when developed by importers, who neglect to consider the dealer perspective and the executional angle. These systems often fail to account for the complexity within the dealership, when neglecting the dealer perspective and skipping necessary testing through a relevant user group. And so, new systems keep building up that force dealers to make detours as opposed to aiding them in reducing complexity.

So, what is required in order to close the gap between the seemingly rational development of strategy and everyday execution?

Whilst it may seem basic, working on establishing a solid and effective feedback culture has a major impact when reducing complexity. Facilitating communication will help bridge perspectives, whilst ensuring a higher probability of an effective implementation of the set strategy. This of course requires a structured and continuous follow-up process that enables adaptability within a short time-frame. Naturally, digital solutions and online meetings are a great solution — and have to a large degree proven to uphold effectivity during the COVID-19 pandemic.

In addition, a solid feedback system will minimize the need for constant controlling and reporting, allowing entrepreneurship to thrive. Aligning perspectives will establish a foundation of trust, leaving the dealers to run their businesses freely and in accordance with individual customer behavior, when basic targets are met and delivered on.

This really paints a picture of what any organization should be aiming at; resisting disruptive change and instead relying on core fundamentals and pre-established culture. Organizations should thrive on the basis of integrated thinking and the behavior already present among employees and across teams. And so, the key is to harvest success from company culture as opposed to disruptive and structural change.

Whenever an importer defines new processes and starts of new initiatives, dealers must put great amounts of energy into adopting and integrating these tasks. And so, a successful execution of strategy requires that analytical groundwork is laid prior to the implementation. This preliminary phase must be instigated in order to ensure that dealers acknowledge and see the value of the new initiatives.

A key component is setting up a good testing environment, where initiatives are run by dealer representatives before being implemented. As a result, the testing creates a necessary filter that will align perspectives as well as bridge strategy and execution. This will also increase the speed of which initiatives can be implemented, as they will not need redefining before being introduced to employees.

Simultaneously, prioritized actions are a necessity when converting strategy into something that can be operationalized and executed on. When reducing complexity on an everyday basis, behavioral change can be led and effectively narrow the divide between strategy and execution in the long run.

So, how do we relieve the pain of translating the strategic into the everyday? It all comes down to mastering the element of simplicity, by reducing complexity and relying on pre-established culture. And so, strengthening the relationship between the importer and dealerships poses an inevitable requirement for sustained change. Adaptability has become increasingly key in the rapidly changing automotive industry, why all importers should be focusing on developing simple and operational initiatives. Testing new initiatives and setting up an effective feedback culture, ensures an alignment of perspectives and eases the implementation of new initiatives — both leading to a larger degree of entrepreneurship. When prioritizing actions based on analytical groundwork, behavioral change can be led and ultimately bridge strategy and execution.

We are ag analytics. A hybrid tech analytics consultancy combining the best in strategic thinking, data science and preparatory technology. www.aganalytics.dk