Scaling in Automotive OEMs & Start-ups: 5 Lessons Learned
At QR_ we’ve had the opportunity to support a number of OEMs through early or growth stages and there are many lessons learned about having to build your business alongside delivering your products. Below, we share some of the most important ones.
The automotive industry is at the cross roads of 3 major disruptions; EVs, autonomy and ride-sharing, but that’s not all. Our industry is changing from ‘automotive’ (building cars) to ‘mobility’ (moving people) with our whole objective shifted to the right.
This has generated high levels of creativity, countless new ideas and many new ventures, each facing a mix of problems, both old and new.
The ‘new’, technology based problems are exciting; they are the life blood of the fascinating scientific and engineering work we all enjoy either doing or reading about. The ‘old’ problems of building a supply chain, designing for cost, meeting programme deadlines, engineering release, managing change (and the list goes on!) tend to attract less excitement and hence attention.
How much new funding was raised because of an exciting new product? How much for a well-oiled development process?
As we are all aware and as recent results from Tesla, amongst others, highlight, ill-defined or immature processes will eventually hit hard. Below we’ve shared 5 key lessons to help avoid early or growth stage pitfalls without losing focus on your all important new product.
1. Don’t confuse ‘buy a system’ with ‘implement a solution’
This is a well worn comment but it’s rare to see efforts well balanced between process, people and systems and for those efforts to not let up until it’s genuinely working (and not in reality still driven by countless excel sheet work-arounds!).
There are a variety of reasons for this — your people are focused on the product, the systems integrator wants to finish the project on time and if the new process doesn’t stick, where should you point the finger?
There are a few ways to avoid this, none of them new. First, some old fashioned requirements capture to really understand what issues you are trying to solve for before you have selected your product or implementer. Next, a clear set of KPIs to measure adoption & value-added (and be led by them) and throughout, a focus which starts with people and how they work, not systems and what they do. The process and the systems will follow. And make it one empowered person’s role to deliver it.
2. Don’t let product trump process all of the time
It’s rare that a really well-oiled process will win you funding for a new vehicle project so early stage businesses and ventures need to focus on creating a really good and differentiated product. The importance of this never goes away. But, as the quantity of products created increases, so does the need for an organised and more formalised approach to delivering them; through good, appropriately sized and well communicated processes.
Too often, the focus is on product to the exclusion of process. This is not easy to avoid when the pressure is on, but we’ve seen some effective strategies. Firstly make someone responsible for process very early on and keep them away from delivery. Have them report directly into the senior leadership team and hire well — this role done well will pay you back many times.
Also helpful is to set the same set of goals and milestones for process as you will undoubtedly have for product. This is especially important where funding is unlocked stage by stage. If they don’t already, help your investors understand the importance of investment in processes alongside the exciting new product, otherwise successive stages will get successively harder.
3. Invest before you’re forced to — but not too much before
Someone once told me that if you develop a process at the right time (just before you need it) it costs half as much as doing it when the need arises and a tenth as much as doing it after you needed it. I doubt this is scientific but having been involved in a few firefights, it feels about right! It’s also important not to jump too far ahead; your solution needs to be relevant to the business as it unfolds.
Try using a ‘now, ‘near’, ‘far’ approach to process planning, acknowledging the changing needs and making decisions about what to do when rather than a binary yes/no or all/nothing approach.
4. Don’t build an 8 lane highway to cycle on
Similarly to the above point about timing, the scale and sophistication of processes should be matched to the need. You need to look ahead but trying to persuade a whole business to do something before they even see the need will be a lot of hard work and risks the parts you DO need at the time failing.
Again, ‘now’, ‘near’, ‘far’ planning helps get everyone on board, seeing that there can be a big, bold vision but with a pragmatic implementation plan. Release changes in digestible stages or programme by programme in a clearly communicated way.
5. Plagiarise but don’t ‘copy & paste’
The large majority of people working in these new ventures will be professional and experienced, will have used these types of processes before and come with many ideas of how they should work. This is a great thing but can lead either to ‘copy and paste’ or to conflicts between differing factions in the business from different backgrounds.
Taking ideas which have worked elsewhere is the right thing to do, but this needs to be based on the specific needs of your venture and needs to be led in a consistent way. Your full time process lead should take responsibility for listening to and understanding the views, ideas and most importantly the needs of the wide stakeholder group. It’s then the board’s role to support them in developing a staged solution, without the strongest personality, the strongest view or the current firefight colouring the outcome excessively.
May you live in interesting times…
The next few years will be exciting and interesting for everyone in our industry; this will be a mixed blessing for some.
In order to provide true mobility solutions which are effective, efficient and sustainable we need the best ideas and new technologies to reach the market quickly and smoothly. Though we’d like to think the best ideas will carry themselves, most will fall by the wayside if the old lessons from the past are not applied and we don’t invest enough, not just in our new products, but in how our products are created.
The organisations that build pragmatic, effective processes alongside their products will ultimately be able to develop new products and technologies faster and more effectively than the competition. This is unlikely to win today’s PR race, and maybe not the next funding round, but it is likely to win the industrial race and deliver a long lasting impact.