Lessons from the "clean slate" approach

Last week at our Autumn Meeting, my colleague Pascal Haubenreisser and I presented the next stage in our thinking on what a “clean slate” approach would look like for a car distribution network in the future, say the mid 2020s.  When I say “distribution” I use the word for convenience, but it would be better described as how a manufacturer of cars generates revenue from the products that they produce, working with a range of partners.  Subscribers to the ICDP Research Programme can find the presentation on our website, but the process of preparing the presentation and then spending time with Pascal afterwards on the next phase of the work raised a few thoughts that I can share more widely.

The first is the challenge of really thinking outside the box.  We are so used to the various elements of a distribution system as we know it today, that even as you congratulate yourself on coming up with a better way of achieving one task, there is a risk that you inadvertently import another piece of conventional thinking as part of your “innovative” solution.  I am reminded of a colleague who was the Operations Director with me at LDV, and who was Nissan-trained.  When we did investigations into persistent quality problems, Michael continued pushing and probing long after I would have been content, leaving no stone unturned.  The fishbone in our Ishikawa diagram (for more information, see definition on Wikipedia https://en.wikipedia.org/wiki/Ishikawa_diagram) was picked totally clean at the end – and we need to do the same when thinking about new concepts and processes.

The second point relates to how easy it is to be put off by resistance from people.  In my experience, there will always be 20% of the people who will follow you, basically because they’re restless and always happy to try something new.  There will also be 20% who will always resist, and you may never be able to change their attitude.  The middle 60% are key, and within that are some key individuals who are respected (or feared) and have a wide influence over others.  When considering major change, we need to identify those key individuals and work patiently with them, engaging them in the process so that they start to experience the better approach.  Again, that was a lesson learned from my past, working on a global new vehicle supply chain project, when we co-opted a key US Sales Manager to the team, and were able to take him to the stage where he owned the proposed solution and became one of the key supporters and advocates.

The third point relates to the financial cost of change.  Particularly in the scenario where we are considering a major change to a core industry process, the gap between the before and after numbers in terms of revenues, sources of profit, inventory and other liabilities sitting on different parties’ balance sheets can be huge.  It is easy to look at that and dismiss the whole concept us unaffordable – “we could never sell that to the CFO”.  But CFOs are numbers driven, and if the new concept is a better way of doing business, then they would be the first to recognise that.  The challenge is to find ways to manage the risk of change (something else which should be high on their agenda), and to cross the river in small steps, not one almighty (probably over-ambitious) leap.

I’m looking forward to sharing more on our clean slate approach with our subscribers and clients in the coming months.  It should be a good discussion, and hopefully the start of something exciting!