Where to look for something new?
The UK news this morning carried a report that a new breed of giant water lily had been found – and that at up to 3 metres in diameter it was in fact the largest in the world. This giant was not found in the depths of a South American jungle (though that is where it originated, in Bolivia), but in the botanical gardens at Kew in west London, where is has been ‘hiding in plain sight’ for almost two centuries. It’s not a unique event. If you’d like a good summer read, try Bill Bryson’s book ‘Down Under’ which includes stories about new species that have been found, lost and rediscovered over the years in Australia. You may reasonably ask what water lilies have got to do with the automotive industry, or whether I have taken up a new hobby, but if you bear with me, there is a link of sorts.
In reviewing the topics that we covered at our recent members’ meeting, there is no doubt that they were all topical – agency, dealer networks, aftersales trends, mobility, online channels and regulation. The presentations reflected the latest insights and analysis and were well received by the attending delegates, enjoying the face-to-face interactions that have been denied to us for the last two years. There is a familiarity to some of the topics and the messages however. We are sounding the same warnings now about so-called ‘non-genuine’ agency as we did in an agency presentation ten years ago. The aftermarket has been in decline for various reasons for as long as we have been doing market projections. Despite the changing landscape in the mobility area, the underlying conclusion has not changed – it is a niche offer with very challenging economics for providers.
Although changing technology and external factors do influence both the specifics of the challenge and the potential solutions available, there are some core messages that keep on recurring. I’d like to just touch on a few, particularly in the areas of people, processes and technology. These are the calls to action that keep on coming back, applicable to both sales and aftersales, franchised and independent, and in reality probably to most business environments. I’ve certainly come across them in other sectors in the past.
The people side was brought home to me last week in two interactions with a premium brand, one with the brand itself, the other with one of their dealers. I had been invited to attend an event by the brand, and was asked to call to book. After two attempts, in each giving up after 20 minutes listening to banal customer service messages, I emailed saying that if this was a taste of their customer service, then perhaps I should cancel my order. I got a call back within 5 minutes and was told that they were short staffed – yet it seems not to the extent that they could instantly respond to an email, but not to a phone call… The dealer just doesn’t answer the phone at all despite usually having three receptionists on duty. It seems they are busy collecting and delivering cars because they are short of drivers.
ICDP research shows that the most influential factor on a new car purchase is people, but also that the most influential factor in terms of aftersales loyalty is trust, so again how they are treated. Yet, time and time again, we come across cases where businesses under-deliver because they employ the wrong people, do not train them adequately in the right areas, or reward and motivate them to do the wrong things. We all know that good quality people are in short supply, but that does not explain why the industry in general seems to do a poor job of attracting those good people into an industry that remains central to all our lives.
Some might argue that entrepreneurialism and process discipline are uncomfortable bedfellows, and I do see that point to an extent. However, there are great process-driven businesses in the hospitality sector that still leave enough freedom of action for their employees (who are carefully selected, well trained and appropriately measured and rewarded) to match the process to the customer. Processes can also be designed to address exceptions rather than some Utopian view of absolute consistency. I would argue that the Toyota Production System is as much about how to respond to the 1 in 1,000 exceptions as it is to the 999 routine occurrences. We need strong processes to ensure that customers get prompt and individualised responses to enquiries, that used cars are prepared quickly, to an appropriate standard at an affordable cost, and that the aftersales experience reinforces customer relationships rather than make them feel they have suddenly moved to the dark side.
Finally, technology has always been seen as a tempting solution to any problem. There have always been ‘snake oil salesmen’ who promise you a solution to all your problems if you just spend a few dollars on the magic potion or a few million or tens of millions on a new computer system. They rarely deliver because the system is only as good as the people and processes that feed it and use it. We are now in a data-driven world, so technology and the ability to leverage it is more important than ever, but ‘cheque book solutions’ that do not have an equal measure of people and process change will always fail.
None of these points are new. Like the giant water lily, they have been around for many years, certainly throughout my working life, and perhaps as long as Victoria boliviana – that not-so-new species. We just need to be more aware that sometimes the right thing to do is obvious, and is the same as we should have done last year or the year before, and will probably still be on the agenda next year. True breakthrough innovation might come along, but for the most part, the agenda will look as familiar as that lily has to generations of botanists.