Business Issue

Leaders at a global division of a within a tech auto dealer had aligned around a new strategy that acknowledge the conglomerate’s leadership position, while anticipating ongoing and accelerated disruption in the automotive solutions market. Several of the organization’s brands were well-recognized market leaders, but slow overall revenue growth and flat EBITA over multiple years required tough conversations about a portfolio of businesses with very different growth profiles. The executive team recognized that the organization needed to be more agile and nimble, characterized by improved speed in decision-making and better execution of key initiatives to deliver results.

Approach

To address these challenges, we helped the organization implement a strategic realignment and organizational restructuring to foster agile innovation and enhance market leadership:

1. Strategic Alignment: We collaborated with the Executive Leadership Team (ELT) to realign capabilities and assets. This involved grouping resources to foster rapid innovation at the business model level, aimed at securing competitive advantages and disrupting the market proactively.
2. Organizational Restructuring: Departing from a structure of over 30 brands each managed by General Managers with individual P&L accountability, the organization reorganized around broader solution sets. This shift aimed to enhance value creation for customers, consumers, and the organization itself.
3. Leadership Alignment: Aligned solutions leadership roles that evaluated trade-offs and optimized the enterprise portfolio, supported by enterprise functional leadership that provided functional guidance and expertise.
4. Operational Optimization: Through rigorous analysis, the initiative identified up to $140M in annual structural and workforce improvement opportunities. This included streamlining operations, eliminating redundancies, enhancing productivity, and optimizing organizational spans and layers.

 Business Impact

• Revenue Growth: The realignment resulted in $90M of new revenue from innovative products in the first year alone, setting a trajectory toward achieving a $15B annual revenue ambition.
• Speed of Decision-Making: A significant improvement in decision-making agility was noted, with three-quarters of senior leaders agreeing that critical decisions were now made faster.
• Cost Efficiency: The initiative identified and implemented measures leading to a 5% annual cost savings, enhancing overall operational efficiency and profitability.

By implementing a proactive approach to organizational design and operational efficiency, we helped the global division of the Tech Auto Dealer Conglomerate successfully position itself to navigate market disruptions while accelerating growth and innovation.