Speed has been in the headlines this week. JCB successfully set a new land speed record for hydrogen-engined cars at 406mph on the Bonneville Salt Flats, a figure that has some resonance as the last official land speed record for wheel-driven cars was 403mph, set by Donald Campbell in 1964 in the gas turbine powered Bluebird. Apparently the new record was achieved using only five of the six available gears and with the two engines downrated to 700 horsepower each from the 800 available. The underlying objective of the project was to highlight the opportunity to use hydrogen combustion engines for off-highway equipment rather than fuel cells or conventional batteries. The production 3CX Hydrogen backhoe loader has a more modest 74 horsepower, but perhaps a GT model is in the wings…?
We have also seen a lot of references in recent weeks to the need for established manufacturers to adopt ‘China speed’ in order to remain competitive in the face of the dual threat of the Chinese brands in the Chinese domestic market and global export markets including Europe. BMW, Renault, Stellantis and Volkswagen have all announced partnerships and collaborations that aim to bring competitive products or key systems like the electrical architecture to market faster than they would traditionally have achieved. It was therefore interesting to come across an interview in Automotive News Europe from March this year with William Wang, the MD of MG Europe. Having been the first Chinese brand (though William claims the British MG heritage matters to customers) to achieve significant sales volumes in Europe, they achieved over 300,000 sales last year, but have other Chinese brands such as BYD, Chery and Geely chasing hard.
Rather than focusing on the ability of MG to pull further ahead, and measure his company against his Chinese peers, he instead focused on the threat from the established manufacturers as they fight back, a topic I also covered in last week’s blog. He said that “they are improving quickly. Volkswagen and Skoda are launching hybrids, and VW’s ID electric models are strong. So we must move faster. You have to outrun your rivals. You cannot sleep.”
This restlessness is in my view the defining characteristic of a high-performing company. I have seen it over many years and not only in automotive. The best businesses understand that targets change, the companies they benchmark continue to move on, possibly at a faster pace than the follower can achieve in their own improvement actions. They also tend to be modest about their own achievements, so when they do benchmarking, they are often surprised when the metrics shown that they are ‘best practice’ – at least for now.
This flies in the face of natural behaviour which is to focus on a target, pace yourself, and anticipate the opportunity to ease back and recover once the finishing line has passed. We are in a world where there is no finishing line, that one marathon follows directly on from the first, and then another after that. As William Wang says – you cannot sleep.
It’s a long time since I was a foot soldier in a major manufacturer so it is difficult for me to understand what life is now like in those many thousands of roles across Europe. Certainly they no longer offer a ‘job for life’ as they did when I was buried deep in the Ford organisation, and there must be an almost continuous background noise of cost cutting measures and redundancy programmes. Those cuts run deep – I have heard mention of 30% headcount reductions in some businesses that are not even the ones in the most pressured positions.
My impression of the Chinese manufacturers is that there is a much higher level of engagement in the drive for growth, because the national ambitions are clear, and this feeds into the intense rivalry between the different manufacturers. For the established manufacturers to compete against this, they not only need to set challenging goals, but motivate their staff at all levels to drive for those goals, and do that over an extended period of time in a series of marathons rather than a sprint.
This will be one of the greatest change management challenges we have ever seen. Despite the millions or probably billions that have been spent on change management consultancy over decades, in my view this has to come from within, not imposed or managed by outsiders. Consulting projects come to an end, and the experts move on to another client, but if we are looking at a constant state of rapid change, then managing this well, engaging and motivating staff, must be part of the DNA of winning businesses. The winning manufacturers will be those that prove most adept at implementing change, in the words of William Wang, who can move fast, beat their rivals and never sleep.
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