We’re all guilty sometimes of being task-focused – zooming in on a particular task, finding a solution and getting it done – a management approach which was closely associated with a senior Ford executive I worked with which was colloquially known as JFDI (Just **** Do It). There are arguments in favour of this. Action will happen quickly, and it has the merit of simplicity – no need for consultation, cross-functional teams or protracted planning. It also has the not insignificant disadvantage that it might be the wrong action, or at least an action that is solving part of the problem, but not the underlying cause of that problem.
I was reminded of this in some recent interactions where decisions were made that were constrained by being too focused on a single question, rather than stepping back, looking at the bigger picture and finding a solution to what is a system problem, rather than a point problem. For example, with my dealer hat on at Auto West London, we are sitting on a prime asset – an empty 8 car showroom in a relatively wealthy part of London, 5 miles (8 km) from Hyde Park Corner. It’s not a modern building and will need some compromise in terms of brand standards to take on a new brand, but as they say in the property world, surely it’s all about location, location, location? It turns out that’s not the case because someone with a preconceived vision of what ‘their’ (actually ‘our’) dealerships should look like rejects it. In one case that means they lack representation across a large part of London with a population of probably 2 million people. Given that ICDP research shows that the physical appearance of a dealership comes low on the factors influencing the purchase decision, it is easy to argue that the decision is made on the wrong criteria.
Similarly, and still with my dealer hat, there are significant issues about operating a dealership in a city like London. Land is expensive, so properties of all types tend to be smaller, and in a dealership that means that space for parking becomes a daily challenge, sites are often split between car sales, aftersales and car storage, and moving cars between the sites costs money and time. If a customer does not turn up on the appointed day or hour to collect their car, this can have a knock-on effect as that space was needed for the next customer. (I recall very similar experiences being reported by a dealer in central Paris, who tried various approaches to manage the complexity, and I believe had a full-time driver just to reposition cars between the floors of their multi-storey facility near the Arc de Triomphe). In a franchise system where all dealers should be treated fairly, you are not asking for preferential treatment in expecting additional support from the manufacturer – you are just levelling the playing field, so that you hopefully have the same opportunity to make a 1% return as all the other dealers in the network. Most manufacturers recognise this and will come up with some form of support package, but a few don’t, seemingly thinking that it is OK for a manufacturer to rely on an unsustainable subsidy from a much smaller dealer investor in order to have the privilege of presenting the OEM brand to millions of potential customers. Six figures saved on support costs, seven figures lost in margin on additional sales.
Turning to a long-standing ICDP specialist area, new vehicle supply is riddled with tunnel vision from end to end. If the tunnel was oriented along the length of the supply chain, that would be brilliant, but it’s not. We have a series of tunnels, all bored down vertically to look at optimising restricted elements of the supply chain such as purchasing, manufacturing, finished vehicle logistics, inventory and monthly market share. There is unfortunately often a conflict between being able to optimise all of these – sourcing, manufacturing and shipping a big batch of cars for a single market to a common specification is great for everyone up to the point of those who have the task of selling them. “Of course madam, you’d like a car? Black one suit you? No, well I can get a white one for you next time we build white in 6 months’ time, or I can knock a thousand off this lovely black one (and don’t worry about the moss growing on the window rubbers, it will clean up just fine when we’ve put it through the jet wash…” It is possible to optimise end-to-end new vehicle supply with spectacular cost, revenue and customer satisfaction benefits (for more details, call waste-busters, also known as ICDP), but it needs a much broader perspective than the typical functional optimisation.
I could cite many other examples, but the message will always be the same – too often decisions are made on the basis of how to address a narrowly defined problem, rather than looking at the broader picture. Sub-optimal individual decisions hold us back and we end up in a game of whack-a-mole, defined as a “futile, never-ending task”. We can get better outcomes by stepping back and taking a balanced view.
Steve Young is managing director of ICDP
