Automotive Ecosystem Series — Chapter 4: Tactics: How to Implement Your Strategy: Assess, Define, and Execute Your Plan

Many automotive industry professionals have read and shared their opinion on this automotive ecosystems series on Medium. Your feedback is of great value as we, the industry leaders, can move the automobile manufacturing industry toward future mobility.

In previous articles, you’ve discovered the need to push for digital transformation, strategic OEM development choices, and key features your company needs to succeed. Success requires time and commitment, and performing a self-assessment of your business is vital to move forward. This is contrary to what’s written by many, and I believe that focusing on practical steps to succeed will bear fruit. It’s essential to not only understand the issues you face but to act on my advice and implement what I’ve suggested so far.

Developing a strategy to succeed in the automotive industry’s new digital transformation requires three simple steps: understanding where your company is currently, thinking and planning ahead regarding the direction in which your company wants to move, and planning in detail the steps to reach your desired future state.

Hence, the proposed methodology: 1) make an assessment, 2) define objectives, and 3) execute your plan.

Step 1. Assessment

Hiring an external consultancy firm works great as an assessment tool if you feel like your company needs an external review of your current situation. Indeed, it makes possible a critical assessment of your strengths and weaknesses as well as capabilities and things to avoid. Out-of-the-box thinking comes from creative reflection of the external party, whose judgment is not clouded by all the ins and outs of your business and who has a clear perspective on the industry.

Another method for assessment is the Transition Radar model, which I suggested in my previous article, Automotive Industry Transformation 101. I recommend it as well if you feel that a self-assessment will work for you. But in the end, it’s solely up to you to choose the method that’s best for your current situation. Choose a provider wisely so as not to inherit their biased opinion on technology, standards, or product selection.

The Big Four firms are usually considered a prime choice, but with the recent scandals rocking all of them, it might not be your best option. In my experience, they tend to oversell their visions and research results. A smaller firm that’s light on their feet may be more motivated to serve your purpose and may deliver way better results, especially if it has sufficient experience with technology in the automotive industry.

Step 2. Define objectives

Defining objectives for a transformation strategy in the automotive sector requires you to focus on your customers, drivers, and passengers — and what they’ll do in your car of the future. For example, try answering the question: What will the driver do in a self-driving car? Rethinking the car concept from vehicle to the “third place of being” after home and office is key.

Identifying objectives will require a high level of alignment with your overall company vision and strategy. If your current understanding seems not to match the vision of the future of mobility (for example, if it’s too car-focused or isn’t user-centric), it’s just about time to redefine it. Good objectives will involve lots of innovation around data and ways of processing it, plus figuring out the mobility needs of your core customers and adjacent industries (logistics, tourism, public transportation, etc.). The user experience should be the focal point, as the current stereotypes of future mobility users are far from true.

Indeed, when we take away the controls from the driver in automated vehicles, OEMs have greater flexibility in design concepts. For example, according to recent research, we can place rear-facing seats in cars, just like we see in trains. But this may compromise the passenger experience due to the increased chance of motion sickness, as stated in research. Therefore, on the one hand, we have increased options to offer customers, but on the other hand, we have more risks and disruptions to the common user experience that should be accounted for in vehicle design. The speed of user feedback becomes a critical differentiator for any novelty you’re trying to adopt.

To be successful in setting digital disruption objectives, you need to answer the following questions: What might users do in your vehicle, especially with it being a constrained environment? How good is your brand image and how does the customer demographic profile match the applications you’ll offer? If your typical customer is a middle-aged man, then access to news and business-related services might be a viable choice. On the other hand, if your audience is young and affluent and is more loyal to your brand, then music and entertainment apps should be at the top of your ranking.

Step 3. Execute your plan

So how do you go about implementing a transformation strategy in your automotive company? Once you conduct a thorough analysis and identify current and potential market leaders, think about the ways you can approach it all. Would it be possible to replicate other OEMs’ services, taking into account your exclusive access to the user? Or should you diversify into nearby services or go down the outsourcing path? An important aspect is how the data you have can be used to your advantage to better target service/app offers. Think about what path to market you’ll use to reach out to your partners. Most importantly, keep looking for new business models around your data. Get more in-depth info in the Data Platform for Autonomous Driving case study, which is a must-read for anyone interested in automotive industry transformation.

Finally, data is your main source of value and capacity driver, and gaining a unique perspective on this issue can make or break your plan. To illustrate this, let’s take the example of John Deere’s digital transformation of its heavy agriculture machines, as seen in this video: “IT Arena Conference on Digital Transformation: Hype or Hope?”

Up Next

What’s so specific about AV platforms and what are the challenges to create them. Get to know this and more in the next article on driving the digital transformation in the automotive industry.