A global automotive dealer solutions provider was in the midst of a major transition, as it sought to pivot its business model to meet the demands of an increasingly disruptive market. Leaders had aligned around a new strategy that acknowledged 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 EBITDA over multiple years required tougher 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 in terms of improved speed of decision-making and better execution of key initiatives to deliver results.
In order to achieve the desired results, we worked with the executive leadership team to group capabilities and assets in a manner that facilitated rapid innovation at the business model level to shape, and or disrupt the market. In order to build competitive advantage, the company’s leadership agreed to shift from 30+ brands led by General Managers with distinct P&L accountability to organizing around broader solution sets that created greater value for customers, consumers, and the organization.
To support these consolidation efforts, we provided ways in which solution leadership roles could be better aligned, suggesting evaluated trade-offs and an optimized enterprise portfolio. These suggestions were supported by enterprise functional leadership who also contributed their own guidance and expertise. Through this collaborative effort, we identified up to $140M in annual structural and workforce improvement opportunities including eliminating duplication and redundant activities, enhancing productivity, and optimizing spans and layers.
After a successful first year after the project’s completion, the company’s ability to respond rapidly to market conditions and customer needs allowed it to capture $90M in innovation-driven new product revenue; and it was on pace to reach a staggering $15B. Additionally, our work resulted in an average of 5% annual cost savings across identified areas, which would help the company achieve its ambitious growth target.
The results were clear: 3 out of 4 senior leaders agreed that critical decisions were made much faster after these calculated efforts.