July 25, 2012
The Five Essentials to automotive greatness.
By Peter M. De Lorenzo
(Posted 7/23, 12:30 p.m.) Detroit. I was sorry to miss our now annual Autoline After Hours Fantasy “Draft” show a couple of weeks ago (see “Autoline After Hours” every Thursday at 6:00 p.m. Eastern at www.autoline.tv - Ed.), where several of us select our “dream team” of auto executives to stock our imaginary car companies. But nonetheless I’ve been thinking a lot about the inner workings of car companies of late, to the point of if it were my car company, what would I like the prevailing modus operandi to be? How would I set the tone and tenor of the day-to-day workings of the company so that everyone involved knew exactly what was expected of them and why we were there to begin with?
So following are my Five Essentials to automotive greatness, in this case as it applies to my personal car company - Renzo Motors - a creator of exclusive, bespoke, high-performance sports cars. And if there are a few lessons to be gleaned here for certain automakers currently engaged in the process as well, don’t be surprised.
1. The Product is King. And it always has been and always will be. That’s the “duh” of the century if you’ve spent anytime perusing this website over the years. As CEO I’d make sure that we all understood that we aren’t making widgets or transportation devices. We aren’t making soulless conveyances or “pod” cars for the uninformed or uninterested. We’re making living, breathing, visceral machines with heart and soul and a definitive point of view. Other car companies might forget about the business they’re in, but not us.
2. Design Rules. Design is the initial point of visual contact, the instantly recognizable “face” that projects who you are and what you believe in as a motor company. It’s the all-important Initial Product Differentiator that sets the tone for the company on the street. If you can’t connect emotionally with the consumer on a visual level, you’re unlikely to connect on any other level either. Needless to say, Design, Engineering and Product Development will occupy crucially important roles in the company.
3. The Financial Role. Yes, financial people are critical to the success of the enterprise; to pretend otherwise would be disastrous. No derogatory “bean counter” references will be bandied about here, however. Why? Because the financial troops are integral players with a positive contribution to make, and their guiding principles would consist of two critical questions: “How can we help?” followed up by “How can we make it easier for Design, Engineering and Product Development to achieve their product and design goals?” I’m not interested in the cheapest solution. I’m interested in the best possible way to achieve the goals of engineering in the most efficient way. There’s a huge difference between the two approaches, as anyone in this business will attest. And no adversarial relationship with suppliers will be tolerated either. We’re out to make great, memorable machines here and anything that gets in the way of that, whether it is attitude or the classic bureaucratic, silo-territorial bullshit will be immediately squashed and/or terminated.
4. Connectivity, to a point. Hands-free phone use, an accurate NAV system and a seamless way to reach your customers through technology? Yes, of course. But much beyond that, no. I’m not into the philosophy that revolves around the fact that the automobile has become, or should become, a computer that happens to have wheels. That has no place at Renzo Motors. The IT function here would only be one of support focusing on meeting the terms of whatever engineering wants to accomplish. There are certain car companies at work at this very moment who have allowed the IT function to become completely warped and outsized in importance, to the point that IT is driving fundamental engineering decisions. This is the most egregious development in the business right now, in my estimation, and it must stop. Because when you allow IT to become anything more than a support function, you are asking for big trouble. (Just ask the folks in Dearborn.) Modern communication technology is a wonderful thing when used in proper context, but if it doesn’t serve to enhance the basic ability of people to control their vehicle, then it doesn’t have a place in the machine, period.
5. Marketing and Advertising. Absolutely essential, obviously. Even the most prestigious automobiles need to be advertised and marketed in order to stoke the “I Want It” fires of current and future buyers, probably even more so when it comes right down to it. As I’ve said previously, brand image is everything, and anything that can be done to burnish that image in consumers’ minds needs to be undertaken carefully and selectively. The buzz in marketing for the automobile business these days has become “personalization” as manufacturers keep refining and honing their messages to consumers in order to make them as targeted and personally relevant as possible. I get that. I also get that consumer “coddling” is the new price of admission for the automobile business, as the actions pioneered by Lexus years ago have become more and more common and expected by consumers. But when you strip all of that away and given the fact that automobile manufacturers, like lemmings, tend to grab onto trends in marketing and advertising en masse (especially in the social media space), what matters most? You guessed it, the fundamental goodness, desirability and integrity of the product. Without that a manufacturer can do all of the marketing, advertising and touchy-feely social marketing reaching out that they want, and it won’t make one damn bit of difference. Not one. Great products can overcome mediocre marketing and advertising (well, sometimes anyway). But great marketing and advertising will never overcome mediocre products. (Note: The one exception to this rule was when Hal Riney executed that brilliant introductory campaign for Saturn. Riney masterfully created an exceptionally desirable aura for what was a decidedly mediocre product.) Oh, and since it is my car company, racing would be used to enhance brand image and product integrity, as it should be.
Running a car company is one of the most difficult tasks in all of business. Running a car company successfully is even harder. The list of issues getting in the way between a car company being merely average and one that regularly strives to achieve greatness is painfully long. Things like economic distress, boneheaded product decisions, intransigent middle management layers (and the entrenched bureaucratic silos that go with them), and tragically unfocused or completely off-target marketing and advertising initiatives are the most prominent obstacles between a car company just going through the motions and one firing on all cylinders.
And I cannot stress enough how the aforementioned “intransigent middle management layers (and the entrenched bureaucratic silos)” can ruin a car company, destroying its focus and derailing it from its mission. I see it every day in this business. Sometimes multiple times a day, as a matter of fact.
My Five Essentials to automotive greatness may be considered an abbreviated list to some, but I’m confident in this: A car company that tries to succeed without them or ignores the implications of how they could positively affect an organization doesn’t have a snowball’s chance in hell of achieving greatness.
And that’s the High-Octane Truth for this week.
Editor’s Note: You can see Peter and cohost John McElroy live on “Autoline After Hours” this Thursday (and every week) at 6:00 p.m. Eastern at www.autoline.tv. This week Peter and John will feature guest Bob Lutz, who will be giving a tour of his personal car collection. - WG