Trevor Hill, Head of Audi SA, Reveals How To Survive in a Challenging Economy When the economy isn't playing ball, it's time to roll up your sleeves, face your challenges head-on, and get to work, says Head of Audi SA, Trevor Hill.
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PLAYER: Trevor Hill
POSITION: Head of Audi South Africa
Some of the biggest brands in the world are well-known for keeping things lean. Amazon is a prime example, where even Amazon-branded employee backpacks are reused.
Many bloated organisations learnt the hard way in 2008 that if you aren't efficient and focused on the bottom-line, you'll struggle to survive in competitive and volatile environments.
On the other hand, businesses that were already lean and flexible not only survived the recession — many of them actually thrived, mainly because they were far better equipped to handle new economic realities than their competitors.
According to research conducted by Bain & Co's authors of The Founder's Mentality, Chris Zook and James Lane Allen, 85% of the biggest growth challenges large-scale organisations face are internal. This doesn't mean the economy and competitors don't matter.
But the way leaders and managers of those organisations react to economic and external stimuli does. Trevor Hill, Head of Audi South Africa, is well-versed on the impact external stimuli can have on a brand — even an established premium brand like Audi South Africa.
Economic and political conditions in South Africa have impacted consumer confidence, and the premium vehicle market has experienced year-on-year double digit declines over the past three years. "The premium market is almost half the size it was three years ago in South Africa," he explains.
"Consumer confidence, the high pricing of premium cars, and a general buying down trend have really impacted our market. Three years ago, we were selling close to 20 000 vehicles per year. Today we sell around 10 000 vehicles.
"You can't ignore market conditions. You need to face them head on, and do what's best for your employees, the brand and your consumers."
Here are Trevor's five lessons for weathering the storm so that your business and brand are well positioned when market recovery begins.
1. Have a clear value proposition that everyone understands and embraces
"We will never be the biggest in the South African market," says Trevor. "Mercedes-Benz and BMW produce in South Africa and have an advantage over us in terms of export credits. If we can't be the biggest though, we can focus on being the best. That is entirely within our control.
"Our "Best' strategy says that we want to be the best organisation, have the best product, the best brand and the best customer service. Everything we do must be looked at through this lens – is it the best?
"If we host an event, have we chosen the best venue, event organisers and caterers? Does the look and feel match our standards? If we can't be the best — we don't do it.
"In everything we do, across the organisation, we ask this question: Is it the best? That's our value proposition. Without it, we don't have a clear direction for everyone to follow."
2. Understand what's in your control and then roll up your sleeves and get it done
The rate cut at the end of 2017 really helped the premium market towards the end of the year. The problem is that there are things you can control — such as running a lean organisation — and things you can't control, such as whether or not there will be another rate cut. So how do you ensure a proactive culture rather than a defeatist mentality when times are tough?
"The spirit of Audi has always been to challenge boundaries, roll up our sleeves and forge our own future," says Trevor. "It's in our "Vorsprung' DNA. This has never been more applicable than when we're weathering a storm, but it has to be fostered when the waters are calm."
The theory is straightforward. If an organisation isn't used to challenging boundaries and being in control of its own destiny, it's difficult to find those characteristics when they're really needed. When something is woven into a brand's DNA, it's because it's always there, and the organisation's entire culture supports it.
Trevor can point to examples everywhere. For example, in the 1980s, Audi was the first car manufacturer to put a five-cylinder engine and four-wheel drive on a rally car, and cleaned up two years in a row as a result. "The Audi spirit is that you can improve anything. You just need to be willing to put in the work."
Faced with extremely tough local conditions, the South African team is now doing just that: Rolling up its sleeves and finding solutions.
"This is how we handle the business as a whole. We've been completely upfront with head office and our investors about current market conditions, but we aren't complaining — we're putting the facts on the table, showing them what we can control, and unpacking how we're going to see the business rolling forward. Because of that attitude and transparency, we have everyone's full support."
3. Never throw money at a problem; smart solutions aren't necessarily the most expensive
"Spending a fortune on brand campaigns isn't going to change the reality of the current market conditions," says Trevor. "It's easy to throw money at a problem, but then what?
"We've taken a different approach. We've selected a number of brand ambassadors whose values really align with our own. These include TBo Touch, Cameron van der Burgh, Wayde van Niekerk and Nomzamo Mbatha.
"Their followers know what they stand for, and associate Audi with those same values. It's a much more targeted and niche way to gain awareness for our brand."
For Trevor, not throwing money at a problem is a value that should be ingrained in an organisation. "We approached 2018 with this value top of mind. At the end of 2017 our management team went away for a strategy session. We collectively took a look at the entire business and asked what we needed to do to drive this business through the stormy waters of 2018.
"Each manager then got a target for their division that was aligned with the other divisions and organisation as a whole. They then conducted individual strategy sessions with their teams. The whole thing was a problem-solving mission: This is the budget we have, this is where our focus needs to be, now how do we go out and deliver the best? What's our plan? These plans were then aligned with each other to ensure everyone was going in the same direction, and we measure everything.
"My KPIs filter down to the management team, and theirs filter down to their teams. It's a very inclusive system; everyone can workshop the problem, and in that way we don't only gather some out-the-box ideas, but we get everyone's buy-in as well."
4. Encourage your team to try new things and communicate collaboratively
Very often, individual divisions communicate well together, but the message and camaraderie is lost across divisions, particularly between sales and marketing. "We've found two ways to encourage participation and camaraderie across the business," says Trevor.
"The first is that we always encourage new ideas. If something is tried and tested and doing well, especially in marketing, try to own that property. But if something isn't giving you what you want, change it. We're often too scared to change things that aren't working or to try something new. We encourage participation and thinking differently. The bigger your pool of ideas, the more you have to work with."
The company also has a number of monthly meetings that bring different divisions into the same room for workshop sessions. "We have a lot of field staff who aren't often in the office. We need to keep communicating with them to pull them into the fold," explains Trevor.
"For example, once a month we have marketing and product meetings. The marketing, product and sales teams all attend. It gives everyone an opportunity to know what's happening and hash out any questions or issues then and there. The communication between divisions — particularly marketing and sales — is much better as a result."
5. Keep your core motivated
Like many industries, there's a lot of employee movement in the consumer and premium brands segment. "People move. That's the reality of job markets around the world," says Trevor. But stability is important, and at Audi SA, that means identifying your core employees and keeping them happy.
"We have a very strong core. Within the organisation we've identified a core group of employees whom we absolutely need if we're going to continue to run this business efficiently and successfully. Once you've identified your core, you need to keep them happy, and that's about a lot more than their paycheque.
Different people want different things — advancement, developing their careers, an opportunity to work abroad or perhaps spend more time with their families at home." The lesson? Figure out what's important to each member of your core and try your best to give it to them. Success is a team sport — you need to keep that core team in your corner.
MAKING A SUCCESS OF NEW TERRITORIES
Trevor Hill began his career with Audi as an area manager in 1989. In 1997 he left South Africa to join Audi's head office in Germany. Since then he has headed up divisions in Germany, Japan, China, Dubai and South Korea.
One of the biggest lessons he's learnt through his travels is that while there are certain business fundamentals that hold true everywhere, each culture has its own way of doing business, and you need to understand what that is on the ground if you're going to make an impact and be successful.
"One of the biggest things I've had to communicate back to head office is that each territory operates slightly differently," explains Trevor. "For example, in Germany, you have 100 days in any new job to prove yourself. If you don't make something happen in those 100 days, you're not seen to be successful.
This is impossible in Asia, where business is all about relationships. You have to develop a relationship based on trust and honesty, and that doesn't happen overnight. Until you have that trust though, your employees and customers won't work with you. When you enter a new territory, take your time.
The first year is all about understanding the lay of the land. In the second year you can implement your strategy, and in the third year you can start reaping rewards."