One of the most important messages from the recent Auto Dealers Innovation Series & Expo (ADIS) was all about the need to innovate, experiment, fail, reassess, and experiment again.
All companies — including car dealerships — need to develop an “experimentation mindset” argued Alfredo Tan, the Chief Digital & Innovation Officer for WestJet Airlines, who has worked for many Silicon Valley companies like Yahoo, Facebook, Instagram and others.
In his wide-ranging talk, Tan effectively laid out the case for why businesses needed to innovate more and faster, and to experiment constantly. Why?
“Since 2000, 52 per cent of the companies in the Fortune 500 have gone bankrupt, have been acquired or ceased to exist,” said Tan, during a live presentation delivered to an online audience of dealers who attended the event organized by the Trillium Automobile Dealers Association (TADA).
Tan said that when he joined WestJet Airlines, he was telling his executive team that their competition wasn’t other airlines — it was other companies like Apple, Facebook, Airbnb, Netflix, Google, Instagram and others. They were defining the customer and digital experiences that we are all addicted to and have learned to love.
“The customer we are trying to win over isn’t comparing us to Air Canada. They are saying my consumer experience is so good on these platforms — why isn’t it as good on the WestJet digital platforms?”
“Every company is going to be a digital company,” said Tan. “But the acceleration is going to be much more rapid. Even the local pizza shop in your neighbourhood is going to be a digital company that just happens to deliver pizza.”
The challenge is, as you are busy transforming your operations, other companies are transforming theirs, leading to an always moving goalpost of what is now considered an elite customer digital experience.
The only way to get there more quickly is to use data with an experimentation mindset, something the tech companies do really, really well.
“You should start to respect data to the point that if an intern has an opinion, but has data to back it up, maybe that’s more valuable than the opinion of the owner of the dealership,” said Tan. “That sounds like heresy, in our own organization that sounds crazy as well, but on my team data trumps hierarchy.”
So if experimentation is the key to their future success and even survival, why don’t more companies do it? “The fear of failing and the repercussions from failing, is often greater than the rewards of success,” he said.
Managers are often reluctant to allocate resources because they perceive doing nothing is the safer bet. It isn’t.
Tan argues that companies should allow any employee to run what he calls “two-way door experiments.” He cites the example of Amazon’s failed $170 million experiment with its Fire Phone product. The phone flopped, but the technologies and the learnings gave birth to the creation of Alexa — a $25 billion dollar industry that didn’t previously exist.
Let’s hope more dealerships and OEMs have the courage to run more two-way door experiments.
On another note, kudos to TADA for experimenting with producing the online event that also provided attendees with an interactive trade show. That experiment will help inform the next event, and the one after that, and the one after that.
