Awareness of digitalization is high and change initiatives are numerous in the automotive industry. Yet on a strategic and cultural level, change is hardly taking place, claims a joint global automotive study by KPMG and Egon Zehnder. The survey, which interviewed 527 auto executives from around the world, determines that most automotive companies are not prepared for the digital shift disrupting the industry. Stalling at the executive level prevents a deeper transformation journey which includes organizational alignment. Largescale change is not possible without a tech-first mindset shift.

• While 92 percent of respondents are convinced that a new and different cultural approach is imperative, only 29 percent regard building a ‘fail first, fail fast’ environment as a guiding principle for such a new culture, and only 34 percent consider fewer hierarchies appropriate. Most respondents (55 percent) openly admit that their company has not defined a new cultural approach at all.

• A majority say the necessary prerequisites for digitalization are “process changes” (57 percent). Cultural changes and leadership awareness are ranked lowest. Also, when asked about usage of AI and other digitalization technologies, almost 50 percent reveal their strategy is to be an early follower. Only 40 percent want to be first movers.

• A majority claim that the main driver of digitalization comprises cooperation models with players from their own industry. Also, 66 percent say that traditional and new business models need to run “side by side” while only 34 percent believe in a “complete shift of business models and products with a clear awareness that the return of new businesses can still be negative today.”

Christoffer Sellberg, Head of Automotive at KPMG Sweden, comments on the study:

“In the study it becomes clear that the industry is still caught up in its traditional mindset. The automotive industry need to focus on their future vision and how to move the industry towards new and digital partnerships”.

The automotive industry is one of many that is trying to figure out how to approach the Digital Gravity. There are mainly 6 clear guiding principles to live after in order to cope with transformation according to our survey findings.

1. Don’t change it all at once. Try not to bring in digital on too many fronts. Instead focus on strategically relevant fields.
2. Get new digital expertise build bridges between your classical business and the digital exploration.
3. Develop and search for talent that will bring the desired culture into your company and that also will fill the gap between traditional expertise and the new digital capabilities.
4. Accept and understand that the old metrics do not work, since the new world is a lot about trial and error and paths to product success are incomparable long.
5. Cultural transformation can only work bottom-up; and bottom-up will only work if it is initiated at the very top.
6. Let culture play a major role – throughout the organization. With an open, inquisitive and learning spirit you will be able to bring together the old and the new gravity that will positively influence each other.

These steps are impossible without a serving, inquisitive and humble leadership that needs to be lived from the top. Although you continue to need strong executional direction, establishing this new culture of openness with curiosity and the power to connect is essential. The spirit of collaborative leadership needs to prevail – and will ultimately enable your organization to accomplish something new and better.

Learn more about the survey’s results via the link below or on the interactive Digital Gravity platform