business news in context, analysis with attitude

by Michael Sansolo

Building any kind of business success is incredibly hard, so I cannot imagine the challenge of doing it twice.  That's especially true when, the second time around, it is critical for leadership to abandon, or at minimum, greatly change, the things that made their original business successful.

The hardest thing is knowing when it’s time to move on and evolve.

A great example of this was presented this past Sunday on 60 Minutes via an interview with Herbert Diess, the CEO of Volkswagen.  It might be worth assigning an online viewing of the segment to people in your organization as homework, asking them to think about what your company can and should learn from the Volkswagen experience.

Volkswagen, the world’s second largest car company (VW owns Audi, Bentley, Porsche, Lamborghini and Ducati) after Toyota, is in the throes of major change with a clearly stated goal to electrify its fleet and leave behind gas powered internal combustion engines.  It’s a change borne out of business realities and climate concerns, but unsurprisingly, as Diess says, it’s anything but easy.

“Historically, there aren’t many cases where successful companies in the old world can demonstrate they are successful in the new world,” he says in the interview. For Volkswagen that means also accepting the changed reality of competition.

As Diess explains, his competitors are no longer just car companies, but now also software companies. And in order to succeed in this new world, Volkswagen needs both new goals and new staffers with the skills to help the company meet those goals.

It is the same in retail.

Retailers have long been accustomed to competitors with fairly similar operations. Sure, Walmart, Costco or Dollar General may look significantly different than the basic supermarket, but all run stores, distribution centers and supply chains that are basically the same as any supermarket company.

The same cannot be said for Amazon, Instacart or even Ocado and some future competitor that at the moment we cannot even envision.  It’s not just that rules of the game are changing; it’s the game itself that is becoming completely transformed.

There is no simple way of knowing whether this new direction at Volkswagen is folly or fortune, but it’s hard to argue with the challenge CEO Diess poses. We’ve all seen incredibly powerful companies fall in recent years due to an inability to evolve quickly enough with the changing times, technologies and customer desires.  

It’s a simple truth that the status quo is comfortable and frankly a place we like to stay, especially for those who are incredibly successful in the present. Change, as we all know, is hard in countless ways.

But change is also the only constant and the ability to anticipate and embrace change before others is the path to sustained success. There’s no telling if Volkswagen’s vision is correct or out of focus and certainly the company doesn’t have a perfect track record in the past. But if Diess is right about anything it is that the world is changing and business leaders need get out in front to win.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com.

His book, “THE BIG PICTURE:  Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available here.

And, his book "Business Rules!" is available from Amazon here.