Very recently the 2013 J. D. Power awards for the various categories of automobiles were announced. One of the most coveted is the award for the best reliability among mid-size sedans, since that is one of the largest auto segments. The Hyundai Sonata was again a winner.
Winning such awards wasn’t always the case at Hyundai. In fact, back in the year 2000, Hyundai was #12 in sales globally and was really struggling. The culture at Hyundai was totally sales focused and the cars had a poor quality reputation. Virtually all the top executives were from the sales area. At that juncture, the board appointed a new CEO and within months, he did two things.
First, he announced a new vision for Hyundai. It was very simple. Hyundai would become #5 in unit auto sales globally and the reason would be the high quality and reliability of its car as measured by the J. D. Power auto surveys. Everyone in the company was informed of the new vision, and its simplicity made it very easy to understand and remember.
Second, the new CEO replaced most of his direct reports with individuals with engineering backgrounds; individuals that understood well what it would take to improve quality. Also, each car line was assigned a “quality czar” who had the authority to stop production of a car when a quality issue arose. Additionally, the compensation of the czars and the executives was significantly influenced by the quality ratings achieved for their particular Hyundai model.
By 2007 Hyundai started winning J. D. Power awards and has been doing so regularly ever since. In 2012 they became the #5 auto manufacturer globally.
This story does a great job in demonstrating what I believe are the two most important elements in driving change:
1.) A Clear and Simple Vision – Without it, a change effort can easily and quickly dissolve into a list of confusing, incompatible, and time-consuming projects that go nowhere. Years ago, John Kotter of Harvard cited a useful rule of thumb: Whenever you cannot describe the vision driving a change initiative in five minutes or less and get a reaction that signifies both understanding and interest, you are in trouble.
2.) A Strong Coalition of Champions – The majority of people in influential roles related to the change effort need to be total believers and they need to create excitement and momentum as they drive the effort to success. The CEO of Hyundai had to make a lot of personnel changes to achieve this and that is often needed.
These are not complicated concepts. But they are absolutely necessary to achieve significant change!