Background and challenge
Our client, a manufacturer of batteries used in commercial electric vehicles, had received a strategic investment at the time it was competing to have its technology adopted by electric vehicle OEMs. The company was just beginning to receive volume orders for its battery packs, and it was feeling the strain of transitioning from a prototyping “job shop” to a provider at scale for its global customers. Our client’s management needed support to help chart a path for organizational growth in the next few years that could support such a rapid expansion — from approximately $100 million in annual sales to well over $1 billion — while maintaining both operational effectiveness and margins.
Approach
L.E.K. Consulting was engaged by management and started with a rapid diagnostic of the current operations. Over the course of a few short weeks, we identified key elements of the operating and delivery model that needed to be preserved in order for our client to maintain competitive advantage in the market, as well as key points of friction that had begun to emerge as the company grew (and would only be exacerbated as volumes increased). This assessment was done while minimizing disruption to the organization, which still needed to deliver on near-term growth objectives.
Working closely with the management team, we developed a new operating model showing how the company should be formed to ensure that structures, processes and systems are aligned to work in harmony to support company growth. Building from this operating model, we developed an “organizational scale-up” plan that would guide management actions over the coming approximately 36 months to realize these growth goals. Specifically, this meant a detailed framework for the resources and investments needed, and the “trigger points” that would signal the requirement to execute each investment.
We also developed a clear playbook for processes and key interactions that management could use to guide critical decision-making across the turbulent future months. This helped ensure that as the client’s team expanded, the roles, responsibilities and decision authorities of each group were clearly delineated to enable efficacy and efficiency.
Results
Ultimately, the clarity and focus of the organizational scale-up plan we developed helped our client successfully navigate the challenges inherent in competing in an early-stage industry. Management and investors realized a successful path for ensuring that its cutting-edge technology supported the move toward electrification of the commercial vehicle fleet.
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