Organisational structure has to change significantly as a company navigates its way through digital transformation.
In AutoTrader SA’s case, the transition from a successful print business into an online marketplace platform has meant that it is now orders of magnitude bigger online than it ever was in print.
In the days of the magazine, AutoTrader had a competitive advantage in print scale, distribution volumes, and weekly distribution. We were faster than anybody else.
Fast forward to the world of the internet…
Fast forward to the internet and suddenly there’s this big print business that can only accommodate about 10,000 cars in a magazine. Whereas, online platforms like AutoTrader SA can carry an infinite number of cars.
The problem, however, was that AutoTrader was held back from being a scruffy start-up that in fact was an existing business with existing revenue and profits.
How AutoTrader changed from corporate bureaucracy
AutoTrader had to stop acting like an old school print corporate bureaucracy which included a lot of hierarchies and management structures.
If you want to navigate the digital transformation and become a digital business, you need to act like a digital business.
Being the leader of the business I decided to go first. I moved out of my corner office and moved onto the main floor to sat with everybody else. Eventually, the rest of the management team followed.
The offices turned into meeting rooms!
Organisational structure can’t change without – Effective Communication
Organisational structure changes will fail unless the business starts to communicate differently. Old bureaucracies are often downward communication type businesses BUT AutoTrader implemented a principle called upward communication.
Upward communication became a part of the general policies within the organisation. It has become one of the most important things within the business. While there is a lot of structure and theory behind upward communication, it ultimately results in any employee at any level having access to anyone within the business.
In order to communicate, no one had to go through management and didn’t have to go through systems and processes. Essentially, communicate from the source!
Overall there’s a lot AutoTrader had to change from an organizational structure point of view, these are a few…