Li Auto reflects on implementation: Upgrading matrix organization 2.0, integrating products and business

DoNews reported on April 3 that in response to the disorder in the launch of new cars since March, Li Auto’s internal reflection has ushered in substantive actions.

36 Krypton learned that on the afternoon of April 3, Li Auto issued an all-staff announcement, announcing the launch of the matrix organization 2.0 upgrade and the adjustment of the organizational structure of multiple departments at the same time.

"This adjustment is indeed related to MEGA. After the previous internal review, the company did not think too clearly about user value and operating efficiency, and the implementation of decisions was not adequate. Therefore, it is necessary to upgrade to maintain the organization Flexibility,” said an ideal person close to the change.

Specifically, this organizational change is mainly concentrated in the CEO office department of Li Auto. Previously, this department reported directly to CEO Li Xiang, covering the Brand Department, Product Department, Commercial Department, Strategy Department, and Supply Department, with about 500 people.

Liu Jie, Vice President of the Commercial Department, Fan Haoyu, Senior Vice President of Products, Liao Zehua, Vice President of the Supply Department, and others are among them. These people have become an extension of Li Xiangwai’s brain.

In this announcement, the CEO office was officially renamed the "Product and Strategy Group", focusing more on products and strategy, while weakening the supply chain and commercial sales functions.

Among them, the commercial department that Liu Jie is responsible for has been renamed "Product Line" and will be responsible for the full life cycle management of ideal models in the future. The model PDT team of the product department under Fan Haoyu's original jurisdiction has also been moved into this department.

Specifically, the functions of the new product line department include:

- The product line is responsible for the management of the entire life cycle of the model;

- The product line team collects and summarizes information from All kinds of information from users, experts, partners, and industries, and coordinate accordingly, determine product definitions, and coordinate the work of various departments;

- In the product development stage, focus on cooperating with the R&D and supply teams;

- During the launch period, focus on cooperating with the sales side (including GTM, sales service) and marketing side.

Regarding this adjustment, insiders said that the product line is mainly responsible for the decision-making and operation of product commercial success, and achieves an overall goal: commercial success means user satisfaction and the company making money.

After spinning off the model PDT team, Fan Haoyu’s product department will continue to focus on platform products such as intelligent driving, intelligent space, and electric platforms.

At the same time, the supply chain department under the CEO's office was originally in charge of Liao Zehua, and after adjustment it was merged into the production and R&D group of President Ma Donghui.

What is more noteworthy is that under Zou Liangjun, Senior Vice President of Sales and Service, Li Auto has officially established a new GTM (Go to Market) team to be responsible for coordinating the implementation of new product launch plans and providing market support. Responsible for results.

Several people familiar with the matter analyzed to 36Kr Automobile that the core of this adjustment is to reduce the functional burden of the CEO office and focus more on products. At the same time, through the establishment of the "product line" department, the definition of ideal model products and With closer cooperation on commercial implementation, “For example, imbalances in MEGA’s commercial prices and sales targets may be avoided.” Later, the biggest round of organizational changes.

The announcement stated that Ideal Internal will continue to learn deeply from Huawei in organizational capacity building, focus on user value, and improve decision-making quality and operating efficiency. At the same time, through organizational upgrading, we can reduce processes that do not create value, reduce the number of meetings, improve employee work efficiency, and increase employee returns.

Some insiders said that when Huawei introduced the IBM organizational structure, it also experienced a situation of "first rigidity, then optimization, and then solidification". The ideal in 2023 basically belongs to the stage of rigid process. "Now that we have fought and fallen, it is time to optimize."

Reflecting on mistakes, Ideal launches Matrix Organization 2.0

On March 1, Ideal is priced at 559,800 yuan The pure electric MPV model MEGA is officially launched. Although it leads the pure electric MPV sales list with a selling price of 560,000 yuan, the sales volume of this flagship pure electric vehicle is still far from the internal target.

On March 21, 20 days after the listing, Li Xiang, CEO of Li Auto, also reflected in an internal letter that the internal misjudgment of the pace of pure electric strategy caused problems with MEGA’s pace. “We mistakenly regarded Ideal MEGA’s stage 0 to 1 (commercial verification period) as operating from stage 1 to 10 (rapid development period).”

In addition, Li Xiang also pointed out that Li Auto has been operating from The top-down focus is too much on sales and competition, allowing desire to outweigh value.

To this end, Ideal also announced that it has lowered its vehicle delivery forecast for the first quarter from the previous 100,000-103,000 vehicles to 76,000-78,000 vehicles.

But reflection must always correspond to action, and Li Auto’s Matrix Organization 2.0 was also launched in this context.

An insider told 36Kr that internal high-level reviews concluded that the success in 2023 was due to the advantages of platform-based car manufacturing. However, with the expansion of the product matrix, “the chain of value transfer is too long, and many decisions need to be made. Multi-department collective discussions."

An employee revealed to 36Kr Automobile that in the past year or so, he did feel that the meetings of department heads were quite intensive and were held almost on weekends. "The time spent on decision-making is too much. Too many, leaving not enough time for implementation and implementation." This adjustment is also aimed at speeding up decision-making and implementation efficiency.

Taking the simultaneous launch of MEGA and the 2024 Ideal L7/L8/L9 as an example, Ideal internally found that the rhythm of Ideal MEGA was out of order, which caused the sales team to significantly reduce the time and energy in serving L series users. The main model Ideal L8 even There is no location in the store.

In addition, in view of the simultaneous launch of multiple new products, resulting in a series of problems on the sales side, including insufficient personnel training, unreasonable allocation of store resources, etc., Ideal hopes to intervene in advance and coordinate through the newly established GTM team to avoid .

According to 36Kr Automobile, after adjustments, the current ideal store has completed adjustments. For example, in some cities with low pure electric penetration rates, MEGA exhibition cars have been removed and replaced with L8, and MEGA has been moved to First and second tier cities.

Continue to learn from Huawei, but optimize

Ideal has realized the importance of learning from Huawei very early. At the Li Auto Yanqi Lake strategic meeting in September 2022, the important consensus reached by the company's senior management was to learn from Huawei in an all-round way.

"We were surprised to find that the painful problems we encountered in product research and development, sales services, supply manufacturing, organizational finance, etc. were solved more than ten or even twenty years ago." Li Xiang Zeng said on Weibo.

So, at the end of 2022, Ideal established a matrix organization within the company and established 7 horizontal management departments, corresponding to 7 first-level processes: DSTE (from strategy to execution), IPD (integrated product development), IPMS (Integrated Product Marketing and Sales), ISC (Integrated Supply Chain), BT&IT, LTD, IFS (Integrated Financial Transformation). In other words, ideal strategies, products, sales and services, supply chain, finance, etc. all want to learn from Huawei.

Take IPD as an example. IPD is a product R&D management system that Huawei learned and evolved from IBM in 1999. It is this system that allows Huawei's wide-spread R&D projects to be implemented and flourish. The development of Ideal ONE and Ideal L9, L8, and L7 is also the product of Ideal’s early single-point learning IPD.

In order to learn more deeply about the essence of Huawei's management, Ideal began to introduce core executive talents from Huawei.

In 2023, there are two core figures who will join Li Auto from Huawei: Zou Liangjun and Li Wenzhi. Zou Liangjun was the director of Huawei's Italian terminal company and was also responsible for Honor's overseas sales and service content. After joining Ideal, he was responsible for the sales service system and reported to Li Xiang. Li Wenzhi was the former head of Huawei's global HRBP management department. After joining Ideal, he was responsible for organizational changes and reported to CFO Li Tie.

But learning from Huawei may also bring about rejection. An ideal person said: "Each company's model is different. It will be very painful to apply other people's models to your own."

Conflicts caused by processes also often occur. For example, when formulating product planning, the commercial department of the CEO office needs the sales team to provide plans for the next year in order to lock in the process and promote product research and development. However, it is difficult to provide some data on the sales side in advance. “The two sides are in a stalemate, sometimes over the data of a few exhibition cars It’s so noisy that I’m red in the face.”

At this moment, Li Xiang will ask the two groups to strictly follow the process and lock in force. “His logic is to solidify the process first, and then solve the problems later.”

Also because of the matrix organization, many decisions within Ideal require horizontal integration of departments and collective decision-making. This is called a “co-creation meeting” internally. An ideal employee said that co-creation meetings for some key product nodes often start at 9 a.m. on Saturday and leave the office at 5 a.m. on Sunday. But sometimes these meetings are not always efficient. of. Ideal people also said that many decisions require many meetings between their respective teams, and the decision-making efficiency is not high enough, which ultimately affects the execution quality and efficiency. This is also an important reason for Ideal to learn more about Huawei's organizational construction and launch Matrix Organization 2.0.

The new automobile industry integrates technology and manufacturing while implementing new business models and channel innovations. This is a new challenge for any company.

As far as Li Auto is concerned, the company's value background has always been to quickly reflect and make timely corrections when encountering problems. It is difficult to predict whether the launch of Matrix Organization 2.0 can cope with Li Auto's market failure at the beginning of the year, but "starting to correct deviations and take action" is the only choice for any company to get out of the storm.

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