The distribution of power in the company is something dynamic. Each decision, each new alliance, each change in the market can suppose a readjustment of power in the company. Normally each department tries to gain more share of power in the company. That is why it is so common that there are power struggles in the company.
If you are in a competitive environment and want to know how to increase your power in the company, pay attention to the following example of the company Autocomponentes:
Initial situation in Autocomponentes
Margarita was the Sales Director of Autocomponentes, a company specialized in the manufacture of car parts. Its flagship product were the interior panels of the car doors. In their more than 20 years of experience, they had manufactured a multitude of panels for various brands and models.
However, in recent years they had fallen behind a bit technically. That is why, 3 years ago, Fermín, a new Engineering Director, joined the company to help transform the company.
The power in Fermín’s company
Fermín had revolutionized the technical area of Autocomponentes. He had established a tight control in the development of projects and the releases were on the dates committed.
Fermín’s success was based in part because he had managed to impose his power on the rest of his peers. For example, if the Marketing Director presented a study that obliged to change any of the existing projects, Fermín always managed not to change them. His usual argument was that the investment was already committed and that we could not throw away all the work done so far. If things got too tense, he even promised to revise those modifications in the next design. But I knew that probably in the end I would not have to apply it.
Margarita had also suffered the excess of power Fermin. However, he did not share this purely product vision and believed that he must do something to return to a more consumer-centered vision.
Everything changes when analyzing each investment
Every time a new product was launched, Mar, the company manager demanded a cost-benefit analysis that guaranteed the suitability of the investment. Traditionally, this analysis had been a mere formality and never conducted an in-depth study. But after the last failed launch, Mar wanted to make sure that the projections of the cost-benefit analysis were met.
Margarita understood that now the cost benefit analysis was going to mark the objectives of her department. If they did not get the sales committed, she would be responsible. In part, she had the power to say if a product was launched or not.
A new fiasco?
Fermín’s team had been working for 6 months on the design of a prototype of a side panel for an SUV. But before starting with the next step they needed to estimate the sales that this new design was going to achieve.
With the information from the marketing department, Margarita estimated sales for that new panel. Unfortunately, the design was not good enough. The commercial network did not see enough potential in the design and the clients either.
If the fiasco of the previous design was not so recent, it would have happened without further discussion. But if this design sold according to estimates, the investment made would not be recovered. Margarita could not fatten the sales estimates because she was running a serious risk of not reaching her goals. Therefore, the current design had to be changed.
The change of power in Autocomponentes
When Margarita explained the situation to Fermin, he practically went into a rage. He was not going to let anyone throw away all the work his team had done during all these months. However, he realized that this time, he had no power over this. Mar was going to make the decision.
The estimates presented by Margarita were clear. The new panel was not going to bring enough benefits. So that design was finally discarded and they started working on a new one.
The main novelty is that now the design process was controlled by the Sales and Marketing areas. The Engineering area was now responsible for realizing the requirements of customers and distributors. The change was very sudden for Fermín who saw how he lost that predominant role he had had until now.
However, the result was exceptionally good for the company. Autocomponentes returned to the market with designs that excited customers. Soon they managed to return to become a market reference.