Reliant - the Plastic Pic - Strategic Management

9.2 Reliant: The Plastic Pig

[pic 1]

Introduction and Context

“I have to say I feel slightly proud to have got this far and we actually saved it, … I totally believe in Reliant, I love the car, it’s a funny old site… you know, it works…”

Jonathan Haynes (SuperOldShows, 2014)

The Reliant motor company was formed in 1935 and was known for their production of 3 wheeler motor vehicles. In 1973 Reliant introduced the Robin, “the most famous British 3-wheeler of all time”, (Payne, n.d.) Yet in the 1990’s the company had been into receivership 3 times and was in decline. When Jonathan Haynes arrived he was tasked with rescuing Reliant from death and generating the rebirth of a British classic.[pic 2]

Figure 1: Reliant Life Cycle based on (“BBC News | End of the road for Reliant Robin,” 2000)[pic 4][pic 3]

Question 1: What barriers or resistance to change did Haynes encounter?

Haynes faced a double edged sword bringing back previous employees. On one hand they held valuable knowledge and experience while on the other hand they had been through three receiverships and were cynical anything would change. This was evident in ‘the answers no…’ attitude of staff, (Angwin, Cummings, & Smith, 2011). Secondly, a number of staff who returned, while loyal were senior in the organisation and were resistant to implementing Haynes new ideas.

Secondly, in addressing the issue of seized and rusted machinery, Haynes had to focus staff efforts on making the factory operational at the expense of moving forward with his vision of the company. Time was of the essence and this delay increased the required level of urgency, change had to be implemented faster once operational, heightening the risk of resistance from staff due to the level and speed of change impressed on them.

Furthermore there was the challenge of overcoming the ‘this is the way it’s always been done’ mentality highlighted clearly with the challenges Haynes had in requesting chopper guns be used when making glass fibre panels, “I’m sick to death of the argument, please go and borrow a chopper gun… and then I’ll start listening” - Jonathan Haynes (SuperOldShows, 2014).

Haynes also had to re-establish the credibility of Reliant Motor Cars. With receivers called in three times in five years (see figure 1) suppliers in particular were sceptical he could deliver the change required asking for payment up front before sending goods.

Question 2: Why was Reliant declining prior to Haynes arrival and why do you think Haynes’ change strategy appears to have been successful?

Reliant was focused on a niche market producing:[pic 5]

• A low cost / no frills vehicle
• Low maintenance

• Lower road tax
• Lightweight, less wear
• Glass Fibre, easy to repair, no rust
• 70 miles per gallon

• A vehicle that could be driven by people holding a motorcycle licence.

This strategy was driven by Reliant’s inability to compete with large scale producers due to their smaller size. Even at their peak as noted in Fig 1, Reliant were only producing c300 cars each week.

Despite this Reliant did well initially as they didn’t face direct competition nor was their niche market big enough to attract competitors.

However, by the 1990’s Reliant’s customers started to change,

• Increase in adults holding full drivers licences
• Incomes in Britain had risen significantly
• Consumers were more dependent on road travel, travelling further and faster

New rivals began to appear, Ladas, Skoda and Fiats and began taking market share from Reliant. Due to Reliant’s smaller size and scale, they were unable to adjust their strategy to meet these rivals.

Haynes recognised the importance of understanding the customers’ requirements and sought out what customer desired, he subsequently added some luxuries and retro upgrades to the Robin, (“Reliant - WOW.com,” 2015).

Haynes also acknowledged the strengths of the company (see VIRO analysis, Figure 3). He recognised the heritage of the brand and the associated customer loyalty. This provided the opportunity to sell spare parts, underwriting the production costs of the new vehicles, a strategy he pursued aggressively constantly resetting stretch targets.[pic 6]

As mentioned above, Haynes also faced challenges in bringing back previous employees. To address this we see Haynes implementing Kotter’s 8 steps, establishing a sense of urgency, carefully picking his management team and communicating the vision of production of 50 cars per week. He targeted short term wins driving motivation (factory operational and completion of 14 Robins), and while Haynes understood the value of his employees experience and listened, if he believed change needed to happen he held his ground consolidating and institutionalising the culture he desired. Consequently there were, ‘tough discussions’ when required, (Angwin et al., 2011).