eastwest connect

Li Auto organizational structure upgrade | CEO: “We must prepare for hundreds of billions and trillions of revenue”

Li Auto organizational structure upgrade | CEO: “We must prepare for hundreds of billions and trillions of revenue”

It is learned on December 24 from Electric Vehicle Era, in the first six years of Li Auto, this new car-making force has maintained a management model of vertical functional organization. Now, Li Xiang, chairman, founder and CEO of Li Auto, announced that the company will upgrade to a matrix organization.

At the same time, Li Xiang even revealed a greater “ambition”, “to prepare for hundreds of billions and trillions of revenue.” A new car company that still has a long way to go to achieve profitability has begun to prepare for hundreds of billions and trillions of revenue. Is Li Auto really ready to change?

Shen Yanan, the co-founder of Li Auto, resigned as the chairman of the board of directors and president, which officially opened the prelude to Li Xiang’s adjustment of the internal organizational structure. After Shen Yanan leaves the Li Auto board of directors, he will join the process committee to serve the smooth transition of Li Auto reform until June next year.

Li Xiang said that the reform is because the company has entered a new stage, “We will enter a revenue scale of 100 billion next year. “The reason why he took the organizational structure to “make the first move” is because Li Xiang once made it clear that he cared more about and valued the organization when he started his third venture.

Li Xiang said: “Organizational upgrading is the most important exam question for enterprises to enter a larger and more difficult stage. More than 90% of enterprises that fail are not because of business problems. Business problems are just appearances, but the essence is organizational capabilities and scale. Expansion and industry changes cannot adapt.”

In the internal letter, by analogy, Li Xiang explained that the biggest feature of the matrix organization is to ensure the management quality of the whole process, the horizontal team plans roads, road repairs, and road operations, and the vertical team builds, drives, and operates cars, and high-quality road cooperation. A high-level fleet can deliver continuously created value to consumers and achieve commercial success, creating a virtuous circle.

Specifically, Li Auto will add five new horizontal physical departments on the basis of the original two horizontal physical departments, the Strategy Department and the Product Department: the Commercial Department, the Supply Department, the Process Department, the Organization Department, and the Finance Department to support the company’s comprehensive Matrix organization upgrade and process operation.

At the same time, Li Auto will also comprehensively upgrade its processes and organization. According to reports, DSTE (from strategy to execution), IPD (integrated product development), IPMS (integrated product marketing and sales), ISC (integrated supply chain management), BT&IT (coordinated consideration of business transformation and IT system construction), LTD (from The seven first-level processes (leading to transaction) and IFS (Integrated Financial Transformation) will be fully implemented in the next three years and continuously optimized to form the smallest closed-loop operation of an Li Auto matrix organization.