I visit the west coast every two months to meet with one of my business partners.
I travel there more than I should, but when my loaner car is an Audi R8, I don’t seem to have any trouble coming up with excuses to justify heading out west.
The R8 is an unassuming beast and a pleasure to drive whether I’m leaving a Carrera at the light or driving long distance. Considered an everyday exotic car, the R8 may not scream in your face like a Lamborghini, but it will scream on the road like one. That’s because under the hood is a Lamborghini V10 engine.
You may be asking yourself what in the world a Lambo engine is doing in an Audi, and the answer to that question has everything to do with Audi’s ownership of Lamborghini. Audi bought Lamborghini in 1998 when Lamborghini’s business was flailing. Ownership passed into various hands, including Chrysler’s and an Indonesian ownership group’s that Audi ultimately bought Lamborghini from for $110 million.
Audi recognized Lamborghini’s potential and wanted to combine Italian boldness, creativity, and design with Audi engineering and precision. Audi infused Lamborghini with capital, technology, and German efficiency. Thanks to Audi processes and discipline, Lamborghini is once again one of the top supercar brands in the world, growing from 200 employees in 1998 to 1500 today.
Audi delivers an incredible automobile from fit to finish to performance. And it’s all due to its tight systems, controls, and discipline in their planning, manufacturing, and assembly. According to Audi, the automaker’s three main tenets are Value, Precision, and Fascination, and they all add up to Quality. That quality is achieved by following precise processes and adhering to high exacting standards at every level of the business cycle from design to manufacturing, distribution, sales and customer support.
For Audi, premium-quality automobiles start and end with efficient processes, all part of a quest for perfection, bordering on fanaticism. AUDI AG has one of the most flexible and efficient production systems in the entire automotive industry: the Audi Production System (APS), based on the principles of cycle, flow, pull and perfection. The APS is characterized by uncompromising precision and strict quality-consciousness. It takes into consideration all aspects, including the needs of employees and the efficient use of resources. Audi demonstrates its commitment to quality in its approach to the following processes:
The dynamic, elegant design of Audi automobiles stems from Audi’s high competence in the use of steel and aluminum. The presses operate with the utmost precision – even a hairs-breadth deviation would not be tolerated. High-tech sensors check every sheet metal blank for potential flaws before it ever reaches the press – a technology in whose evolution Audi played a crucial role together with young scientists. Press-hardened steels – a further pioneering achievement – lend the body maximum strength and impact resistance, while simultaneously reducing its weight.
Audi is also at the cutting edge when it comes to engines. The cylinder barrels of the V6 and V8 TDI engines are exposed with laser light. This process, which displays precision ranging down to thousandths of a millimeter, makes diesel engines even more efficient and longer-lived. Laser exposure is one of many Audi production technologies that are already being used in mass production today.
Manufacturing at Audi is innovative. The first step in creating every new production line is to plan it on the computer as a “Digital Factory”; it is designed for high efficiency and flexibility. A textbook example is the way doors are manufactured in the Body Shop operation at the Ingolstadt site, where the Audi A4 Sedan, the Audi A4 Avant, and the Audi Q5 run on a single production system.
Audi systematically applies its three tenants to not only production but to all its business processes. Audi is never content to sit still and remains focused on a continuous improvement process (CIP). Audi knows when companies neglect continuous improvement, they risk their long-term success.
Like when Audi took over a floundering Lamborghini
in 1998, I often find prospective clients in the
same lost state when it comes to raising capital.
These are some of the common complaints and excuses I hear from these potential clients:
“I had verbal commitments to be fully subscribed, but most of them disappeared when the time came to transfer the funds.”
“I had a lot of interest but no one invested.”
“He was all ready to invest, and I sent the documents to be executed and never heard back from him.”
“I’m in too much of a hurry to implement pre-sell and launch process, so we just email everyone the docs. Now, we don’t have enough investors. What do we do now?”
For entrepreneurs seeking to raise capital
successfully, taking a page out of Audi’s playbook
will improve your chances of success substantially.
- Create systems to generate new Accredited Investor leads.
- Establish a marketing campaign to presell your investments before they are announced.
- Set up a system to accept reservations (commitments) before the launch of the syndication or fund.
- Do not take verbal commitments as 99% of them are worthless. Have system to take them via a form.
- Develop a thorough qualification process that weeds out the bad leads or your competition looking to waste your time.
- Use forms and qualifying questions to determine their level of interest and select only those with a high-level of interest.
- Draft compelling emails to use as a follow-up for commitments you’ve been given….omit the corporate language for a better response.
- Establish pre-call rules to ensure the prospect is qualified.
- Be sure the prospect consumes key content before the call.
- Do not allow prospective investors to “skip” a process just because they appear to sold.
- Have a post-appointment or call – What is the next step?
- What is the follow-up process?
More important than coming up with systems
and controls is the actual implementation of these systems/controls in your everyday efforts.
Audi doesn’t just talk about its processes; it documents them so that they can put them into place with exacting discipline.
By religiously following the systems and controls you establish, you will see your capital raising take off. As the CEO of your business and capital raising efforts, it’s essential for you to keep everyone in check, especially making sure every one of your prospects follows your processes and systems without deviation.
Follow Audi’s lead but don’t overcomplicate things.
Don’t bog yourself down with minor stuff. Focus on the major items where systems and controls will benefit your business. Remember, a continuous improvement process (CIP) is essential for business success, so refine those systems and controls as needed.
Audi would not be where it is today as one of the world’s top and most respected automobile manufacturers without the controls they have put in place. Without their commitment to perfection, their cars would not be in such high demand and hold their value as well as they do.
Processes and systems are valuable for any business…when tuned in, they help you provide consistent results.
If you don’t have these controls in place for your business, especially at the capital raising stage, you will continue to struggle to raise capital, and your business will have trouble ever getting off the runway.