Execution, culture and technology: Inside the AA’s transformation

When Jakob Pfaudler took over as chief executive of the AA, he stepped into one of the UK’s most recognisable brands – but also a business that had lost momentum. In conversation on the Business Leader Podcast, Pfaudler outlines how he approached the challenge of revitalising a heritage organisation while preparing it for a far more competitive and digital future.

The starting point, he explains, was confronting reality. The AA had deep trust with customers and a long history, but parts of the business had drifted. As Pfaudler puts it, the organisation had become “more nostalgic than ambitious.”

That mindset, he suggests, is a common risk for established companies. Brand strength and legacy can create a sense of comfort, which in turn slows the pace of innovation and decision-making.

Rather than immediately rewriting strategy, Pfaudler focused on understanding the fundamentals. He describes inheriting a business with “a superb brand” and “a superb customer ethos”.

However, it was one that had “fallen behind the times” in areas such as technology, innovation and performance discipline. The task was therefore not to rebuild the identity of the company, but to modernise how it operated.

Central to that shift was a renewed focus on execution. Pfaudler is clear that business transformation is rarely about grand strategy alone. “It’s 95 per cent an execution game,” he says, describing how the AA moved from slower management cycles to a more regular operating rhythm.

Instead of relying on infrequent reviews, the leadership team introduced tighter reporting and weekly operational cadences designed to surface issues quickly and drive faster decisions.

This focus on operational discipline is increasingly relevant across the UK economy. According to the Office for National Statistics, 37 per cent of UK businesses with 10 or more employees reported that labour costs were affecting their turnover in early 2025, while 56 per cent said rising labour costs were influencing price increases.

In such conditions, consistent execution and close monitoring of performance become essential rather than optional. People were another early priority. Pfaudler emphasises that organisational renewal begins with leadership capability.

Reflecting on the changes made during his tenure, he summarises the philosophy simply: “First who, then what.” Much of the senior team was refreshed, with a focus on leaders who could think across the organisation rather than purely within their functional silos.

That emphasis on culture and mindset has been critical to reshaping how the company approaches growth. Rather than treating transformation as a single project, Pfaudler frames it as a continuous process – one that requires leaders to combine clarity of direction with the willingness to challenge long-standing habits.

Technology also plays a central role in that evolution. Pfaudler summarises the relationship succinctly: “Technology plus people equals growth.” Modern platforms and data capabilities, he argues, allow businesses to serve customers more effectively while creating new opportunities for services and efficiency.

For Pfaudler, the lesson is ultimately about balance. Heritage brands should preserve the trust and purpose that made them successful, while ensuring their systems, leadership and culture evolve with the market. The result, he suggests, is not simply a turnaround – but the foundations for sustainable growth in a very different business environment.