The transformation of the automotive and mobility industry will only succeed with the right executives

For the first time since the invention of the automobile more than 130 years ago and its development into a means of mass transportation in the post-war period, the automotive industry is undergoing a triple transformation that poses enormous challenges for manufacturers and suppliers. As if the electrification of the powertrain was not difficult enough, the automotive industry is also working on connected and autonomous cars and new mobility concepts. After all, more and more people are no longer interested in owning their own car, but in the availability of intermodal mobility, in which the car is one of several flexibly usable key components. There are a number of reasons for this. While urban youths are foregoing driver’s licenses or at least their own cars partly for environmental and partly for cost reasons, the growing number of older people could become an important target group for autonomous vehicles or robo-taxis in the future. Ever stricter environmental regulations, such as the environmental zone that has been introduced in Munich on February 1, 2022, will further increase demand for electric vehicles. Of course, this also means that the production, recycling and secondary use of batteries offers significant growth potential for existing players as well as new entrants to the market.

Each of the three developments has considerable disruption potential on its own. But together, they become an existential threat to companies that do not adapt their business models in a timely and appropriate manner. Traditional carmakers are facing more and more new rivals, that don’t have to deal with the transformation of their production facilities. Simply because they dare to enter the market as suppliers of electric vehicles from the outset. These primarily include new e-car manufacturers from the USA and China. Based on studies by various renowned management consultancies, Chinese manufacturers now have a market share of almost six percent due to considerable cost advantages. For suppliers, electrification and the development of autonomous vehicles in particular mean significant changes in the supply of automotive production and the spare parts market. It can be assumed that electric cars will require significantly fewer spare parts and at the same time be more durable.

We have been following developments in the automotive industry for many years. In our discussions with senior leaders and decision-makers, we always hear the same concerns: How do we manage the balancing act of generating the means with the existing business model so that we can invest in future technologies and business models? And how do we get the right people to help us along the way? Because one thing is clear: In times of change, we need leaders who can develop and implement strategies while at the same time taking away the workforce's fear of the future and encouraging them along the path of change. Although a company's own employees cannot stop the transformation of the industry, they can significantly hamper the speed of change and adaptability of a company through active or passive resistance.

Tuned for change from head to toe

Automobile manufacturers, suppliers and mobility providers who want to successfully shape the change should question themselves at regular intervals and consider the following points:

• Defining strategy
  The decisive questions for management in the context of the transformation of the automotive industry are: What does the customer want (for suppliers, this also and above all means the manufacturers) and how can their wishes be fulfilled? How does our business model have to look like, to ensure value creation is generated in the company in the future as well? The forward-looking observation of the mobility sector and the striving to increase the customer's benefit is becoming increasingly important for manufacturers and suppliers. All processes in the company should be aligned with this goal. The triggered personnel and organizational changes in the company must be explained through a great deal of communication. Only then employees will be prepared to see the opportunities that are in for them, too, and will play an active role in shaping this path.
• Competency modelling and leadership development
  The success of transformation depends very much on whether the job holders have the necessary competencies for their respective tasks. Comparing the actual status with what is really needed shows the gap between available and necessary competencies. Aptitude diagnostic methods are indispensable for determining the ability to change and other important skills to be able to create valid personality and competence profiles. In this line, managers can be optimally deployed or, if necessary, empowered through targeted and individually tailored training and coaching. Basics such as openness and acceptance of change can be improved specifically, as can communication and decision-making skills.
• Executive Search
  New strategies can rarely be implemented without personnel changes at the top and substitutes from outside. With professional support and the use of aptitude diagnostics, you can ensure that you bring on board the right executives with the personalities that fit your company. It is of great importance that both the existing and the newly acquired executives pull together. They should also have the individual skills and abilities to lead their divisions, motivate employees and develop or attract talent.

Conclusion

In times of rapid change, it is the company's executives who matter most. Based on a vision of the company's future and its position in changing mobility markets, it must devise and implement a strategy to ensure that the repositioning is successful. The spectrum ranges from technical conversions to an entire business model change with new business units. In all cases, it is important to inform, motivate and develop employees to make sure they understand the reasons and goals of the transformation and pull together.

If you would like to know more about this topic or to be contacted personally, please feel free to contact us:

Irena Schierjott  |  Principal Consultant | Hamburg
Mobile: +49 151 511 88914  |  Office: +49 (0)40 85 171 60

Daniel Müller  | Partner & Director | Zurich
Mobile: +41 76 353 50 42  |  Office: +41 (0)44 396 11 11