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Why the best automotive CEOs are bridge-builders
by Christian Rosen | May 19, 2016
‘Dieselgate’ is just the latest in a series of indicators that the automotive sector is facing change on a vast scale. The connected car is just around the corner, and driverless cars are by no means a distant pipe dream. The sector has traditionally been strongly process-oriented, but digitization is rolling towards it like a tsunami heading for an island. The mega-wave hasn’t struck yet, but the warning signs are clear for all to see. The automotive sector has long aimed to sell its customers the perfect product, the fruit of long-term planning, incremental progress and continuous innovation, but against this backdrop, that goal is no longer enough.
A product called mobility
The automotive sector of the future will be selling mobility rather than just cars: automakers are morphing into mobility service providers. It’s not a new trend – it emerged in the late 1990s – and there are parallels with the way in which mobile telephony developed. Customers want mobility and flexibility; they don’t care so much about the platform that delivers them. And their traditional loyalty to a single supplier will increasingly become a thing of the past. New areas of business are opening up in the mobility sector, from parking garages to railroad stations, from regional transportation to car sharing. And underpinning growth in all of these emerging intermodal mobility concepts is a high level of connectivity between all concerned: just consider ‘Here’ and its digital map-making activities, and the way they are being tailored to the mobility industry’s global ‘Internet of Things’ platform.
Today, it is truer than ever that the top players in the sector need to act fast on all fronts. Keeping pace with the digital world means being able to react flexibly. Short product cycles mean gearing decision-making and operational structures to working in small, flexible and network-based teams. And all of this will impact on the traditional, centralized management thinking that continues to dominate the automotive industry.
CEOs as bridge-builders
Wherever the old and new worlds clash, CEOs are tasked with managing transformation, showing that they are open to change, and building bridges. Otherwise the two worlds will never mesh. So managers across the automotive sector are going to need skills beyond technical expertise. It is no coincidence that former managers from Silicon Valley now occupy top jobs in automotive companies around the world. Yet even they have to grapple with the challenges of bringing the old and new worlds together. And of course, it doesn’t mean that all auto industry managers now have to be able to write their own software. What is much more important is an openness to the digital topics with which the next generation is already engaging, and at the same time an understanding of the “old” world. The CEO’s role is to equip their organization to make the digital world as much a part of the company as the traditional way of doing things. The new digital logic is already setting the pace. The search is on for managers who can not only build great cars but great bridges as well.
Christian Rosen heads Egon Zehnder's global Automotive Practice.