Courage is key if German auto leaders are to negotiate the hazards of oncoming change

23 Feb 2021

Courage is key if German auto leaders are to negotiate the hazards of oncoming change

Facing a wave of disruptive technologies and new nimble competitors, can the leaders of Germany’s auto industry create the brave culture required for success?

The challenge for the German auto industry is well-known and becoming clearer every day as newcomers enter the home market with technologies that offer new possibilities.

Each new entrant or technology asks questions about just how well the established German brands and also the big suppliers, weighed down with legacy and conservatism, can compete against the challengers and their technologies.

Winning the culture race

Importantly, this is not simply a technology or investment race.

Yes, it will take immense effort and investment if Germany’s automotive industry is to play a relevant role in this future world market. Some of this has already been spent.

But without a re-engineering of culture and the leadership to lead that substantial cultural shift, the German industry is likely to slip further back into the position of follower, not leader.

Following China

Consider one example, the local concentration on Lithium Ion batteries, even as China is already looking beyond to hydrogen-powered cars, trucks and buses. They are moving ahead, building the H2 fuel-cell supply chain and developing hydrogen-powered vehicles.

This is the type of development that should ring alarm bells from Wolfsburg to Ingolstadt and Stuttgart, and beyond, an indicator that cultural change is required.

No time for old thinking

This is a challenge that will need truly brave thinking, from top to bottom, in order to respond faster and more comprehensively to a changing market than ever before.

The challengers come with a ‘clean sheet’, a typical start-up approach, nimble and open to the technology that works today and open-minded about the future.

It is often said that one can be ‘afraid of one’s own bravery’. Well, this is no such time for that.

Confident leaders lean into change

“In our 2020 Global Leadership Confidence report, we discovered that only 15% of business executives worldwide have confidence in their company's own top leadership to successfully manage disruption. Including unexpected events like pandemics, technological advances, shifting demographics and climate change.”, says Olaf Szangolies, Partner at Odgers Berndtson Germany.

The Index also compared companies that score highly on confidence in their top leaders with those that don't. Confident companies are most positive about their leadership's courage, vision, and curiosity, plus their ability to drive a sense of purpose.

Importantly, successful companies recognise that mindset as well as skillset is critical in their leadership.

Agility is key, both at the organisational level and in the individual characteristics of leaders inspiring confidence.

German leaders with those characteristics are not easy to find. Most have been “brought up” in a top-down and conservative management environment for decades.

Attributes of mindset are now very important if individuals are to adapt and seize opportunities in the face of unprecedented disruption, just like the German automotive industry is facing right now.

The right leaders to drive cultural change.

The uncomfortable truth for some CEOs and other senior C-Suite leaders is that a strong track record does not equate to having the capabilities to deal with future disruption and lead the cultural changes required.

The more progressive leaders see only opportunity in disruption. They have a healthy and brave attitude towards change.

Furthermore, the leaders who are successfully thriving now, are much more

collaborative with their colleagues. They give their time to more open debate and see better outcomes as a result.

Organisations with more limited views are stifled in their ability to innovate and react to disruption. This is why a leadership mindset focused on continuous evolution and the agility that goes with that is not compatible with the old management culture of “command and control”.

Success is possible

Leaning into change is exactly what German auto industry leaders need to do just now if they are to succeed at building the type of culture that will beat the new OEMs at their own game. This is surely no time to be afraid of your own bravery, both individually and at the corporate level.

If you would like to discuss your leadership and talent requirements, or your personal  auto industry career aspirations, please don’t hesitate to get in touch.