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Transformation in the automotive industry

Patrick Koller, CEO of Faurecia, talks driverless cars, company culture and the art of good leadership

By Patrick Koller 19 March 2018

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The automotive industry is going through a transformation of unprecedented magnitude. There are four major trends – connectivity, autonomous driving, the sharing economy and electrification – as well as megatrends such as the increasing demand for fully personalised products.

Yes, we are going through a significant change. Yes, there will be new users and new customer needs – but this is good news because it will extend our business models. It probably won’t go at the speed that people think, because we still haven’t answered some of the critical questions.

It is not just powertrains that are undergoing a revolution. Car interiors are becoming an increasing area of focus as autonomous driving becomes a reality. They will be the main differentiating feature of the vehicle. What will you do in a car that you don’t need to drive? What can we offer in terms of versatile architecture, how will we keep you safe and how can we recognise what you want as an individual? A consumer-centric approach is key. We’re also innovating around data collection, which will be relevant in the future for predictive health, human-machine interface (HMI) systems and personalised comfort and wellness.

These major changes in the vehicle have led us to orient our strategy around the two key domains of smart life on board and sustainable mobility. It has also led us to accelerate our innovation and develop a broad innovation ecosystem. That way we can become more agile and bring technologies to market more rapidly.


An evolving culture and organisation


As a consequence our company culture is also undergoing major change. Before, we had one kind of organisation that we deployed all over the world. Now we have an ecosystem in which very different organisations coexist: start-ups, joint ventures, partnerships. At the same time we need to deliver an outstanding level of operational excellence to our customers. With ten major customers representing 80% of our sales we cannot have a problem with any one of them without it rapidly escalating.

With over 109,000 people in 34 countries we can no longer manage the company centrally. With 9,000 new recruits each year we need to make our culture explicit to ensure their rapid integration. So we have developed a set of beliefs and values that bind our whole community of Faurecians. These beliefs give a common understanding of what we are and how we want to behave. It’s what makes our community unique. When we recruit, we can say, ‘do you recognise yourself here? Will you be at ease with these beliefs? If not, we might not be the right company for you.’

One of our beliefs is that diversity is a strength that creates value. At Faurecia, you can take your career to the highest level whatever your nationality. In terms of gender diversity we must recognise that 50% of our end customers are female. If we aren’t able to design solutions they find attractive, it’s a problem. Women are 50% of the talent worldwide: if we don’t consider that, we have an issue.

In order to accelerate our innovation we have also introduced a new way of organising ourselves. We call it Faurecia Tech. We have identified incubator divisions such as that for the cockpit of the future in Meru, France. Here we manage pre-development ideas with our customers and work with our technology partners. We have also established technology platforms in key hubs around the world such as Silicon Valley. We organise our scouting activities and work with start-ups to rapidly develop proofs of concept. In order to access the best research we have an open innovation network with academic and research establishments around the world which feed into the incubator divisions and the technology platforms. And internally as well, we are encouraging new ways of working through innovation challenges.

The transformation of our culture and organisation is permanent. I think we need to remain agile and learn how to work in a different way with our enlarged ecosystem. We can learn from start ups and from technology companies as to how to foster innovation and new business models. We will also need to work with new customers. In the future we will not just have our traditional automotive customers – we are working with cities, with fleets, with industry, with car sharing companies. Mobility and air quality are huge topics for society in general and I am really excited about the role that Faurecia will play in the future.


Leadership qualities


Transformation is a top-down process. As a leader you need to make sure you look outside the company, you have to exchange with people who have a different understanding, experience and skills. It’s this exchange which triggers an idea. One meeting, one conversation can be a catalyst. The senior leaders who participate in the IGNITE programme at London Business School benefit from a break in their daily business. It gives them time to reflect on the transformation of the company, to exchange on their needs and to be inspired and coached by people outside the company to do it. It triggers new ideas, which is what we’re looking for. I want people to develop a higher level of critical thinking. Personal culture is important. Philosophy and history, for example, support your critical thinking.

During IGNITE we spend a lot of time discussing the schizophrenia of having to simultaneously deliver the short-term and transform the mid-term. Ten years ago, we recruited two different people to do that. Today, a leader needs to do both. The short term is about excellence in the bottom-line processes. You need to spend time with your people on the shop floor in different locations, making sure they deliver. Our Top 10 customers are supplied by 275 plants on a daily basis and for which we develop about 500 programmes at the same time. If one plant isn’t delivering as expected it places a stress on the relationship with the customer globally. In this industry you can’t fail; you have to deliver. It’s in our DNA to satisfy the customer. So we can never take our eye off the ball in terms of short-term performance.

But at the same time we need to constantly be looking ahead. As a CEO you need to share the vision and give the rhythm. A company moves at the speed of its CEO. Your energy drives the company and your speed becomes its speed. When I recruit people I try to select those that radiate energy, because they will be able to transmit it throughout the organisation. Managers need the right kind of energy to drive change.

One of the keys to leadership in this time of rapid transformation is Intellectual agility and curiosity. Leaders have to understand and be willing to support change. We also have to accept the discomfort linked to uncertainty. This is an important mindset in a world which will continue to accelerate in terms of change.

We are working in a tough world, in an industry that is under a lot of pressure. From my point of view there’s no need to add more pressure. I try to have fun with my people. The days are long and hard so when we have an opportunity to relax and have some good time, we should do it.

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