Excerpted from Rules of the Road for European Automotive Leaders.
Automotive leaders in Europe have adapted to the dramatic changes that have shaken up their industry in recent years, and are proving adept at handling the new rules of the road. One consequence of this flexibility is a new perception of the leadership qualities that exemplify success in the sector. A recent survey of automotive leaders in Europe asked them to name the most important business experience for senior general management, and their top answers are an important window into the skills that denote success in the automotive world, as well as a look into future trends for the industry.
International experience. The leading response, with more than half identifying it as a critical skillset. Familiarity with other parts of the world has proven especially valuable in an increasingly global supply chain, where events on the other side of the planet – natural disasters, political turmoil and economic missteps, among potential occurrences – can disrupt production and distribution closer to home. A more complex supply chain means that leaders must be well-informed and prepared to adjust systems quickly on a global scale.
Customer relationship management. Throughout the European automotive industry, the nature of roles and responsibilities are evolving to meet the demands of a more exacting customer. For example, manufacturers are now relying on suppliers for more substantive contributions to help satisfy their car buyers’ hunger for innovation. One executive estimates that up to two-thirds of the value of a car today is in the hands of Tier 1 suppliers versus one-third a few decades ago.
Product innovation. Marketing skills are taking center stage, as car makers are concentrating more and more on design, on vehicle integration and on the validation of the vehicle. For original equipment manufacturers, key functions are changing to reflect the greater emphasis on design and marketing and the lessened importance of procurement or manufacturing. Meanwhile, some Tier 1 suppliers are bolstering their marketing capabilities in order to better position themselves as strategic partners versus providers of parts.
Entrepreneurial orientation. Carmakers’ growing expectations have driven the organization’s evolution and redefined the sales function. In particular, suppliers have transformed significantly in recent years, shifting from merely providing hardware to become a supplier capable of providing improved materials, with more value added in design and specifications. Now their role continues to evolve, as they seek to become providers of full system solutions, offering customers new technological ideas and solutions for customer products alongside alternative options to meet customer requirements.
People development. Beyond technical skills, companies are seeking leaders who are “fast and flexible” and empowered to act proactively. The auto industry has a perceived shortage of commercially oriented executives with business development expertise who can simultaneously see all aspects of the business, the bigger industry and economic picture, and operate within a complex organizational matrix. Being flexible and nimble is proving to be more important than being big in order to compete and win in this environment. In order to build a more intelligent organization, automotive firms are working to develop people who understand how to receive and circulate information, with autonomy and initiative, i.e., an internal intelligent network.
Learn more about the skills European auto leaders need to face their biggest challenges.