Slow growth but rapid change

Citation

Donkin, C. (2015), "Slow growth but rapid change", Strategic HR Review, Vol. 14 No. 4. https://doi.org/10.1108/SHR-06-2015-0051

Slow growth but rapid change

Article Type: Strategic commentary From: Strategic HR Review, Volume 14, Issue 4

How automotive businesses need to adapt their leadership approach in order to succeed in the future

Chris Donkin is based at Korn Ferry, London, UK.

The automotive industry grew to be a global industrial powerhouse in the twentieth century. An engine of economic growth and prosperity, it was epitomised by generations of hard driving “command and control” leaders. Now, however, the sector faces greater challenges than ever before: tighter regulation, more demanding consumers, disruptive new players, unfamiliar technologies and increasingly complex global markets. The industry has become more complex, with a web of joint ventures, industrial partnerships and inter-company platform architecture sharing. This increasingly requires leaders who can influence and inspire rather than dictate and direct.

As the industry enters this period of significant change, recent research conducted by Korn Ferry among senior automotive industry executives reveals that to succeed, manufacturers will need a new breed of leaders who are agile, quick to adapt and able to successfully apply their experience to new or first time challenges. In the words of Andy Palmer, Chief Executive Officer at Aston Martin, “We need agile leaders with broad, international experience, able to successfully adapt to changing circumstances and fresh challenges while remaining focused on a clear strategic direction for the business”.

Talent strategy needs to shift gear

To deal effectively with increasing levels of disruptive industry change, automakers and suppliers need a talent strategy that is clearly aligned to their business strategy and that identifies and develops leaders equipped to deal with these challenges. However, more than one third (39 per cent) of senior automotive industry executives surveyed believe their company has either no clear talent strategy or one that is actually in conflict with the business strategy. Furthermore, barely half (53 per cent) of senior executives are confident that their company can identify and develop high potential next generation leadership talent (Figure 1).

Figure 1 - How well aligned is your company’s talent strategy to your business strategy?

Korn Ferry’s findings suggest that the most successful companies in the future will be those with clearly aligned talent strategies that can “flex” to respond to changing business needs. An opportunity exists, therefore, for automotive companies to close this gap, thereby seeing faster progress toward delivering the business strategy.

Finding next-generation talent

At the same time, it is imperative to broaden the search for skills as new, disruptive companies enter the auto industry, from Google’s prototypes of autonomous cars to Tesla Motors’ challenging of orthodox thinking. As new technologies grow in importance, sourcing new outside skills will become more common, says Barb Samardzich, Ford of Europe’s Chief Operating Officer. In particular, she highlights connectivity and advances in autonomous vehicles. “We do not have homegrown engineers who are expert in those areas, so we look to hire in specific capabilities to fill those gaps”, she says. “Typically this is coming from very different industries, including high-tech, consumer electronics and mobile telecommunications”.

Future leadership potential and effective succession management

With the rate of change across the industry accelerating, it is becoming increasingly important to be able to objectively measure future leadership potential, rather than relying on subjective assessment which can often be influenced far more by past achievement.

This Korn Ferry survey and a significant body of other research by the firm have identified agility as the most valid predictor of leadership potential and one of a number of critical attributes for the future, as shown in Figure 2 below.

Figure 2 - Future leadership attributes for success

Some of these attributes are more innate; others can be developed over time and through a range of interventions, including carefully planned stretch assignments and tailored coaching programmes. All of these can be measured and, in combination, provide the most valid and reliable predictors of future leadership potential.

Chris Donkin, Senior Client Partner at Korn Ferry and co-author of the report says: “The results of the survey point to a fundamental shift in the leadership capabilities required to succeed in what is likely to be a prolonged period of slow growth and rapid change.

Automotive enterprises need to prepare leadership teams that can cope with the mounting pressures to stay competitive. At the heart of these new talent strategies should be a succession management process designed to identify and develop the next generation of leaders, based on a number of leadership attributes that correlate strongly with success in complex, fast-moving, competitive business environments.

Ultimately, the winners will be those companies that can evolve most quickly, developing streamlined, adaptive talent organizations driven by a new breed of executives with different leadership skills.”

For a full copy of the Korn Ferry study – “Accelerating change: An automotive leadership wake-up call” – email http://chris.donkin@kornferry.com

Reference

Donkin, C. and Binvel, Y. (2015), “Accelerating change: an automotive leadership wake-up call”.

About the author

Chris Donkin has spent more than 20 years in executive search and marketing communications on behalf of automotive clients and has lived and worked in Asia Pacific, continental Europe and the UK. His focus is on working closely with colleagues to further develop Korn Ferry’s integrated leadership and talent consulting offering in the automotive sector. Prior to joining Korn Ferry, Mr Donkin was Chief Executive of Magma People, a division of Magma Group, the global advisory and consultancy business established in 2005 to address issues and capitalise on opportunities in the rapidly changing automotive, transport and technology industries worldwide. Prior to that, he was European Managing Partner for another global automotive executive search firm. He started his career in advertising and marketing communications, working with a number of automotive clients globally, including Jaguar Cars, Ford Motor Company and Volvo Car Corporation. Chris Donkin can be contacted at: mailto:Chris.Donkin@KornFerry.com