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We have an abundance of generic management training but are starved for the critical technical knowledge in the automotive industry. This realization led me to give up my career in senior management in the automotive industry to start a learning consultancy.
The superiority of technical skills.
When I started as a manager at a car company, I looked through all the company training catalogs and asked my boss what I needed to learn. It appeared that training in compliance, customer experience design, presentation and leadership skills were necessary for career advancement. I realized that my colleagues had attended identical courses. As a result, I decided that these courses would be useful and effective for my career.
Consequently, I thought learning general skills was better than training technical skills. As the HR department saw this as the skills they were looking for, their training portfolio also included general courses rather than technical training for employees like me.
But that is wrong.
To be clear, the steepest learning curve I experienced was when we inspected a panel van on a lift to look for spot welds to find out how the competition designed this van. That was useful because I actually learned something practical about cars and engineering.
The contribution of the individual in the automotive transformation
Everyone wants to make a meaningful contribution and receive a good salary. But what does it take to make a valuable contribution?
In the automotive industry, it’s frighteningly simple: technical skills are required to contribute to value-adding processes such as vehicle development, production and sales. The more relevant an employee’s skills are to getting a car on the road, the more valuable and respected they become. Therefore, the order of skill needs in the automotive industry should be as follows: Technical skills come first, followed by general skills.
Every employee needs to understand what the employer needs most. Superior technical skills are fundamental to the financial sustainability of any automotive business. Therefore, technical skills training is always mandatory. General skills training can only be seen as an optional extra.
And that applies more and more these days.
The technical core of the car industry is being ripped out and a new technical core is being implanted.
This conversion puts the training of technical knowledge and skills under a magnifying glass: the problem becomes even more visible and the heat increases at the same time.
The electrification and digitalization of the car are rapidly changing all core processes. In addition, the demand for employees with technological skills in the areas of artificial intelligence, software and battery technology is very high.
I saw with my own eyes how the training of employees in the car manufacturers’ offices in technical skills was the lowest priority. And could hardly believe it. As I advanced my career beyond the day-to-day operations, I couldn’t get my hands on any quality technical training related to my employer’s core processes. I realized that in this environment, my value as an employee was diminishing.
So I threw in the towel.
The cowboys who don’t ride.
Companies with good cash flow are increasing their management levels.
In other words, they place additional chess pieces on the board to win the game.
This is straight out of a management playbook, as a manager’s job is to figure out how to adapt operations to new markets or technologies. But inevitably, in their new role, these managers themselves need new technical skills and a better understanding… which they don’t have.
This leads to a paradoxical Catch-22 situation from which managers cannot escape.
This phenomenon is not only known in the automotive industry. I spoke to a friend who works for a medium-sized software company. The company has been creating ERP systems as its main business for more than a decade. It employs 700 programmers who write the code – that’s the core process of a software company. But the total number of employees is 6,000, which raises the question: do all employees contribute to the company’s value creation?
Elon Musk has caused a stir in the industry by laying off more than 50% of the Twitter workforce. Most of the employees did not have the necessary technical skills to run Twitter. Twitter’s technical department was asked which of them had reviewed the code within the last 4 weeks. It turned out that less than 50% had reviewed the code. An engineer in a software company who is not involved in code development has inevitably turned into a generic manager.
In all these companies, the pyramid between generalists and experts has been reversed.
In the weeks that followed, the tech industry followed suit and laid off more than 60,000 employees. And this trend has already left the confines of the tech industry: FedEx has laid off 10% of its executives.
Without irreplaceable technical skills, an employee’s contribution to a technology-driven company dwindles.
My decision in 2019 may have been premature, but my reasoning was correct.
Bringing the pyramid back into balance.
Every wave from the United States eventually makes its way to the shores of Europe.
The inverted pyramid is the result of high-performing companies that tend to add management layers in response to new challenges. Following this logic, tens of thousands of well-paid management positions have been created in the automotive industry over the last fifteen years since the 2008 financial crisis.
The automotive industry continued to grow and reached its peak in 2019.
Then came the pandemic. Factories remained closed and shortages of microchips reduced the subsequent production ramp-ups. Production output declined. The high-end vehicles that were still coming off the production line were able to achieve higher prices and profits, giving manufacturers another record year.
But the tide is turning.
More experts are needed. The management levels are being put to the test.
The battle for technical skills is on.
A new mix of technical experts.
Names such as Watt, Edison, Tesla, Ford, Zuse, Gates and Jobs stand for significant technological advances in certain industries. Time will tell whether Elon Musk represents such a technological revolution in the global automotive industry.
In any case, the automotive industry needs a new mix of technical specialists.
It took the automotive industry a century to learn how to build cars. Similarly, it needs to familiarize itself with battery packs, car software and artificial intelligence for driving in this decade.
New employees from the tech industry have to learn about “cars”, such as product life cycles and platforms, supplier logics, the industrialization of vehicle production or servicing and supplying the fleet in the field.
This learning process is crucial for competition.
Let me explain.
At one point, I was assigned to the product development committee, which met weekly to discuss issues relating to new cars in the product process. All my colleagues were the best, the most experienced designers, engineers and managers. The team’s mission was to convert the company’s entire product portfolio to vehicles with the lowest possible emissions and to turn the company around.
The team was outstandingly successful. And here’s why.
All team members of the committee were respected beyond the organization for their expertise. All of them advanced in their careers because they had acquired specific knowledge when they successfully passed important projects. If there was unused technology, a new component or a new functionality to be discovered, the domain expert researched it with his team and presented the results to the rest of the team.
The decision-making process was quick and effective. Some of the cars developed during this period are still blockbusters, especially on European roads.
From time to time we ran into a wall.
The arguments for investing in technical training are there.
The team thought one problem was unsolvable: software and electronics. The associated department grew within a few months, but the integration problems remained. The same thing happened here as with the software company I mentioned earlier, Twitter or FedEx.
Traditional OEMs have struggled with software and electronics up to now. On the one hand, this is due to conventional automotive technology and engineering architecture. On the other hand, software processes collide with OEM decision-making processes. Managers struggle in both situations and strive to become experts in automotive software.
The blatant lack of technical training for employees does not make things any better.
Therefore, any investment in technical skills training in the automotive industry has a great return by improving the contribution of managers and employees to the company’s value creation.
“We have no choice but to get serious technical training,” explained Henry Ford in 1920. “We may lose a skilled worker to other companies, but if we don’t train them in the first place, we lose twice.”
What better time than now for a new culture of mixed experts and a historic wave of technical training in the automotive industry?
