Content:
The good old days are over.
Strategy versus technological reality
In good, profitable times, German car manufacturers and suppliers have expanded their management capacities. With the shift to new technologies such as electric drives and software-defined vehicles, these managers have designed strategies, implemented them, then discarded them and started again.
Meanwhile, the competition in China and the USA has caught up with and overtaken us technically in the new disciplines.
Specialist and technical skills are required to remain competitive: software development, cell production, new electrical/electronic architectures, etc. Management skills alone do not seem to be driving this technological change fast enough.
Today I am talking to Ole Harms, CEO of VAIVA GmbH, a software supplier in the field of security technology. He was previously co-founder and CEO of MOIA and played a key role in the founding of CARIAD SE.
Let’s start, Ole: what’s your dream car? We’ve never talked about that before.
Ole Harms: What would you think? Well, I have two.
I could imagine a Samba bus. And a Porsche as a second car, but I’m not quite sure. Something sporty as a second car.
Ole Harms: Well, my first one is an old Porsche, the 911 Turbo of the 930 model. Unfortunately, at the moment it’s just sitting in the garage. And you said the other one correctly: a T1 Samba, albeit electrified. VWN built it two or three years ago with a partner, E Classics, in orange. A dream.
We are too slow and not consistent enough.
To our actual topic: What is the state of transformation in the industry? Where are we and where are we heading?
Ole Harms: That’s a good question. The necessity and direction of the changes are now widely understood. And everywhere. Almost everyone knows the drivers of change.
What is the status? It’s already tough. From the first hackathon we did in Boston in 2014, to the mobility partnership between the VW Group and Hamburg in 2015, to various stories about autonomous driving, I’ve been able to experience a lot. My impression is that things are progressing very slowly. And – the speed of adaptation in Europe is much slower than in the USA or China.
Because change also means giving things up: mucking out, clearing out, throwing away. We find that very difficult. And the same goes for resolutely seeing things through over a longer period of time. If we look at the last few years, whether in politics, the economy or in Germany and Europe in general, it’s like this: “Forward! No, we’ll stop that now. Different approach, funding up, funding down. Solar in. Solar out.”
So a) the speed and b) the consistency are missing.
China and the USA are faster and braver than we are.
Is it because of the people? Why is it that the USA and China are faster? What can we do to change this?
Ole Harms: It does have something to do with attitudes and cultural influences. In core Europe and in Germany, we simply have to kick ourselves in the butt. Show more willingness to perform and try things out more. In my opinion, we are too often hampered by a pronounced sense of security.
More is happening in many other countries. A lot of new things are emerging. We should ask ourselves the question: Can (and should) we transform everything at all? What can be saved for the new era and which areas need to be created from scratch? New formats, new companies, new technologies, new products?
Of course there are risks to be taken here. New things can flop. But there is no alternative to being courageous. If you only do something half-heartedly, then you lack focus, courage and perseverance.
There seem to be more of these in other regions.
Letting go of the familiar and the tried and tested.
We have plenty of well-trained people. And we have institutions that ensure that people are trained, that we conduct research, that we develop. You would actually think that the conditions for creating something are very good. If we’re talking about throwing away cars, it’s a fact that you can still earn good money with the combustion engine at the moment. So what should we leave then? Success also guides you.
Ole Harms: I don’t know whether the analogy with the omission fits the question of combustion engine or electric. I’m more concerned here with the procedures.
We have to let go of some of the things that have made us successful in the past. For example, when it comes to software or revising the value chain or the depth of value creation with regard to battery/cell technology, we cannot do this with the thinking of the past.
The approaches of the past are not bad. But they are no good as a reference for the new topics. They have to be set up completely differently. Everyone is currently talking about the software-defined vehicle: first the software, then the car. That’s easy to say. But that’s what you have to do. You really have to set up your entire operating model in this way. Right from the start. And not try to tune something that already exists, add something here, flange something on there.
We often just need a blank sheet of paper on which to start afresh and have the confidence to develop something from scratch, to learn and adapt. And not immediately fall into the mechanism: “Oh damn, we don’t have a reference. How do we do this now? On what basis should we decide? Come on, let’s take a look at how others have done it in the past and then press it into our decision-making structures. Then we’ll be well protected.”
Efficiency and expertise are once again a priority.
You are working in one of these future-oriented fields: software, security, development of digital products. And you are responsible for employees. What do people need to make this change successful?
Ole Harms: You need the right environment. It needs an environment in which experts can work. And to do so quickly, effectively and without compromise.
Higher business speed.
Ole Harms: Exactly. Point one is to avoid pointless discussions, interfaces and decision-making channels. Decision-making authority and implementation must be brought down to the lowest possible level, to the experts.
The second point is the promotion of expertise. Either you get experts from the market or you train them yourself. Mediocrity, mediocrity, “okay” skills – there’s no room for that anymore.
At the same time, existing opportunities and potential must be exploited: Everyone wants to develop further. You can create opportunities there. But at the same time, demand that employees continue to develop and build up in-depth expertise at all levels.
General management is overrated in such an environment. “I’m a good manager, I can do everything, I can lead teams, whether they build ships or bicycles…”. That’s over. That no longer works.
The third is continuous learning. The transformation never stops and is even accelerating. And that’s why learning is so important. And learning does not mean: “Read a book and memorize it.” But rather: Doing something, understanding what works and what doesn’t. Then adapt, move on, understand more, adapt further, and do it again and again. In this sense, however, “productive learning” does not work if I repeatedly and quickly question a path I have taken, break it off and pursue a new direction.
So these three things are important: the right environment, the right expertise and then consistent learning. How old is Nvidia now? 30 years. 30 years of stringent work and continuous development. Jensen Huang, one of the founders, is still CEO today. It takes time to build great technologies and a competitive business model. Nvidia is now one of the most valuable companies in the world.
What does an ideal learning environment look like?
Ole Harms: In an ideal learning environment, learning is desired and not negatively connoted, along the lines of: “Why are you still learning? Why can’t you do it already?”
First and foremost, learning must be perceived as the core essence of development.
The next topic is the much-cited (but often not really practiced) error culture: making mistakes and learning from mistakes. A culture of error creates an environment in which you can try things out without having to draw up a 10-year business plan. A certain robustness in the justification of new product approaches, for example, is of course necessary, but this is often exaggerated.
If you make mistakes, you also realize: “Damn, it didn’t work out. But here’s what I’ve learned: we should tweak it this way and that way and then it will work next time.” That’s how learning works, that’s how innovation happens.
But if you do business cases for 8 weeks before you try something out, then it won’t work. That’s what I mean by the procedures from before. Then the learning doesn’t take place.
Experts have experience, of course, and also a certain amount of basic knowledge. How do you manage to provide this basic knowledge at VAIVA?
Ole Harms: Firstly, it is about empowering managers. In other words, first developing the managers themselves in their leadership roles. For example, making it clear that learning and personal development are a massive management task. Last year, for example, we introduced a binding development plan for all employees, which we look at together several times a year and adjust or add to if necessary.
The next thing is that we want to actively create offers that enable people to broaden their horizons. Top conferences, cool training courses in an international context with peer groups, participation in meet-ups that take place in the scene. We have a corporate account on Udemy for all employees, so you can get very creative yourself. But we also have our exchange formats, e.g. our “Talk, Meet, Eat”, to which we always invite interesting people. For example, a professor with whom we took an in-depth look at the metaverse and its industrial applications. Just recently, we had an internal evening event on a product idea that we are currently evaluating and were able to discuss content in depth and share ideas in a broader context (and in a relaxed atmosphere).
There are people who actively pull at every learning opportunity.
And there is one big part that you have to nudge a little. To paraphrase Saint-Exupéry: “If you want to build a ship, don’t start by collecting wood and distributing the work, but awaken in people’s hearts a longing for the great wide sea”.
Go to a Developers Conference. Go to an Autonomous Meetup and you’ll be so fired up that you’ll think: “Oh great, I’ll have to look into that. What exactly does this mean? Yes, I’ll have a look at that now, I’d like to go deeper: Where is there training?”
It’s about both, offering the opportunity, and that’s why we invest in it. On the other hand, you also have to encourage people to take advantage of the opportunities.
Another important element is that we have principals. They are our senior technical experts and they also have a training mandate. They not only promote their topics, but also anchor them in the organization and provide internal training.
I hear two basic tendencies in your work to promote learning: One is social learning: you actually learn the fastest from each other, at the congress, from other colleagues, from the principal. The second is “discovery”: that you discover things, open a door and see what’s behind it. In other words, triggering this curiosity in people and creating motivation.
Yes, that fits quite well.
Throw away the old and then play the real game.
Let’s assume you could write a letter, Ole, to the Olas and Olivers of the automotive world and also to the CEOs of the suppliers. What would you want to tell them?
Ole Harms: First of all, I wouldn’t write any more letters, the topic has long been over. Secondly, of course, I don’t presume to be a whisperer here. These are all highly competent people, surrounded by many advisors and sparring partners.
In a personal conversation, I would advocate courageously taking a path and continuing on it even when the wind is blowing from the front.
And it will continue to blow brusquely from the front. The next few years will certainly not be a walk in the park for our industry.
Technologies and companies develop in the familiar S-curves. It’s all about continuous learning and staying on the ball. We have to work on our long-term competitiveness, Simon Sinek calls it ‘Playing the Infinite Game’. We have a few years of work ahead of us, we have a lot of catching up to do, especially in the whole area of software technologies and value creation.
But we also have good prerequisites for this. You’ve already mentioned it: Know-how, in-depth knowledge, a high level of education, etc. But that will only happen if you follow the path consistently for a few years. Really a few years. And if you fall into a pit, you just have to shake yourself, walk 3 meters to the side and then carry on anyway. And don’t question everything again, just keep going. That’s the first thing: this consistency.
The second is to clear out as you go. Throw it away. Cut it off.
Don’t carry the big backpack to get to the top.
Ole Harms: Maybe that’s the image. You walk a long distance with a heavy rucksack. You get fitter. But you also take things out of your rucksack so that you can get further. Yes, and then in the end it really is a fitness program. But that takes years and only works if you don’t constantly castigate yourself in the sense of: “Oh damn, now we’ve missed a train and we won’t be first next year – we have to question everything.” For me, it’s not about being “the best” in some new technology or value-added area in 2-3 years’ time.
The goal is long-term, successful market participation and to achieve this, the necessary skills must be established in a determined and sustainable manner.
If there was a chance, I would like to discuss this with one or the other over a glass of red wine.
Thank you, Ole, for a deep and entertaining conversation.
