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The fat times are over.
In good, profitable times, German car manufacturers and suppliers have expanded their management capacities. With the pivot to new technologies, such as electric propulsion and software-defined vehicles, these managers have designed, implemented, then discarded and started again.
Meanwhile, the competition in China and the USA has caught up and overtaken us technically in the new disciplines.
Business and technical skills are needed to remain competitive: software development, cell manufacturing, new electrical and electronic architectures, etc. Management skills alone do not seem to be advancing this technological change fast enough.
Today I am talking to Ole Harms, CEO of VAIVA, a software supplier in security technology. Previously, he was co-founder and CEO of MOIA and played an integral role in the founding of CARIAD SE.
Let’s start, Ole: What is your dream car? We have never talked about that before.
Ole Harms: What would you think? So, I have two.
I could imagine a Samba bus. And secondly, a Porsche, but I am not quite sure. Somehow still something sporty as a second car.
Ole Harms: Well, my first one is an old Porsche, the 911 Turbo of the 930 model. Unfortunately, it would currently only be in the garage. And you said the other thing right: a T1 Samba but electrified. VWN set it up two or three years ago with a partner, E Classics, in orange. A dream.
To our current topic: What is the state of transformation in the industry? Where do we stand and where are we headed?
Ole Harms: That is a good question. The necessity and direction of the changes is now widely understood. Everywhere. Everyone knows the drivers of change.
What is the status? It is tough. From the first hackathon we did in Boston in 2014, to the VW Group’s mobility partnership with Hamburg in 2015, to various stories about autonomous driving, I was 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 up things: clearing out, clearing out, throwing away. We have a hard time with that. The same applies to bravely following through with things over a longer time. If we look at the last few years, be it in politics, in business or in Germany and Europe in general, then it goes like this: “Forward! No, we are going to stop that now. Different approach, funding up, funding down. Solar in. Solar out.”
So, a) the speed and b) the consequence are missing.
Is it because of the people? Why is it that the USA and China are faster? What can we change?
Ole Harms: It has something to do with attitudes and cultural influences. In core Europe and in Germany, we simply must kick ourselves in the butt. Show more motivation and try out more. A keen sense of security hinders us far too frequently.
In many other countries, more is happening. 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 in the new era, and which areas need to be completely recreated? 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 do something half-heartedly, then you lack focus, courage, and perseverance.
There seems to be more of this in other regions.
We have a lot of well-educated people. And we have institutions that make sure that people are trained, that we research, and that we develop. One would think that the conditions for creating something would be exceptionally good.
If we relate “throwing away” to cars, it is a fact that you can still make good money with the internal combustion engine at the moment. So, what should we leave, then? Success also guides you.
Ole Harms: I do not know whether the analogy with omission fits the question of a combustion engine or an electric one. For me, it is more about the procedures here.
We must let go of what has made us successful. If, for example, it is about software, the revision of the value chain, or the depth of value creation regarding battery/cell technology, then we cannot do this with past thinking.
The procedures of the past are not bad. But they are not suitable as a reference for the new topics. You must set them up in a distinct way. The Software-Defined Vehicle is on everyone’s lips right now: first the software, then the car. That is easy to say. But that is what you must do. You really must set up your operating model completely like that. Right from the start. And do not try to tune something that already exists, to put something in here, to flange something there.
Quite often, we simply need a blank sheet of paper on which you can start anew and have the confidence to develop something from scratch, to learn and adapt in the process. And do not immediately fall into the mechanism: “Oh damn, we don’t have a reference at all. How do we do that now? On what basis should we decide? Come on, now let us 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.”
You are active in one of these future fields: software, security, and 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. There needs to be an environment in which experts can work. And it does so quickly, effectively and without compromise.
Faster business speed.
Ole Harms: Exactly. Point one is the avoidance of pointless discussions, interfaces, and decision-making paths. Decision-making authority and implementation must be packed to the lowest possible level, to the experts.
The second point is to promote expertise. Either you get experts from the market, or you train them yourself. Averageness, mediocrity, “okay” competencies – there is no more room for that.
At the same time, existing opportunities and potential must be exploited: everyone wants to develop further. There you can create offers. But at the same time, it demands that employees develop further and build up deep 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’re building ships or bicycles…” That is over. That does not work anymore.
The third is continuous learning. The transformation does not stop and is even accelerating. And that’s why learning is so important. And learning does not mean “read a book and memorize it.” Rather: do something, understand what works and what does not. Then adapt, move on, understand more, continue to adapt, and do it again and again. In this sense, however, “productive learning” does not work if I repeatedly question a path that has been taken, break it off and pursue a new direction.
So, these three things are important: the right setting, the right expertise, and then learning consistently. How old is Nvidia now? 30 years. They have been working rigorously for 30 years and are continuously developing. Jensen Huang, one of the founders, is still CEO today. Building great technologies and a business model that is superior to the competition also takes time. Now, Nvidia is 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, like: “Why are you still learning? Why can’t you do it already?”
First and foremost, learning must be perceived as the core of development.
The next topic is the much cited (but often not really lived) error culture: making mistakes and learning from mistakes. An error culture creates an environment in which you can try things out without drawing up a 10-year business plan. Of course, a certain robustness is needed in the justification of e.g., new product approaches, but this is often exaggerated.
If you make mistakes, you also realize: “Damn, nothing has come of it. But here’s what I’ve learned: We should tweak it this way and that and then it will work next time.” That is how learning works, that’s how innovation happens.
But if you do 8 weeks of business cases before you try something out, then it will not work. That is what I mean by ways of doing things in the past. Then learning does not take place.
Experts have experience and a certain basic knowledge. How do you manage to provide this basic knowledge at VAIVA?
Ole Harms: First, it is empowerment of the managers. In other words, first, develop the managers in their leadership roles. For example, to deposit that learning and personal development are a massive leadership mandate. Last year, for example, we introduced a binding development plan for all employees, which they look at together several times a year and adjust or supplement if necessary.
The next thing is that we want to actively create offers that allow people to broaden their horizons. Top conferences, cool trainings in an international context with peer groups, participation in meetups that take place in the scene. We have a corporate account on Udemy for all employees, where you can be highly 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 the content in depth on a broader scale (and in a relaxed atmosphere) and bring ideas together.
There are people who actively take part in every learning opportunity.
And there is a big part that you need to poke a little bit. To paraphrase Saint-Exupéry: “If you want to build a ship, don’t start by gathering wood and distributing the work, but awaken in people’s hearts the longing for the great wide sea.”
Go to a Developers Conference. Go to Autonomous Meetup and you will get so fired up that you will think, “Oh awesome, I’ll have to deal with that. What does this mean exactly? Yes, I will look at that now; I would like to go deeper: Where is the next training session?
It is about both offering the opportunity and that is why we are investing in it. On the other hand, you also must encourage people to take advantage of the opportunities.
Another crucial element is that we have so-called principals. They are our senior experts, and they also have a training mission. In other words, they not only advance their topics, but also anchor them sustainably in the organization and provide internal training.
I hear two basic tendencies from you to promote learning: One is social learning: you learn fastest from the other, at the tradeshow, from other colleagues, from the principal. The second is “discovery”: that you discover things, open doors, and see what is behind them. In other words, you trigger this curiosity in people and create motivation.
Yes, that fits quite well.
Let’s say you could write a letter, Ole to the Olas and Olivers of the car world, and also to the CEOs of the suppliers. What would you like to tell them?
Ole Harms: First, I would not write a letter anymore; the topic has been over for a long time. Secondly, of course, I do not presume to act like 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 along it even when the wind is blowing from the front.
And it will continue to blow harshly from the front. The next few years will certainly not be a walk in the park in our industry.
Technologies and companies develop in the well-known S-curves. It is all about continuous learning, staying on the ball. We must work for long-term competitiveness, which Simon Sinek calls ‘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 have already mentioned it: know-how, deep knowledge, high education, etc. But that will only be something if you follow the path consistently for a few years. Really a few years goes. And if you fall into a pit, you just must shake yourself, go 3 meters to the side and then continue anyway. And does not question everything again, but just moves on. That is the first thing: this consequence.
The second thing is, while you are leaving: clearing out. Junk. Cut off.
Do not carry a big backpack so that you can get up from time to time.
Ole Harms: That is the picture. You walk a long distance with a heavy backpack. You are getting fitter. But you also take things out of your backpack so that you can get ahead. Yes, and then in the end it is really a fitness program. But this takes years and is only possible if you do not constantly flagellate yourself in the sense of: “Oh damn, now we’ve missed a train and we’re not going to be first next year anymore – we have to question everything.” For me, it is not about being “the best” in any recent technologies or value-added areas in 2-3 years.
The goal is long-term, successful market participation and for this we must courageously and sustainably create the conditions to establish the necessary skills.
If there were the possibility, I would like to discuss it with one or the other over a glass of red wine.
Thank you, Ole, for a deep and entertaining conversation.
