Die neue starke Konkurrenz der chinesischen E-Autobauer auf unsere Premium-Autobauer in Deutschland

München, Januar 2023

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Die neue starke Konkurrenz der chinesischen E-Autobauer auf unsere Premium-Autobauer in Deutschland funktioniert

München, Januar 2023
E

s herrscht ein großer Druck für deutsche Autobauer - auf dem chinesischen Markt und auf unserem heimischen Markt in Deutschland und Europa.

Autor
Dr. Jan Burgard

Berylls Group CEO

Viele neue chinesische Brands auf dem Vormarsch – Fokus E-Mobilität

Neben BYD gibt es auch neuere Marken wie NIO, MGmotor, Polestar, die unter Konstrukten wie Geely Global geführt werden. Das sind neuen Konkurrenten besonders im Premium-Segment, denn diese Hersteller haben sich ausschließlich auf den Elektromarkt konzertiert. Wenn Sie sich den europäischen Automarkt anschauen, der rückläufig ist, denn das einzige Segment, das wächst, ist das Thema Elektromobilität.

Jetzt Podcast anhören:

Quelle: Börse hören.
https://www.brn-ag.de/41624

Mehr Einblicke vom Berylls China Team

Quo Vadis, China 2023 – What’s next for foreign OEMs as pressure from Chinese players increase
Munich, January 2023
China’s automotive market once again displayed great resilience in 2022, despite severe  challenges. In total, 23.6 million passenger cars were sold, a year-on-year increase of 9.5 percent. This included the record-breaking figure of 6.5 million new energy vehicles (NEVs), a y...
German (premium) customer acceptance of Chinese OEMs
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In the last series of articles, the Berylls China team analyzed the Chinese OEMs’ bumpy market entry story into Europe. The focus of these analyses was a broader scope of understanding for successfully entering the European market and what currently hinders the Chinese OEMs. Fr...
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Why the new market entrants can only gain sales traction in a well-functioning ecosystem with the right partners. This is the third and final article in our short series that focuses on the performance of Chinese OEMs (old and new) in Europe. Following the previous article, we ta...
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This is the first in a new short series that will focus on the performance of Chinese OEMs (old and new) in Europe. In this introductory article, we take a hard look at Chinese entrants’ achievements so far. Continue reading in the upcoming weeks for further insights.
Dr. Jan Burgard

Dr. Jan Burgard (1973) ist CEO der Berylls Group, einer internationalen und auf die Automobilitätsindustrie spezialisierten Unternehmensgruppe.
Sein Aufgabengebiet umfasst die Transformation von Luxus- und Premiumherstellern, mit besonderen Schwerpunkten auf Digitalisierung, Big Data, Start-ups, Connectivity und künstliche Intelligenz. Dr. Jan Burgard verantwortet bei Berylls außerdem die Umsetzung digitaler Produkte und ist ausgewiesener Spezialist für den Markt China.
Dr. Jan Burgard begann seine Karriere bei der Investmentbank MAN GROUP in New York. Die Leidenschaft für die Automobilitätsindustrie entwickelte er während Zwischenstopps bei einer amerikanischen Beratung und als Manager eines deutschen Premiumherstellers.
Im Oktober 2011 komplettierte er die Gründungspartner von Berylls Strategy Advisors. Die Top-Management-Beratung ist die Basis der heutigen Group und weiterhin der fachliche Nukleus aller Einheiten.
An das Studium der Betriebs- und Volkswirtschaftslehre, schloss sich die Promotion über virtuelle Produktentwicklung in der Automobilindustrie an.

Quo Vadis, China 2023 – What’s next for foreign OEMs as pressure from Chinese players increase

Munich, January 2023

Featured Insights

Quo Vadis, China 2023 - What's next for foreign OEMs as pressure form Chinese players increase

Munich, January 2023
C

hina’s automotive market once again displayed great resilience in 2022, despite severe  challenges.

In total, 23.6 million passenger cars were sold, a year-on-year increase of 9.5 percent. This included the record-breaking figure of 6.5 million new energy vehicles (NEVs), a year-on-year rise of 94.3 percent, reinforcing China’s critical role in the worldwide shift to electric mobility.

Repeating their success in 2021, Chinese players proved the big winners in the NEV market, accounting for more than 80 percent of total NEV sales. Meanwhile, established foreign OEMs lagged behind.  Even premium brands which in the past could depend on success in China struggled to cope with intensifying competition from domestic manufacturers as the transition to e-mobility accelerated.

The next international phase of this battle has now begun in earnest, with Chinese automotive companies taking on major global markets, focusing especially on western Europe. In 2022, China’s total vehicle exports reached another record high of 2.5 million passenger cars, a year-on-year increase of 56.7 percent.

Looking forward, market conditions in China will remain challenging for foreign OEMs, as more new Chinese players ramp up production and sales amid rapidly changing customer tastes and shifting government priorities. Nonetheless, there are still areas such as sustainability and the metaverse where foreign players can gain a competitive advantage, as we explain in this report.

A LOOK BACK ON 2022

During 2022, China’s economy continued to be affected by restrictive COVID-19 suppression measures while in October, the 20th National Congress of the Chinese Communist Party (CCP) set the country’s direction for the next five years. In addition, Chinese manufacturers, like their international peers, were severely affected by the global chip shortage and rising raw material prices. Against this background, China’s automotive industry experienced a turbulent twelve months.

 

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Quo Vadis China 2023 - What's next foreign OEMs as pressure from Chinese Players increase
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Authors
Dr. Jan Burgard

Berylls Group CEO

Willy Wang

Managing Director China

Hongtao Wei

Associate Partner

Soleiman Mansouri

Associate Partner

Lois Yang

Lead Analyst

Dr. Jan Burgard

Dr. Jan Burgard (1973) is CEO of Berylls Group, an international group of companies providing professional services to the automotive industry.

His responsibilities include accelerating the transformation of luxury and premium OEMs, with a particular focus on digitalization, big data, connectivity and artificial intelligence. Dr. Jan Burgard is also responsible for the implementation of digital products at Berylls and is a proven expert for the Chinese market.

Dr. Jan Burgard started his career at the investment bank MAN GROUP in New York. He developed a passion for the automotive industry during stopovers at an American consultancy and as manager at a German premium manufacturer. In October 2011, he became a founding partner of Berylls Strategy Advisors. The top management consultancy was the origin of today’s Group and continues to be the professional nucleus of the Group.

After studying business administration and economics, he earned his doctorate with a thesis on virtual product development in the automotive industry.

Willy Wang

Willy Lu Wang (1981) joined Berylls Strategy Advisors in 2017. He started his career participating in the graduate program of Audi focusing on production planning. After stations at another strategy consultancy as well as being the strategy director for a German Tier-1 supplier, he is now responsible for the China business at Berylls.

He has a broad consulting focus working for all clients in China, whether they are JVs, WOFEs or pure local players. He is also responsible for the development of AI and Big Data products dedicated towards the Chinese market further strengthening the Berylls End-to-End strategy and product development capabilities.

Wang studied Electronics & Information Technology with focus on Systems and Software Engineering and Control Theory at Karlsruhe Institute of Technology.

Hongtao Wei

Hongtao Wei (1988), Associate Partner, joined Berylls Strategy Advisors in 2015, an international strategy consultancy specializing in the automotive industry, where he focuses on all issues related to the Chinese automotive market. In addition to Western manufacturers in China, his clients also include Chinese OEMs, investors, provincial governments, and state-owned enterprises.

He has profound expert knowledge in the areas of sales and aftersales. His other areas of expertise include digitalization, connectivity, and turnaround management.

He studied Sinology, Economics and Statistics at the Ludwig-Maximilians-Universität in Munich.

Soleiman Mansouri

Soleiman joined the Berylls Group in March 2022. He has set his focus on customer-centrist solutions, gaining experience in Product- and Corporate Strategy, Consulting with the focus on the OEM business. His Automotive career started with digitalization of the Aftersales of an US OEM in Europe and took him to China to the leading German OEM group, heading the Product and Portfolio department. He gained intensive consulting experience with one of the top management consulting firms and as a freelance consultant. Before joining Berylls, he was the Director Go-to-Market of one of the top Chinese OEMs supporting their entrance into the EU market. Soleiman is a graduated M.A./MBA in International Business from the University of Hamburg and ECUST/Shanghai.

Soleiman joined the Berylls Group in March 2022 and is part of the Asia-team, responsible for supporting all players in a successful market entrance. Also, provides profound expertise of customer-centric Product Marketing and Portfolio Strategy approaches to our clients.

Soleiman is expert in customer-centric Product-/Portfolio Strategy, Go-To-Market, Corporate Strategy and Entrepreneurship.

How carmakers can manage complexity without hurting growth

Munich, January 2023

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How carmakers can manage complexity without hurting growth

Munich, January 2023
T

he Viable System Model (VSM) can help automotive companies steer a path to sustainable profitability while managing their increasing organizational complexity

The growth paradox

75 percent of companies are unable to grow profitably over the long term., according to Sebastian Raisch, Gilbert Probst and Peter Gomez, authors of Wege zum Wachstum. One of the main reasons for this, is called the “growth paradox”, which describes companies chasing growth in a way that creates complexity, which actually inhibits growth.

Many executives say that it is not the complexity of external market conditions that causes them problems but the control of complexity within their own organization. Internal processes and administrative structures build up as the company grows, making it difficult for executives to maintain direct contact with their business and customers. As a result, they lose the essential focus on developing the potential for success.

This is where the Viable System Model (VSM) developed by the cybernetician Stafford Beer can help organizations make their complexity controllable and embed the important principle of self-organization.  

Why automotive company reorganizations often fail

The goal of many reorganizations is to „manage“ corporate complexity. However, Berylls’ research and feedback from our clients suggests that most such exercises in the automotive industry only achieve limited success. Martin Pfiffner, author of The Neurology of Business: Implementing the Viable System Model, has identified the following cardinal errors that mean reorganizations often fail to have the desired impact:

  • Starting with organizational charts: Drawing boxes and lines in a chart to show the company’s future shape only displays the surface layout, like the icons for Windows functions on a computer screen. Organizational charts do not reveal a company’s underlying operating system.
  • Losing sight of the customer benefit: Almost every reorganization mission statement talks about focusing on the customer. In practice, only a minority of re-organization programs target what the customer is really willing to pay for.
  • Copying from competitors: Executives often ask for „best practices“ and „benchmarks” before making decisions about organizational structure. Resist the temptation – fitting another company’s structure on top of your unique culture and strategy is unlikely to succeed.
  • Treating the symptoms: Time pressures sometimes lead organizations to address the symptoms rather than the root cause of a problem.
  • Escaping into the matrix: A popular but illusory way out of the complexity trap is to build a matrix organization which maximizes the number of interfaces between people. Instead, the number of necessary rather than possible contacts should be minimized.
  • Prioritizing people over problems: In many cases, organizational projects start with decisions about who should take on which positions rather than about the key issues that need to be tackled.
  • Defining without equipping new units: Companies frequently establish new business units while failing to provide them with the resources and competencies to manage themselves successfully.
  • Organizing the new in the old: Successful innovation is one of the most difficult challenges for a leader because everything is new and uncertain. A common mistake is not separating new from old business units, to allow innovation to flourish.
  • Failing to differentiate supporting units from operational units: Reorganizations frequently do not distinguish between operating units which are responsible for results and supporting units which provide internal services. The former should grow and have plenty of autonomy, while the latter should only be as large as necessary.
  • Neglecting an organization’s “Neurology”: There is often too much focus on individual processes and structures, and not enough attention paid to developing a functioning “neurology” where control and communication “nerve pathways” connect the different organizational units.

How the Viable System Model (VSM) addresses the challenge of complexity

The VSM offers executives a framework for avoiding these errors and shows how they can solve the problems created by complexity. Its primary focus is not to define structures such as divisions and departments within a successful organization, but to define the relationships between them.

A fundamental principle of the VSM is that the operational units of a company must be organized as viable systems according to the same model. This principle, called “recursivity”, enables problem-solving strategies for dealing with complexity and creating order out of chaos across the organization.

Box: How the Viable System Model was created

Why VSM is especially relevant to automotive companies

Many major OEMs and suppliers are undertaking or considering hugely ambitious reorganization programs to keep pace with the industry’s accelerating transformation. The VSM, correctly applied, is a critical approach for managing these organizations’ increasing complexity while maintaining growth and staying ahead of competitors.  

To manage the increasing complexity within automotive organizations, the VSM provides five key control functions:

Figure 1: Viable System Model in an automotive company

Source: Berylls Strategy Advisors, following Pfiffner (2020) - Die dritte Dimension der Organisierens

Berylls’ research and our work with clients globally confirm that the VSM has repeatedly delivered rapid, effective solutions. Here are our key insights about how the VSM can be applied to achieve the only success that counts – satisfying customers to generate sustainable, long-term profitability:

Putting the customer first

It is crucial to design the organization’s dominant control dimension correctly to ensure that the business is structured in such a way that it focuses on the customer’s purchasing criteria and can implement the defined strategy effectively. Potential control dimensions include products, technologies, customer groups, applications, or regions.

Examples:

Premium OEMs: Cars, Vans, Service & Parts, Digital Services, Financial Services

Automotive Software Suppliers: Car Operating System, Omni Channel Commerce, After Sales, Production Automation, Enabler Technologies

Determining how far to decentralize:

Within operating business units, it is important to ensure that managers are responsible for the competencies and resources that determine success (System 1, see Figure 1). This autonomy should cover all functions that have a direct influence on the criteria that determine purchasing, such as product development.

At the same time, responsibility for organization-wide functions such as IT cannot be delegated, while central management may need to maintain control of plants or production capacities shared by operating units to achieve synergies between them (System 2).

The right degree of centralization can be calculated by asking the following questions:

Firstly, can we afford decentralization?

If the answer is yes, will decentralizing a task influence one or more key customer purchasing criteria?

If the answer is no, can a synergy be achieved by continuing to centralize the task?

If the answer is again no, the task should be assigned to the relevant unit because of the principle of subsidiarity.

Flattening further than conventional wisdom suggests

“How many direct reports can be managed?” is the wrong question. In our experience the traditional rule that there should be a maximum of seven „direct reports“ fails in most cases. The correct approach is to look at horizontal and vertical complexity and consider how much autonomy operational units need to perform at their best and whether they need more or less support from senior management (horizontal complexity). In addition, reorganization programs should address whether senior management has sufficient scope for intervention to limit the autonomy of operating units in the interests of the whole company (vertical complexity).

At one automotive supplier, a VSM diagnosis showed that the organization could be flattened from five to four management levels by dissolving three business units and converting ten new product units into fully-fledged operational units. This flattening was possible because the product divisions were different and to a large extent able to manage their complexity independently. Furthermore, senior management had significant vertical complexity control to ensure overall optimization of the product areas (System 3).  

Navigating into the unknown

In the automotive industry, navigating a rapidly changing environment must also be organized, with senior management taking the lead (System 4). Senior executives and senior operation leader (System 4 and 3) must balance what is right for today’s business with what is important for the future, while identifying external opportunities and threats. The last function to be designed is normative management (System 5) which defines the business mission and formulates governance policies which establish the guard rails within which strategic and operational management can function. This interplay of operational, strategic and normative management is of utmost importance to a successful transformation.

Conclusion: Why OEMs and suppliers are increasingly deploying the VSM to steer a path to sustainable growth

The timely redirection of human and financial capital from the old to the new business is both the most difficult and important task currently confronting the automotive industry. Figure 2 shows this interplay and the shift from the lower S-curve to the upper S-curve. However, too many senior automotive managers lack sufficient time to devote to strategic questions such as how much to invest in electromobility, connectivity or ADAS development because they are mired in operational issues which absorb most of their attention.

 

Figure 2: Adaptability – When do we change course?

Source: Malik, Berylls Strategy Advisors

By applying the VSM, an increasing number of OEMs and suppliers have executed successful organizational transformations that free up management time while delivering the critical interplay of operational, strategic and normative management. In plain terms, they are at least one step ahead of their competitors in seizing the opportunities created by this period of industry transition and transformation.

Authors
Dr. Christopher Brüggemann

Associate Partner

Peter Eltze

Partner

Laura Kronen

Partner

Dr. Martin Pfiffner

Foundation Council bei Fondation Oroborus

Dr. Christopher Brüggemann

Dr. Christopher Brüggemann (1983) is a Project Manager with focus on transforming organizations to improve performance, speed and agility. He is also an expert in strategy deployment, organizational design, and transformational change. Christopher has advised numerous companies through multiyear organizational transformations, often focused on operating model development and putting new ways of working, structures, processes, decision making mechanism in place.

Before joining Berylls, Christopher worked at Sixt SE, several other consultancies, and served as a research associate in cooperation with Deutsche Telekom. He has a PhD in economics and a diploma degree in business administration of Bayreuth University.

Peter Eltze

Peter Eltze (1964) joined Berylls by AlixPartners (formerly Berylls Strategy Advisors) as a Partner in November 2015. He began his career in the medical technology division of an integrated technology corporation, and became a project manager at Malik Management Zentrum St. Gallen in 1996 before being appointed Partner in 2001. From 2003, in his role as member of the executive board, he was in charge of Management Education & Development. Since the end of the 1990s, Peter Eltze has advised companies in the automotive and mechanical engineering industries. At Berylls, his consulting activities focus on integrated organizational development (strategy, structure, culture), transformation management, and executive development.
Education in wholesale and international trade; administrative sciences at the University of Constance, Germany.

Laura Kronen

Laura Kronen (1980) is a partner at Berylls by AlixPartners (formerly Berylls Strategy Advisors) with a focus on transformation. She is passionate about moving people and organizations forward. With over 18 years of industry and consulting experience, her focus is on transformative challenges in the operations context – from executives to individual employees, at manufacturers and suppliers. She helps her clients align strategy, structure, and culture in their respective market environments to build resilience.

Prior to joining Berylls, Laura Kronen worked at PwC Strategy&, Volkswagen AG and Audi. She holds a diploma degree in industrial engineering from the Karlsruhe Institute of Technology (KIT).

Dr. Martin Pfiffner

Dr. Martin Pfiffner (1965) works at Oroborus Fondation. Martin is one of the world’s leading experts on the practical implementation of the Viable System Model and Syntegration. Over the last thirty years, he has advised numerous economic, public, and private entities across the world, helping them get back on track and achieve success. His work centers on “The third dimension of organization,” which he defines as the neurology of an organization. His most recent book is The Neurology of Business: Implementing the Viable System Model (2022)

Martin studied economics at the University of St. Gallen (HSG) and earned his doctorate. At the time, he served as an assistant to professors Peter Gross (sociology, multi-option society) and Fredmund Malik (systems-oriented management theory). Later he studied in Canada and in Wales with Professor Stafford Beer, the pioneer of management-cybernetics.

Warum erfolgreiche Transformation nur über Führung (Leadership) funktioniert

München, Januar 2023

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Warum erfolgreiche Transformation nur über Führung (Leadership) funktioniert

München, Januar 2023
E

ine erfolgreiche Transformation ist nur möglich, wenn die Führungskräfte die entsprechenden Qualitäten mitbringen.

Autoren
Laura Kronen

Partner

Peter Eltze

Partner

Das Umdenken der Führungskräfte ist entscheidend 

Der Begriff der Transformation ist allgegenwärtig und auch in der Automobilindustrie nicht mehr wegzudenken. Es geht darum, dass das Unternehmen sich umorientiert. Dass das Unternehmen Dinge neu erlernen -sowie eingeschlagene Pfade verlassen muss.

Wenn wir von der Transformation sprechen, müssen wir auch über die Transformation der Führungskräfte sprechen.

Jetzt Podcast anhören:

Quelle: Börse hören.
https://www.brn-ag.de/41564

Laura Kronen

Laura Kronen (1980) ist Partner bei Berylls by AlixPartners (ehemals Berylls Strategy Advisors) mit Schwerpunkt Transformation. Menschen zu bewegen und Organisationen voranzubringen begeistert sie. Mit über 18 Jahren Industrie- und Beratungserfahrung liegt ihr Fokus auf transformativen Fragestellungen im Operations Umfeld – vom Executive bis zum einzelnen Mitarbeiter, bei Herstellern und Zulieferern. Sie unterstützt ihre Kunden dabei, Strategie, Struktur und Kultur in ihrem jeweiligen Marktumfeld in Einklang zu bringen und somit ihre Resilienz zu stärken.

Bevor Laura Kronen zu Berylls kam, arbeitete sie bei PwC Strategy&, Volkswagen AG und Audi. Sie hat einen Diplomabschluss in Wirtschaftsingenieurwesen vom Karlsruher Institut für Technologie (KIT).

Peter Eltze

Peter Eltze (1964) ist seit November 2015 als Partner bei Berylls by AlixPartners (ehemals Berylls Strategy Advisors) tätig, einer internationalen und auf die Automobilitätsindustrie spezialisierten Strategieberatung. Er ist Experte für ganzheitliche Transformationsprozesse und kann auf eine langjährige Erfahrung im Vertriebs- / Marketing- und Operations-Umfeld zurückschauen.
Peter Eltze berät seit 1994 Automobilhersteller und -zulieferer im globalen Kontext. Er verfügt über ein fundiertes Expertenwissen in den Bereichen Strategie- und Organisationsentwicklung. Zu seinen weiteren fachlichen Schwerpunkten zählen unter anderem Top Executive Coaching und der Themenkomplex rund um die Gestaltung von Führungsstrukturen und -konzepten.
Vor seinem Einstieg bei Berylls Strategy Advisors war er für MP und Malik als Mitglied der Geschäftsführung.
Im Anschluss an seine kaufmännische Ausbildung bei Siemens studierte er Verwaltungswissenschaften mit dem Schwerpunkt Managementlehre an der Uni Konstanz.

Our hearts beat for transformation!

Munich, January 2023

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Our hearts beat for transformation!

Munich, January 2023
D

o you want to know what excites us most about transformation? Get to know the members of our team to find out!

Dr. Frank Heines

Associate Partner

Wabe_Heines Frank
How did you get into transformation consulting?

After graduation, I started as an executive assistant and was immediately appointed to the core team of a company-wide business reengineering program. From then on, the topic of transformation has been at the center of my work. Both in my next job as a member of the management team in a medium-sized company and then later as a consultant, the support of strategically-induced major change processes was always the focus.

In St. Gallen, I learned the systemic approach and the foundational interplay of strategy, structure, culture, and leadership, which is still part of my methodology for transformation projects at Berylls.

What excites you about transformation?

It always excites me to realign or revitalize organizations and help them elevate to a higher level of performance. The greatest thing for me is when we succeed in inspiring executives and employees along this journey, so that they can support the transformation and further develop themselves throughout the process. Only then will the changes we have initiated be put into practice and bear fruit. It is also a pleasure to support companies in this transformational process over a longer period while building lasting relationships.

Ultimately, a transformation is like an open-heart surgery, often exhausting because of its dynamic and complex nature, but at the same time it is very fulfilling when success becomes visible and sustainable.

What are the customer setups you are usually working in?

I regularly work for automotive OEMs and suppliers. For larger transformation projects, my clients are typically from the C-suite level or are their direct reports. For management system topics, I usually work closely with subject matter experts and change agents.

Wabe_Johl Theresa

Theresa Stütz

Project Manager

How did you get into transformation consulting?

Originally via strategy work. We always discuss a holistic approach with our clients, and the best strategy only helps if it can also be implemented. My first transformation client had expressed their wish for our implementation support to bring our strategy to life. From then on, I didn’t want to just drop the pen after strategy development.

It’s also very nice to actually be able to see the results of one’s work!

What excites you about transformation

I’m excited about linking strategy and implementation. The best strategy can only be implemented if it is supported by the employees and if the organization is adapted in such a way that enables employees to impact change. At the end of the day, it’s always the people that matter.

What are the customer setups you are usually working in?

So far, I’ve worked with premium OEMs where I have focused on sales, marketing, and HR. I work with both middle and senior management levels.

Sebastian Böswald

Associate Partner

Wabe_Böswald Sebastian
How did you get into transformation consulting?

I was first thrown into the deep end during my second consulting project, but then quickly discovered my passion. In terms of methodology, it fits perfectly with my focus on software-defined vehicles, where there is a huge need for transformation. This allows me to advise my customers not only on content, but also directly on the transformation process.

What excites you about transformation?

I see two factors there: firstly, I enjoy working with people to help them grow and succeed – this makes our work more tangible than pure strategy concepts.
Secondly, the measurable impact that the transformation work has enables me and my clients to assess how things have improved after only a few months! Our concepts go directly into implementation and don’t disappear into a drawer.

What are the customer setups you are usually working in?

My focus is on OEMs, mostly within central organizational development. My contacts range from mid-level-management to C-suite level. My smallest transformation project involved 100 FTEs while my largest involved 20,000 FTEs.

Philipp Neubauer

Senior Consultant

How did you get into transformation consulting?

As a psychologist, I have a natural interest in change and transformation. But I quickly realized that pure methodological knowledge alone is not enough. Strong content know-how is also required to have a real impact. That’s why I combine strategy and transformation consulting.

What excites you about transformation?

That it goes beyond pure strategy work. Good strategy work is still essential, but transformation also gives me the opportunity to implement these strategies and achieve tangible results.

Another relevant aspect for me is the fact that there is organizational development in every transformation. Ultimately, we are changing the environment in which thousands of people work every day – it is impressive to see how transformations can change this for the better.

What are the customer setups you are usually working in?

My projects are close to top management, as they are usually game-changer projects for my clients. The size of the transformation project team varies. The largest one was staffed with almost 1000 employees from our client and other consulting companies.

Authors
Dr. Frank Heines

Associate Partner

Sebastian Böswald

Associate Partner

Theresa Stütz

Project Manager

Philipp Neubauer

Senior Consultant

Theresa Stütz

Theresa Stütz (1991) joined Berylls Strategy Advisors in December 2017. Meanwhile she is associate partner and automotive downstream expert.

She has been advising automotive manufacturers in a global context both in the luxury and premium segment. She has in-depth expert knowledge in the areas of sales and marketing, particularly in the context of customer experience strategies. Other areas of expertise include strategy development processes, Go-to-market strategies and transformation management.

Theresa received both Bachelor and Master of Science in Management and Technology (Mechanical Engineering) at Technical University of Munich.

Dr. Frank Heines
Dr. Frank Heines (1967) joined Berylls Strategy Advisors as Principal in September 2016, and is based at Berylls’ Swiss office. He started his career at the postal automation division of Siemens AG before changing to a medium-sized electrical and electronics company where, in his position as responsible for the technical department, he soon became member of the board. In 2003, he began his consulting career at the Malik Management Zentrum St. Gallen, becoming Partner and member of the group management board in 2007. The focus of his consulting work lies in strategy development, organizational design, productivity increase as well as in integrated organizational development and transformational management.
Economics at the University of Constance, Germany; business administration at the University of Zurich; Ph.D. at the University of St. Gallen, Switzerland.
Sebastian Böswald

Sebastian Böswald (1991) joined Berylls by AlixPartners (formerly Berylls Strategy Advisors) in April 2021. He is an Associate Partner and an expert in both transformation and operations. Over the last decade, he has focused his work on strategy and organizational design, as well as on two megatrends shaping the automotive industry: software-defined vehicles and CASE (connected, autonomous, shared, and electrified mobility). In these fields, he has advised our global OEM clients as well as Tier-1 suppliers and tech companies.

Prior to joining Berylls, he worked for PwC Strategy& and started his career at BMW as a project manager for product strategy and digital charging services.

He received a Bachelor of Science in Automotive Computer Science at the Technical University of Ingolstadt as well as a Master of Science in Management from the Technical University of Munich.

Heinrich Huhn: Übernahme durch Berylls mit Unterstützung von Creditshelf

München, Januar 2023

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Heinrich Huhn: Übernahme durch Berylls mit Unterstützung von Creditshelf

München, Januar 2023
I

n der Automobilzuliefer-Branche häufen sich bereits seit einiger Zeit die Krisenfälle. 

Aber mit dem richtigen Konzept für die Zukunft kann es wieder nach oben gehen. Die Berylls Group GmbH mit Hauptsitz in München hat über ihren Beteiligungsarm Berylls Equity Partners den insolventen Automobilzulieferer Huhn übernommen – unterstützt durch eine Fremdkapitallösung von Creditshelf.

Von Alexander Görbing

Vor zwei Jahren kam die schlechte Nachricht, die Heinrich Huhn-Gruppe musste Insolvenz anmelden. Im Verlauf des Insolvenzverfahrens konnte mit der Berylls Group GmbH ein strategischer Investor gefunden werden, der über eine umfangreiche Erfahrung in der Mobilitäts- und Zuliefererbranche verfügt. Im Rahmen eines Insolvenzverfahrens müssen alle Beteiligten eng zusammenarbeiten – und das unter hohem Zeitdruck. Wenn hier die Zahnräder nicht reibungslos ineinandergreifen, dann kann die geplante Unternehmensrettung auch noch an Kleinigkeiten scheitern. Wie das Zusammenspiel der einzelnen Parteien idealerweise, funktioniert, zeigte sich dagegen beim Automobilzulieferer Huhn aus Drolshagen in der Nähe von Siegen in Nordrhein-Westfalen.

Informationsfluss und Zeitplan sind sehr wichtig

„Es ist immer sehr wichtig, dass alle Player im Prozess sehr gut informiert sind, dass es einen Zeitplan gibt und dass dieser dann auch eingehalten wird. In einem Insolvenzverfahren bauen viele Entscheidungen aufeinander auf und es gilt Fristen einzuhalten, um zu vermeiden, dass zeitkritische Folgeprobleme entstehen können“, erklärt Stefan Hnida, Leiter Partnermanagement bei der Creditshelf AG. Seit mehr als zwei Jahren setzen sich Teams bei Creditshelf auch mit Finanzierungen im Bereich von Distressed M&A auseinander. Bislang gab es schon ein gutes Dutzend Fälle, die mit Fremdkapitallösungen ermöglicht wurden. „Ermöglichen ist genau das richtige Stichwort, denn wir verstehen uns bei diesen Transaktionen als eine Art ´Deal-Enabler´ für einen strukturierten Verkauf“, fährt Hnida fort. Angesichts der Vielzahl an Herausforderungen weltweit, rechnet er für die kommenden Monate mit mehr Geschäft in diesem Bereich. Das liege nicht nur an den Nachwirkungen der Corona-Pandemie und der aktuellen Kosten- und Lieferkettenkrise, sondern auch an der zunehmenden Zurückhaltung von klassischen Banken. „Wir agieren sicher etwas risikofreudiger als traditionelle Geldgeber – aber wir lassen uns das auch entsprechend bezahlen“, so Hnida weiter.

Autor
Andreas Rauh

Executive Partner

Im Kern grundsolide Unternehmen

Im Fall der Heinrich Huhn-Gruppe ging das Team von Creditshelf ähnlich vor wie bei vergleichbaren Finanzierungsentscheidungen im Bereich Automotive. Ein Kriterium bei der Entscheidung ist unter anderem der Umfang der Wertschöpfungskette. Weiterhin werden auch die Marktchancen im Bereich der Elektromobilität überprüft, während die Lieferung von Komponenten für den konventionellen Antriebsstrang eher negativ bewertet wird. „Die Unternehmen, die wir uns ansehen, sind oftmals im Kern grundsolide und haben ein tragfähiges Geschäftsmodell. Trotzdem können sie durch unerwartete Entwicklungen in eine Liquiditätskrise geraten“, so Hnida. Insgesamt sei die gesamte Branche sehr finanzierungsintensiv, durch hohe Aufwendungen im Bereich Investitionen, Lagerhaltung sowie Forschung und Entwicklung. Bei der Frage einer Finanzierungsbeteiligung sei es aber ebenso wichtig zu erfahren, welche Pläne der neue Investor mit dem Unternehmen hat und welche Wachstumsstory es geben soll.

Schnelle und effektive Lösung

Die Heinrich Huhn-Gruppe beschäftigt rund 500 Mitarbeiter an ihren Standorten in Drolshagen sowie bei der Tochtergesellschaft in Vráble (Slowakei). Das Unternehmen, das auf eine über 100jährige Geschichte zurückblicke kann, beliefert weltweit Abnehmer aus der Automobilbranche mit Metallumformteilen für Bremskraftverstärker, Lenksäulen, Getriebe, Lager sowie mit weiteren Baugruppen im Automobilbereich. 1912 gegründet, war die Heinrich Huhn Deutschland GmbH ein Familienunternehmen, das bis in die vierte Generation in der Hand der Gründerfamilie blieb. Die Herausforderungen für den Automobilzulieferer, wie die die Dieselkrise und die weltweite Corona-Pandemie, waren dann die Auslöser für eine existenzbedrohende finanzielle Schieflage. „Als wir auf die Huhn-Gruppe aufmerksam wurden, waren wir schnell der Ansicht, dass wir für die herausfordernde Situation des Unternehmens eine schnelle und effektive Lösung finden können. Das war für uns dann der Auslöser, um uns intensiver mit einer möglichen Übernahme zu beschäftigen“, erklärt Andreas Rauh, Geschäftsführer bei Berylls Equity Partners GmbH. Der sofort eingeleitete Transformationsprozess wurde dann allerdings im vergangenen Jahr durch die Halbleiterkrise empfindlich gestört. „Es hat sich im Nachhinein als sehr gut erwiesen, dass wir bei unserem Übernahmekonzept ein paar Sicherheitspolster vorgesehen haben“, fährt Rauh fort. Trotz aller Widrigkeiten befinde man sich auf einem guten Weg, denn – so fügt er an: „sicherheitsrelevante Teile in den Bereichen Lenkung und Fahrwerk im Auto werden immer gebraucht, selbstverständlich auch beim E-Auto“.

Gute Vernetzung in der Automotive-Branche

Die Berylls Group GmbH hat neben dem Hauptgeschäft der Top-Level-Management-Beratung in 2020 ihren Beteiligungsarm Berylls Equity Partners gegründet, um mit eigenem Kapital in kriselnde Unternehmen der Mobilitätsindustrie zu investieren. „Wir haben auf der Beraterseite so viele erfolgreiche Unternehmenstransaktionen begleitet, dass wir uns das auch selbst zugetraut haben“, sagt Rauh. Inzwischen gab es in jedem Jahr eine Übernahme und das Berylls-Team hält weiter die Augen offen. Durch die gute Vernetzung in der Automotive-Branche bekomme man frühzeitig Hinweise so wie schnelle Einschätzungen über die Krisenursachen und Marktchancen möglicher Übernahmekandidaten. „Wir wissen relativ schnell, ob es sich bei einem Unternehmen lohnt, tiefer in die Zahlen einzusteigen. Entscheidend ist für uns an erster Stelle immer unsere Einschätzung der Nachhaltigkeit des Geschäftsmodells. Nur wenn wir bei Berylls Equity Partners von ihr überzeugt sind, prüfen wir detaillierter, ob sich ein Investment lohnen kann“, erklärt Rauh weiter. Im Mittelpunkt steht immer, die Firmen im Berylls Portfolio langfristig erfolgreich zu entwickeln.

Erschließung neuer Kundengruppen

Bei der Heinrich Huhn-Gruppe läuft derzeit die Aufbau-Arbeit nach der überstandenen Insolvenz weiter. „Aktuell haben wir mit den Unsicherheiten durch die Entwicklung bei den Energiekosten zu kämpfen“, erklärt Jens Lange, seit 01. Juli 2022 Geschäftsführer der Heinrich Huhn Gruppe. Die hohen Tarifabschlüsse in der Metallbranche seien auch nicht hilfreich. Beide Faktoren – zusammen mit einem unverändert unsicheren Abrufverhalten der Hersteller – könnten nach seiner Ansicht besonders im Jahr 2023 zu weiteren Krisen in der Automotive-Branche führen. Bei der Heinrich-Huhn-Gruppe setzt man langfristig darauf, neue Geschäftsfelder zu erschließen. „Wir sehen Energiespeichersysteme, die in Zukunft verstärkt im Stromnetz eingesetzt werden, als eine Technologie mit viel Potenzial für die Zukunft. Da wollen wir ganz vorne mit dabei sein“, so Lange. Aktuell sei das Unternehmen noch „100 Prozent Automotive“ – aber man wolle sich beim Know-how breiter aufstellen. Geplant ist außerdem die Erschließung neuer Kundengruppen. Parallel sollen die Aktivitäten am zweiten Standort des Unternehmens in der Slowakei als auch außerhalb Europas auf- bzw. ausgebaut werden. Denn auch bei der Huhn Gruppe kann man sich einem generellen Trend in der Industrie nicht verschließen. Die aktuellen Bedingungen insbesondere bei den Energiekosten führen branchenweit zu einem Verlagerungsdruck.

Firmeninfo: Heinrich Huhn Gruppe

Branche: Automobilzulieferer
Gründung: 1912
Mitarbeitende: 500
Umsatz: ca. 100 Mio. EUR

https://www.heinrich-huhn.de

Andreas Rauh

Andreas ist seit Januar 2020 als Mitgründer und Geschäftsführer bei Berylls Equity Partners tätig. Berylls Equity Partners investiert, als Beteiligungsgesellschaft der Berylls Gruppe, in Unternehmen der Mobilitätsindustrie, die sich in Sondersituationen befinden.

Andreas ist Experte in den Bereichen Private Equity, Mergers & Acquisitions und Unternehmensführung.

Nach zehn Jahren im Bereich Transaktionsberatung mit Schwerpunkt im Mittelstand wechselte Andreas im Jahr 2014 in den Beteiligungsbereich. Dort hat er seitdem in leitender Funktion eine zweistellige Anzahl an Firmenübernahmen und -verkäufen begleitet.

Andreas ist ausgebildeter Diplomkaufmann mit einem Abschluss von der Universität Trier und hält einen Master of Science in Business Abschluss der Handelshøyskolen BI.

Digital capability building: Solving the key transformation bottleneck

Munich, December 2022

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Digital capability building: Solving the key transformation bottleneck

Munich, December 2022
U

pskilling and reskilling staff is critical for automotive companies as the industry’s transformation accelerates. We identify the obstacles that undermine capability-building programs and how to overcome them.

The irresistible rise of connected, autonomous, shared, and electric (CASE) vehicles, combined with advancing digitization, is re-shaping the automotive industry – but in most auto companies, the knowledge and skills of the workforce are not yet keeping pace with the transformation. Consider these striking numbers drawn from our global automotive industry experience and engagement with clients: 

Author
Dr. Frank Heines

Associate Partner

Transformation in the Automobile industry is in full swing with capability building becoming a key bottleneck for success.

Source: Berylls, Malik

  • More than 50% of CEOs see the lack of key knowledge and skills as a threat to their future business
  • More than 70% of CEOs are concerned about capability gaps in their organization
  • However, companies that continuously invest in upskilling and reskilling retain more than 90% of their employees

Disruption on the scale currently happening in the automotive industry dramatically reduces the half-life of existing knowledge and the value of established skills. Many companies also have ageing workforces, and the shortage of employees with the right skills will only add to this problem. In addition, new market entrants have brought fresh approaches to the industry, that in many cases have the potential to replace existing practices.

New expertise is therefore required, which sometimes nobody in a company currently possesses. And what is true for traditional skills is also true for new ones. They can become rapidly outmoded as the sheer pace of change across the industry turns the capability wheel faster and faster.

REINFORCING THE CAPABILITY BOTTLENECK

Companies cannot stand back and hope these challenges will resolve themselves over time. Instead, the solution is proactive capability building, which addresses how to develop new and existing knowledge and skills within the organization. A lack of action on this front amounts to what we call a capability-building “bottleneck”. 

Most managers we consult agree with this perspective, yet very few have so far succeeded in overcoming a challenge of such vital strategic importance. We have identified the following key issues from our engagement with clients that cause or reinforce a capability-building bottleneck:

  1. Inadequate capability pipelines: Transformation managers often attach too little importance to capability building. As a result, a “systemic pull” on the pipeline is missing across the company, from business operations to HR strategies.
  2. Lack of cutting-edge knowledge: OEMs and suppliers cannot upskill and reskill successfully through purely internal efforts because the new type of knowledge required is rare. As a result, it is dispersed too thinly across the company, or sometimes does not exist at all except via a small number of external experts.
  3. Insufficient time spent on learning: Managing transformation today consistently prevents learning for tomorrow, with the time spent on knowledge and skills training at all levels close to zero at some companies.
  4. Small-scale learning approaches: Imagine 10,000 people being trained in classroom training sessions over a short period of time. This kind of approach will not work in an industry with large-scale learning demands, and which is under increasing time and cost pressure, reinforced by the impact of Covid-19.
  5. Unsuitable learning environments: Digital learning environments currently often fail to meet the high requirements of both the industry and users, in areas such as security, compliance, robustness, usability and attractiveness, where technology is global but still must be customized to meet individual needs.

Several examples illustrate the scale of the capability gap facing the industry. Among suppliers, Bosch plans over the next five years to upskill and reskill up to 80,000 employees.  Meanwhile, ZF Friedrichshafen’s Electrified Powertrain Technology division has successfully launched the largest capability-building initiative in the company’s history as part of its e-mobility transformation.

ZF Friedrichshafen AG – Capability building amid transformation

More than 12,700 managers and employees at ZF Friedrichshafen AG worldwide are learning, networking, and developing themselves, and their teams to master the transformation from combustion engine to e-mobility.

Source: Berylls

Over at Continental, the company wants to enable its transformation by offering training in Industry 4.0, new drive concepts and digitization at its Continental Institute of Technology and Transformation (CITT). 

On the OEM side, software development is one of VW’s focus areas, with around 11,500 employees involved at its Wolfsburg plant. BMW has launched its largest-ever training initiative to deepen and expand the company’s expertise. Not to be outdone, Mercedes-Benz plans to invest more than €1.3bn in Germany alone in employee qualification and development by 2030.

It is a similar story beyond Germany. Stellantis recently announced an initiative to build up the next generation of automotive engineers. Ford has begun to raise overall business capability worldwide across key future and existing disciplines, and General Motors has declared that building a future-ready workforce is a key business priority to make its transformation a reality.

CAPABILITY BUILDING – BUT DIFFERENT

These types of capability-building initiatives by companies regularly exceed previous transformational upskilling and reskilling programs in their scope and scale. It is not just the large numbers of participants and the global ambition that increases complexity and makes these initiatives extraordinary. It is also the fact that they stretch across the whole organization from management to shopfloor.

Any capability-building initiative of this ambition is bound to fail if business divisions do not take the lead in ensuring success. Without their leadership, the initiative and ultimately the transformation will lack guidance, purpose, and role models. In addition, day-to-day business and project management decisions will not be aligned with the initiative’s goals.  

Given the number of disruptive trends impacting the automotive industry, capability building is essentially about safeguarding functional strategies in areas such as management and value creation, thereby securing underlying core services in the long term. Proactive capability building addresses these issues before it becomes clear that existing capabilities cannot meet changing market conditions and customer demands.

Companies need to create a holistic, modular competency model that is regularly updated and incorporates both the strategic perspective of the business and the needs of employees. They should use hypothetical employee profiles that reveal behavioral patterns to meet the requirements of different target groups. The model should combine awareness, upskilling, and reskilling offers to fix basic problems or to bring employees up to the next level.

When it comes to scalability, flexibility, online and offline availability, effectiveness and efficiency, the advantages of digital learning in transformation and change situations outweigh the disadvantages of higher initial costs and longer preparation times before programs can be launched. Live online formats can be a significant part of blended learning and make highly personalized learning journeys possible. The service should also be supported by learning analytics and dashboards to advance overall progress toward the achievement of educational goals.

BRINGING CAPABILITY BUILDING TO LIFE

Transformation of this size can feel like bringing an elephant to a dance. So lastly, here are the key factors that can help secure the ultimate success of a capability-building initiative:

1. Only work with the best of the best

As we have noted, the types of knowledge and skills now required are new to most employees and the organization in general, apart from a few experts. Second-best capabilities will not help a business seize future opportunities and nor will they motivate employees or attract outside talent. It is far better to bring internal and external experts together to create a world-class content, teaching and learning experience.

2. Avoid the priority trap

Overwhelming workloads are a serious issue during business transformation projects. However, there is also the danger of falling into a trap where managers feel forced to decide whether capability building or current business targets are the top priority, and to ask who will benefit if employees are released for upskilling or reskilling programs. Both questions are wrong because over time, solving capability-building bottlenecks benefits the whole company.

3. Focus strongly on activation and engagement

From the outset, it is a mistake to underestimate the importance of ensuring the highest possible engagement rates, an active learning culture and the integration of capabilities and mindsets into daily workplace routines. This effort should start weeks before the initiative’s formal launch with sneak previews, teaser videos, testimonials, games, email communication, and large-scale kick-off events. 

4. Personalize everything

Companies should create learning journeys based on individual readiness checks followed by personal learning recommendations to engage participants and tailor learning to meet their needs. General personal development processes and capability building should be combined in a way that immediately supports participants in their daily business activities.

5. Create a seamless "killer application"

The whole program must be scalable, personalized, available online and offline, continuously extended over-the-air, and have maximum user acceptance, to enable the best possible individual and group learning experience. Enabling participants to use their own devices makes the task far easier to address.

CONCLUSION: TAKING A SYSTEMATIC APPROACH TO CAPABILITY BUILDING

Capability building is a matter of long-term viability for automotive companies. Many OEMs and suppliers in Germany, the rest of Europe and globally have started to address this fundamental challenge, demonstrating an increasing awareness of the urgent need to upskill or reskill their workforces to fill new job profiles. Yet the results of these initiatives are still extremely variable.

As we have noted, too many companies are burdened by inadequate capability pipelines, gaps in their knowledge, insufficient time allocated for upskilling and reskilling, and small-scale learning approaches. All these shortcomings lead to a capability-building bottleneck.

By following our recommendations, companies can largely avoid having to take a trial-and-error approach. Based on our engagement with clients, we believe that the chances of success are dramatically improved by working through the systematic approach we have set out in this paper.

Please contact us to find out more. We look forward to hearing from you.

Dr. Frank Heines
Dr. Frank Heines (1967) joined Berylls Strategy Advisors as Principal in September 2016, and is based at Berylls’ Swiss office. He started his career at the postal automation division of Siemens AG before changing to a medium-sized electrical and electronics company where, in his position as responsible for the technical department, he soon became member of the board. In 2003, he began his consulting career at the Malik Management Zentrum St. Gallen, becoming Partner and member of the group management board in 2007. The focus of his consulting work lies in strategy development, organizational design, productivity increase as well as in integrated organizational development and transformational management.
Economics at the University of Constance, Germany; business administration at the University of Zurich; Ph.D. at the University of St. Gallen, Switzerland.

Zero-Emission Zones

Munich, December 2022

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Zero-Emission Zones

Munich, December 2022
B

y 2030 170 Mio. people could live within proximity of a zero-emission zone (ZEZ) – affecting 80 Mio. Passenger cars on the road.

At least 36 cities pledged to establish a significant area of their city as a zero-emission zone by 2030. This will have a massive impact on new cars sold in and around these cities as well as the replacement of their current vehicle fleet.

Authors
Dr. Alexander Timmer

Partner

Lars Behr

Consultant

Map of cities planning to introduce a zero-emission zone by 2030

Decarbonization of the vehicle fleet in line with the Paris Agreement is essential to fight climate change. To spur the decarbonization of the vehicle fleet, governments all over the world take measures for the conversion of fleets from internal combustion engines (ICE) vehicles to zero-emission vehicles at the tailpipe.

To phase out ICE vehicles many countries plan to ban the registration and sale of new ICE vehicles. The member states of the EU agreed to enforce this ban by 2035. Another measure taken by cities and local governments is the introduction of zero emission zones (ZEZ). This helps to spur the decarbonization of the vehicle fleet, improves local air quality and limits congestion. While there is no strict definition of ZEZs, generally only buses, trucks, and cars with zero tailpipe emissions as well as pedestrians and cyclists are allowed access. The restrictions for freight are not consistent between the different governments, however it is likely that the majority of ZEZs will also apply to freight, perhaps even more so. For example: at least 29 cities in the Netherlands announces to implement ZEZs for freight by 2025!

In addition to national or isolated initiatives to establish ZEZs, 36 cities around the world that are part of the C40 alliance have joined forces. The members of the C40 alliance have set themselves the goal of combating the climate crisis. 36 of these members have committed to creating ZEZs to reduce emissions in city centers. Among them are cities like London, Berlin, Mexico City and Tokyo (see map). In their “Green and Healthy Streets Declaration”, they pledge to establish a significant area of their city as a zero-emission zone by 2030. This means that by 2030 170 million people could live within proximity (within 25km) of ZEZ and thereby affect their future purchasing decisions. Currently, these 170 million people represent a vehicle fleet of about 80 million passenger cars; ZEZs will require accelerated replacement of this fleet. For comparison, IHS currently predicts that around 230 million electric vehicles will be produced between 2022 and 2030.

Besides commitment from European cities, it is remarkable that many cities in developing countries committed to ZEZ. Their ambitious targets signify the high relevance of the climate crisis and pollution of inner cities for these regions of the world. It is likely that some of these cities will delay or soften the implementation of a ZEZ, if more pressing political issues arise.

Furthermore, looking at the map, there is one apparent gap. China, responsible for around one third of worldwide vehicle sales, does not have any cities committing to ZEZs. However, multiple cities like Shenzhen and Luoyang in China, have or a planning to introduce ZEZs for freight vehicles. A change in policy in Chinese metropolitan areas could have a significant impact on the impact of ZEZs on global auto demand. If the current Chinese C40 cities were also committed to creating ZEZs, that would be over 90 million people.

However, the steering effect of cities committing to implementing ZEZs is significant even without Chinese involvement.  However, only a few cities so far have made the commitment official, have set a start date, indicated the exact vehicle types affected, and have binding requirements for access based on things like emission performance standards. Examples that fulfill these four conditions currently exist primarily in Europe, which is a role model for ZEZs. It is likely that other nations will follow the European example. What is certain is that the final implementation and impact of ZEZs on car owners will depend on the adaptation of national and local laws.

Dr. Alexander Timmer

Dr. Alexander Timmer (1981) joined Berylls by AlixPartners (formerly Berylls Strategy Advisors), an international strategy consultancy specializing in the automotive industry, as a partner in May 2021. He is an expert in market entry and growth strategies, M&A and can look back on many years of experience in the operations environment. Dr. Alexander Timmer has been advising automotive manufacturers and suppliers in a global context since 2012. He has in-depth expert knowledge in the areas of portfolio planning, development and production. His other areas of expertise include digitalization and the complex of topics surrounding electromobility.
Prior to joining Berylls Strategy Advisors, he worked for Booz & Company and PwC Strategy&, among others, as a member of the management team in North America, Asia and Europe.
After studying mechanical engineering at RWTH Aachen University and Chalmers University in Gothenburg, he earned his doctorate in manufacturing technologies at the Machine Tool Laboratory of RWTH Aachen University.

Six transformation secrets for auto industry leaders

Munich, December 2022

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Six transformation secrets for auto industry leaders

Munich, December 2022
L

eaders must not be afraid of the transformation and the far-reaching measures that will be required in order to succeed

The car industry is going through a period of enormous change. Increasing demands from customers and regulators for more sustainable cars and a series of global crises have combined to create huge complexities for companies. These require radical re-thinking of decades-old business models and consistent, decisive action by leaders.

We believe carmakers need to announce a “general state of transformation”. Transformation involves questioning the familiar at the same time as learning new competencies and skills. It means processing and managing multiple new states of being at once. Automakers must break away from their traditional organizational structures and ways of working, supported by temporary structures focused on ensuring the transformation succeeds.

Managing this process exponentially increases the demands placed on management teams. It is the responsibility of leaders to steer the company quickly from its old organizational and operational structure to the new, transformed state (see Exhibit 1).

Authors
Peter Eltze

Partner

Laura Kronen

Partner

Theresa Stütz

Project Manager

Exhibit 1

Source: Malik, Berylls

Managers need to identify the future state they are aiming for and not be afraid of the transformation and far-reaching measures that will be required in order to get there.  The future success of the company should be based on the understanding that change fixes the past, transformation creates the future.

In our experience working with some of the world’s biggest automotive OEMs, six secrets help management teams to lead their organization successfully through the state of transformation:

Secret 1

Take on board the transformation’s purpose and pursue it consistently

Secret 2

Show humility and respect toward the company’s history and values

Secret 3

Convergence of strategy and organizational development are essential

Secret 4

Set and follow your transformation plan consistently and purposefully

Secret 5

Create the transformation team from a balanced mix of experienced and younger managers

Secret 6

Make sure that every staff member recognizes their contribution to the transformation

Secret 1

Take on board the transformation’s purpose and pursue it consistently

Transformational power should always come from an organization’s top management. They have to be prepared to consistently make transformation their top priority – and to make the required changes in their own ways of working too. Leaders must exude a genuine enthusiasm for transformation. The whole system can only be successfully implemented when a strong will and desire for transformational change is displayed at top management level – and when the management team acts as if the path to be followed has already become reality.

Successful transformation is often initiated by “top down” messages that put the whole system under pressure. These messages act as amplifiers that propel the company into action: it can no longer break away from the path it must follow.

The transformation’s purpose should be defined and shaped by a small group, otherwise there is a danger that it could remain under discussion for too long. However, leaders should also create a big enough coalition of supporters in advance of the transformation work starting, to help them convey the purpose in detail. Individuals whose support for the purpose seems to be wavering should be closely observed and reassigned if there is any doubt.

Secret 2

Show humility and respect toward the company’s history and values

Successful transformations actively engage with the past and uncover how the company’s ability to change has shaped it to date. The lead questions to be kept in mind are: where have we come from? Why is it like that? Which patterns can be broken and which ones not? Leaders should keep in mind that there are almost always good reasons why company structures are as they are and why people behave like they do.

By recognizing current structures and cultural patterns, and treating them with respect, leaders can evaluate where there is a need for action and where radical changes cannot be initiated overnight.

Secret 3

Convergence of strategy and organizational development are essential

Integrated strategy and organizational development involves combining the conceptual perspective of strategic thinking and acting with the organizational perspective and continuously harmonizing them. This is where we talk about ensuring convergence: the elements of strategy, structure and culture have to be continually examined for consistency and coherence, and the effects of change have to be monitored so that the whole system is optimized rather than only individual elements of it.

When it comes to transformation, the translation of strategy into organizational development such as organizational structure, monitoring systems, IT infrastructure and Human Resources should be examined and adapted just as leadership and culture should. This should be carried out very quickly after the finalization of the strategic target picture, so that a transformation concept for changing the relevant elements can be directly developed and implemented.

All too often, organizations are adapted after too much time has elapsed, and momentum for supporting the transformation cannot be used. Even if the idea of convergence is not new, in practice it is very challenging to implement because it requires a lot of cooperation and alignment between the relevant functions in the organization. There are usually no identifiable organizational tick boxes for elements such as culture and leadership. Setting organizational requirements such as re-interpreting the role of organizational development and investing strategic and organizational functions with creative and joint responsibility has proven to be helpful. This central function oversees convergence during the transformation and works closely with individual functions.

Secret 4

Set and follow your transformation plan consistently and purposefully

The planning component of a transformation is designed to deliver consistent implementation. From the outset, it is essential to convey the transformation plan in a clear and structured way and to set up a firm performance framework which is closely monitored by strict milestone tracking and impact assessment.

Of course, even with the best planning in the world, there is no protection against unfavourable and unforeseen outside conditions, as the events of the past three years have made clear. Leaders must therefore remain extremely alert to changes in the environment. Jim Collins even speaks of a “planning paranoia”, which can be converted into productive action.

The secret is to stick to planned objectives, not underperforming but at the same time not striving for even further-reaching results that go beyond the scope of the current transformation. This is because even if it seems tempting to overdo the speed, scope, and other elements, organizations cannot usually keep this up over the long run and the positive momentum behind the transformation is lost. For the same reason, it is important during the planning phase to scrutinize transformation plans closely and examine their feasibility for the organization.

Secret 5

Create the transformation team from a balanced mix of experienced and younger managers

The core transformation team plays a key role in the success of the overall initiative, and it is essential for top management to choose the members very carefully. In our experience, the ideal team is a mix of experienced managers and younger managers who are keen for change. Experienced managers are usually adept at assessing feasibility, practicability and potential risks. At the same time, there is also a need for adventurous and courageous input from those who see the situation with fresh eyes.

Whereas experienced people in the final stages of their career have little to lose and are in a good position to hand over the new course of action to the next generation, the most dangerous group for the success of the transformation is those who have achieved a degree of seniority and stand to lose it through the changes.

The importance of communicating in an empathic way therefore cannot be underestimated. Conceptual skills are in themselves not sufficient for a successful implementation of a transformation; rather managers are needed who lead staff with empathy and who radiate stability and security in uncertainty.

Secret 6

Make sure that every staff member recognizes their contribution to the transformation

Management needs to not only fully understand and steer the transformation with all its interdependencies; they also have to ensure that all members of staff can make a contribution. Leaders should ensure from the start that people can understand what the transformation purpose means for their role, discover how they can contribute to the purpose, and take ownership of it. Staff should understand why the transformation is the right thing to do, what contribution they are making, and what every individual needs to do to help the transformation take place successfully. If these elements are in place, the chances of a successful transformation will be considerably greater.

Conclusion

The automotive industry is confronting changes that exponentially increase the demands placed on management teams. This unique challenge requires leaders who have the vision and the stamina to transform their organisations’ core, organisation and value chain all at the same time.

They must lead top-down and build a coalition of the willing around a shared purpose at the same time as acknowledging and honouring their organisations’ past successes. They must ensure that strategy and organisational development are in full lockstep by ensuring that transformation-critical functions remain closely aligned without straying from the transformation roadmap they have committed themselves and their organisations to.

 

The most successful transformation managers rely on mixed teams that represent the best of the old and the new while ensuring that employees understand how their roles are impacted by the transformation and how they themselves can contribute to its success.

Too many transformation initiatives flounder because leaders fail to fully integrate the demands of the transformation in their every action. In so doing they risk arresting their organisations in permanent firefighting and thereby compromise their organisations’ ability to adapt and its members’ trust in the transformation effort itself.

Examples:

Example Mercedes-Benz: A consistent premium strategy
  • Mercedes-Benz has set itself the goal of pursuing a consistent premium strategy and defining sustainable and modern luxury of tomorrow.
  • The strategic direction was clearly communicated and the purpose was specified top down: profitable growth instead of volume focus, no mainstream expansion but dedicated focus on the growing and attractive luxury segment, at the same time reduction of complexity in other segments. With this, Mercedes-Benz sends clear message to develop to a premium/luxury manufacturer and to take away the focus from the volume segment.
  • This is accompanied by tremendous changes for the organization and the people who work on the affected products. To exit a complete segment means to free oneself along the entire value chain - from development to production to marketing.
  • The clear and confident announcement of this major change led to the organization being moved to action, with a clear focus on implementing the vision rather than questioning taking up space and time. The organization is thus left with the strength and positive momentum to concentrate on intensive transformation support, which must be carefully considered in order to be successful.
Example Porsche: Porsche’s early electrification strategy
  • In terms of new vehicles, Porsche has set itself the goal of already achieving 50% of sales with fully electric vehicles by 2025 and increasing this rate to 80% by 2030. To this end, the entire portfolio will be fully electrified, with the exception of the iconic 911.
  • This means that - despite a target group with a historical high affinity to combustion engines - the transformation from an absolute position of strength with high market success in the combustion performance segment was initiated early on and pursued consistently.
  • The example of the Taycan clearly illustrates this: the strategic product decision was made almost 10 years ago. The Taycan is the full concentration on its own platform & architecture, including its own 800 volt system. Making this decision at that time shows how clearly Porsche strategically initiated the transformation at an early stage and believed in it. Moreover, Porsche has made investments in an own production of high-performance battery cells, consistently expanded services such as premium charging parks or wall boxes.
Example ZF: Transformation ZF E-Mobility: Electrified Powertrain Technology
  • ZF Friedrichshafen’s Electrified Powertrain Technology division, in which ZF bundles all its technologies related to electric vehicle drives since January 1st, 2021, has successfully launched the largest “Capability Building” initiative in the company's history. More than 12,700 managers and employees worldwide are learning, networking, and developing themselves, and their teams to master the transformation from combustion engine to e-mobility.
  • Within months, participants build-up comprehensive knowledge and skills in all aspects of e-mobility. This gives them the opportunity to upskill or even reskill professionally, to onboard successfully to the new division or to recommend themselves for new job profiles.
  • The ZF E-Cademy is intended to establish a new, strong learning culture that focuses on collective and individual learning experiences via a modular, platform-based blended learning offer. It impacts all areas of business, from strategy, innovation, employee engagement, employee retention, and many other elements of the organization. This is a major step towards creating a strongly positive transformation momentum and ensuring that employees recognize their personal contribution to transformation.
Theresa Stütz

Theresa Stütz (1991) joined Berylls Strategy Advisors in December 2017. Meanwhile she is associate partner and automotive downstream expert.

She has been advising automotive manufacturers in a global context both in the luxury and premium segment. She has in-depth expert knowledge in the areas of sales and marketing, particularly in the context of customer experience strategies. Other areas of expertise include strategy development processes, Go-to-market strategies and transformation management.

Theresa received both Bachelor and Master of Science in Management and Technology (Mechanical Engineering) at Technical University of Munich.

Peter Eltze

Peter Eltze (1964) joined Berylls by AlixPartners (formerly Berylls Strategy Advisors) as a Partner in November 2015. He began his career in the medical technology division of an integrated technology corporation, and became a project manager at Malik Management Zentrum St. Gallen in 1996 before being appointed Partner in 2001. From 2003, in his role as member of the executive board, he was in charge of Management Education & Development. Since the end of the 1990s, Peter Eltze has advised companies in the automotive and mechanical engineering industries. At Berylls, his consulting activities focus on integrated organizational development (strategy, structure, culture), transformation management, and executive development.
Education in wholesale and international trade; administrative sciences at the University of Constance, Germany.

Laura Kronen

Laura Kronen (1980) is a partner at Berylls by AlixPartners (formerly Berylls Strategy Advisors) with a focus on transformation. She is passionate about moving people and organizations forward. With over 18 years of industry and consulting experience, her focus is on transformative challenges in the operations context – from executives to individual employees, at manufacturers and suppliers. She helps her clients align strategy, structure, and culture in their respective market environments to build resilience.

Prior to joining Berylls, Laura Kronen worked at PwC Strategy&, Volkswagen AG and Audi. She holds a diploma degree in industrial engineering from the Karlsruhe Institute of Technology (KIT).