Culture eats Strategy for Breakfast. The true reason why change fails …

We all know this – of course only from friends and acquaintances, not from own experience: The New Year’s resolutions, which are off course fixed and irrevocable, such as eating healthier or doing more sport, are torpedoed by the inexorably breaking power of habit at the beginning of February and then die a quiet and pitiful death. What remains is persistent frustration and the monthly debits of the gym’s annual contract.

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The resolutions of companies, called strategies in technical jargon, all too often suffer a similar fate. These, too, do not usually fail because they lack sense, consistency or necessity, but – quite the contrary – because they are so reasonable, coherent and necessary from the point of view of those responsible that their comprehensive implementation is seen as granted and any further intervention as an unnecessary effort and thus as superfluous. And just as on the cold Sunday morning in February, when a sudden feeling of mild pain in the back is reason enough not to run in the park as planned, habits strike mercilessly here too, this time in the form of the corporate culture, which has often grown over years and decades.

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“We have now derived everything cleanly, agreed and communicated to everyone. Everyone said they understood what to do and why. Why on earth it is not happening now?”. In the current situation days, this can be life-threatening. A company that, in times of change (such as current in the areas of digitalization, mobility or sustainability) is prevented by consciously or unconsciously retarding forces from adapting quickly enough to the constantly changing framework conditions and rules of the game, inevitably loses its connection and is then suddenly “out of the game”.

The ability to really know the culture of one’s company on the one hand and, on the other hand, to be able to influence it in a targeted manner if necessary, is therefore an essential prerequisite for the sustainable implementation of strategic goals. What sounds simpler than it is, because corporate culture does not mean how enthusiastic the employees of a company are about its brands and products, but the sum of their individual attitudes, desires and feelings as well as the common norms, values and behaviors arising from group dynamic interaction. And this makes it a critical factor for the desired sustainable implementation of change needs: Are these communicated comprehensibly and well-founded down to the lowest level and their implementation maintained, or is this prevented by a middle management level acting as an impermeable clay layer? Are the employees responsible for the implementation really behind the strategies, or is there rather the view that “those up there” have again come up with something new, but as with the last times, this time again it won’t be eaten as hot as it was cooked?

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A positive corporate culture in this sense connects all levels of the hierarchy and creates a fundamental openness to change through trust. An important detail here is that “together” includes all partners involved in value creation, not only employees in the legal sense. Culture does not stop at organizational boundaries. And: Corporate culture cannot be captured by one-time online employee surveys and certainly not changed by executive decisions overnight – not even with the help of specially appointed and in the end even externally recruited cultural specialists. A long-term, bi-directional and honest interaction between management, executives and employees is a prerequisite for successful and lasting change in corporate culture. And not so much – as is often misinterpreted – out of pure philanthropy (although a decent and respectful treatment of employees and executives, which is a side effect, is certainly welcome), but primarily simply for the benefit of the company.

 

Making Connected Cars Work. The Next Dimension of Automotive Development.

Automotive Development.

From product development’s point of view, a passenger cars certainly have always been one of the bigger challenges. In contrast to the majority of other product categories, their customer relevant functions and properties (e.g. agility, passive safety, cabin comfort or exterior and interior design) are not fulfilled by one specific vehicle component (such as engine, body, seats, drivetrain or chassis), but by a complex interplay of mostly all these components. Over time however, the boundaries of the automotive system to be considered during development have gradually expanded.

Level 1: When cars were just cars. The classic art of complete vehicle integration.

Development of a premium passenger has always been carried out as a sequence of development cycles. Starting from the initial vehicle concept, each of these cycles included dimensioning and designing the components, testing and optimizing them using virtual or real prototype parts, and then merge them into a complete vehicle – again virtual or real – in order to test and optimize it. This vehicle integration process includes the proper positioning of all components within the complete vehicle in consideration of available space and required clearance (so-called geometric integration), validating manufacturability (so-called production integration) and last not least ensuring the desired vehicle properties and functions mentioned above (so-called functional integration).

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Both the electric components (such as lights, window lifters or power steering) and the very few electronic devices (such as engine control units, navigation systems or anti blocking systems) were separate systems, sharing power supply but running independently. The conventional cars that came out of this first level vehicle development process were highly integrated and optimized “systems of electromechanical components”.

Level 2: System integration. How to develop computers on wheels.

This approach proved itself very apparently insufficient when after the millennium premium automakers made almost every component software controlled and interlinked all these electronic systems to a “system of systems”, however without including proper validation of the electronic functionality in their development processes. As a result, these systems lacked the appropriate technical maturity, and early customers regularly despaired of the rather unpredictable behavior of their vehicles. Especially the luxury class flagships, filled up to the roof with the latest electronic features, surprised their owners by suddenly and unexpectedly opening windows and sunroofs, switching wipers on and off, or stalling the engine.

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To quickly come out of this rather embarrassing (and costly) situation, automakers hurried to enhance their existing vehicle integration process by a system integration process to comprehensively validate hardware and software together – first on component level, then on domain level, and eventually on complete vehicle level. While control software changes on component level had typically been executed uncontrolled before, they now had to abide by a strict release process that led to thoroughly validated hardware-software sets (so-called integration levels). Ultimately, the desired system reliability of this “computer on wheels” was secured before the car left the manufacturing plant and was handed over to the customer.

Level 3. Connected cars. Things in the internet of things.

Even though no one never called it so, car radio was the first data based feature provided in vehicles. Having a working component installed was not enough, a car radio could only fulfill its duty, when broadcast stations continuously provided their service. And just like carmakers never had a contract with filling stations obliging them to deliver fuel and oil, they just trusted in the radio stations to keep on delivering appropriate data.

Decades later, data transmission in the other direction, namely from the car to a backend system, was used to indicate imminent service requirements. First via diagnosis cable, then via mobile internet connection. But as these teleservices apply to manufacturers or dealers rather than customers, their reliability has been considered rather uncritical, and their development went not as part of but in parallel to the vehicle development.

However, when data based vehicle features (such as audio streaming, traffic flow information or remote control via smart phone) are rendered to customers, they must be developed as a part of it. But in addition to the electronic systems on-board the vehicle, these data based features also require off-board elements, i.e.:

  • Data provider delivering the required data (e.g. traffic flow or weather conditions).
  • One or more backend servers, where this data is collected, stored and if necessary processed.
  • A mobile network to exchange data between cars and backend servers.
  • Additional connected systems that exchange data with backend servers or cars (e.g. smartphone apps or internet portals).

By this expansion of the system boundaries, cars become connected, become “things in the internet of things”. To ensure its functionality, first of all the respective development process must cover these off-board elements. Then, just like for any other component, quality criteria for data and their provision process must be defined:

  • Data availability: Data must be generated, transmitted and aggregated in a reliable and timely manner. Providing e.g. 10 minutes old data in a traffic flow information system makes it useless at that time and certainly leads to major customer dissatisfaction. Responsibility for data availability lies with data providers, but also with mobile network and backend operators.
  • Data quality: Getting stuck in a traffic jam in a road that was indicated free by the traffic flow information system or realizing that the parking structure the connected parking system has guided you to is fully booked are only two examples for what can happen to the customer if data is available but of poor quality. Here, responsibility lies with data providers.
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To safeguard proper function of data based features, the automotive development processes for connected cars must include the appropriate methods, sub-processes and milestones that ensure robust provision of functional data for as long as the respective data based feature is used.

From producer to service provider. The almost unnoticed transformation.

The truly radical change for automakers though stems from the fact that in contrast to conventional vehicle functions, where their job is normally done when the car passes end-of-line inspection at the manufacturing plant, dependable operation of connected cars and their data based functions requires permanent efforts and support over the whole vehicle lifespan. For manufacturers, it is not sufficient anymore to hand over cars and – if required – provide repair and maintenance services, their role now includes continuously operating the vehicle’s features.

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This is especially true for autonomous vehicles. In order to safely steer through traffic under all possible conditions, their control systems (which can be considered the most complex data based automotive feature by far) must continuously exchange a tremendous amount of data with their backend, and someone (i.e. the manufacturer) has to ensure that this functions safely and reliably.

At the end of the day, organization and processes must adapt to that transformation. As interaction with the vehicle increases “after sales”, companies have to clarify responsibilities for the ongoing operations of data based features as well as the management of their quality. The classic silo structure – development, production, sales and aftermarket – does not seem to be the right answer here anymore.

 

First published on LinkedIn on 8. October 2020

Talkin’ Bout a Transformation …

#emobility

Whether eagerly yearned for or grudgingly conceded: By now, you have probably accepted that electric cars are inexorably on the rise. And even though you are sure that at least in some places there will still be cars with combustion engines on the road by 2050, it surely looks like EVs and Plug-in Hybrids will prevail in the cities. However, what you still find far less clear – even though you witness more and more public chargers around – is how EV drivers will be able to cope with the limited range of their vehicles in connection with the perceived scarcity of charging stations. And while at the same time some nerdish engineers reiteratively broadcast that fuel cells and hydrogen will solve this problem for ever, you still cannot get rid of this uneasy mental image of a huge crater stretching over a highway after a car crash with a poorly maintained hydrogen vehicle involved.

#mobilityservices

Then, as you read through your business strategy journals, you are told over and over that car ownership, the century old mobility pattern number one, is in rapid retreat. Urban teenagers, whose fathers were dreaming of fancy sports cars when they were their age, don’t even go for a driver’s license anymore. If train, bus or bicycle is not an option, people would not buy or lease cars but rather share a car or call a ride hailing service like Uber, the affordable and app-steered successor of what has long time been known as a taxi. But what is worrying you even more is that new digital service providers are said to take over the complete mobility business soon, with automakers being downgraded to basic hardware providers and public transport companies begging for contracts.

#autonomous

On top of that, automakers claim they will soon bring autonomous vehicles on the road. Not just something like an extra-advanced driver assistance system, but cars with neither steering wheel nor pedals but lots of extremely expensive sensors and software that must be extensively tested and meet standards initially developed for military aircraft. And while in spite of all confidence in engineering you still wonder how these cars would ever make it safely through unsecured road works or snowstorms and – even more significant – who apart from ride hailing providers would actually want to buy them, you witness the heralded date from which on these robocars should populate our cities’ streets being postponed year by year.

#digitalization

And as if all this wasn’t bad enough, some of the young guys around you, the ones wearing sneakers, a full beard and watching e-sports, tell you that data is the new gold, that big data means even more gold, and that your company should work agile, fail fast, provide something you would call completely unacceptable but they call minimum viable product, scale and ultimately indulge yourself in a so called digital transformation. All that of course independently from whether you are in automotive, mobility services, energy, public transport, insurance, law, or whatever. After thinking it over, you are left with the feeling that this is not all new but still kind of frightening. If only you would understand all these fancy IT buzzwords.

#change

If your work was related to mobility for the last couple of years, all of the above probably sounds familiar. The battle-hardened manager, now somewhat disoriented and undetermined in this overgrown jungle called mobility of the future. How do all these bits and pieces fit together? The good news is: No one has ever been brought from one place to another by software alone. But the fact that vehicles and smartphones send and receive an exponentially increasing amount of data, that they are connected to back-end servers and with each other, and that artificial intelligence can create astonishing and valuable information from this data, will not only improve vehicle and service functionalities but dramatically change the way they are developed, produced or rendered, marketed and sold – and especially how vehicles and their private or corporate customers are served after sales.

The key for survival and success is embracing change. At the end of the day, the question is neither if you should proactively engage in a digital transformation nor when you should do it (the answers are yes and now). The sole question is how – and can usually not be answered sufficiently by the people who brought your company to where it is today …

 

First published on LinkedIn on 5. August 2020

Surrounded by Idiots – or Can the Mobility Change not be Looked at in a More Differentiated Way?

Mobility moves emotions too

A look at the comments on corresponding posts on LinkedIn or elsewhere proves: The change in mobility affects each individual very directly – and is accordingly emotionally documented. Comparable to issues such as nuclear energy or migration applies: anyone who takes a different opinion from myself and that opinion – whether actually or only assumed – threatens my own circumstances, attacks me personally, and I shoot back accordingly quickly and sharply. A factual debate often falls by the wayside.

It is obvious that the right solution for everyone does not exist, indeed cannot exist. In terms of mobility, it not only has everyone’s own individual preferences and priorities, but also everyone has to cope with their own framework of individual and general constraints – be it the personal life situation including the available financial resources, the local availability of certain mobility offers, including the necessary infrastructure or the applicable legal situation.

So anyone who asks the family man, who on the daily commute from his home with garage in a quiet community to his workplace in the nearby business park never had to stand in a traffic jam let alone worrying about a parking space, to think about giving up his car, will hardly find any understanding. Conversely, if you live in the city centre, where the monthly parking space rental in an underground car park is in the range of the leasing rate of a mid-size car, and you come to the office from your apartment in less than 15 minutes by subway, you are probably glad not to have your own car and to be able to use alternatives such as car sharing or ride hailing if necessary.

Change, yes, of course. But where to where? 

It is undisputed that driving your own car has been the standard in mobility for decades, and accordingly all other forms of transport have been referred to as mobility alternatives – despite the fact that some of these alternatives have been available for much longer and are also used by far more people than owned cars, especially in the big cities. The fact is, however, that the traffic situation resulting from this standard in the cities is perceived by the people living there – both by motorists and by other road users – more and more as a massive, multidimensional problem: on the one hand, due to traffic jams and parking shortages, on the other hand, by deterioration of air quality, increasing emissions of greenhouse gases and noise, deterioration of road safety and occupancy of the scarcer public space. The fact that more and more people want to move to the suburbs and want to be mobile there with their own car is constantly exacerbating the situation.

All those affected agree that the traffic situation needs to change. However, opinions differ clearly on how the problems could actually be solved and how a corresponding change should look like: those who want to continue driving hope for more roads and parking facilities, whether by expanding the existing transport infrastructure or by switching to mobility alternatives as possible. If you care about reducing emissions, you want the continuous replacement of internal combustion engines by electric drives. And if you want to have more green spaces and space for alternative mobility in your area, you might want inner cities without private cars.

Extreme positions of individual mobility

In the end, the real mobility situation is always the result of the sum of individual decisions made within a framework of personal possibilities and preferences, market-side offers, available infrastructure and last but not least regulatory/political conditions. The individual not only decides on his or her personal mobility mode, but also regulates the supply of mobility products and services via demand and also influences the promotion or rejection of different solutions by means of regulatory requirements through the election of a party or a delegate. The change in mobility is thus supported, at least in democratic conditions, directly and indirectly by the will of the majority – and is therefore often difficult for the individual to understand and endure.

In this situation, on the one hand, many people today have the impression that politics and society are interfering in more and more things that used to be a purely private matter. Of course, everyone is allowed to smoke – but not everywhere for a long time. Of course, everyone is allowed to wear whatever they want – but they are also confronted with the conditions under which their garments were made at the other end of the world. In principle, everyone is allowed to eat what they want – but they have to accept questions about fair trade, environmental protection and animal welfare. The same feeling now arises in terms of mobility: Can I not even drive a car now?

On the other hand, there are people with different personal values and priorities who, for example, attach great importance to ecologically and socially sustainable life and action, cope wonderfully without a car of their own and feel affected by the mobility behaviour of others in their quality of life. From such a point of view, it is often incomprehensible why someone wants to hold on to their own car around everything in the world.

How do we get to sensible and majority-capable solutions here as citizens with mobility needs, as mobility providers or even as politicians, despite all differences of opinion? An indispensable prerequisite for this is the fundamental assumption that people with an opinion other than their own do not generally represent them out of stupidity or malice, and the willingness to deal with conflicting points of view in a factual and differentiated way in a consideration of the overall system. A look at the motives from which extreme positions are represented helps. In this sense, figures 1 and 2 show different reasons, for which the positions “I drive with my own car and want to continue doing so!” and “I don’t own my own car and don’t want one!” are taken – each descendingly ordered by how easy alternative can be found.

In addition to the understanding of the “opposite side”‘s reasoning, this analytical analysis also reveals the shortcomings of one’s own reasoning or supply: those who want to sell cars would do well to understand why some people do not or no longer address this offer, and with which vehicles or services customers could be held or recovered. Those who offer alternatives to owned cars, on the other hand, should look very carefully at what drives people to continue to drive their own cars in spite of everything.

Let us not be under any illusions: in the end, this approach will not lead to a result that everyone is happy with. But it makes the debates on mobility change noticeably more constructive and thus leads it clearly towards an overall optimum.

Coronavirus and Mobility: Every Cloud has a Silver Lining …

Most of the measures taken to solve the problems caused by mobility aim to improve or enhance the available choice of mobility options, e.g. by designing electric cars with lower or no emissions, enabling autonomous driving, creating alternative vehicle concepts, generally improving publictransport or offering innovative mobility services.

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Few measures however focus on the actual root cause of these problems, namely the individual mobility needs. Apart from the tremendously long-term and costly political efforts to transform monocentric into polycentric cities in order to keep people in their neighborhood and thus shorten the average trip distance, a short-term and effective measure is to reduce the overall number of trips by replacing on-site gatherings through means of tele-cooperation, e.g. tele-working, tele-learning or tele-diagnosis. But while the required technology has been available for many years, its application often stalled due to rather irrational hurdles: IT had not installed the required hard- and software, associates were reluctant to stay back home, managers were afraid to lose direct control, professors didn’t want to give up personal interaction with their students, patients were reluctant to measure blood pressure, pulse or body temperature by themselves. And after all, the pressure and need for this transformation has obviously not been considered that urgent.

But now, as the measures taken to staunch propagation of Covid 19 lead to companies having their associates work from home whenever possible, schools and universities closing down, doctor’s appointments being postponed, and face-to-face meetings being generally reduced to a minimum, tele-cooperation undergoes a true boost. As there aren’t any more alternatives, people get enabled, use the technology for the first time – and then realize not only how easy and comfortable it works but also how much time they can save that they formerly spent traveling. And furthermore, it becomes clear that hard- and software for tele-cooperation are part of the so-called critical infrastructure and that its availability and performance should be secured accordingly.

Aside from all the severe and worldwide impact the Coronavirus pandemic will have for a while, the boost of tele-cooperation and its positive side effects for mobility are certainly here to stay.

 

First published on LinkedIn on 15. April 2020

Business Travel in the Post-Coroniticum

Another new experience: Last month, I attended my yearly performance review meeting – the first time over Skype. And while reflecting that not too long-ago people in many companies would have flown in for something like that from wherever they are located in the world, I watch also recruiters doing job interviews online, agencies giving pitches via video conference, buyers negotiating and closing over the air, and even consultants interacting with their clients using web-based collaboration platforms.

After we all have got more or less used to attending team meetings or regular one-on-ones from our makeshift home office by now, this certainly is a next level of tele-working. While for this kind of personal encounters, meeting face-to-face has at least in the overwhelming majority of cases always been considered indispensable, our involuntary real-life experience imposed by the coronavirus situation now proves to us that all this is possible in a reasonable manner without meeting in person.

So, what does this mean for the hopefully near future when coronavirus will have eased its grip on us? Will anyone want to turn back time and spend hours in a car, train or plane only to meet someone in person for one hour? Rather not. But this then obviously leads to pressing strategic questions regarding the future of business travel. As an airline or railway company: Will passenger numbers fully recover, or will they rather follow an L than a U or V? And as a car manufacturer: Will range as the unceasingly uttered main advantage of combustion engines over electric drivetrains still be so decisive for the purchasing decision? I am convinced that a good deal of the changes we are now forced to implement in our routines are here to stay …

 

First published on LinkedIn on 8. April 2020