Embracing Diversity Can Turn Automakers Into Mobility Leaders

The distinctive profile of the automotive executive may well be a factor in the industry’s success to date. Yet there are elements in this profile that may hinder – rather than enable – fundamental transformation. Today’s “car guys” need to evolve.

Juncal Garrido

November 4, 2015

4 Min Read
Embracing Diversity Can Turn Automakers Into Mobility Leaders

We are in the age of digital disruption, where seamless connectivity and big data processing are dramatically transforming our lives. Driverless cars, electric motors, connected vehicles and modifications in the business models all require leaders capable of navigating even more dramatic changes ahead.

In this new world, a different set of experiences and competencies are necessary to survive, and the war to attract and retain this diverse talent is a reality. Positions that 10 years ago did not even exist – user-experience director, search-engine marketing/search-engine optimization director, native-product director, chief data scientist, to name a few – now are sought after by many sectors where fast digitalization is key to keeping a competitive advantage.

The automotive industry currently competes against companies that appeal to younger generations including recent college graduates. In the past 10 years, no automaker has been in the Forbes Top 10 list of perceived best employers.

There also is a strong correlation between how diverse and inclusive the culture of a company is and how well its brand as an employer is perceived. Simply put, traditional companies in general must ensure they are able to hire a master in one of these fields and empower him or her to add value to the company.

This means that this diverse executive’s judgment and ideas will have to be listened to and considered beyond one’s looks, age and out-of-the-box thinking – and this is where the challenge lies.

In 2012, a CEO in one FTSE 50 company mentioned to his newly hired chief digital officer: “We never have had someone attend an executive committee meeting in jeans,” to which the CDO replied, “I am surprised you don’t see it more.” Three years later, this jeans-wearing CDO has completely transformed the company and positioned it as the digital forefront runner in the sector.

But how can the automotive industry better approach this new paradigm?

To clearly understand the impact of this shift on the industry’s leadership talent, Russell Reynolds Associates studied the profile of 185 top executives from leading automotive companies around the world, including a psychometric analysis of the group’s supporting and hindering traits in the face of the anticipated challenges.

We focused on three leading roles in analyzing the current profile and future requirements for the CEO, the chief technology or the research and development officer and the chief marketing officer.

We found a very homogeneous group of executives and surprisingly little change in the typical profile over the past few years despite the pending transformation. Most of these executives are white males over the age of 60 who have been lifelong industry insiders with little or no international exposure. This finely tuned automotive executive profile is the result of multi-decade-long rewards on repeatability, efficiency, precision and expertise.

However, this profile hardly is reflective of today’s end markets: Women often are credited with making the majority of car-buying decisions. And major markets like China and India or many of the emerging ones are dynamic markets that necessitate local insight but which are not represented on the industry’s management teams. The homogeneity and lack of diversity are just as acute at the board level.

We also found the psychometric traits common to this group of executives as a whole clearly are differentiated from the rest of the automotive senior leadership population. While relatively innovative and open to change, for example, these executives tend to lack the highly collaborative and risk-taking predisposition normally required to make disruptive changes.

As a result, we see a legitimate need to boost the diversity of skill sets, competencies and perspectives found within these executive ranks. As the industry shifts, auto executives in general will have to excel in vision and strategy setting and exhibit the courage to take well-calculated risks.

The distinctive profile of the automotive executive may well be a factor in the industry’s success to date. Yet there are elements in this profile that may hinder – rather than enable – fundamental transformation if these attributes are not balanced by complementary skill sets, competencies and perspectives. We believe today’s “car guys” need to evolve into tomorrow’s mobility leaders.

Thus, how can the industry foster diversity while ensuring inclusion of the new profile that is so highly sought after?

Plan for fundamental change: Review your corporate culture and the competencies of senior executives. Develop a plan for talent transformation through a combination of selective retaining, focused development and strategic acquisition of critical talent and skills.

Make the change happen: Foster diversity by supporting efforts to promote diverse candidates who can challenge “the way things have always been done.”

Recognize the power of cultural transformation: Today’s automotive leaders have an established profile that has served the sector well to date. However, the industry’s pending transformation will require unleashing the power of truly diverse experience, skills and thinking to conquer the coming challenges.

Juncal Garrido leads Russell Reynolds Associates’ Diversity and Inclusion Practice in Europe and is a member of the firm’s Automotive and Digital Transformation practices. Juncal co-authored Russell Reynolds recently published “Changed Conditions Ahead: Automotive Executive Study 2015.” She can be reached at [email protected].

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