Speed Gets Built in the Room: Why Collaboration Is Automotive's Competitive Edge

[Transcript]

[00:00:00] Jan Griffiths: This is the Automotive Leaders Podcast. Straight talk from the CEOs and innovators who cut through the noise, create clarity, and drive transformation across this industry. The old command and control playbook is dead. Culture is the operating system. Authentic leadership is the edge. We're rewiring it, starting now. I'm your host, Jan Griffiths, that passionate, rebellious farmer's daughter from Wales and the champion for culture change. Let's dive in.

[00:00:39] This episode is brought to you by Lockton. Rising benefit costs aren't inevitable for you or your employees when you break through the status quo. Independence matters, it means Lockton can bring you creative, tailored solutions that truly serve your business and your people. At Lockton, clients, associates, and communities come first, not margins and not mediocrity. Meet the moment with Lockton.

[00:01:08] Today, I want to talk about collaboration. Not in the way that we've talked about it over the past several decades. No. I want to talk about how we make collaboration a reality and what it does to help the competitiveness of our beloved auto industry. You know the word. We've used it all the time. It's in every corporate deck.

[00:01:34] It's probably on every conference room. In fact, you know what? I am gonna look up, right now, exactly what it means. What does Webster say it means? Let's see. Let's have a look.

[00:01:50] Collaboration is the act of two or more people or organizations working together to create or achieve a shared goal.

[00:02:01] Wow! So simple, isn't it?

[00:02:03] But if it's so simple, then why is it so hard for us to achieve collaboration in the automotive industry? Now, you've heard me say many times that the silo way of working that we have in our industry right now was developed in 1911 by Frederick Taylor. Yeah, yeah, yeah. We know all that.

[00:02:26] And we focus very much on optimizing our individual silos, but what is it gonna take to get us away from that mentality, where we focus on crossing over those silos and focusing on the outcome of the business, of the function, whatever it is?

[00:02:49] You can call it value stream if you want. But when are we gonna get to the point where we stop playing games in silos, and we start focusing on the outcome? What it's gonna take is leadership and a mindset shift. An enormous mindset shift that says that the way that we've been working for the last several decades is not the way that we're gonna work anymore, that we're gonna focus on getting to the outcome, whether it could be focusing on the customer's pain point, and not just leaving some applications engineering group or sales team to work on that.

[00:03:32] Maybe it's a cross-functional team that does that. We often talk about bringing in the supplier early on in the process, and I have to tell you, I was thrilled to see an article by Kurt Nagl in Automotive News, yesterday actually, and he is reporting on the fact that Stellantis is now bringing a handful of suppliers in at a time into its North American headquarters for 10 weeks.

[00:04:02] They'll work directly with Stellantis engineers and manufacturing people, and I'm quoting, "On the parts that define how a vehicle looks and feels like fascias, fenders, lighting, and dashboards. They're starting with the next generation Ram 1500, and it's expected to spread to other vehicles."

[00:04:21] Now, we've been here before. We've said this before, and I have every confidence in Marcelo and the team in Stellantis that they will pull this off. But here's some of the roadblocks that we've had to work through to get through an early supplier involvement program in the past, and that is, trust. Will the supplier trust the OEM?

[00:04:50] And then, when does the supplier selection decision actually get made? So is Stellantis purchasing actually gonna select the supplier before they come in and sit there for 10 weeks and do all this work? Or are they gonna bring in two or three competitors, and then are they gonna make the supplier selection decision?

[00:05:14] I don't know. If anybody knows the answer to that question, I'd love to know, because I think that's gonna be critical. 'Cause if you're the supplier that's selected for the business and you have trust, there's trust on both sides. There's trust that the OEM is gonna follow the sourcing path and actually source the business to you, and there's trust from the OEM to the supplier that you're gonna give it your very best efforts, and you are gonna put in a lot of work and resources to essentially co-design these products to reduce both cost and timing.

[00:05:56] That's how we'll define collaboration between the OEM and the supplier. How exactly will this work? I can't wait to see the outcome. I wanna hear all about it. So if anybody's got any more information on this program, please let me know.

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[00:06:35] Now, you've heard me talk before about an early supplier involvement program that I was on in the '80s, and we're good at doing it on a project-by-project basis, but we're not so good at developing it into, it becoming the operating model, meaning it's just the way that we do business.

[00:06:57] Because a lot of things are gonna have to change, not only how we make the supplier selection decision, but then how do we measure the supplier after the product is launched? If we continue to focus on PPV, purchase price variance, then resilience is gonna go out the window. Total acquisition cost goes out the window.

[00:07:21] So there's a financial aspect to this as well that needs to come into play before we can really define what collaboration is. Trust is a huge part of this, and we know that in the auto industry we've gone through cycles of building trust and destroying trust. And I am also thrilled to tell you that I have a guest coming up on the show, and he is the head of purchasing for one of the largest OEMs on the planet, and I can't wait to get into some of these discussions with him.

[00:08:01] And I'm not gonna tell you who it is. You're gonna have to wait and see, because I hate to put out a name until we actually record the person. But keep an eye out for it in November. But okay, I digress. Let's go back to this.

[00:08:13] Now, let's talk about China speed. So we know that the Chinese OEMs are much better at collaborating with each other than traditional legacy OEMs.

[00:08:26] I mean, the thought of it. Can you imagine GM and Ford and Stellantis collaborating on a component or a part or on a design? And the message that's coming through from the Chinese OEMs, and now we're starting to hear it from the Japanese OEMs, from Toyota and from Nissan, is we need to collaborate more together.

[00:08:48] And I'll give you an example. I was at the procurement, Art of Procurement Catalyst event a few weeks ago, and Terry Woychowski, president of Caresoft, was one of the presenters, and I could listen to that man talk for days. And he presented a very simple chart that showed an HV battery thermal vent breather cap.

[00:09:10] And on the left-hand side of this slide, he showed a picture of seven different Chinese OEMs and exactly what that component looked like. And if you look at the slide, and I know this is audio and you can't see it, but if you look at the slide, they look all pretty much the same. No, not exactly, but pretty much the same.

[00:09:33] And then, he showed for the same type of component, the rest of the global OEMs, seven different OEMs. Every single one of them looks dramatically different. They don't even look like the same component part. And the message coming from the Chinese OEMs, well, and now the Japanese, is, "Why don't we collaborate on the things that the consumer doesn't see?"

[00:09:58] So the things that really are important to the vehicle that the customer touches and sees, okay, that's, you know, you probably don't want to mess with that. But if it's something that's under the hood that the consumer really couldn't care less about, then why can't we collaborate on that? It's something that we've really got to take seriously.

[00:10:22] Now, later this month in October, I will be at the Reuters Automotive Conference, and I am gonna be getting into this in a bit more detail. So let me set up the panel for you so you have an understanding who's there. So the panel that I'll be running will be with the president of Karma Automotive, the CEO of NIO North America, and we'll have a senior level executive from Volkswagen.

[00:10:53] And, I want to go deep into this subject of collaboration and see what they all have to say. It's gonna be fascinating. If you're in Detroit and you're planning to attend the Reuters Automotive Conference later this month, please make sure you drop into my panel session and say hello. So this is about taking a different view of the business, a different view of how we operate, and really asking ourselves what makes sense?

[00:11:22] Where's the common sense in how we operate? And we know that cycle time drops when the right people sit at the same table earlier. We know that the Chinese OEM started with a clean sheet of paper. We know that. And they were not encumbered by all the legacy processes that have built up over time, which, you know, is a kiss and a curse at the same time, right?

[00:11:48] That can be an advantage, but it can also hold you back. We know that Tesla very much operates in a more concurrent engineer and collaborative way, getting all the people in the same room at the same time. Now, it's not easy, I know that, but we need to take this seriously now, and that's why I'm thrilled to see what's happening at Stellantis, and I'll be watching very closely to monitor the results.

[00:12:16] But we've got to do this. We can't make it a project and be one and done. We've got to make this part of the way that we do business.

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[00:13:01] My last episode, I had Tom Lewis from Horse Powertrain on, and that's a fascinating concept. Now imagine getting the OEMs to buy one powertrain system, a common powertrain system that goes to different OEMs, a common engine. Wow. I think we're going to learn a lot from Horse Powertrain.

[00:13:28] So I would ask you this, take a good hard look at how the business operates. What can you do under the spirit of collaboration? And I'm not talking just something that you throw in a PowerPoint deck or throw up on a conference room wall. I mean, really, what can you do to put the same people around the same table with a view to improving the output and reducing time?

[00:14:03] Because the other thing that we're struggling with is AI. You can't put AI on a broken process or an old process that's too slow. Why would you? Why would you do that? So now is the time to look at our processes, look at the way we operate, look at the decision-making hierarchy, and start to push decision-making down, start to reduce the cycle time.

[00:14:29] My last solo episode, I talked about total quality through speed and reducing the process cycle time of every process, whether it's administrative or on the shop floor, and we've had those tools for 30 years. We've got to use them. Now's the time to start using those tools.

[00:14:48] Start somewhere simple. Start by thinking about, okay, what process or what product, or pick an area of your business right now that you can put the right people in the right room at the same time.

[00:15:07] Speed gets built in the room. Make sure the right people are in it.

[00:15:15] And I'll see you next time.

[00:15:18] Thank you for listening. You can watch the full conversation on our YouTube channel. Search for Jan Griffiths Automotive Leaders, and download the 21 Traits of Authentic Leadership. It's a free PDF and the link is in the show notes. And remember, stay true to yourself, be you, and lead with Gravitas, the hallmark of authentic leadership.