I guess I’ve got your attention now.

Volkswagen is the world’s biggest automaker. The problem is that traditional diesel and gas powered automobiles are endangered and will be less profitable in a consumer world worried about climate change.

Volkswagen Chief Executive Officer Herbert Diess last week warned VW senior management that they’ll have to “slaughter some sacred cows” within the organization.  Tough words for tough times.

Talking about striking fear for the necessity to change in a global automotive company. So how do you do that with hundreds of thousands of employees who were hired, educated, promoted, and reinforced based upon traditional automotive values?

I would have said carefully.  Now, that’s no longer the case.  Global company and small company leadership are trying to instill a new sense of urgency.

So, what’s going on with VW having to slaughter sacred cows?  In every type disruption, a disruptor company comes along and breaks the rules of business in that sector.  In the automotive industry, investors value Tesla not as an auto company but as a tech company.

Big difference.  As you know, Tesla makes electric vehicles.  So, you’d think that Tesla who has had problems meeting its sales forecasts with overly optimistic projections.  Tesla has just surpassed the market capitalization of GM and Ford. And, Tesla’s market cap Is approaching that at VW the worlds biggest auto company.  Go figure!

So last week, Volkswagen CEO said that auto companies won’t keep their competitive advantage in a world that will be moving to electric vehicles.  VW CEO said that the senior executive group inside the company needed a “radical change of direction” and the time was now to do it.  Period.

As many of you know, automobiles are simply not transportation but are now computers on four wheels. Someone estimated that the value of the automotive software is worth more than the rest of the automobile.  Go figure!

So how does a company executive facilitate its senior managers to think different, do different, and be different?  It’s not an easy challenge as more companies need to transform themselves to remain competitive.

The driver for VW was the CEO of Tesla saying that they’re going to build an electric vehicle factory right down the road from Volkswagen’s headquarters in Germany. If that doesn’t strike fear in VW management I don’t know what will.  Unfortunately, it’ll  strike fear in workers too.   Worst case scenario, It’s estimated that fourth hundred thousand jobs maybe in risk in Germany automakers if they don’t retain their competitive advantage.

Now you’d expect that Volkswagen had a terrible year in 2019. The reality is the carmaker reported record sales last year.

In 2020, we’re going to see more organizations having to transform themselves to remain competitive. This could be an interesting year lots of challenges for managers and employees.

So, what’s your company going to do to transform itself and be competitive?

Bio:

Greg is the developer of Certified Enterprise Risk Manager(R) and CERM Academy.  Greg is also the founder of:

WorkingIt.com
800Compete.com
CERMAcademy.com
Other startups.

Greg is also author of more than 30 books.  Greg can be reached at: 503.233.1012 and GregH@euroopa.com.