Meet Stefan Krause, A driving force in the world of EVs

[Transcript]

Jan Griffiths: 00:08

Welcome to the Automotive Leaders Podcast, where we help you prepare for the future by sharing stories, insights, and skills from leading voices in the automotive world with a mission to transform this industry together. I'm your host, Jan Griffiths, that passionate rebellious farmer's daughter from Wales with over 35 years of experience in our beloved auto industry and a commitment to empowering fellow leaders to be their best authentic selves, stay true to yourself, be you, and lead with Gravitas, the hallmark of authentic leadership.

Let's dive in.

This episode is brought to you by Lockton. Lockton redefines business insurance and people's solutions with a personal touch. Their global team of 11,000 is driven by independence, not quarters, to tailor success for your business. Discover the Lockton difference where your goals become their mission.

Independence, it's not just how you think but how you act.

Jan Griffiths: 01:26

Today, you'll meet Stefan Krause, the man who walks the talk when it comes to authentic leadership. Many leaders profess about titles not being important, yet their organizations still have them. Stefan broke the mold on that issue. When I first met him, his title was simply ‘in charge.’ He held the CEO position at an electric vehicle company; his title was just that, in charge. I'll openly share with you how I completely misjudged him and why. Stefan shares candidly his leadership experience as Head of Sales for BMW Europe, CFO of Deutsche Bank, and his EV mission with Faraday and Canoo. You'll learn how simple changes in the way we measure people can drive significantly different results. You'll hear about leadership in good times and bad and what it takes to be a bad-weather sailor. And when you were the CFO of Deutsche Bank in 2008, I think that qualifies you to be able to speak to that. Stefan believes, as I do, that people are inherently good. And we waste far too much time managing the bad apples. We explore the topics of trust and innovation. We get into a discussion about the startup culture in California and why people leave traditional automotive companies for EV companies and startups. You'll hear the answer to the ultimate automotive industry question. I asked Stefan, “What advice would you give traditional OEMs?” Let's jump right in. Stefan, welcome to the show.

Stefan: 03:27

Hey, thank you. Thanks for having me.

Jan Griffiths: 03:30

I think I would like to share with our audience, what I expected you to be, who I expected you to be when we first met, and how dead wrong I was, I had it completely wrong. In a moment, I'm going to ask Stefan to share his story. And I will tell you that when I first met him, I knew that he had held senior-level roles at a major German OEM, at a bank; a major German bank, and was now CEO of an EV company in California. And because of my experience with German OEMs, which, you know, was not horrible, but certainly was not indicative of what I would call warm, authentic leadership. And I had expected somebody who was extremely hard-nosed and all about the numbers and really not about people, not about the soft stuff, not about the human skills, none of that. That's what I was expecting. And when you hear Stefan’s story, and you understand his background, I think maybe you'll give me a little credit and understand why I would think that. And when I met Stephen, nothing could be further from the truth from what I had expected. He is a warm, authentic leader. Yes, a leader with Gravitas. He knows how to connect people to a vision. In fact, I wanted to work for him. I was right there and ready to go. But that's another story. So, enough of what I thought and how I got it wrong. Let's hear from Stefan Krause, who he is. And let's talk about authentic leadership. So, Stefan, with that opening, what is your story? Who are you?

Stefan: 05:29

Yeah, yes, but for the record only, I also really wanted to employ you. And I was really sad that you didn't join our team. And we would have loved to have your skills and your experience; I'm sure that it would have made the company even more successful than we got it to go. So, I was really sad. But we kept in touch because obviously, I think there was a good connect from the beginning. So, thank you very much for having me today. Yeah, my story, obviously, like I said, starts also a little bit unusual, because obviously, I'm not a German born in Germany. I’m a German born in Colombia. My parents lived 50 years in Colombia, I was born there, I was raised there. So, obviously, my first years and impressions were very different than I would say a traditional German person would have. This was the Columbia of the many issues that the country had, the drug lords, that now has become, to my surprise, very popular in many movies. And reminding me of my youth, also about the Guerrilla situation, obviously the poverty of the country and all the issues that this country has, you know, at the time, they were developing and moving ahead, a huge degree of political uncertainty. But very nice people, very open. And I think that one of the skills I learned during my time in Colombia was really improvisation. Because it was about improvising everything every time. Yeah. And I think that's a skill that stayed with me throughout my professional career and we can talk about this. I then went to the German school there, it was a nice German school, and I graduated, I got my Colombian degree, my German degree, and that enabled me to go and study in Germany. And that was the first time where I really did leave outside of Columbia, left and started to study in this little north Bavarian city of Würzburg, it's very quaint and very nice and had a nice university. And I did my average degree, my average German MBA degree. Yeah. And I had the opportunity to go to Japan to work, do an internship at Japanese company, which was super interesting at the time, as Japan was opening more and more to the west. I returned to Colombia to basically take over my dad's company, but the situation had gotten so difficult that for somebody starting a young career, the situation was harsh and difficult, and to create a young family, security concerns, etc., led me to take the view that I should go and work in Germany for one of the large companies. And especially because, obviously, I did want to learn because my dad’s small company was done by a self-made man that, you know, didn't have any high school education. And he always felt that I should learn with large companies how to properly run a business. So, I sent my resume around, kept, obviously the usual nice first and then got a couple of years, and ended up at BMW, had a 20-year career at BMW. I was in four different areas of the company; I was in engineering, I was in sales and marketing, I was in financial services and in finance. And very quickly, in my first years, I changed between these different departments, which BMW has very accepted that you don't do career within one area of specialization, that you move around. Was then sent to the US to build up the capital finance company, BMW Financial Services, and help the team there, which was kind of my first, I would say, successful experience on how to start a business because we all started from ground zero and did a lot of mistakes. The only nice thing when you do it within a corporation is there's always enough money. And then, I was made Head of Sales for Europe and was responsible for about a third of BMWs group sales; Rolls Royce and Mini included. And then, very quickly was promoted, became CFO, a position that I held for about eight years. And towards the end, I even then switched from the CFO role back to the sales and marketing position at the company.

nd then in the famous year of: 2008

Nevertheless, part of being a leader, you sometimes have to take from positions and you have convictions. These convictions weren't shared by some of the shareholders that I had at the time. So, I ended up leaving. Helped Fisker then in the process of becoming a public company as well. But immediately started to work on my own new business, which is hopefully close off for announcing soon. And I've been working on for a couple of months on this since the beginning of the year. In the meantime, joined SPAC as the CIO, Chief Investment Officer and Chief Financial Officer. We're trying to help Europe to not lose ground in the EV mobility space in the automotive as we believe that too many of the existing players have slept for long and keep denying that electric cars will be a reality. We hear announcements. I hear a lot of announcements now. But it's mentioned that a year ago, you didn't even hear these announcements. Now, some of these announcements lack conviction. And therefore, we believe that we should support a European company to become a major player in Global EV markets because I think American companies and Chinese companies are dominating the future mobility markets, and it's a little bit sad to me to see that Germany, who dominated the old combustion engine-driven marketplace for so long, it's kind of losing ground because the inability of these companies to go for radical change and to move along, which is very much obviously a leadership, visionary leadership topic that you are involved in. So, yeah, that's a little bit, my upbringing. I was lucky to be able to be given positions with big responsibility early on. I was obviously in over my head. I was always clueless on how to do it. So, I couldn't rely, I wasn't always the smartest person in the room that I couldn't rely on what many managers rely on that they think that they're the smartest person in the room. So, obviously, I had to learn and lead differently. And I think that's probably a little bit of what you saw and experienced.

Jan Griffiths: 15:59

Yes, yes. Thank you. Well, thank you for sharing that. And you mentioned radical change, you are no stranger to radical change. I would like to talk more about EV and the future leadership model. Before we go into the area of future leadership in automotive, I have to ask you this question, because I'm sure a lot of our listeners are thinking about this, given the traditional stereotype of the German OEM leadership, aggressive, harsh, not focused around people, not mission-driven, very much task driven. How on earth did you not only survive but thrive in that kind of culture, when you are truly an authentic leader? Could you help us understand that?

Stefan: 16:55

Well, I think that the interesting part is, I think, in your observation is correct. has a lot to do also, with the German culture, you know, it's very formalistic, you know, rules, you know, Germany and rule in the in the country rules are important, right? You know, like, always make fun, always, you have to follow the rules, the rules are important. And we only work because the people follows the rules. Yeah. And this, this, obviously, is, is a little bit the management mantra that it's that it exists. Yeah. And people very often, as you know, the biggest issue is, people are worried about their careers or worried about their thing. And therefore, obviously, they tend on the one hand, to follow rules. And then, of course, if they follow the rules that expect everybody else to follow the rules as well, and that creates the system, that at the end of the day, in these companies, you know, everything is about, you know, following the rules that have been invented, many of these companies obviously have been existing for a very long time, right. And therefore, the myriad of bureaucratic rules and of committees and of meetings and have processes. And all of this exists. And to some extent, it's also easy to hide behind this, because it's a model that is not built on a model of personal accountability and responsibility, right. And at the end of the day, the best way to survive in that environment is just following the rules and in complying with the rules, and then you will never be in trouble, right. But it's not a system that generates innovation. It's not a system that's prone to make changes, especially not radical changes. It's a system that preserves and that's the different stakeholders, these tools have been developed, obviously, by a group of stakeholders, trying to keep their jobs, keep their roles, keep the power, keep their say in the game, right. And, therefore, there's no incentive to change it. And honestly, I maybe I didn't do this by planning, but I was so naive, maybe and so young, that I always felt that it had learned that just to speak, speak out and say, what's, what the effects are. And I must say, the most experience that I had it was accepted, and it caught many of them, by surprise. Of course, I did have a reputation of not necessarily always doing what was expected and not doing. But sometimes the surprise element also was very helpful, right. So, to give you give you only to make it little bit more for your audience make explaining a little bit so when I was, you have to imagine, and this is now BMW at its core, I was a young kid, I was made Head of Sales for Europe. Right. And this meant that 19 countries, yeah, reported into me in which BMW was selling. And obviously, like, you know, from these companies, in each one of these countries, there was a senior leader, very accomplished, that done a lot for the company. Very good people, by the way, you know, obviously, BMW had smart and good people, but they were living in this system in which the corporation was exploiting the competition amongst them, right? And of course, you know, each one of them wanted to be successful. And just to show it because I'm a believer that charts in companies very often tell the mindset of the company, the main chart that was shown about sales started with one country on the top and all the other countries following right. And that way you created a you created a culture of one winner, that tended to be arrogant that was not willing to share how they were successful. Right? And, in my case, 18 losers, right? Because they were not on the top of the chart, right? And it was interesting. It was competition within. So how many cars did you sell in Great Britain and France and Spain, things like that. And this was the environment that people were in. And of course, this environment doesn't help them to share ideas on how to join to become better. And, and, for me, it was therefore easy, I understood that very quickly, I said, I need to get two people to work together. And we just changed one chart. It just changed how they were doing against our Mercedes and Audi competition. And we ranked them differently. Yeah, we now didn't rank them by amount of cars they were selling, but how well they were performing against a locker. And all of a sudden, they started to share ideas, because now it was all about cooperating and become overall better. We also changed, there was a big centralization process going on, you know, these companies always tilt from centralization to decentralization, which is the funny game right there it goes on, the new manager comes and believes in centralization, and all, everything gets changed to this, then the next manager comes in believes in decentralization and it all gets decentralized. So, we were in a centralization process at that time. By the way, for the customers, this doesn't mean anything, right? It doesn't help the customers; this doesn't help anybody. But this is what these large corporates are always busy in their power games on. And we were in this centralization process. And I was able to convince them that they were losing this centralization game. And most of the sales and marketing activities were being centralized at the headquarters department, ignoring different cultures and different ways of communicate understandable, people, just to save some costs, in terms of marketing. And by working together, we just changed the dynamics, you know, I created the European marketing and sales Council. And instead of them having to fly to Munich to talk to the central people, we make the central people come to us, and tell us what their ideas were for change. And obviously, that little slight change created a very different dynamic and avoided, you know, decent avoided centralization, and topics that you should definitely should not centralize because want to be close to your customers and the dealers, and things like that. So, very often, it was the simple changes that that made a difference. Yeah. And I was, and that said that what you said, I was trying to really understand that. I personally think that human beings are good. And I personally think I don't have a bad opinion of human beings. And I think that at the end, human beings want to do the right thing and want to be successful. And you really have to switch the criteria in the system, right? So if you want managers to be people, managers to measure them on how well they are as people, managers, if they wanted to be empathetic, managed them, learn, teach them to be empathetic and an honor if the and recognize if they are right. And, and that's how I've always believed, it was also interesting to see that the same people in different systems would work completely different, right. And I think that's what I've always encouraged to approach people to take a risk, it's part of being being a human is to take risks, and allowing yourself to do some mistakes, because we all do, and we always will. But learn out of these mistakes, and don't repeat them two or three times, right. So kind of these were kind of some of the things that helped me early in my career. And then, of course, you also have to have luck. Sometimes you have to be the right person at the right time.

Jan Griffiths: 24:43

You talk about making mistakes. And we all know that failure is required is a required part of innovation. If you don't create an environment where people feel comfortable taking a risk, and making a mistake and supporting them and helping them through that, then we're never going to get the innovation and certainly not the speed of innovation that we're all looking for. Let's broaden the discussion now to let's move away from German OEMs and talk about the automotive industry as a whole. The culture in the automotive industry has often been you can't make a mistake, right? If you make a mistake, you're going to get your head taken off; you'll be yelled at by somebody. And if you make it again, you could be fired. Right? huge generalization I know but that certainly still exists in the culture. Again, companies are trying to change but the I think companies still struggle with some very fundamental issues, and you said it, and it's very simple. You believe that human beings are inherently good and want to do the right thing. And it's how you see your role as a leader of people as to whether or not you can make that happen. And I think that the industry today has had trouble with some of those very basic fundamentals.

Stefan: 26:07

Yes, I agree. Don't forget most of the most of the, and we do this all the time, as human beings, we are what I call, we managed by the bad apples by the 10% 5%, bad apples that you have, right? And you can you punish 95% of the good apples, because you bring the same level of distrust to all of them. And that's what these systems end up doing. You know, they're fundamentally based on distrust and fundamentally based on a bad view of human beings, right? And in but it is, you will always, no organization, no group in the world, yes, you will have some bad apples, and that may have nothing to do with the company; these are human beings that may have gone through difficult life experiences that that, you know, maybe ideologically, or etc., that that may just have, you know, had a difficult family upbringing and things like that. And, but we tend to spend more time on how can we protect these companies from these bad habits, doing something to the company then spent time on ow can we get the 95% of good people that we have, really to be innovative and active and working right. And this has something to do with this mistake. Nothing can happen. I said certainly there are certain businesses like when you're in airlines, you need to have a zero-mistake policy. No question, you're playing with human beings' lives, right? I think also in the automotive, you, when you build a car, you will also play with human beings’ life, and you have to have a zero, mistake mentality as much as you can. But not when you work with people not when you're when you're organized, not there, you need mistakes, you need the willingness of people to take certain risks, because otherwise there's no progress, right. And there's no innovation. So, I remember trying to solve this problem. And I remember many years ago with Chris Begley, who was a great designer at BMW, and at that time was not as much recognized. But today, I see that the industry followed his good designs, and always liked what he did. And he was innovative. We were frustrated that the company really in BMW, people wouldn't dare to say what they really believe. And we have done, you know, we had done some mistakes in product development and design. And we were figuring out, we have the best 100,000 people in the world, and we still bring out a bad car. How can how can that be? Yeah, it was the best designers, the best engineers, the software people. And still we did this mistake. And then it was really because people just didn't dare to say something I didn't dare to speak up, didn't dare to say, out of these fears that exist in this organization. At that time, second life was like the game everybody was playing. So we created a second life in BMW Chris Begley actually called Red Square, Red Square had the idea, because we couldn't deal with the system as it was, why do we create a parallel life in which every employee can be what they want to be in the organization, right, and can continue their opinion. And we created we want to create this game, like you're an engineer, but you believe that the marketing people weren't doing a good job. So you could slip into a marketing role. And in the game proposed, you know, what you would do in marketing and vice versa? And, and, you know, people could, and there would be no bosses and things and you know, there would be a compensation system for good ideas and things like that. But I can tell you, when we started with this idea, this system for tech, very hard. We tried to implement that we couldn't implement it, because people had to even feel to what would come out of it, right. But in our initial stages of implementing this was amazing. You know, there's so many hidden skills and talents and ideas from people that don't come out of this organization. Because exactly of these roots of fears or concerns or, or the way that I always thought is to bet at the end of the day. And I think I think that obviously as we are evolving, our organizations are really built for people that are supposed to execute like in the military, right, some that one person thinks and the rest of them execute, and that's the wedding cake organization. We have in most of the companies today, but when today you have educated people that can bring an end a lot of value, it's just the wrong way of organizing and running around. And that's kind of, kind of I totally agree with you. allowing people to do mistakes is one important, especially trusting people, I think, empowering trusting people.

Jan Griffiths: 31:05

Let's, let's talk about the future. And let's talk about the EV culture, leadership culture. In California, specifically, very, very different. So you were able to take all of your leadership philosophies, ideas, practices, everything that you'd learned, everything you knew that you wanted to do, and you were able to implement them in the EV space. Tell us a little bit about that transition.

Stefan: 31:36

It was interesting to see that, especially you know, when we have an ability assumed, and I don't think that's some stretch, but when we will work in small teams, and that's what the most startups start, right? Because everyone has to take risks. And everybody has to, you know, say their opinion, and everybody in the team is small, and relationships are clear, there's a basic trust amongst the people in that small environment, we probably can work and be innovative and create great ideas and everybody there to speak up, right? And as we grow bigger, right, from, from the family, to the village, to the town, to the city to the country, right? We lose that, right? We lose all of sudden this stability. And what intrigues me is, how can we keep this spirit? Yeah, that the startup team always will have, right. And the basis, obviously, there's a common understanding of what you want to achieve. The second thing is, there's a common level of trust, it's because you cannot do all the jobs, you cannot micromanage you cannot direct you cannot do because you need to rely on everybody in the team to do their part, right? That you can transfer this to a large organization. And that was basically the guiding principle, when we started to create the organization around Canoo and starting to thinking about how we how we get organized, how we develop this. So, the first thing is all the famous, you know, organizations create all this, what I call distractions, these are titles and office spaces, and how many people report to you and how big your budget is, and all of this. And these enormous distractions, right, this is this is, again, trying to control and monitor people, right. And the first thing that I did, I did and so we played around this, you know, with this word to be in charge of something, because what it really matters is whether you're accountable and responsible for and so we didn't have any titles, we try to avoid any organizational charts. Still, the people were so accustomed to organizational charts that some of them couldn't envision to work without them. So, I tried to at least change the picture, again, into circles instead of wedding cakes, right? So, at the beginning, you know, our organization had circles, and we had no titles. And in the basic assumption in your title was just saying what you were in charge of. So you were in charge of the front desk, or you were in charge of the power train, right? There was the same title for everybody. And it was also descriptive enough that everybody knew what you were supposed to work on, right? And what you were what you were involved in. This was some of the principles where we'll try to keep up this, this, what we all can do in small organizations to keep it up in the larger organization. But it became increasingly difficult because people were joining the organization that are so educated and so trained in the wedding cake, command and control environment that they really struggled in struggled with, with dealing, you know, with this, yeah.

Jan Griffiths: 34:51

Is it true that in California, in the electronics, tech kind of environment, that they are more, they're used to that type of culture rather than command and control? So, it's almost easier for an EV company with an electronics background to launch and to grow, then it is for a traditional automotive company to adopt this kind of culture and leadership.

Stefan: 35:21

I would have totally two years or three years ago, I would have completely concurred with you. But I have now dealt with also startup environments in Europe and startup environments even in China. Yeah. And I must say it's probably more inherent of a group of people initially voluntarily coming together. To get the mission accomplished right. And, and certainly I think what California has done right, which is very impressive. And I must say what California has really done right is to create a framework that supports this when most of these older countries and systems still have frameworks that make it more difficult. Right? So being that if I listened to teams here, for example, in Germany, or listen to teams in China, they have, they have the same impetus, they have the same drive, they have the same, they honestly look very much the same the way they operate the way they have, there's a few people that have what, what is the word always used that carry conviction into them. Don't forget, in large organizations, its compliance, what works. And you forced and incentivized for compliance, right? You're not, a large organization doesn't support your conviction. Once in a small organization, you live by conviction, and the people come there, they work there, they probably don't have to work there, and probably have other choices. But they come because they have conviction. Right? And that you'll find there too. But then what California has done right is, for example, the legal system that there is, there's no anti competition laws, right that you cannot, that everybody can live in. I thought this, for example, is super smart thing. Because as an employee, of course, you want to avoid your employees going somewhere else doing exactly what you're doing. Yeah, that's very protective of a company. And people would believe that that's, that's, you know, we've invested in this product and things like that. And the ability that my employees can go in on the other side of the fence and build a new company with the same product. Yeah, in the old thinking is really bad. But when you think through and I had interesting discussions, yeah. I said, I think it's great that it's possible. And you know why? Because if you as an entrepreneur want to keep your people, just motivate them, just give them the tools, they don't, they don't go over the other side of fence on a Thursday afternoon because they have nothing to do, there's a reason they move over and start over again, it's because you do on this one I left, and I see every day still also, by the way, happening California, they treat their people poorly. They are not open; they have command and control structures. They have, you know, unacceptable leaders, they have rules that frustrated people. And of course, if you have the choice, you will go to the place. So, I think this is a smart thing for California to do, because it necessitates from you to create the right environment and happy people and happy managers and happy, they will never leave you. If you create the right environment. Yeah, but you should use it as the entrepreneur bear the risk, that if you do the right things and keep your people keep them motivated, that they can walk, why restrict them from working, if it's new that's causing the issue? It's not certainly not that, right? So, some of that was smart. I think that's a very smart, smart rule to implement. And I wish that more places in the world would implement it, because that would force companies to just take care of more of their employees, and to value their employees differently. And, and, and kind of ensure that they are that they can do what they want. Many people today leave the traditional OEMs why and go to the startups because the OEMs don't allow them to innovate, to your question on innovation. So, you know, some of the people that we heard from BMW in the company, they went to the startups because they couldn't do what they wanted in the large oil. Yeah. And I think this this, this is a very good dynamic in California that exists. And second, obviously, the whole culture of fundraising and providing funds to young teams, and this culture that has been created over many years is, is our support. So I think that there's some basic fundamental rules that created this, or made California to take the lead in global company development. And they're very, very easy. Yeah. And then you know, other countries complain that they cannot compete, just need to change their, their attitude towards innovation and their attitude to let's study to set some rules on how to better make people function. California I'm a little concerned. Taxing, they're taxing the hell out of people now, and they will lose because of the young companies in the young talent will try to find other ways to go. Right. And, and I think that's the second thing that they have to be careful because there's other ecosystems that are coming up. Now. They're just playing the same California game, just providing people with a good environment to build businesses that developed on.

Jan Griffiths: 40:43

I like what you said, compliance versus conviction. Because again, that's a very basic fundamental shift in your thinking as a leader, as a manager of people. Are you looking for compliance? Or are you looking for conviction? And if you can honestly answer that question and come out on the conviction side, you've got to get a head start. So, if you are all about compliance, then that's a huge, huge problem.

Stefan: 41:16

When it shows, you're generally when you see compliance, you're a weak manager, because you don't have to better conviction means you have to have the better arguments, right? Or you have to then also be willing to accept somebody else's argument. Because at the end of the day, the biggest and that's what I've always tried in my career as a leader, is I want people to work for me that are convinced that what we're doing is right. And then I don't have to worry about them making decisions. Because as long they have the conviction, and they're convicted going the right direction. And how do you get people to believe if you discuss you argue, you use their experience, you share your experience with them, and you jointly create a way forward, right? Then you always will get conviction. And we have teams. And once you have a team that's, that shares the same conviction you have, you don't have to worry, they're not gonna do something against this. But they're gonna do the right decisions. You can empower them to make decisions; you can let them go. If you enforce compliance, and said, because I'm Senior Vice President, and you're only Vice President, you have to do what I have. What I tell you to do, then I think you've lost, of course, people will comply, because they are forced to Yeah, they have a family, they have a mortgage. Right. But what kind of company are you then, you know, what kind of a team are you generating? And that's for me, this compliance versus conviction. I was looking at, like managers come to me and already worried about their titles and worrying about their office space and worried about all these sides. Yeah, that want to enforce compliance in other people, then of course, they get super skeptical. I think there are bright managers, I would like to at least try.

Jan Griffiths: 43:02

What advice would you give to traditional OEMs, American OEMs, specifically, what advice would you give them as they are working hard to embrace EV, to embrace and change the culture? They're doing everything they can. I believe they are. They're trying. My concern is it's not fast enough. Let me ask you two questions. What do you think is the biggest challenge that they face? And what advice would you give them to help them?

Stefan: 43:36

Well, whenever you have a transition to manage, right? And then we’re certainly left in these difficult times like Deutsche Bank, you have a legacy business. And to recognize that it is a legacy business and not hold on to it too long. And to start preparing yourself on how you're going to down manage your legacy business in a smart and considered manner. Also including, obviously, the legacy people you will help for whom you are responsible, and whom you should take responsibility for, and whom you should help to transition. I think the best advice I can give is recognize quickly you have a legacy business and the job in the legacy business is different than when you have a future business to develop. So, for too long these companies are defending the legacy business as something that they track here until it gets too late. Until only catastrophe, right? Until only the big bump would solve the problem to get rid of the legacy business because you're not in control of that any more, of your legacy business. And then once you're not in control, and that's what I also learned at Deutsche Bank, when you have assets that you had time to manage down, then you have options. But if overnight, your derivatives book became a problem, right? Then your company was gone. And this doesn't take we saw it at Lehman, it doesn't take long. When you don't recognize that, it goes very fast. So, my advice is the biggest problem is they should recognize that large part of their business today is a legacy business, they should stop defending the legacy business and they should start thinking about how to properly and carefully manage down the legacy business to allow the new business to grow, right? And this is also done by building conviction in your staff, right? Of course, your staff will also go into a mindset of defending the legacy business because that's where they have their jobs today. That's where they have the future today. And of course, we have a tendency to keep legacy businesses alive longer than the outside world really tells us that they will be alive, right? And that's kind of my advice.

I would say it in a very different, funny way. What my recommendation to them is, you have to fire your current customers. Just fire your current customers because they're buying the wrong things, right? Somebody today buys a combustion engine; that's not a customer you want to have because that customer is the wrong customer for you. If you just change this mindset and say, ‘Okay, let's fire all these customers that are buying the wrong things. And let's try to acquire the customers that are buying the right things.’ If that's the attitude you take, yeah, then that really changes your view on what you need to do, what you need, what the task ahead is. Don't say my customers today are still buying eight and 10-cylinder engines, say I have to fire and I have to get rid of these customers. And I have to find customers now and have to start competing to find customers to buy, for example, zero-emission vehicles. These are my customers of the future, and those ones I have to find, and the rest, I fire.

Jan Griffiths: 47:09

Wow, that's great advice, but hard, I think, for a lot of people to actually take on board. But I agree with you; I think you're absolutely dead right. And it goes back to your comment earlier about preservation. You mentioned the term preservation, and we want to, as human beings, we want to feel safe. And if you've grown up in a leadership model, in an industry that acts and behaves a certain way, and it has assured you your success, and you feel safe, you're going to do everything you can to perpetuate that and make sure that that doesn't change. And that I see as a problem as we contemplate this back to the office. And what the hybrid workforce could look like. There's still a lot of people out there that can't wait to get everybody back in the office because they want to keep their eyes on them and get back into that compliance mode, rather than conviction mode. And this is such a great opportunity to embrace the conviction side and move away from the compliance side. And quite frankly, that gives me a great opportunity to pursue my mission, which is to allow authentic leadership to thrive. As you know, I have used the word Gravitas in my business. And I believe that Gravitas is the hallmark of authentic leadership. It's more a feeling like you say it's a conviction that you get a leader is a leader that's able to bring people in to them so that they feel safe and they can contribute, and they can truly realize their full potential, that's a leader with gravitas. If I were to ask you what is Gravitas to you in terms of leadership, what would you say it was?

Stefan: 48:53

Yeah, first of all, I do think that at the end of the day, whether you have Gravitas or not is going to be decided by other people, right? It's not something you can walk in the room and say, ‘I have Gravitas,’ right?

Jan Griffiths: 49:09

Right! I've seen people sort of do that. I've seen a few of those.

Stefan: 49:16

They won't last long that will probably be answered with a lot of cynicism, if somebody were to say that. And I would say it just has something to do on how people react to you, and to what you're trying to do. And for that, I think it's so easy, just put yourself in their shoes, right? Just think about what would be important to you to follow a person. And that's how I always like to use this word conviction versus compliance because, in my mind, in the essence, first of all, you have to convince yourself if you're insecure, right? I always use this example; imagine you have a pilot and there's a little bit of turbulence and he comes over the speakerphone and doesn't come over as confident and this calm. And think, then, of course, what's going to happen to the rest of the passengers? It's going to be a disaster for them, right? Because then they're going to kind of feel that you're really in a serious situation. And if that's what you say, creating a secure environment has something to do that you need to have confidence you need to know and therefore you, at the end, you need to have your own conviction of where you're taking and where you're leading people toward. And then the second thing is that people expect, I think people sometimes, most of the managers, always feel that people don't like bad news and do all kinds of stuff to avoid having to give people bad news, right? And for me, somebody who has Gravitas understood this one thing. I don't think people cannot deal with bad news because it's our life reality, our life will always have ups and also if downs, and we'll have to, sort of, you know, I've been fired, I've been told bad news too, I've not only had a successful career, I've also had, you know, my downs in my career, and it comes in every career. The only thing in putting yourself in their shoes, the only thing that people want when you tell them bad news is to be treated fairly and not dismissive, not this, you know. And I think Gravitas for me is also the second way on how you deal with people, right? It’s how empathetic you are to people, you know, how you understand that sometimes I've had to fire people. And I've always managed, at the end of the day, that they left my office sometimes even with some level of gratitude only because you dealt with, yeah, you’re the past bad news, but you dealt with them in a human, fair basis, and you help focus them on the future, and you focus them on what's to come. So, I think these are the main aspects that I can give off the top of my head, tell me if you could give me a weekend to think about it, I give you even smarter explanation for what it is. But this would be my first take at it.

Jan Griffiths: 52:11

No, I think that's a that's a perfect interpretation of Gravitas. We have several young people listening to the podcast, Gen Z. What advice would you give to your 25-year-old self in today's environment? If you were looking at 25-year-old Stefan right now, what would you tell him?

Stefan: 52:39

So, the first interesting thing that I honestly completely ignored at the beginning of my career that should also hold focus, like you said, on tasks and jobs and roles and things to do, is network, right? I think the most valuable part now in hindsight that I must recognize is your network; the people you know, the people you trust. the people that can give you advice to people. So, I always felt in my early years that I had to work, work, work, work and work hard. And I didn't spend enough time developing my network and developing, you know, relationships, because to be honest, everything you do in life is about relationships. And very often later in your career, relationships out of the past will play different than the important role, all of a sudden, right? So, the first advice is don't ignore it, because that's not what we get taught in business school, normally, right? We get taught valuation models and business cases, and all kinds of marketing and sales, and all kinds of technology and things like that. But we don't really get taught on how to be smart about developing, you know, your networks.

And the second thing that I would definitely also say is, understand that in today's changing world, right? To embrace change as a positive thing is a super thing. It's not a threat. Yes, it does feel uncomfortable, that has something to do with us as human beings. But at the end of the day, my experience is that there's always a reason for this change to come. And at the end of the day, the longer term you recognize it had a reason, it was for the better. So, don't fight change, just embrace change. I think that's also what I would tell. Young people tend to generally accept it more because they obviously need me to change. And then lastly, I think I talked to you about don't ever lose your curiosity. I think curiosity is regretfully something people lose over the years, right? And I can always say, don't lose your curiosity, because I think the world has so much to offer, right? And there's so many different things to your life that you can explore. And then, last but not least, I think I've seen too many people, and I understand when you're a young person, you try to optimize your life, you try to get a certain standard of living, you try maybe to have a family and tried to want to have, as millennials, maybe a little bit different now, but at the end of the day; I think what I also recognized too late in my life at the end it's not only about your life, and optimizing your life, it’s you know, how can you really help the world? It’s a famous, maybe cliché sentence, but it has a lot of truth to become a better place, right? How can you really help humankind and think to move along, and if you were able to give it a little bit of a push, then, I think, you had a very fulfilling life. It's not the money on your bank account that counts. It's what you were able to move and push forward in terms of making the world a better place.

Jan Griffiths: 55:57

Yes, I agree. And as a leader, it's how you make people feel, right? It's how you make people feel. That's a beautiful way to end. Stefan, thank you so much for your time today. It's been a pleasure.

Stefan: 56:12

It's been a pleasure too and all good luck to you. And I'm sure we'll be in touch very soon.

Jan Griffiths: 56:19

Yeah, we will.

Thank you for listening to the Automotive Leaders Podcast. Click the listen link in the show notes to subscribe for free on your platform of choice. And don't forget to download the 21 Traits of Authentic Leadership PDF by clicking the link below. And remember, stay true to yourself, be you, and lead with Gravitas, the hallmark of authentic leadership.