German carmakers are adopting techniques used by Silicon Valley tech companies in order to bring new technology to the market faster and cheaper. These techniques include empowering staff to come up with new ideas and removing layers of bureaucracy.
Daimler CEO Dieter Zetsche has asked 144 rank and file employees to generate new ideas instead of relying only on managers. This change of strategy came after a visit by 100 top managers from the company to Silicon Valley last summer where they met with executives from top companies such as Apple, Google and Uber.
Zetsche described his company as a rhino but added “Rhinos are large but they are not slow.” However, this rhino would need to move as fast as tigers of Silicon Valley. While Daimler relies on meticulous planning before committing budget to new technology, a company like Tesla allocates budgets to new ideas and develops uses for the new technologies as technicians go along. The company calls this approach “shoot and aim” principle.
Daimler has generated about 150 new ideas by adopting the new technique, of which 80 percent have been implemented. In future, decisions will be reviewed in the company by two layers of management instead of six.
Large carmakers have realized they need to be leaner and move faster in the current market conditions to catch up with electric and autonomous vehicle development. New rivals are muscling their way into the market and are challenging the status quo.
Another motive for adopting new technologies faster is to retain talented experts who often defect to smaller start-ups to escape the stifling bureaucracy of their former corporations.
Zetsche used to joke that he was the only one to make money from electric cars when he sold Daimler’s shares in Tesla. Now, he is worried about losing the market if his company is too slow to adapt and move forward with electric cars’ development. The rhinos are fast indeed, but can they beat the tigers?
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Adel Murad is a senior motoring and business journalist, based in London.
Email: [email protected]
Rhinos vs. tigers
Rhinos vs. tigers
