Creating a Global Champion

D IMPACTL STORIES CREATING A GLOBAL CHAMPION A CUSTOM CASE STUDY WITH IESE BUSINESS SCHOOL, HEC PARIS AND THE TRATON GROUP (FORMERLY VOLKSWAGEN TRUCK & BUS) DL+ | IESE Business School, HEC Paris and the TRATON GROUP The TRATON GROUP is benefiting from a successful collaboration between business schools HEC Paris and Barcelona-based IESE oming together is a beginning, staying together The TRATON GROUP designed the program By Tom Nash is progress, and working together is success.” with HEC Paris and Barcelona-based IESE. “ This observation, made a century ago by Nineteen executives with high board potential C Henry Ford, has been borne out more recently were chosen from the group and its strategic by another giant of vehicle manufacture, the TRATON partners, Volkswagen Commercial Vehicles GROUP. The German multinational group is benefiting from a and Navistar, to come together for four newfound ‘togetherness’ inspired by an innovative leadership program modules spread over 10 months. development initiative. The modules took the participants to Rennes and San Francisco with HEC, and Beijing and The TRATON GROUP’s first ‘Executive Elite Program’ was put Barcelona with IESE, familiarising them with together in collaboration with both a French and a Spanish different cultures, as well as teaching them new business school, took place in four countries (on three management theories, and inspiring in them continents), and involved participants from all over the world. innovative commercial thinking. 2 CEO Andreas Renschler is intent on further enhancing efficiency, professionalism and innovation – taking the group to the next level The hallmark of this complex industry is Innovation… future leaders need to anticipate And shape the future DL+ | IESE Business School, HEC Paris and the TRATON GROUP A growing business an ongoing development initiative, and its first iteration was Volkswagen Truck & Bus (officially renamed the TRATON launched in Spring 2017. GROUP in August 2018) was formed three years ago when The Next Big Idea Volkswagen Group bundled together its truck and bus brands – MAN, Scania and Volkswagen Caminhões e A key element of the first program, running through all the Ônibus. The logic was simple: to enable the newly formed modules, was the ‘The Next Big Idea’, requiring participants company to focus solely on the truck and bus business, with to focus on how the TRATON GROUP could best cope with the explicit objective of creating “a global champion in the the threat – and exploit the opportunities – of rapid change in transportation business”. the automotive sector and the wider transportation industry. Since then, the company has made significant progress, The hallmark of this complex industry is innovation, with improving collaboration between its 81,000 employees, technological developments ranging from the advent of integrating systems and processes, and leveraging its connected and autonomous vehicles to the rise of digital powerful brands. It has also strengthened its presence in manufacturing. The premise of The Next Big Idea is that the the North American and Asian markets through strategic TRATON GROUP’s future leaders need to anticipate and alliances with Navistar and Hino Motors respectively. In 2017 shape the future. the TRATON GROUP achieved sales of 205,000 vehicles, driving annual revenues up 12% to almost €24bn, and “Because we are a very young company, we have to operating profit up 27% to €1.7bn. understand that to become a global champion, we have to work together,” says Renschler. “It means changing the So far, so impressive. But Group CEO Andreas Renschler way we think and work, how we interact with customers, is intent on further enhancing efficiency, professionalism competitors and partners and, most importantly, how the and innovation. The name of his current ‘Next Level’ project coming leadership connects, combining their respective sums up his approach, with its objective of achieving experience, know-how and forces.” capital market readiness, providing the TRATON GROUP with additional financing opportunities to accelerate Dr. Martin Hofmann, Head of Human Resources and HR profitable growth. Strategy at the TRATON GROUP – and chief internal sponsor of the program – puts the company’s motivation bluntly: “We And taking the group to the next level is where the Executive don’t want to be asking ourselves in a few years ‘what went Elite Program comes in. Entitled ‘Building the Global wrong?’,” he says. “We don’t want to join the companies that Champion of Truck and Bus’, the program is intended to be already have the letters ‘RIP’ after their name.” 5 DL+ | IESE Business School, HEC Paris and the TRATON GROUP To avoid such an outcome Hofmann had sought a program was designed to mould the individuals, many of whom were that would put particular emphasis on how the group should strangers to each other, into a cooperative and supportive handle disruptive innovation. Executives must be encouraged group through tough team-building and leadership to think creatively, examine new business models, propose development exercises. radical changes, and consider the reinvention of entire processes. As Hofmann explains, “They definitely expected this to be a run-of-the-mill seminar in a hotel. But as soon as they got For this, he had looked beyond VW Group’s regular internal there, we put them on a train and then a bus to Saint-Cyr. academy courses, instead researching and travelling to some They lived in shared accommodation and had to overcome of the world’s top business schools. “I really liked both HEC’s various challenges as a team, which took them out of their and IESE’s ideas, so I pushed for a three-way collaboration comfort zone.” to get the best from both of them,” he says. “I didn’t want an ‘off the shelf’ program, but one that was tailored for us. One of the tasks involved navigating a labyrinth of tunnels in It needed to really challenge the participants to take bold complete darkness. Hofmann continues, “In daily business leadership stances, question current strategies, and learn you’re permanently engaged in routine work and you don’t from exposure to different environments.” really have time to think outside the box. To do that you have to get a little bit uncomfortable – to push boundaries.” Specifically, the TRATON GROUP also wanted the executives to develop their own new ‘Big Ideas’ that could reshape the HEC’s Custom Programs Director, Nicolas Lemoine, recalls a future of the company and assure its success for the next stony silence when the executives were first thrown together 20 years. They were duly split into four teams, each of which on the train and bus to Saint-Cyr. “There was absolutely would work on an idea during and between modules, and no interaction,” he says. “It was not a group, but a set of present it at the conclusion of the program in March 2018. individuals.” But to cope in an unfamiliar environment, the executives learned the importance of working together, Module 1: Leadership and teamwork and soon grew into a strong unit. By the conclusion of the The Executive Elite Program kicked off in May 2017 with the module, says Lemoine, “There was talking and laughing – we first module run by HEC Paris. But it didn’t begin in Paris, as had created a group that could work well together.” the participants had expected. Instead, the 16 male and 3 female executives were faced with combat-like challenges at His colleague, Academic Director, Professor Jeremy Ghez France’s Saint-Cyr military academy near Rennes. The plan says the executives became comfortable enough with each 6 DL+ | IESE Business School, HEC Paris and the TRATON GROUP 7 “One of the tasks involved navigating a labyrinth of tunnels in complete darkness… …In daily business you’re permanently engaged in routine work and you don’t really have time to think outside the box. To do that you have to get a little bit uncomfortable – to push boundaries.” DL+ | IESE Business School, HEC Paris and the TRATON GROUP other to give free rein to their imagination and their ingenuity. “They learned that creativity really has no limits,” he says. “We also know that there are virtually no technological limits to what we have the potential to do. The biggest obstacle to progress is ourselves.” Module 2: Disruptive innovation and new business models Three months later, the second module took place in San José, California. Also run by HEC, it was designed to expose the participants to the cutting edge of disruptive innovation. The module focused on putting fresh ideas into practice through new business models, and was made vivid by a visit to tech-driven taxi pioneer Uber. Experts from Uber and Google, along with entrepreneurs from smaller Silicon Valley start-ups, offered insights into their visions, and described how it is possible to rethink existing ways of doing business. Nowhere is this more relevant than the transportation sector, where technological advances and ever- tougher regulations on emissions have put the future of the internal combustion engine in doubt. 9 DL+ | IESE Business School, HEC Paris and the TRATON GROUP Manufacturers of automotive ‘hardware’ – including “We must think about how we can bring together our trucks and buses – must consider vehicles becoming traditional – and currently still essential – business model more like commodities, and therefore about evolving with transformative ideas.” into technology companies offering higher value online Module 3: Digitalisation and culture and digital solutions, as well as transport services. To achieve such a transition, they must look for new ways In November 2017, IESE came to the fore, running the third to cooperate and innovate, but without jeopardizing their leg of the program in Beijing. This module was designed to intellectual property rights or strong brand positioning.

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