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CREATING A GLOBAL CHAMPION A CUSTOM CASE STUDY WITH IESE , 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 -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.”

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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

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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 , 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.

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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. expose participants to the awe-inspiring scale, complete cultural difference and massive disruptive capability Program participant Leandro Siquiera, Strategy, Product of China. Planning and Digital Office Vice President at MAN Latin America, says the TRATON GROUP must explore alliances As well as making the executives more aware of that offer both new transport solutions and a return on alternative leadership models and corporate strategies, investment. “One of the most important things we realised this module gave them an understanding of the extent was that we have to become more agile,” says Siquiera. to which technology has permeated day-to-day life in

10 “Our thinking was always twofold: we set out to convey the fast pace of digitalisation in China and emphasise the shift of the centre of gravity in the automotive sector.” DL+ | IESE Business School, HEC Paris and the TRATON GROUP

“As the program drew to a close, executives from the different brands came together under one umbrella to create a very strong, coherent team for the future.”

Asia. A highlight was a visit to Horizon Robotics, a leader shift of the centre of gravity in the automotive sector. Being in in Artificial Intelligence, and discussions focused on the Beijing helped participants to reflect about these dimensions.” significance of AI, big data and Industry 4.0 for the mobility Module 4: Reinvention and future business and transportation solutions of the future. IESE ran the fourth and final module close to home, in Participant Niklas Klingenberg, Senior Vice President for Barcelona, in late February and early March 2018. Purchasing Powertrain at Scania, describes the experience as, “Leaving my day-to-day job and stepping into a parallel Over many centuries Barcelona has been home to a plethora universe where radical change is already happening. It was of cultures, and continues to wrestle with its identity today impressive”. He adds, “I sometimes found it hard to take on as both the capital of Catalonia and an integral part of Spain. board the speed at which some of these companies move – In terms of diversity and reinvention, it informs visitors more but seeing it makes you want to move forward quicker as well.” than most cities, making it an ideal location for them to address both themes. To address the cultural differences, participants were exposed to ‘The Beijing Experience’, a discovery safari to ‘deep-dive’ Program participants enjoyed another journey of discovery, into Chinese culture, including a short lesson in Tai´Chi and a ‘The Barcelona Experience’, to demonstrate how the city visit to a Chinese temple. has evolved over the last 2,000 years. They also visited Camp Nou, home of Barcelona FC, to learn how this global IESE’s Academic Director and member of IESE’s Academic sporting champion has engineered constant renewal and Executive Education Committee, Professor Marc Sachon, sustained success over the past 100 years. Building on the reflects: “Our thinking was always twofold: we set out to convey theme of the disruptive nature of technology, the module the fast pace of digitalisation in China and emphasise the also incorporated a visit to the Mobile World Congress.

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DL+ | IESE Business School, HEC Paris and the TRATON GROUP

“For our managers, this has been a great opportunity to network, strengthen their collaboration and share ideas. Above all, it will support them in Reinventing the TRATON GROUP as a global champion.”

IESE Program Director Neil Selby says the course leaders schools coming together to create experiences that simultaneously sought opportunities to continue to have bonded participants from across the diverse cement bonds that had been created earlier between group, exposed them to the disruptive technological and the participants. “A feature of the program throughout leadership change in the world, and inspired them through was the willingness of both business schools to work well examples of corporate and cultural reinvention. together to complement each other’s input,” he says. “As the program drew to a close, executives from the different As participant Ulrich Dilling, Chief Production and Logistics brands came together under one umbrella to create a very Officer, MAN Truck and Bus AG, sums up: “The beauty of strong, coherent team for the future.” this program is that we could take time out from day-to- day business to reflect on what we’re doing and how we’re The Barcelona module culminated with the four executive doing it. We’re thinking about the challenges we have in the teams making their ‘Next Big Idea’ presentations to the group, having new ideas, and looking to the future to see TRATON GROUP Board, where they covered key issues such how we can approach things in a better way.” as automating the business, creating capacity on demand and providing future mobility solutions. One idea, judged the The TRATON GROUP’s Hofmann agrees, “For our managers, winner by the Board, was seen as suitable for implementation, this has been a great opportunity to network, strengthen their while a second was thought worthy of serious further collaboration and share ideas. Above all, it will support them in consideration. reinventing the TRATON GROUP as a global champion.”

Champion elect He concludes, “Right now, we’re working with HEC and IESE For the TRATON GROUP, the Executive Elite Program has on the second program to begin in 2019. The challenge is to proved to be a resounding success, with two business come up with something fresh, but just as inspiring.”

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ABOUT IESE BUSINESS SCHOOL

Ranked #1 in the world for Executive Education and Custom Programs by the for the fourth year running, IESE is unique in its global scope and reach. The school has campuses, field-based research hubs and strategic alliances across five continents, a distinguished international faculty made up of leaders in business, education and research from all over the world, and a 50,0000-strong alumni community that spans more than 100 nationalities. www.iese.edu/en/executive-education

ABOUT HEC PARIS Specializing in management education and research, HEC Paris offers a complete and unique range of educational programs for the leaders of tomorrow: Masters programs, Summer School, MBA, PhD, Executive MBA, TRIUM Global Executive MBA, open-enrolment and custom executive education programs.

Founded in 1881 by the Paris Chamber of Commerce and Industry, HEC Paris is a founding member of the University Paris-Saclay. It boasts a faculty of 108 research professors, more than 4,500 students and over 8,000 managers and executives in training each year.

HEC Paris was ranked second business school in Europe by the Financial Times’ overall business school ranking in December 2017. www.hec.edu

Developing Leaders looks at the critical confluence between the provision of Published by IEDP | www.iedp.com executive education and the real everyday needs of organizations to strengthen their management teams, their corporate performance, and their leadership.

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