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Reacting faster and with more agility – this is becoming a critical success factor for companies in the digital age. With its new understanding of leadership, Schaeffler is preparing for new challenges such as electric mobility and Industry 4.0.
At the beginning of the 20th century, Antarctica was still “Terra Nova”, uncharted territory of which most people had only vague ideas. On December 14, 1911, Roald Amundsen became the first person to reach the South Pole, and afterwards he and his team returned to their Norwegian homeland safe and sound. The success of the polar explorer was not only the result of a sophisticated strategy, but was above all due to its consistent implementation under his leadership. For example, in the face of many doubts he decided in favor of an anchorage that was much closer to the geographical South Pole than that of his rival Robert Scott, whose expedition tragically failed.
Schaeffler also needs to conquer new territory. After all, the automotive industry and all of the suppliers’ other target industries are facing radical change. Schaeffler reacted to this situation at an early stage with its strategy “Mobility for tomorrow”. But what is true of every journey applies here as well: The approach alone is of little avail if it isn’t implemented correctly. The Schaeffler Group therefore launched the excellence program “Agenda 4 plus One” as part of its strategy. It is designed to not only increase the company’s customer focus, operational excellence, and financial stability, but in order to also improve competitiveness and increase corporate value in the long term, the Agenda explicitly addresses the topic of “leadership and talent management”. One of now 20 groupwide initiatives included in the program is entitled “Leadership & Corporate Values”.
At the heart of the initiative are Schaeffler’s values, leadership principles, and Leadership Essentials. The values of the listed family company were revised two years ago with the involvement of a great number of employees:
These values form the basis for all of Schaeffler’s entrepreneurial activities and are the starting point for a new leadership culture that, on one hand, promotes speed and dynamism so that the new challenges can be met, but at the same time also preserves the company’s identity on the other. It is the task of every leader at Schaeffler to ensure in their areas of responsibility that these values are brought to life. Three Leadership Principles are derived from this:
Our Corporate Values – sustainable, innovative, excellent, and passionate – provide identity and direction for all employees and are the components of Schaeffler’s DNA. They describe who we are and who we want to be in the future, based on our heritage. Our Corporate Values are not only our internal benchmark, but also describe how we want to be perceived by others.
Our Leadership Principles define our aspiration and what the results of leadership should feel like: We want to work in an organization that is characterized by trust, transparency, and teamwork.
Our Leadership Essentials specify critical leadership behaviors by describing how people at Schaeffler lead and drive the business success. They help our leadership in making better trade-off decisions in everyday business and thus make our organization stronger.
Our future viability also depends on whether we succeed in establishing a leadership style that allows sufficient freedom.
Our Leadership Principles represent a goal for good leadership. Since the end of 2017, they have been accompanied by six Leadership Essentials that describe how executives at Schaeffler should act. Every action and every decision in day-to-day business must be measured against these essentials. This applies not only to leaders with disciplinary responsibilities, but to anyone who assumes leadership – for example in projects such as the development of a product for volume production or the introduction of a new IT standard.
These Leadership Essentials play a key role in the further development of Schaeffler. It was therefore clear from the outset that if they were to have the desired effect, they could not simply be dictated by the Executive Board. Hence, they were developed using a multi-stage process which started with individual interviews with leaders from all hierarchical levels that were conducted by Human Resources. Additionally, an online employee survey was conducted. The results in brief: For Schaeffler to be well prepared for the challenges of the future, leadership concepts must change. Leadership should no longer concentrate mainly on problem-solving instructions, but rather the further development of the company’s own employees should become the focus of attention. To develop Leadership Essentials in line with this understanding, workshops were held in all regions during the first half of 2017. Based on the results of these workshops, the company’s top management discussed the Essentials at the annual executive meeting before they were ultimately adopted.
Late 2017 saw the company-wide implementation of the Leadership Essentials, accompanied by targeted communication measures throughout the group. Their objective is that not only executives, but all employees worldwide should know and understand the new guidelines. In order to give the necessary weight to this topic, CEO Klaus Rosenfeld holds many personal discussions at various locations, including with junior management staff. An employee survey on the subject of leadership is carried out to check whether the communication goals are being achieved. With the introduction of its Leadership Essentials, Schaeffler is also changing the standards by which the performance of executives is measured. While the focus has so far been on achieving agreed-upon targets, annual perfomance appraisal meetings will in future also cover how targets are reached.
The new Leadership Essentials are also intended to help maintain Schaeffler’s attractiveness as an employer for specialists and managers in the long term. “For young talents, it matters whether their own manager is promoting their development”, says Corinna Schittenhelm, Chief Human Resources Officer. “Our future viability also depends on whether we succeed in establishing a leadership style that allows sufficient freedom.”
However, Schaeffler employees are not the only ones who benefit from the new leadership culture – it especially hold benefits for customers as well. Schaeffler’s business is constantly growing more complex: The company currently develops complete electric axle drives and intelligent, self-monitoring bearings for industrial applications. This is only possible if all players within the company connect for success. Furthermore, globalization is increasing prosperity in all regions of the world – and with it the quality demands of customers. These can only be met in a global production network if courageous decisions are made locally and employees take on responsibility. Since innovation cycles are becoming ever shorter in the digital age, a technology leader such as Schaeffler must introduce new forms of work and innovative processes. In particular, the cooperation with start-ups and business incubator forums can help drive the change.
Connect for success
We all have both the aspiration as well as the responsibility to continue Schaeffler’s success story. We aim to excel to the top in certain businesses and maintain our position where we are already leaders. This is only possible if we cooperate seamlessly across our regions, businesses, and functions.
Take on responsibility
Every day, leaders are required to make decisions, with varying degrees of difficulty and risk. Taking and standing by those decisions is an essential component of leadership that should be carried out consistently.
Drive the change
In recent years, our industry has experienced incredible technological development at an ever-increasing pace – a trend that is set to continue. Therefore, all leaders need to drive innovation and engage our employees to develop and implement new ideas.
Manage for results
Result orientation is part of our DNA. This “promise and deliver” attitude is something we need to keep and further build on. A stronger focus on customer requirements and increased efficiency will be vital in serving their articulated and anticipated needs.
Care for people
The commitment and expertise of our employees are key to the future success of our company. Therefore, we need to ensure that our leaders not only help their teams to develop new skills, but also provide an inclusive working environment that encourages and acknowledges creativity.
Empower your team
Leaders need to be able to focus on the most important tasks at hand. To realize our maximum potential, we need to empower others and we have to trust in them to do a good job.
However, experiments are unacceptable when it comes to keeping promised delivery deadlines to customers – for example, because production or even just a car would come to a standstill without a certain spare part. Manage for results is therefore a key guideline for Schaeffler’s business activities. New technologies such as electrified drives or digitally interconnected industrial solutions require solid training and ongoing further education for employees. Care for people therefore means that Schaeffler must also use the highest international standards of vocational training and education. The boss as sole decision-maker cannot cope with an increasingly complex world, especially not when volume production of an innovative product is launched at a new plant and many technical and organizational challenges must be met at the same time. The ability to empower your team therefore becomes a key qualification.
The examples on the following pages show that the six Leadership Essentials have already been brought to life at Schaeffler today. Thus, a crucial prerequisite for conquering uncharted territory – whether in electric mobility or Industry 4.0 – is now in place.