Ferrari puts the future in the driver’s seat

Gallery: The million dollar Ferrari prototype from 1957 and the Shelby Cobra racing cars from 1963

2 pictures

It is hard to deny the importance of the people at the top of an organization in initiating or suppressing transformative change. Despite the popularity of a true bottom-up revolution, the catalyst for change, either as originators or as supporters, almost always takes us back to the organization’s C-suite and mostly to the CEO himself. This is why Ferrari’s election of a new CEO a few weeks ago is so interesting; and why the relative lack of press attention is so confusing.

It’s hard to say that this is far from the first step in an inevitable transformation of a fabled organization and its business model. Additionally, Ferrari’s choice of an industry outsider to take on his position as CEO is a volley fired over the bows of other industry traditionalists who believe that with the skills and competencies they already have, they are directly facing change can hand; that they can take small samples from other disciplines like electronics and tie them to traditional car cultures, and still do well when the forces of disruption pervade their industry. Make no mistake, this is a big bet on a certain future looming in the unknown; There is no guarantee Ferrari is right, but it certainly is betting on change, not the status quo.

The automotive saga is a living testimony to the importance of leadership in creating great competitive changes. Just think of Henry Ford’s decision to build a simple car and pay his employees a fair wage; Alfred P. Sloan’s decision to offer customers a portfolio of models rather than “take it or leave it” and then the annual design changes that shifted the focus of the industry from development to marketing; Toyota’s Eiji Toyoda institutionalized the Toyota production system, differentiated a then unknown company as a provider of reliability in an industry that was anything but, and made Toyota an international auto power; and Elon Musk, who almost single-handedly led the global automotive industry into the electric vehicle era. It can be argued that the history of automobiles is a history of leadership, successful and not.

All of these giants in the automotive industry were “car people” except for one: Elon Musk and his Tesla; and now two: Ferrari’s election of Benedetto Vigna as new CEO. Vigna is currently President of the largest division of the European chip manufacturer STMicroelectronic. How important is it to be an “outsider” for the industry at a time when electronics are reinventing the automotive customer experience? After all, Vigna’s predecessor as CEO of Ferrari, Louis Camilleri, wasn’t a “car man” who had built his career at Philip Morris International, but PMI was so closely associated with Ferrari as a sponsor of its racing teams that Camilleri was, in the truest sense of the word Word, already one of the most important stakeholders before he took on the CEO role.

At a time when every traditional manufacturer seems to be struggling to introduce an “outside-in” mentality into their business, in an industry where electronics will almost inevitably be the future, you wouldn’t bring an electronics star with you. to run a company the ultimate outside-in leadership step? After all, organizational transformation is so much about changing mindsets, and mostly the mindsets that need to be changed the most are at the forefront, especially if the organization has been successful in the past and present. If you think about it, despite his occasional craziness in promoting Tesla’s fortune, Musk didn’t do such a bad job that he turned the entire global auto industry upside down at the same time; but of course he founded Tesla, so he didn’t have a deadlocked culture to deal with. What Musk Tesla has given is a combination of personal energy, talent search, the courage to be courageous, boundless curiosity, restlessness and the spirit of discovery.

Vigna is an explorer too, and explorer mindsets are the first step to effectively tackling the unknown, and that is exactly what the disruptive challenge of electronics poses to the automotive industry. In 1995, at the beginning of his career at STMicroelectronics, Vigna was hired to develop MEMS or microelectromechanical systems, something he then had to learn on the fly. The result was the motion sensor chip that powers Nintendo’s Wii. This ability to perform in the face of the unknown can help Ferrari find a place in a future that in many ways denies the exuberance of Ferrari tradition.

Despite all of the amazing changes that have taken place in the automotive space in recent years and the inevitable digital convergence, the specifics of Ferrari culture are particularly strong. Baked in the hot Italian sun and tested on so many racetracks over the years, Ferrari’s culture is special. Like most industries in the midst of potential upheaval, today’s insurgent automotive technologies come from the outside and in some ways are alien to what Ferrari has stood for all these years. Mention Ferrari to any car enthusiast and the conversation inevitably turns to the howling sound of a powerful Ferrari engine. Road & Track magazine rated Ferrari’s twelve-cylinder 412 T2 model from the 1990s as the best sounding racing car engine in history, with a three-liter engine that could reach 15,000 rpm. Added to this is the tradition of the Ferrari Formula 1 racing teams with legendary drivers such as: Juan Manuel Fangio, Michael Schumacher, Nino Farina, Alberto Ascari, Tazio Nuvolari, Mike Hawthorn, Phil Hill and Niki Lauda. Magic reigns here: the drivers, the cars, Italian racing red and the all-pervasive legacy of founder Enzo Ferrari, il commendatore, the commander, himself a former Alfa Romeo racing driver before he left the Scuderia Ferrari Grand. Prix ​​Motorsport Team started in the early 1930s. Ferrari’s charm, and abundant and impressive, has engine oil and mechanics as integral parts of its birthright; How far can one move from electronics and, above all, how resilient will they be to Vigna and the future it represents?

Disruption is an industry phenomenon, however, and when it comes to the auto industry, it is the need to abandon its century-old reliance on internal combustion engines in order to meet the emissions standards that will relentlessly drive the industry toward ever greater car engine electrification and computerization . Manfred Broy from the Technical University of Munich paints a clear picture of an industry in upheaval: “Software was once part of the car. Today software determines the value of a car, ”and in fact, the majority of this software is now made by suppliers far outside the traditional automotive industry. Deloitte Touche Tohmatsu Limited estimates that by 2030, fifty percent of the cost of a new car will be semiconductor-based electronic systems. Such forces of change are seemingly overwhelming and relentless. Ferrari’s latest answer, the 296 GTB, is a hybrid that combines a 663 hp three-liter V6 turbo engine with a 167 hp electric motor and a 7.45 kWh battery; In the history of disruption, hybrids have had a dubious history, especially if you remember hybrid endeavors in photography, smartphones, and cartridge fountain pens.

In a recent discussion about transformation experiences organized by StrategyTools, the question arose as to the “critical moments” that can make or break a transformation story. It has been argued that that critical moment when you decide to stop doing old things can be just as important, if not more important, than deciding to do new things. Such crucial moments have a symbolic quality that makes the path into the future crystal clear and often offers the ability to accelerate the pace of transformative change. The decision not to hire another driver would fit this definition. Now the same leader has to come up with a compelling transformation story to keep the momentum going. Ferrari has put the future first in choosing Vigna and that likely means that whatever happens next, no matter how transformative it may seem, it will have the support it needs where it matters most, at the forefront of the industry Organization. This is certainly a transformation journey to watch out for.