Knowledge Center: Podcast
Reinventing a British icon: London Electric Vehicle Company’s transformational journey12/10/2020 Heidrick & Struggles
In this podcast, Heidrick & Struggles’ Camilla Gilone speaks with Joerg Hofmann, CEO of the London Electric Vehicle Company (LEVC). Hofmann discusses the transformational journey the iconic British brand undertook to move from being a traditional automotive company to its entrance into the growing global e-mobility market segment, as well as his implementation of new company values that focus on speed, trust, and performance. Hofmann also shares his experiences and advice for leading a multicultural company and the benefits associated with workforce diversity.
Some questions answered in this episode include the following:
- (1:18) Can you please take us through the transformational journey LEVC undertook from a traditional automotive company to a disruptor in the industry?
- (2:37) How did your leadership style and that of your executive team change to support LEVC’s overall growth strategy into new markets?
- (4:13) You recently marked an important milestone with the launch of the first zero-emission-capable electric van. What impact will this have on the mobility sector? What future developments can this lead to?
- (5:39) How have the business and the industry been affected by the COVID-19 crisis in 2020? What have you as the CEO done to maintain engagement and morale through this period?
- (9:42) How do you see the rapid shift away from the combustion engine affecting both the industrial value creation and jobs in the local automotive industry?
Below is a full transcript of the episode, which has been edited for clarity.
Welcome to the Heidrick & Struggles Leadership Podcast, the premier provider of leadership consulting, culture shaping, and senior-level executive search services. Every day, we’re privileged to talk with fascinating people who are shaping the future through their leadership and vision. In each episode, you’ll hear a different perspective from thought leaders and innovators. Thanks for listening to the Heidrick & Struggles Leadership Podcast.
Camilla Gilone: Hi, I’m Camilla Gilone, a member of Heidrick & Struggles’ global Industrial Practice, based in London. In today’s podcast, I’m talking to Joerg Hofmann, CEO of LEVC—the London Electric Vehicle Company—formally known as the London Taxi Company and a subsidiary of the Chinese automaker Geely. Joerg joined LEVC as the CEO in February 2019 to lead the transformation of the iconic brand into a leading European manufacturer of electric commercial vehicles and provider of green mobility solutions. He began his career at General Motors and then spent 17 years at Audi, where he held a number of international executive management positions. Joerg, welcome and thank you for taking the time to speak with us today.
Joerg, can you please take us through the transformational journey LEVC undertook from a traditional automotive company to a disruptor in the industry?
Joerg Hofmann: Of course, Camilla. As you know, the London Electric Vehicle Company was formally known as the London Taxi Company, and we have more than 100 years of history with our brand. When we saw disruptive trends like electrification, autonomous driving, and shared economy, we immediately understood—with the help of our parent company, Geely—that we had to change or be changed. And we certainly wanted to remain at the forefront of development. So, we took up the challenge and developed the whole company with a clear focus on electrification. As you know, our industry is changing completely; this may be the biggest change of the industry in the past 130 years, since the invention of the automobile, and we reacted to that new challenge and put complete focus on electrification. We launched our new electric taxi at the beginning of 2018 and are now expanding our electric product range with a new electric van, VN5, which we just launched in the United Kingdom and which we will bring to Europe in March next year.
Camilla Gilone: You opened the first fully electric vehicle factory in the United Kingdom, and your goal is to be the leading European green commercial mobility solution provider. How did your leadership style and that of your executive team change to support LEVC’s overall growth strategy into new markets?
Joerg Hofmann: We made a £400 million investment in a new electric vehicle factory in Coventry, and we are now expanding our brand into Europe with the opening of a new export office for the European Union in Frankfurt. So, we are growing the base of our business. And, as you correctly said, electrification and being an e-mobility company need a different approach. I implemented new company values to react to the new challenge, and our company values at LEVC are now speed, trust, and performance. In order to survive in the e-mobility sector, where a lot of companies, even little start-ups, are popping up every day, you need to be faster or at least at the same speed as the others. You need to trust your team, and you need to be a high-performance team. My management team and I are always focusing on [ensuring that] all the people we hire are hands-on, very pragmatic, and very speed driven. With that attitude, we picked and selected a good, visionary e-mobility team.
Camilla Gilone: You mentioned before that you recently marked an important milestone with the launch of the first zero-emission-capable electric van, the VN5. What impact will this have on the mobility sector? What future developments can this lead to?
Joerg Hofmann: COVID-19 has had an impact [on the sector], but there is one segment that is growing despite the pandemic, and that is the e-commercial van segment because, due to COVID-19, more and more people are doing online shopping and e-commerce is growing dramatically, and this will certainly continue after COVID-19 has disappeared.
So, the e-commercial vehicle—the e-van business—is growing. There’s a segment of about 600,000 cars per year in Europe—this is a small and mid-sized van segment—and our electric van is exactly targeted at that 600,000-car segment. The beauty, Camilla, is that, at the moment, that whole segment consists of diesel vans, and we are living in a time of sustainability, a time when zero-emission zones are increasing and people are thinking much more green than before. With our electric van, we are entering that growing market segment—opening up the electric van segment, which we believe has huge potential to grow.
Camilla Gilone: In 2019, I remember LEVC celebrated a record, delivering 2,500 sales of the electric TX [taxi] model. How have the business and the industry been affected by the COVID-19 crisis in 2020? What have you as the CEO done to maintain engagement and morale through this period?
Joerg Hofmann: The impact of COVID-19 on the taxi business is certainly significant. The overall automotive market is down by something between 50% and 60%. We had a similar negative effect on our taxi business in the United Kingdom; that’s quite clear. What helps us dramatically is that we are expanding our business across Europe, and so we are compensating for a lot of losses in the United Kingdom with sales in Germany, France, and other European countries. At the same time, the launch of our new electric van, the VN5, will also help us to compensate for the negative impact of COVID-19.
To maintain morale of staff and people, my firm leadership principle is regular and especially open and frank communication. This is very important in normal days as well. Now, due to COVID-19, we can’t have many face-to-face meetings, but I send a CEO message to all my staff members every week, giving them an update, giving them frank messages about our challenges, but also the good news, the strategic things we are working on, to keep everyone closely involved. We are talking a lot these days about home offices and working from home. These [arrangements are] nice, and we have them at LEVC. However, we encourage people wherever possible to show up physically at least one or two days a week in the office. As the CEO, I see my role as a leader to be an example, and that means that I’m commuting between Germany and the United Kingdom. Despite all the quarantine rules and limited travel connections and flights, every week I’m on the plane; I show up at our factories in the United Kingdom for two to three days before I go back to Germany and work from home. I think being personally, physically present and being seen by the staff on-site is key, and I consider this as leading by example, which is quite important these days.
Camilla Gilone: That’s a very good message, Joerg, and thank you. You’ve been at the forefront of the disruption in the automotive industry, reinventing a British icon. How will LEVC and its culture continue to evolve as the transformation takes hold?
Joerg Hofmann: What we did already—and we can’t go back—was change our company from a taxi company to a production and engineering company for electric commercial vehicles. We are broadening our scope to electric commercial vehicles. For sure, the British core of our iconic brand will always be at the center. However, with our export strategy, we will certainly grow our brand to be a much more global brand.
On the other hand, what is also important is that we will consider new business areas. Eco-electric commercial vehicles are certainly the hardware that we are producing, but I can tell you that we have to take up the next disruptions and challenges: cloud-based business, digital business, infotainment, and telematic systems. We set up a new business unit inside LEVC to work exactly on that new digital, cloud-based business as an addition to our electric commercial vehicle business.
Camilla Gilone: We look forward to this evolution. Last but not least, Joerg, let’s talk about the workforce. How do you see the rapid shift away from the combustion engine affecting both the industrial value creation and jobs in the local automotive industry?
Joerg Hofmann: Everyone is saying that developing and engineering a battery car, an electric vehicle, is easier and requires fewer people than engineering a combustion engine car. This is certainly true in some areas. However, I firmly believe that positions, profiles, and jobs that you lose on one side, maybe because an electric engine is easier to engineer compared to a combustion engine, will be gained on the other side. What we need is a new skill set; that’s quite clear. And looking at LEVC, we certainly are growing and expanding our electrical team; all our electrical engineers, electrical experts, battery experts, and software experts have the new skill sets that we need, and we are actively hiring in that area, whereas in other, rather mechanical-focused areas, we need fewer people. So, I think we will lose jobs in one area, but we will create jobs in other, different skilled areas.
Overall, for the industry and value creation—in the old days, in the old automotive industry, there was a car. A car manufacturer produced a car and just the hardware was core. What we will see now, as I said before, is that new areas will become more important. You will still manufacture a car, but it’s important, as we will do at LEVC, to offer something around it. You have to offer software solutions; you have to offer applications and digital business. So, the hardware will remain, but you will see that in order to survive successfully in the long term, you have to add digital, software-based business to the hardware. This will be the change that we will all see.
Camilla Gilone: To conclude, Joerg, let me ask you: as a German leader working internationally, what advice would you give to the other executives who wish to grow a truly multicultural business?
Joerg Hofmann: I spent my automotive career, more than 20 years, across the globe—Japan, the United States, Brazil, Asia, Europe—and I was quite privileged to always have multicultural teams around me. In our European office, we have people from eight different nations, including Germany, France, the Netherlands, Sweden, and Poland. It’s a great combination of people. In the United Kingdom, we have mainly British employees, but we have a lot of contact with China, and we have some European employees as well (I’m German). For me, it was always a big privilege and very inspiring to work with different cultures. [I learned that] there’s a different challenge everywhere, but there are also very interesting new skills and values that you learn by dealing with each culture. You find out that each culture has different strengths and different skill sets, and it was always interesting to me to learn and grown my own skill set.
People say it’s very difficult to lead multicultural business units. I don’t agree with that. As I said, I find it very rewarding, very inspiring, and interesting. But the most important thing is that I saw business leaders failing to run multicultural teams because they tried to adjust themselves too much to the local community. It should be very clear that, as a German, I can’t be Japanese; if you are British, you can’t be Chinese. If you try to be a copy of a Chinese person, it will never work. The people will not accept you because they don’t see you as you are. So, my advice (and what always worked successfully for me) is that, wherever you are, stay authentic and stay true to who you really are.
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