Simple ideas, decisive leadership, and succession planning can build resilient, globally competitive businesses with lasting impact, said Thomas Dose, MD, BMW Group Chennai Plant, while delivering his chief guest address at MMA’s Platinum Jubilee Celebraions.
Thomas Dose
Managing Director, BMW Group Plant Chennai
I’m used to bringing a present when I’m invited to a birthday party, so my present for today is also a book. It’s called Ilai. For those of you who aren’t familiar with Tamil, let me explain that word: it means simple and easy. Let me tell you a little bit about why I wrote it.
Sixteen years back, I came to India for the first time, and I fell in love immediately. After three years I had to go back to Germany. Seven years back, I came back to India — but unfortunately, and not many people know this, I got an order from our board at BMW. They said, “Thomas, you have to sell the plant. Way too expensive. We can do better with a partner.” And can you imagine — working three years with my Indian colleagues, and my present for them would be that we have to close the plant, or sell it? No. That was not going to work.
The time for just maintaining the status quo, was over. We needed to change something. It wasn’t about managing. It wasn’t about being incrementally better. We had to turn the whole ship around, and that was the point where I learned a lot — with all my forty years now in this industry, thirty-five of them in management. I had a very nice lesson from my Indian colleagues. I was very much into lean. I spent six years in Japan. I studied everything. But the real breakthrough came here in India, because of one single word: AI. Not artificial intelligence; make it simple, make it easy. Don’t overcomplicate everything. Whatever you have learned in your management schools, keep it aside. Make it as simple as possible.
And this is exactly the first message I want to leave you with today. Don’t look abroad. Don’t look to all these management schools. You have everything you need already in your heart. You’ve absorbed it with your mother’s milk, because it is in your DNA. This is very, very important — and this is how we made our turnaround, in just two years: seventy percent cost reduction, one hundred percent increase in productivity, and so on. Nobody questions the plant anymore. Now everybody comes to Chennai to see how the team manages such high complexity with very low automation, at a very high level of quality. I can tell you our plant is the most complex in the entire BMW product portfolio — the most complex plant in the whole BMW network — and also the most cost-efficient. But that was only one point I wanted to make.
The backbone of the German economy is our small and medium-sized companies — that is the backbone. We have more than fifteen hundred small companies in Germany that are global market leaders in their own segment. But most of the others are highly dependent on a single customer. And what we are seeing now is that all these small companies are vanishing — taken over by Chinese companies where the technology is attractive, or absorbed into bigger companies.
If you look at when these small businesses started — after the Second World War, in the fifties and sixties — and you compare that to India, the boom of small and medium-sized companies here came in the eighties and nineties. This is exactly why we need to do something about this. You need to diversify your portfolio, and most important of all, you need to think ahead. Ninety percent of business in India is family-based. So who is going to be the next one? Who is taking over?
Think about the founders. They had a technical idea, a business idea, maybe a customer, and they went deep — they made it happen with that one customer. That is a unique skill. But it is not the same skill you need to hand a business over, successfully, to the next generation. You’ve sent your children to universities. You’ve sent them to business schools. They’ve learned all these management techniques. But when a real crisis hits — like the one we faced at BMW — all these management techniques are only good for running the day-to-day business. They are not built for crisis. In a crisis, you have to throw overboard many of your paradigms. Are your children, are your grandchildren, ready for that kind of challenge?
This is something we need to talk about. This is something we need to think through for the future — how do we create more hidden champions, more world market leaders, so that we are not dependent on the automotive industry alone, not dependent on a single customer? How do we diversify our portfolio? And most important — how do we carry the spirit of the founder forward to the next generation, and the generation after that? Because that is a completely different challenge, and it’s something I want to put on the table at gatherings like this one so that we’re aware of it, and so that we keep it as simple as possible. You already have all the tools you need in your hands.
I want to bring all my experience to work with you, on exactly these simple questions.
