Volkswagen Australia Unplugged: Michał Szaniecki on Navigating Automotive Innovation
Many of the most remarkable successes stem from initiatives that were launched when they were 30%, 50%, or even 80% ready, rather than 100% complete. My advice is not to wait for that elusive 100%. Instead, act on your ideas earlier, test them, experiment with them, and gauge where they stand.
Michał Szaniecki
Volkswagen Australia
Managing Director
In a world where cars are more than just vehicles, Michał Szaniecki, Volkswagen Australia's linchpin, offers a lucid take on the transformative tides of the auto industry. From the sparks of electrification to refining the art of the deal, Szaniecki dissects the challenges and triumphs of today's car market. Get an insider's view on how one of the industry's titans is setting the pace for tomorrow.
How would you define innovation in the automotive industry, and how is Volkswagen contributing to this?
Innovation in the automotive sector, as I perceive it, revolves around three pivotal areas:
- Evolution of the Automobile Product: Vehicles are rapidly evolving towards electrification and becoming “connected cars”. The transformation is not just in terms of fuel sources but also in the integration of online technologies.
- Consumer Journey: Buying a car isn’t like picking up a shampoo bottle. It’s a process that might span across months, encompassing a multitude of considerations due to its significant financial implication. Thus, there’s a vast opportunity to gather data and implement business solutions to enhance this consumer journey, ultimately boosting conversion rates.
- Data-driven Business Solutions & digitization: this is all about autonomous cars (slated for 2025 already at our Group), being safer & giving us back more time, as well as all ecosystems to hyper-accurately respond to particular mobility needs of our consumers.
Further elaborating on the innovative strides, the push towards more sustainable vehicles is evident. Modern cars, with their technological advancements, are not only more environmentally friendly but also significantly safer. Interestingly, the rise in car safety technologies has led to a decrease in accidents, which is a delightful consequence for society at large.
However, there’s an existing paradox: purchasing a car has become a convoluted process, made complex by the industry itself. Discussing or even selling such a technologically intricate product, considering its mechanics, performance, efficiency, and various components, becomes a challenge. There’s a vast opportunity in simplifying this traditionally daunting 3-month process. By making it more straightforward, we not only facilitate the customer’s journey but also increase our sales potential. A staggering statistic to note is that in the U.S., 80% of Americans would rather visit a dentist than a car dealer. This apprehension arises from the perceived advantage dealers have, given their technical knowledge. By addressing this through a simplified and educative approach, and conveying information in layman terms, we see a grand opportunity to refine our business operations.
Innovation is not merely about flying cars of the future but also about refining present processes, ensuring user-friendliness, and continually adapting to the evolving needs of our customers.
What strategies does Volkswagen employ to foster a culture of innovation among its employees?
At Volkswagen, our strategy for nurturing a culture of innovation is twofold and rooted in both inspiration and pragmatism:
- Broadening Horizons: We continually encourage our team to look beyond our industry. While the automotive sector can be insular, often caught in its technical intricacies, it’s essential to seek inspiration outside of our immediate realm. Whether it’s understanding financial models outside of car financing or embarking on journeys like Dream Force in San Francisco to experience customer paths in other sectors, we’re committed to finding parallel innovations that can be applied within our industry. By peering into the “satellites” surrounding our domain, we ensure that our approach remains fresh and isn’t confined just to the physical aspects of our product.
- Experimentation and Pragmatic Inspiration: Once inspired, it’s crucial to translate these ideas into tangible experiments. While large-scale implementation may not always be feasible, allowing our team to test these inspirations on a controlled, smaller scale is vital. This practice ensures that innovative thinking doesn’t remain theoretical but has a tangible impact.
Furthermore, while our cars’ physical aspects are essential, our innovation culture doesn’t rest solely upon them. Every surrounding component, from the purchase process to the overall brand experience, holds equal weight. Emulating the thinking models of giants like Amazon or Apple helps infuse our business with a renewed perspective.
One of our aspirations, for instance, is to simplify the car-buying process. Imagine selling a car with a single signature, in one visit, ensuring both safety and psychological comfort for the consumer. While it may sound utopian at the moment, it’s such dreams that guide our innovative pursuits.
Our innovation culture thrives on adopting an external perspective, always remaining curious and open to learning from diverse sources.
What emerging trends in the automotive industry should consumers be most excited about?
So, from my perspective there is three trends worth to watch:
- Electric Mobility: The shift to electric vehicles (EVs) isn’t just about creating a greener planet. Modern electric vehicles are proving to be not only environmentally friendly but also a potentially safer and more comfortable choice for users. The global statistics show a noticeable decrease in accidents with electric vehicles, suggesting that users are driving more cautiously. This makes EVs not just good for the planet, but also for the passengers, and as the technology evolves, there might be more exciting advancements even beyond electric power.
- Connectivity: The modern automobile isn’t just a tool for mobility; it’s now becoming a crucial part of our online ecosystem. Cars will no longer just interact with smartphones but will be seamlessly integrated into our online lives. Solutions are emerging where, for instance, a courier can access a car’s boot to leave a package safely, without the owner being present, thus merging our online shopping habits with our offline mobility assets.
- Over-the-Air (OTA) Upgrades: Traditionally, cars would depreciate quickly and age both in terms of their physical attributes and technology. However, with the advent of OTA upgrades, vehicles can remain technologically current for much longer. The car’s “heart and soul”, its software and digital features, can be refreshed to ensure it remains as contemporary as when it was first bought.
Besides these primary trends, the market dynamics are changing too. Brand loyalty is reducing, and the conventional automobile market leaders face stiff competition from new entrants, especially from the Asian markets. These new entrants bring a lot of dynamism to the industry, questioning established norms, and forcing brands to be better than ever before.
Additionally, an interesting shift is happening in the product landscape. Where once cars were highly differentiated based on technology and features, now they’re becoming more technologically similar. This means brand loyalty can no longer be solely based on product differentiation, pushing brands to innovate in other areas to win consumer trust and interest. This rapid evolution and challenge are exciting, as they mean better products and services for consumers in the long run.
In your opinion, how is the consumer behavior shifting, especially in the market, and how is VW responding to this?
As I recently experienced while traveling 2,500 km in an electric car in Australia, the infrastructure might be less developed compared to places like Poland, but the journey was without major hitches. The cultural shift is pivotal here. In some cultures, speed is paramount, but with EVs, one might need to pause for charging. However, these pauses can offer quality breaks, leading to a more refreshing journey overall. After such distances, I felt neither mentally nor physically tired and found the entire electric driving experience superior. Electric cars aren’t just about being green; from a hedonistic viewpoint, they simply offer a better driving experience.
Consumer behavior is undoubtedly evolving, not just in Australia but on a global scale. Observing from a Polish perspective, where we’ve witnessed emerging trends that have been present for years, there are several noteworthy shifts.
- Electric Vehicles (EVs): In Europe, the adoption of electric cars was primarily driven by legislative changes and financial incentives from governments. However, in Australia, the consumer mindset seems to be inherently inclined towards EVs. Australians are buying electric cars because they genuinely like the idea of a greener future, making a statement, and doing something positive for the environment. Their motivation is less about legislative incentives and more about personal conviction and vision for a sustainable future.
- Vehicle Ownership Dynamics: The traditional notion of owning a car is changing. Instead of purchasing a car outright, consumers are more interested in flexible ownership or leasing models, binding themselves to a vehicle for shorter periods like 4-5 years. This change offers an opportunity for automakers to build and sustain loyalty through flexible offerings.
- Commoditization and Diversification: As the auto industry tends to produce similar products across brands, the differentiation comes from the entire ecosystem surrounding the car. It’s not just about the vehicle anymore but about the associated services, car-sharing possibilities, ecosystem engagement, and more. The idea that a car can be co-used by neighbors or family members, or integrated into broader mobility schemes like carpooling, underscores the trend towards viewing vehicles as part of a larger mobility solution rather than just a standalone product.
In response to these shifts, it’s imperative for automakers, including VW, to continually adapt, innovate, and offer products and services that align with these changing consumer preferences.
What role do you see digital platforms and connectivity playing in the future of Volkswagen?
Digital platforms and connectivity are transforming the automobile industry and are pivotal for Volkswagen. The integration of connectivity in cars significantly enhances comfort and safety for consumers. As vehicles become more connected, it results in fewer accidents, thereby safeguarding people’s health and lives. Additionally, these advancements allow cars to be more intertwined with our daily lives, even assisting in managing our schedules, including service visits.
Furthermore, digital platforms, especially those that interact with consumers before they visit dealerships, enable the efficient utilization of first-party data. This data helps Volkswagen understand consumers’ specific needs, allowing for a more tailored approach. For instance, instead of inundating a potential consumer with information, Volkswagen can provide details aligned with their exact requirements. Whether someone is looking for a family car or a vehicle suitable for their weekend escapades, digital platforms allow for a precise understanding of consumers’ life stages and requirements.
Moreover, the wealth of data available to us today ensures that we can engage consumers more effectively. Gone are the days where cars just waited to be found; now, we have the means to find and understand the consumer. By leveraging this information, Volkswagen can conserve resources, avoiding a blanket approach that may not resonate with everyone.
In the post-purchase phase, the goal is to maintain an ongoing relationship with the consumer, not just for monetary gains, but to genuinely assist them in their mobility needs. Digital platforms empower us to do this seamlessly, enhancing our ability to communicate and understand our consumers better.
How do you, as a leader, stay updated with fast-evolving trends and technologies in the automotive world?
Firstly, whenever I immerse myself in a new environment, it’s essential to listen, learn, and understand rather than rush to judgments. While many leaders come with a “know-it-all” approach, I prioritize a “learning tool” mentality, viewing every situation as an opportunity to learn, regardless of its complexity.
Instead of resting on past achievements and solely relying on established pathways, I consistently seek out new information and experiences. Even if it means taking risks and facing challenges, I believe that the aggregation of these varied experiences eventually yields more significant benefits.
In past roles, when I led teams in Germany and Switzerland, I initially tried replicating successful strategies from one context to another, expecting quick results. However, this led to a significant setback, teaching me the importance of adapting and understanding the unique nuances of each environment.
Displaying vulnerability as a leader, admitting when you don’t know something, and seeking advice from team members with more localized knowledge can be powerful. This approach fosters trust, encourages team loyalty, and allows the team’s collective potential to be realized more swiftly. Instead of team members merely waiting for directives, they become proactive contributors, leveraging their individual talents for the team’s benefit. In essence, by focusing on continuous learning and fostering a collaborative team environment, I ensure that I stay updated with the rapidly changing automotive world.
Any advice for aspiring leaders in the tech-driven industry on balancing innovation with practicality?
Certainly. One of the most valuable insights I’ve gathered from my reading about the tech culture in the U.S. and from observing numerous successful organizations is that waiting for perfection can be counterproductive. Many of the most remarkable successes stem from initiatives that were launched when they were 30%, 50%, or even 80% ready, rather than 100% complete. My advice is not to wait for that elusive 100%. Instead, act on your ideas earlier, test them, experiment with them, and gauge where they stand. This approach might lead to some failures, but it’s crucial to remember that the real market and the response from the other side are the best indicators of an idea’s validity, not a meticulously prepared presentation. In essence, without execution, innovation is merely a hallucination. Embrace the idea of launching, learning, and iterating rather than aiming for perceived perfection from the outset.
