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Dieter Zetsche
  Dieter Zetsche
 

Adapting Is Key to Survival, Says Chrysler President Dieter Zetsche

3/11/2005 --

William Davidson Institute and European Union Center sponsor event.

ANN ARBOR, Mich.—Drawing from his own business experience and mixing in a bit of humor, Chrysler President and CEO Dieter Zetsche entertained a University of Michigan audience with lessons he has learned during 28 years in the auto industry and from the merger of Daimler-Benz and Chrysler Corp.

Speaking at the Ross School of Business on March 8, Zetsche, who has run Chrysler since 2000, stressed that while developing countries such as China and India are important to the future of auto companies, the relationship with the developed world is still vital. His talk was sponsored by the William Davidson Institute and the University’s European Union Center.

"Despite many political differences, the ties between Europe and America are as important and are as tightly woven as ever before—especially the economic ties," he said.

Zetsche said global competitiveness is increasing each year with more nameplates and models in the market. This may lead some to think "only the strong survive," Zetsche said, quoting Darwin. But Zetsche reminded the audience that Darwin also said those who are "most responsive to change" survive.

"Adapting to compete in the new order is the key to survival," he said. The merger of Daimler-Benz and Chrysler was necessary for the survival of both companies. It didn't immediately solve any of the problems both were having but "created an opportunity for us to blend our organizations, expertise and technology know-how in the search for solutions to surviving in this hyper-competitive global market," Zetsche said.

He said the 1998 merger taught executives at the new DaimlerChrysler many lessons, including five he shared with a capacity crowd at Hale Auditorium.

  • Success or failure may be less about the business model you choose and more about how well you execute your model.
  • In a global merger, protect your brands and integrate your operations.

Merging two companies but then running them as separate entities doesn't make sense. "That's not a marriage, that's just roommates," he said with a smile.

The DaimlerChrysler merger didn't mean the company was going to put a Mercedes badge on a Chrysler or vice versa. However, some operations were transparent and could be integrated and streamlined. The company's Procurement and Supply group, separated into three divisions and run by one executive, is an example of the new state-of-the-art processes created by the merger.

But mergers can be difficult for employees.

"When you have to tear up old organizations to build new ones, you take some people out of their comfort zones and that can be a managerial challenge," Zetsche said.

  • When it comes to merging cultures, it's all about business.

Merging the American and German cultures was not difficult; merging the corporate cultures was. Both companies had their strengths and had to learn from each other. At Chrysler, Zetsche said they had to adopt the discipline of Mercedes without losing their creative spirit. The automaker called the concept "disciplined pizzazz," a term that has "stuck with our employees and made us a better company."

  • Never take your eye off your core business—be it product or service. Zetsche said it may sound basic, but it is easy to be distracted—especially if a company is going through a merger or major business initiative.

"When you're competing against global competition, taking your eye off the ball, even for a moment, can cost you big," Zetsche said.

Also, in a globally competitive market, a company can't be satisfied to simply work in its home market "while the competition brings the fight to you. You also have to take the fight to the competition," Zetsche said. "You can only do that successfully if you first get the product right."

  • Although the business world is more competitive than ever, there's also a new world of opportunity for those who are best prepared, willing and eager to take advantage of it.

Zetsche said global companies need talented people with a good education, experience or demonstrated ability, and with the attitude to succeed.

A bachelor's degree is required in the global business world these days and a master’s degree is preferred. “People need to have knowledge in other fields.” For instance, engineers should know something about finance and economics majors should know about marketing. Studying abroad also is favored by global companies, which shows them you can adapt to other cultures and conditions. And speaking a foreign language, even if it's just the basics, can go a long way in the business world, he said.

Finally, there is a need for what Zetsche calls "corporate maturity." Companies don't expect a new hire to walk through the door and know everything. But companies expect new hires to work hard to learn the ropes.

"Teamwork and a teamwork attitude are essential in global companies today," Zetsche said. "That's why so many companies are moving toward behavior-based selection processes. In other words, it's not only about your achievements, but how you achieved them."

Zetsche also urged the students to make their own opportunities. “Find mentors who can help steer your career," he said.

"Take advantage of training and continuing education opportunities. Be willing to accept global assignments with increasing responsibilities that provide exciting challenges and professional growth. And, don't forget to have fun while you're doing it."

Written by Dan Shine



For more information, contact:
Bernie DeGroat
Phone: (734) 936-1015 or 647-1847
Email: bernied@umich.edu