THE BMW JOURNEY TO AN AGILE CULTURE OF COLLABORATION
Markets and environmental conditions are changing so quickly today that companies with traditional structures are no longer able to respond effectively. The consequence: Internal structures and processes can no longer keep up with external complexity and dynamics.
Companies often focus on their internal processes to create order. As a result, routines are established over the years and enterprises become more sluggish, losing sight of their customers as well as their requirements and needs. They no longer primarily focus on the value-creation process, but are rather characterized by silo thinking and inefficient processes, which inevitably leads to an increase in complexity. Agile companies, in contrast, strive for change in their organizational structures. They want to free themselves from unnecessary, paralyzing structures and processes in order to adapt more quickly to new markets and environments. Agile companies want to revive their original founding mentality. They are able to recognize changes at an early stage and adapt accordingly, using the most effective and efficient form of organization. With this spirit, a change program was established in 2018 in a department at BMW and Staufen AG was awarded with the project “EG-5 goes agile.”
WHAT IS BMW EG-5?
The Forschungs- und Innovationszentrum (FIZ) in Munich has been the center of BMW Group’s worldwide research and development network since 1986. The department EG-5 “Product Lifecycle” is situated in the FIZ and is part of overall vehicle development. EG-5’s mission statement is: We ensure sustainability and reliability in the vehicle lifecycle and thereby form the foundation for a premium customer experience. The area of responsibility covers the topics of operational stability, corrosion resistance, product sustainability and materials and their integration into all series. In the department, 200 employees work on nearly 65 simultaneous projects. The department comprises 4 sub-departments and 13 teams.
INITIAL SITUATION – WHERE DID WE COME FROM?
Among BMW employees, the department EG-5 was not considered very attractive for ambitious and talented employees who were looking for more design influence.
There were fewer interactions between employees within EG-5 than with external process partners. Instead of increasing the department’s potential, it increased silo thinking and heterogeneity.
The result was a lack of communication, transparency and adaptability. A survey of employees showed that a high workload combined with failure to achieve goals led to a high level of dissatisfaction. In addition, the requirements of related areas increased.
The dynamics of product innovations, shortening of development cycles as well as increasing complexity and numerous unpredictabilities made changing to agile working methods and structure absolutely necessary.
“WE NEED TO CHANGE THE WAY WE THINK TO PREPARE FOR A FLEXIBLE, COLLABORATIVE AND RAPIDLY CHANGING ENVIRONMENT.”
INTERVIEW WITH BARBARA SCHWEICKERT
What motivated you to steer the course towards agility?
At BMW AG, we gave off the impression of being a very old, outdated and hierarchical area. We wanted to change this.
What measures did you take to change this?
Our goal was not only to work more efficiently and cost-effectively, but also to create more freedom and give employees time to innovate. We wanted to develop a different, better culture. Our goal was to move away from a traditional matrix hierarchy and towards a circular model. In the future more focus should be placed on bottom-up, self-initiated and interdisciplinary work.
What have you achieved?
Much has changed. We save on budgets, work more efficiently and deliver more on time. At the same time, we sense that a cultural change is taking place.
What are the factors of success for this type of project?
Executives must stand behind it, otherwise there is no use in starting such a transformation. External support is also important. You cannot do it on your own.