Anadi Misra and Dr. Ulrich Bez
On Oct. 3, Dr. Ulrich Bez, CEO of Aston Martin, came to Chicago Booth to speak at a lunch event co-hosted by the Media, Entertainment and Sports Group (MESG) and the European Business Group (EBG). Under Dr. Bez's leadership, Aston Martin grew its sales more than fivefold within thirteen years, returned to competitive motorsport, launched more than 20 new models and reclaimed its place as a maker of one of the most sought after luxury cars in the world.
Prior to the lunch event, Chicago Business briefly caught up with Dr. Bez to talk about the company, its strategy and his vision for the future.
Chicago Business: How was your transformation from an engineer to a manager and then CEO?
Dr. Ulrich Bez: It is important to understand what you do to be a good manager. So you need to know your product very well. You must understand the product and its complexities better so you can make better decisions. I have done a lot of things as an engineer, from managing a single project to multiple projects, have created products and been involved with innovation. I have learned valuable lessons from this that have helped me shape my perspective as a CEO.
CB: What are Aston Martin's plans for the near future in terms of new models and segments, and new markets (such as China and India)?
UB: Growth will come from being present in all key markets. Since customer preferences always keep evolving, we have to think how the sports car market will look in 15-20 years. So we are always considering new options. Emerging markets like China and India aren't luxury sports cars markets yet as people who would purchase those kind of vehicles typically tend to hire a driver, whereas Aston Martin's cars are intended to be driven by the owners.
CB: What are you most proud of at Aston Martin?
UB: I am very proud of how our brand is valued in the public: how our friends and supporters view the brand and how we are known among the "coolest brands" in the world. I think we are considered cool because we are honest, authentic, original, but most important, we are different. That is our USP.
CB: How does it feel to be the CEO of such a valued brand? What motivates you on a day-to-day basis?
UB: Being the CEO of such a valued brand is not just fun, but it is hard work, 24x7. You also get to meet interesting customers and friends and get to hear their perspectives. The underlying motivation comes from a desire for perfection and beauty, an opportunity to be involved with a brand which is a world leader in several aspects of the auto industry and the adulation and interest you get through association with that brand, similar to how an artist is motivated by the applause from the audience.
CB: What do you do in your leisure time?
UB: If I am completely free, then skiing, mountain biking, mountaineering, tennis and reading a lot of books. I love reading books, newspapers and magazines and watching a lot of soccer! The last book I read was my own book, Making Aston Martin (released this September).
Aston Martin and the Auto Industry
Here are some sound bites from Dr. Bez's lunchtime presentation:
The resurrection of Aston Martin: In the 100 year journey of Aston Martin, the company built only approximately 17,000 cars in its first 87 years. In the past 13 years, under Dr. Bez, the company has produced around 48,000 cars. When Dr. Bez took over the reins in 2000, the company had no new designs and didn't have its own engineering processes. Under Bez's leadership, the company developed a modular system for design and was able to build the same luxury cars at a fraction of costs as compared to its competitors. This helped the company achieve economies of scale for as little as one or two cars and helped it become profitable while still maintaining the luxury brand image. Aston Martin does not make cars as a marketing exercise.
The brand: A big reason why the company made so many comebacks in those 100 years is because the people kept the brand alive. Coupled with sophisticated engineering and design, Aston Martin has been able to outshine the competition. Out of the 65,000 Aston Martin cars made, approximately 90 percent are still on road, some as vintage cars. It is the company's belief that in order to compete as a luxury brand, it needs to excel in most departments, if not all. That is what drives them.
The future of the sports car: The company strongly believes that history without future is just history, but otherwise, it is heritage. Company employees place a lot of emphasis on taking the long-term view, identifying trends in technology and consumer preferences and then adapting to those changes. The company is forward-looking because it thinks of the future as a tool to improve upon the past. While mass mobility will evolve in the near future and be very different from what it is today, a sports car is a dynamic experience, and very different from mass mobility. Hydrogen fuel might be a viable future option as the world's reserves of fossil fuels continue to fall. Although electrical cars are a great innovation, they will likely stay a niche market, as there aren't enough resources in the world to run 50 million cars on electricity.
The Bond saga: The Bond endorsement wasn't a marketing strategy but became probably the best example of product placement in marketing. The producers of Gold Finger (1964) requested a British car and Aston Martin gave them one. The Bond movies are the company's only global marketing communication; it doesn't do many commercials or promotions otherwise.
Key Management Lessons from Dr. Bez
Take small steps, but fast steps. Make incremental changes to design and production at a rapid pace to stay ahead of the competition.
Perfection is the death of innovation. If you are perfect, then you can't improve upon it and hence there is no motivation to innovate.
Mentorship is important for success. Use people who care about you and in whom you can trust as a sounding board; they can serve as your mentors. You need people to help you in your career. One of the challenges of being a CEO is that there are very few people you can speak to freely.
Hard work is everything. Prepare yourself to work very hard if you want to succeed.
Turn failure into success. In middle school, I wasn't promoted to the next class twice, because of trouble communicating in English and French, but I overcame that. So you need to fight for things that you think are right and not give up.
Don't be content with low-hanging fruit. Set targets a little higher than your reach so you keep pushing yourself slightly outside your comfort zone every time.
If you want to do something different, take risks. Once, during the early days of my career, I fractured my spine while test driving a Porsche. One of the notes I received from a senior manager said, "Congratulations! Lucky you! You could have broken your spine by falling in the bathroom too!" So have confidence in your abilities and take risks if you want to be different.
Continue learning. After working at Porsche for almost a decade, I left the company to join BMW to learn new things and then returned to Porsche as the head of engineering design. I worked in Korea, to learn from their auto industry. You must have confidence in yourself to take these kinds of risks.