Leading a Circular Transformation

Increasingly, customers and investors expect companies to act in socially responsible ways and shift to sustainable business models. BMW Group board member Ilka Horstmeier and Bloomberg Media’s Anne Kawalerski discuss how corporate leaders can successfully manage this transition.

The automobile industry is a perfect case study, as Ilka Horstmeier notes at the outset of the discussion. “Mobility is a deep seated need of people”, she says, but global efforts to reduce carbon emissions put pressure on car manufacturers to rethink their entire business approach. “We are aware that we now have to change dramatically to sustain this freedom”, Horstmeier acknowledges.

The company wants “to lead the path to a more sustainable, more connected, and also a safer mobility in the future”, she says, adding that this goal helps to attract talent eager to shape a better tomorrow.

“We have a lot of employees who are affiliated with Fridays for Future” Horstmeier says. “But they are working for BMW, because they are convinced that by doing something, taking action, they can really change something instead of just going on the street.”

Findings from Bloomberg’s most recent Brand Health System study also show that purpose-driven companies fare better in the eyes of customers, partners and employees alike, Anne Kawalerski says. “We’re seeing an inextricable link between purpose and leadership today. It's impossible to separate it.”

True change in an entire industry, however, requires a systems approach. For automobile production this means that it’s not enough to replace the combustion engine with an electric drive train, Horstmeier notes. “You have to really rethink the whole value chain”, reinventing materials, bringing in suppliers and changing the ways cars are used.

This may sound ambitious, the BMW manager admits, but she says that she has learned a valuable management lesson throughout her career. “If you set ambitious targets, and people understand the reason why, they will follow you. Inside the company and outside the company.”