How purpose and agility are key for the leadership of tomorrow

In this podcast, Heidrick & Struggles’ Roman Wecker speaks with Uwe Raschke, board member of Robert Bosch as well as CEO and chairman of BSH, Bosch Siemens Home Appliances. Raschke shares his perspective on agility, purposeful leadership, and the skills future leaders need in order to thrive. He also discusses the business transformation he led of Bosch’s power tools division and how both organizational and culture change were vital for its success.

Some questions answered in this episode include the following:

• (1:16) What does agility mean to you?
• (7:47) How has the transformation journey of Bosch’s power tools division changed you and also influenced a collaboration with your board colleagues and your direct reports?
• (12:22) What type of leaders do you need to support you in this transformation?
• (14:24) How is digitalization changing or supporting the transformation of the power tools industry?
• (16:28) If you were to give one piece of advice to future leaders about what they most need to do today to thrive, what would that be?

Below is a full transcript of the episode, which has been edited for clarity.

Welcome to the Heidrick & Struggles Leadership Podcast, the premier provider of leadership consulting, culture shaping, and senior-level executive search services. Every day, we’re privileged to talk with fascinating people who are shaping the future through their leadership and vision. In each episode, you’ll hear a different perspective from thought leaders and innovators. Thanks for listening to the Heidrick & Struggles Leadership Podcast.

Roman Wecker: Hello, my name is Roman Wecker, a principal in Heidrick & Struggles’ Frankfurt office and a member of the Global Industrial Practice. In today’s podcast, I’m speaking to Uwe Raschke, board member of Robert Bosch since 2008, responsible for the consumer goods business sector. Uwe was also president of Robert Bosch’s power tools division, one of the world’s leading providers for power tools, power tool accessories, and measuring tools, from 2003 to 2008. And in July 2019, he was additionally appointed as both CEO and chairman of BSH, Bosch Siemens Home Appliances, the largest manufacturer of home appliances in Europe and one of the leading companies in the sector worldwide. Uwe, welcome, and thank you for taking the time to speak with us today.

Uwe Raschke: My pleasure.

Roman Wecker: Uwe, you are known both within Bosch and outside for being an ambassador of change and agile transformation. What does agility mean to you?

Uwe Raschke: First, I don’t like the word too much. It’s a buzzword, and everybody has a different feeling of this buzzword. To me, we need a process where we change our organizations into organizations that are based on a clear purpose—what is the reason why we are here, what is the improvement we want to achieve in the world, and which smile do we want to bring to which faces?

Second, I believe we have to be more adaptive by reducing hierarchy levels. Big companies have up to eight, nine, ten, or more hierarchy levels. In the future, I believe the communication meaning of hierarchy levels in the digital world is less and less important. So we have to think about what is the real added value of hierarchy levels, and my feeling is that we need much less than we had in the past.

Third, we have to change our communication patterns. We have to communicate much more transparently and much faster to everybody in the company about almost everything. [For example,] 99.9% of things I am sending every day are not confidential, and we sometimes treat them as confidential as management talk, but they are definitely not, and our associates have the right to understand the background of our decisions.

The next point would be to have a new HR toolbox. Our old HR tools are outdated, and we need new ones. For example, we still make our assessment of our people by superiors, but what we should do regularly is to make the assessment of superiors by associates, but this is still very often the exception in big companies.

So, agility means increasing adaptiveness through totally new collaboration models in big companies.

Roman Wecker: You have defined what the term “agility” means, and while you don’t like the wording precisely, it’s still had a positive connotation for quite a while. So in your opinion, what are the challenges and limitations of the whole concept?

Uwe Raschke: I believe challenge number one is—and this is maybe for any change—that many people are in the situation where they have had more than two or three decades of success with their patterns they know, they are well familiar with, and they have learned, and those people may ask, “Why should I change something? We’ve had 20, 30 years of success.” And this is a very dangerous statement in these days where the changes in the world are really tremendous, by digitalization, by political volatility, by demography, whatever—many things come together very fast, and so we need change. And this is the first challenge, and this was the challenge all the time.

As for the limitation of the concept—well, I wouldn’t say the limitation, but I believe everything in front of the curtain is very important for agility. That means those people who generate innovation, who generate ideas, who generate services, who generate the things I want to sell, they have to work in a different pattern and a cross-functional pattern. And behind the curtain, people who give services within the company, whether it’s a payroll service, whether it’s accounting and other activities, I believe here agility is not the best word. The thing that comes to the forefront here is efficiency, the most important thing we have to deliver.

Roman Wecker: The power tools division has gone through a massive transformation. Where do you see its position in its journey toward agility today?

Uwe Raschke: We started in 2015, and what we did was a fragmentation of the power tools division into 50 business teams. And the new thing in these 50 business teams is that they are led by a cross-functional team, which is in charge of innovation, product management, and daily operations. So they left their functional silos and went into small cross-functional teams. We took out two or three hierarchy levels, so it was a major change. We completed this change at the end of 2018. This was the formal completion. Now the cultural change takes much longer than the formal organizational change. I would say it will take a minimum of five years until we have really been conditioned and can say we now have this way of life in this new presence. But we are in a good way, and I am very confident that this will also show very good results in the future.

Roman Wecker: What would you consider to be the greatest achievements so far?

Uwe Raschke: We did this organizational change quite differently. We put all the people together in one room, including the delegates from the unions and the workers’ councils, and we explained to everybody at the very same moment what our basic idea would be. And then we told the people, “We give you a prototype, but this prototype is not fixed, so you have to formulate the details and you have to question our prototype, and at the end of the day, you have to generate this organization.”

After four or five months, we introduced it in the first business unit, and there was the normal confusion in the beginning as to who is now doing what, what is my role, how is this decision done in the future? So we needed 12 months for each business unit until it was very clear how this new organization would work. You have to consider that. If you make such major changes to an organization, it will not work perfectly from the very first day, so it needs some time. But after that, the motivation is even bigger. And what we have gained so far is huge speed—we are much faster at making decisions than in the past.

Roman Wecker: How has this transformation journey changed you and also influenced a collaboration with your board colleagues and your direct reports?

Uwe Raschke: For me, it was a highly interesting personal challenge. I spent four years in China in charge of Asia Pacific operations of Bosch as a board member, and when I returned, everybody was talking about agility, but nobody knew at this time, in 2012–13, what it meant for a big company to be agile. And as I worked on my own definition [of agile], I learned the concept of design thinking, which taught me the meaning of cross-functional organizations. And this was a process [that lasted] about one and a half years, and after this one and a half years, I had a certain picture of how we should transform the power tools division into a new organization collaboration model. This has changed me in a way that I now question much more the meaning of hierarchy and of leaders than I have done in the past.

How do we change our collaboration? Collaboration of the Bosch board was not changed by this project for part of the vision, but of course we worked together in a less stiff way than we did 10 or 15 years ago. We are sitting together and discussing things from very different perspectives. We all have very different backgrounds on our board. We have engineers, we have people from business administration, people who have lived in India, people who have lived in China, people who have lived in America. We are all German, but our backgrounds are very different, and we use more and more of these different cognitive backgrounds to get the best out of the decisions we have to make. And we work in workshops, we try to separate certain tasks to certain people, and we work in sprints for some more important things. So the collaboration style of our board has changed substantially over the past years. And we are now sitting in a totally new, very transparent office setup.

Roman Wecker: It’s great, by the way. It’s absolutely great.

Uwe Raschke: The old one was very old-fashioned. You couldn’t see any people around; it was brick and mortar, no glass, no transparency, nothing, and here it’s a totally different environment. And this also shows a little bit of the change in culture we have right now.

Roman Wecker: Looking back, is there anything you would have done differently, or any key learnings?

Uwe Raschke: Of course, if you start such a project without any experience and without any blueprint, you have huge learnings. And the most important learning is to leave things open, not to start with the 100% concept; you have to start with 80%, and then you have to be aware that you have to change things along the way. When I did organizational concepts as a young manager, it was pretty clear that if you would have changed something five minutes, five months, or five weeks after the introduction of this new setup, your boss would have told you this was not very well thought through and that you should do it better next time. And here now it’s a principle, so we adapt it every month.

Still today, we sit together. I talk to 1,500 people in person in this process. And this was also a key learning. You have to make understood in person what you want, what are the values that are guiding you, not “This is 100% this concept, please execute,” but why are we doing this? There are some good reasons for doing things differently in the future, and these are the reasons that have led to this idea, and now you have to realize it in concrete ways for your work and for your collaboration. And this was also very important.

Another key learning is that you need excellent people and the right people in the right place. Sometimes you notice in this new organization that there are certain persons not in the right place, and then you have to look for a better place for them.

And the third point is that you need good strategies. So strategy, organizational model, and the right people—if these three things come together, you are fine.

Roman Wecker: Talking about talent, what type of leaders do you need to support you in this transformation?

Uwe Raschke: Leadership of tomorrow is what we call T-shaped leaders. We need high expertise—a leader has to be an expert in something, and in this expertise, he has to be able to be part of a working team, not as a boss but as an expert.

And leadership of tomorrow also means to make sure that your people have no barriers to find the best solution. The best solution very often doesn’t come from hierarchy; it comes from the people on the bottom of the pyramid. But you have to bring them together, you have to orchestrate them, you have to make things easy. You have to be a good coach.

You have to be a good strategist, and this is a difficult one. From my experience, there are not many leaders who are also really good strategists. So you have to think about communication. The content is changing. It’s not about doing all the nitty-gritty details by yourself, what we were taught 30 years ago: you are the best in doing everything, and your people learn from you how you do it, but you decide how it is done. The world is too complex, too fast, and we are too big to work in this style anymore.

Roman Wecker: So Bosch is also known for strongly promoting internal people. How important is external influx of talent for this process? Can you do it purely internally, or do you also need external people?

Uwe Raschke: Of course we need external people. One simple reason is that, more and more, we need talent in areas where we have no history. Look at software for the Internet of Things, look at artificial intelligence, and so on. We are very proud that people like working for Bosch, maybe their whole life, as me, and there are many, but we also have good experiences and people coming from the outside, and I believe the mix is decisive.

Roman Wecker: So the Internet of Things, digitalization—how would you expect that this is changing or supporting the transformation of the power tools industry?

Uwe Raschke: Digitalization is changing all industries. For example, a big part of power tools lands at construction sites, and if you look at construction sites, this is the least productive industry in the world. So I believe digitalization will change productivity at construction sites—or it has the opportunity to change this tremendously—and so power tools will be part of new ecosystems and part of this digital management. And, of course, this will change business models as well as the skills you need in your organization for this. All our markets in the future will be substantially changed by digitalization.

Roman Wecker: In your opinion, will we still have sales teams in the future, or can the sales and the relationship be 100% substituted by digitalization and the Internet?

Uwe Raschke: I believe we will have people in charge of sales, but I believe the content will be totally different. We do many things traditionally that could easily be 100% digitalized. We have tools that look strictly at how innovation comes to users, this end-to-end thinking that is sometimes interrupted by trade, and this traditional trade has many challenges at the moment. So I believe the task will migrate more and more to the users of our products. And it’s not that strongly as maybe in the past to look at the consequent filling of dealers’ warehouses. What we learned 30 years ago when we started marketing is that pull is maybe as important as, or more important than, push. Now the time of pull is coming, and the sales roles will change toward this direction, too.

Roman Wecker: My last question for today is if you were to give one piece of advice to future leaders about what they most need to do today to thrive, what would that be?

Uwe Raschke: I believe it’s important to think about purpose and what really makes you happy. And what is the meaning of your activity and to which purpose do you want to dedicate your life? And this is not only a leadership task. What is the sense of your life, and also what’s the sense of your professional life? This should be the first question you ask yourself when you make a decision in which industry, to which company, whatever you want to do.

Second, to have a clear understanding of the content of leadership for tomorrow, which is very different from the traditional ones.

Third, you have to be an expert in something, and you have to be able to change this expertise several times in your life. And this is also new. When I was studying 35 years ago, you studied something, and then you added 10 years of experience, and this was called expertise. Today, knowledge is growing so fast in the world that, after a few years in your professional life, you can forget your studies already and you can start learning again. And I believe it’s very important to stay open to this and to understand this very well.

And the fourth thing, you have to be guided by strong values in everything you do. At the end of the day, what you do is not always important, but how you do things, this is always important. This would be my advice.

Roman Wecker: Uwe, thank you so much again for making the time to speak with us today. Great insights.

Uwe Raschke: My pleasure.

Roman Wecker: Thank you.

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