CHRO Alignment Series: The CEO Alliance with Mercedes-Benz

[00:00:00] Mo: Welcome to today's episode of People and Strategy. I'm your host, Mo Fathelbab, president of International Facilitators Organization, People and Strategy is a podcast from the SHRM Executive Network, the premier network of executives in the field of human resources. Each week we bring you in-depth conversations with the country's top HR executives and thought leaders.

[00:00:30] For today's conversation, I'm excited to share with you a recording from SHRM's Visionary's 2025 Summit. An exclusive conference for SHR M'S. Executive network members. This is a live session recorded on stage featuring Mercedes-Benz USA's, president and CEO Adam Chamberlain and CHRO Lars Menz. The session is titled Harmonizing High Stakes Leadership, strengthening, CEO, and Executive Team Dynamics.

[00:01:00] Adam started his career in sales and has since worked in a variety of leadership roles over the years at Mercedes-Benz and Volkswagen. Lars is an executive network member and was formerly an HR lead focused on talent for the Home Depot. Keep listening to hear their takeaways on how to ensure CHRO CEO Alignment.

[00:01:24] Our next session is going to be amazing. It is harmonizing high stakes leadership with the leaders of Mercedes-Benz in partnership with the CEO Academy. first I'd like to introduce, CEO Adam Chamberlain, president and CEO Mercedes-Benz USA. He leads 1700 employees, 384 dealer partners. Good morning.

[00:01:51] Good morning, sir. Good morning. And he has 30 years of experience in the automotive industry. Welcome, Adam. Thank you man. next I'd like to welcome Lars Menz, who has been on this stage before. He is the CHRO Mercedes-Benz North America. And, we are gonna have a, an important conversation about real world executive team challenges and, I gotta just applaud you guys because.

[00:02:19] You might have some challenges with one another that, you're gonna uncover here on stage.

[00:02:26] Adam Chamberlain: We, do have one. It's fairly major, but it, the action might give it away a little bit, but we'll come back to that later on.

[00:02:32] Mo: Alright. Right. All right, well welcome. So Adam, I'm gonna start with you and I wanna talk about breaking down silos in the C-suite and how you foster collaboration.

[00:02:43] Adam Chamberlain: Thank you Mayo. I think one of the things, I was very fortunate when I first became a leader. Guess 20 'cause scary over 20 years ago to have a, really good coach who Simon's, who Lars has also met a guy called Simon Scott, who also coaches the London Stock Exchange. He coaches the Formula One executives on how they're, how to take their whole platform globally.

[00:03:02] He's worked with them. So I was very fortunate that he didn't charge me the same price tier. He charged these other guys and he's kind of like me, so help me. And so I learned a lot from him and it's, I think a lot of it is applying the basics consistently. So, for example, we will have a Monday morning kickoff.

[00:03:17] We collapsed. I came back into this business, I should say, 90 days, 92 days ago, and they used to have five or six executive management meetings a month, and all meetings that hold the business in my opinion, was paralleled by, paralyzed, by meetings. And to give you some context, what I mean by that.

[00:03:33] We're a sales and marketing company for finished products, right? Our cars are already built. We like to think we get a say in how they've done, but they basically arrive here in North America and our job is to distribute them, win the hearts and minds of the dealers with who that, that sell them or win the hearts and minds of our customers.

[00:03:47] But basically, we distribute cars. We're not trying to solve world cancer. We're not trying to put people on the moon. So we didn't need to have five executive, six executive ma management meetings a month. We needed to be really intentional about what we need to do and empower our people to run and do it right.

[00:04:01] And, so, so we changed, we collapsed all the meeting structures. I spoke to Lars Daily before I, we joined the company 'cause I, should also say I worked for 2000 sixteens, 2021 from Mercedes-Benz, then had a sabbatical away for four years. And, they've just come back. But I spoke to Lars an awful lot about how, about the setup, because I wanted to come in with a real intent to, kind of drive change.

[00:04:22] So we have a Monday morning kickoff, all the executives between eight and nine depending on what other, schedules are happening. But basically there was no agenda. There's bring a coffee and let's huddle around the table or round around the desk and talk about what the priorities of the week, what are the burning topics for the week ahead.

[00:04:38] And it just kind of shares it's, you know, our very old English expression is a problem, shared is a problem halved, right? So it shares priorities, it fosters communication. And you oftentimes, there's no kind of business topics. You might talk about what you do that weekend with your kids or, with your families or friends.

[00:04:53] And again, that kind of fosters a that fosters a a, relationship of caring and, breaking down the silos. Then we have a monthly executive meeting that four hours long, super intentional about the agenda items. Decisions are made in the meeting laws, right? So people get on and go and cascade to their teams and get their teams running.

[00:05:12] and if we need a decision, we'll crash a meeting together. and we'll, talk about that. So I would say we've done an awful lot of work. The one other piece we try and do, Is, I always say to my team, what's the intent of the meeting? What are we trying to achieve as a result, and what do we want people to do as a result, being in that meeting?

[00:05:29] And because then I think if you can be clear about that and you are clear about the messaging, it's really useful then for the, team to, for the team to, get on and then, and do their, job.

[00:05:39] Mo: Yeah. And Lars, from your perspective, you've been in this position for, 15 years and come in seven years?

[00:05:46] Seven. Seven years. I've been with the company for 10. Okay. And here comes in a new CEO? Yeah. How do you. Prepare for that.

[00:05:53] Lars Minns: How do I harness the new CEO? No, just kidding. I think the first thing is to really be clear on his intent. so as Adam mentioned, we had a number, we had the benefit of having a number of calls.

[00:06:07] One, we also had the benefit about it having a really good relationship prior to him taking the seat. but we had a number of calls before and I was really clear. What his intention was. And then he was also open, and I think this is perhaps the most important part, and this where I take great delight in our relationship.

[00:06:25] he was very open to hearing my perspective on, his intention. And I think combined, we had the melding of something really foundational, but also something transformative. And I know, sometimes too, those little things appear to sound simple. It's not simple mindedness. I, think it really is profound.

[00:06:45] And then we just use that, on a, daily basis to make sure that, we launch this relationship, but more importantly, launch his helm, in the right way. and that's, worked tremendously well. I think it also has given the rest of the executive team a chance to model what, or it's given us a chance to model what the relationship should look like with him and the CMO him, the head of network, et cetera.

[00:07:07] but it's been, it's actually been, fantastic and I think it's. It is grounds for any challenges that might come, might lie ahead for us. And I think we'll be able to, get on the other side of them, without, great difficulty.

[00:07:20] Mo: And have you all ever found yourself at odds in any way? And how did you get through that, Adam?

[00:07:27] Adam Chamberlain: I mean, I think the good news is what we're trying to create in the company, and again, I speak to Lars about this a lot, is a culture where. we're trying to achieve the goal. We had an offsite with a team six weeks ago, last six, and define what would make us look great? What would, what does great look like for our business?

[00:07:42] Again, we're not trying to solve really complex issues. We're trying to distribute sales, selling, cars and parts, and so we aligned really quickly. It was a real, it was, we set three, you know how the classic offsite, everyone takes a, stick to ticker and you have three groups and you come together.

[00:07:57] All three groups who put the same, literally, that all three groups have put the same things they wanted to achieve down. It was remarkable. So we've got a simple, mantra. Now we sell about 300,000 cars in North America today. We think it's eminently feasible to sell 400,000 by the end of the decade, by 2030.

[00:08:11] So we have a simple mantra. It's what we're doing today, helping us get 400,000. If it's not, can we stop it? And if that means you can stop doing some reporting that you hate doing anyway. By all means, stop it and we'll find, there's plenty of work to do. Don't worry about not having, something to do.

[00:08:26] But I think that, so that kind of single-mindedness across the company, of course we have, discussions and we had a, we have a disagreement on an HR policy. Actually a couple of weeks ago we did. and it was less actually large, it was more of a global thing. 'cause we also have 28 other entities in North America that we have to have some degree of consistency with.

[00:08:44] And you know, in the end, I think Lars and I looked at each other, said. Is this gonna kill us? Just to say yes to this one? Take a take, take a loss here. Because the big, in the bigger picture of things, we took enough wins.

[00:08:55] Lars Minns: That's it. That's exactly it. Yeah. Mo I would just say, when the relationship is founded on dignity, then I, and then I think you actually are starting to put a nice veil or border around.

[00:09:10] Those challenges are those odds. Now he won't tell it, but I'll go ahead and tell it now. I, was dying to, I was hoping that he would say, we do have one child. we can work it out right here. Okay. Go ahead. All right. we actually can't, we, actually can't. We, can't. It's impossible.

[00:09:25] Adam Chamberlain: There's two, soccer teams in North London.

[00:09:27] They're literally less than a mile apart. And Western United, Tottenham, HBAR. An arsenal and they are arch enemies. You cannot, the police separate the parts of the city because the two fans cannot cohabit and coexist literally. It's tribal. And that's the one thing, it was very disappointing to me when, when, Arsenal beats us so thoroughly for the last six years.

[00:09:49] But when I feel like we're coming back last

[00:09:50] Lars Minns: Yeah. I feel like we're coming back. It can only be settled on the soccer pit. Yeah. And it'll only be settled in the next two matches. Yeah. this season. So, yeah. You were gonna say? No, I was just, I'm just, I wanted to wrap up just by saying that, I, honestly think, he and I will continue our odds, but.

[00:10:07] Back to that mantra, does it help us sell another car? And I think so oftentimes, in an executive capacity or in a relationship across executives, we just get so, stumped around things that really don't matter at the end of the day. And by the way, we're also diluting the clarity that we hopefully have set across the organization by allowing those things to dilute, the relationship and dare I say, the, clarity.

[00:10:33] Adam Chamberlain: And lemme just add one more there though, for me, and I think. We talked about all the meetings that used to happen. When you have so many meetings, it dilutes clarity. Yeah. Because there's, no pressure to make a decision. Things just, and I noticed, I asked for the previous minutes on a few topics and I see topics which are really simple to fix.

[00:10:51] Yeah. Just going and going and going because no one took a decision. Just wanna debate and opine to things. Right, Lars? Yeah. And, and, so I think that clarity is, really helpful. Yep.

[00:11:02] Mo: Speaking of clarity, I would imagine there are times, Lars, where you get conflicting, direction from the CEO, and the board.

[00:11:11] Yeah. How do you reconcile those moments when that happens?

[00:11:14] Lars Minns: Yeah, it happens often. I, think the number one thing, is for and I to have an immediate, conversation about it. 'cause nine times outta 10, based on the board structure, so there's a board member for HR. Globally and there's a board member for sales and marketing, both of our bosses or I have a boss in between.

[00:11:33] But nevertheless, I think it's important for he and I to discuss, the conflict that we see, and then how do we translate that to our, business locally in, in North America. I mean, it's, never quite easy. There's obviously, there's a, there's politics that we have to navigate through, but I think that discussion is very important.

[00:11:53] And then oftentimes I'm looking to him to ask. What's the best way for me, spec specifically, but then for us to navigate this. and that's when I rely heavily on Adam's wisdom, largely because he sees it from a totally different, vantage point, but also because from the sales and marketing, arm, they have a certain view on, how the world or how our business should operate.

[00:12:14] And so those, two in particular, mo I think, that really helps. Maybe there's a third. I also, I'm looking for his insight on who else within our executive team can shed some light as to how we also, navigate it. But I would get it from that second point I made often.

[00:12:36] Mo: And sometimes, there are general communications, breakdowns.

[00:12:41] how do you, what are the indicators that you look for and how do you address those? Adam, maybe start with you with this one. Yeah, I think.

[00:12:50] Adam Chamberlain: I think one of the things you go back to, what's the mission? So if we've got a communication breakdown, why have we got a silo suddenly appeared. But I think getting, teams together with a degree, of frequency.

[00:13:03] Again, we're, fortunate. Last we all sit in one building. Got a beautiful building on Abernathy up here in Sandy Springs. But, I think, we try and jump on it pretty quickly. I'll call that if I sense there's an issue with an area and I need to speech about an area this afternoon actually on da, on data.

[00:13:17] But, but if we sense as an issue, I'll talk to Lars and say, look, how do we handle this together? Again, there's a kind of mantra, is this a really, is this something we need to really fix? Is this a real issue? Like Defcon one for us? And we'll fly into it. If it's a smaller thing, we'll try and figure out how we can appease the situation, and get the parties talking without kind of coming, flying in from all angles.

[00:13:40] Does that make sense? Yeah. Try and assess the gravity of the topic and why there might be the silo there.

[00:13:45] Mo: And what are the indicators, Lars? How do you know that there's an issue?

[00:13:49] Lars Minns: Well, oftentimes, I will, and this is over a 10 year period with the company, when things start to make their way down to the organization.

[00:13:58] I know that's usually a sense that we've got an issue, but down to the organization, down through the organization. The message has been lost, along the way. and I think at that point, that's when it's time for us to take it back to why did this happen in the first place? What was the original intent?

[00:14:15] And as a company too, when you're working between a, foreign headquarter, operation, and then certainly what's happening locally, that is, pretty commonplace. at the same time, that's when we see it. Making its way down the organization and people losing the thread. that's a strong indicator.

[00:14:34] I think the other thing too is, and this isn't always the case, and this is just my philosophy, whenever emotions start to get involved, that suggests to me that perhaps people miss the clarity as to what's going on. I mean, we have it right now where, we are really forging a, unified, operation across North America.

[00:14:52] 12,000 employees, several different legal entities. There's a lot of emotion. I think what is critical for us is to go back to why are we doing this in the first place? And again, as Adam said, will it help us in any way sell more cars? The answer is yes, there'll be better synergies. And if for whatever reason those, emotions are not connected to the sale of, more vehicles and us achieving the ultimate mission, then we need to have a discussion with the individual to make sure the emotions are, parked.

[00:15:21] Mo: When are emotions good and when are they not good?

[00:15:24] Adam Chamberlain: I, we were talking about this, the other week there. There's, Now if you put stress on the system, yeah, I think, you can see some healthy emotion, but there's a very fine line between stress and de-stress. So you tend to get very high production up to the top of the bell curve.

[00:15:40] And then you get de-stress with the, angry bad sort of emotion on the side. And one of our jobs as leaders, and certainly I, lar and I talk about that one of our jobs in leadership is to manage that balance between stress and de-stress. Yep. And, be. 'cause you right at the top of that bell curve, you really see optimal performance when teams are stretched, but collaborating, working well together, you see great results.

[00:16:00] But your, job is to try and keep people on top of the bell curves and let them slide back

[00:16:05] Lars Minns: down occasionally as well. Yeah. and Mo if I might, Adam mentioned he referenced Simon Scott, a, few, a few minutes ago. That's something he'd enlightened me to. de-stress or distress is never good in an organization.

[00:16:20] And so when you start to use that, use those parameters of stress and distress, then you say, ah, I can see, I, I can localize around where, something needs to be addressed. again, I mean, we, have a specific scenario today where. I would say I can, sense it's starting to create distress and now we need to get the organization back to equilibrium, which is that stressful point where we can really, attack the mission, wholeheartedly.

[00:16:47] But, with, core focus.

[00:16:49] Adam Chamberlain: the other thing I would add, having worked in a couple other organizations that didn't have this at all. The company is a, has a pH, has a philosophy of collaboration on projects. So there are many cross-functional projects where the leaders of all the teams will be involved.

[00:17:03] So we, we've got one right now called Next Level Performance, where we're looking at all aspects company, where we drive revenue. Where can we manage the costs more efficiently? As Lars talked about bringing all the entities together, but we have all of the leaders involved in that project working together collaboratively for the outcome.

[00:17:18] So of course you get silos, of course you do. But as a general theme, and, my last company I worked on was almost no collaboration. So this is a really collaborative business. Yep. Agreed.

[00:17:29] Mo: And Lars, how can, what can HR do, what steps can HR take to ensure transparency in, financials and budgeting?

[00:17:38] Lars Minns: Yeah, so Adam mentioned this, initiative that we have called Next Level Performance. I think number one, I always, I've always tried to ensure. The biggest line item in our balance sheet, which of course is labor costs, is clear to everyone across the executive team. and, then what are the main instruments that creates?

[00:18:01] That large Yes. Or, the, expansion of that, that, those labor costs. so if everyone's clear and then if everyone, and further, if everyone's clear on exactly how they create the right equilibrium or balance. then everything's fine. But that's my task along with the other CFO. So if I take it all the way back, the relationship between the CHRO and the CFO is also even more is critical.

[00:18:25] Not even more than the CEO, but it is very critical. So it's Adam and I and then it's our CFO because my understanding of the, elements of what she looks at. Then gives me the opportunity to properly communicate across the rest of the executive team. And if we do that properly, then we can take it down throughout the, the rest of the organization.

[00:18:48] But I play a major role in that. and I can tell you when we look at our overall benefits cost, these things are ballooning overnight. and it's really important that, that we have the right clarity. But again, I communicate that clarity across the rest of the executive team, and then we start to see some harmony across understanding, but more, more importantly, deployment.

[00:19:08] Thank you.

[00:19:09] Mo: And as we talk about facilitating consensus. helping with more effective decision making. What role do you see HR playing in that process at Mercedes-Benz North America?

[00:19:21] Lars Minns: Well, I, think it's central, and I'll use a word, catalyst. Yeah. I, believe facilitators certainly. Appropriate. But I like the word catalyst.

[00:19:30] And if you think about it, I'm sort of the kick on switch, for a number of things that happen. And, so are any of the other executives res with respect to their function? but I believe I play the, a key catalyst role. I try my best to listen for emotion, listen for a lack of clarity, listen for distress, and try to bring everyone back to, back to center.

[00:19:55] And oftentimes I won't do it in a public setting. I won't do it in a group setting. I'll do it one-on-one because in these, you guys know it all too well. I mean. Executives are under immense pressure. And I'll just use an analogy that I learned from another football club in, in England. they're, leader of, player development, Jack Nailer from Everton Football Club.

[00:20:15] He said, you know, we, concentrate so much on the player. In this case, the employee, but not enough on that leader. And so to, create even more pressure in a group setting versus taking it away in a one-on-one, I think, adds to the, problem perhaps. so one-on-one I'll sit down with them just to gauge what, are they really feeling?

[00:20:38] And they're very, very open with me, oftentimes more so than they are in a group setting. where vulnerability perhaps may not be the order of the day, but they'll, share with me 1 0 1, here's where this is coming from. And then that gives me the angle or gives me the opportunity to step in and say, let me, explain again.

[00:20:55] Let me, add some clarity. But hopefully too in the process, I'm, removing some of that, distress. Thank you.

[00:21:03] Mo: we talked about executive coaching, and I know that it's been an important part for the entire C-suite. and specifically for you, Adam, I'm curious how the leadership coaching has impacted your C-Suite and what you've seen, and then I want to talk about your own experience.

[00:21:19] Adam Chamberlain: Yeah, I think it. I think firstly it gives you a perspective, right? So I think you can, try in your own mind, you know, even when I think about restarting at Mercedes-Benz USA after four years away, and of course you're going back as a different person. That's the first thing. You're no longer vice president.

[00:21:34] You are now the CEO. So you have to have, be approaching everybody in the position a little bit differently than you were necessarily before. So I think I, I would talk to my coach then about. Some contextual thinking about how we're gonna approach the situation. And, you know, 99, 9 times out of 10, all he's probing me to do is use the tools, which I have.

[00:21:56] But it's about preparing yourself and getting those tools ready for the situation to walk into. So, I, so I think it's, I think, again, I was very fortunate. I had a really cl a class guy a long time ago who supported me and, o oftentimes I use the same tools over and over again. And it's just, but, it's useful to have an hour's con conversation with him.

[00:22:15] Before we did our offsite six weeks ago, he and I had an hour together in terms of, approach. And I've taken the same approach for the offsite. We have a deal in all of our dealers in North America. We have 450 people coming together in Las Vegas in about six weeks time, six weeks. And one of the things we're gonna give them a very different message and an uplifting message.

[00:22:34] 'cause we've already tested it on a few smaller audiences to know that it resonates. But one of the things that Simon got me thinking about for our offsite and doing exactly the same thing for the dealer meeting is think about pre-contact. What do you want people to be thinking, arriving at the meeting in contact?

[00:22:51] What do you want to leave with them? What do you want them to leave as a result of the presentation? And then post contact, what do you want them to do? We've thought about it and, I'm gonna write a little postcard, nothing Pro profound, just a small note to every single of those 450 attendees to say, look, this is, a new world.

[00:23:07] And, please be open-minded. Please support the, please support the endeavor. Then obviously they'll have a, well prepared, storyline and, presentation from, my team. And then on, on the same day that we do the, kind of two and a half hour presentation. Every leader who's presenting has gotta do two and a half to three minute summary to camera with one or two of their charts of their key messages.

[00:23:31] And the idea is then the post contact piece will be every dealer holds a meeting for their team and does a cascade that's 25 minutes long and get some coffee and donuts and share the messaging and then give their kind of impulse over, over the top of, the presentation. So then you've got a, it feels like we've got a thread then that can be transferrable and managed.

[00:23:51] and for our leadership offsite laws, I wrote, everyone on a note, pre-contact. We had our presentation in contact and then we had our much more, much less glamorous than a video, but we had our kind of aligned three to five things that were gonna do different as a result of the meeting, as our post contact isn't.

[00:24:07] That's super useful when you're thinking about trying to impact big change.

[00:24:11] Mo: You know, one of the things I've heard from you consistently, Adam, is every meeting. Is absolutely nailed down in terms of what the outcome's gonna be. No wasted time.

[00:24:20] Adam Chamberlain: Yeah, absolutely. I think, and I think that, but I think that's not just for, the, endeavor of not wasting time, it's also for clarity.

[00:24:29] You want people to understand what are we trying to do here? Yeah. And what do we wanna do as a result of having this meeting? We didn't just come together to have coffee. That's very nice if we do, but we got a business to run and we need to do some things.

[00:24:39] Lars Minns: Yeah. And, Mo if you, don't mind, Abby, I'll tell you when, I got, Adam's note during, or right before offsite, when you, attend those meetings with clear objectives, hopefully.

[00:24:55] But you also have your set of objectives. You know, your team is sort of funneled to you. This is what I wanna make sure you say. Please make sure you mention this. Let's be in alignment on this. Let's get a decision year. What the node did, it was reminded me that of all of those things, which all of them I'm sure are important, are of importance.

[00:25:13] There's one thing that's most important. It's us collaborating in this moment that we have, which is a day plus to make sure that we hit the objectives that we've set prior to, the meeting. And I think psychologically knowing the importance of our roles, I think those little things really matter. figuratively, I just think we all have these onstage moments and your preparation for those onstage stage moments and the tools you use prior to going on stage, they're absolutely, critical.

[00:25:44] Mo: Yeah. Adam, one of the things that I'm curious about is how do you empower leaders to communicate challenges? Too often people are reticent, they're afraid to communicate the challenges, and that can be quite costly,

[00:25:59] Adam Chamberlain: I think. I think first of all, I think you have to lead, I think you have to take a leading position with your leadership team to talk about the challenges and to, confront things, right?

[00:26:08] So if I think about. I'll give you a chat with my previous company. the, system that powers all dealerships, is a thing, very boring, but it's called dealer management system. Everything that's done, whether it's selling a car, getting a part, getting a loaner, taking money, every single thing, there's an infrastructure that spreads like a spider's web through a car dealership.

[00:26:28] And we have three, we had from my previous company had 380 car stores in North America. The thing that powers and the DMS went down for about 30 days. It was a cyber attack, so nothing the deal, and it was well publicized. It was two years ago. A dealer couldn't basically do anything with any kind of recording.

[00:26:47] Everything was done manually. So we were selling cars, we were handwriting, borrowed car agreements, getting people to sign, saying that they acknowledged it wasn't their car, et cetera. but what we did, and so it was a May day one, it was like the world's finished, we're finished. And you can imagine, right?

[00:27:00] I, it takes you back to that first day of COVID. but, so what I did was every single day we had kind of a leadership call for, you know, strategic things. This is how we're approaching CDK with filed insurance claim with our cyber insurance company, blah, blah, blah. But then there were the operational leaders.

[00:27:17] So I got the 30 operational leaders that managed those 380 stores every single day for. Every single month, every single day. In June when it impacted us on a call. And we talked about, this is a, this is the news today. And we asked the leaders to talk about best practice. What are they seeing that's good?

[00:27:34] What are they seeing for people that are selling cars, are getting cars in for service? How we, how are we figuring that out? And, so I think communication and not hiding behind a problem, but confronting it up front is critical. And similarly with the tariffs. So the, unfortunately, the automotive industry got slapped with some pretty big tariffs, on the 2nd of April.

[00:27:52] And we, had a crisis room and confronted it. And I think if you. Can get the leadership team talking about it and realizing that this isn't gonna be the end of the world. We can figure it out. Then they've got positive messaging, doing gifts to their teams. So then you're kind of empowering them through being very open and intentional.

[00:28:09] About, about discussion channels.

[00:28:11] Mo: Just as an aside, how much more is a Mercedes-Benz on a percentage basis because of the tariffs?

[00:28:16] Adam Chamberlain: Well, we were, I think we were, extremely good 'cause we increased our prices between North 0.6 and 1%. We didn't pass on, we felt, first of all, you may, recall, I'll be very politically correct here.

[00:28:27] You may recall that Walmart got slapped down pretty heavily, for saying they were gonna pass prices onto customers. So we were very sensitive to that. But honestly, the, truth is there's, an elasticity, right? We're already at a premium price. If you put your prices up, the tariffs of 15%, if you put car price up by 15%, you're gonna lose volume significantly.

[00:28:46] So we want to grow our volume, not lose it. So we went to the factory and, said. Follow us on a, growth ambition and, so we didn't pass on the price.

[00:28:56] Mo: what metrics, do you use to measure the impact of executive team initiatives?

[00:29:03] Lars Minns: so our, We, have a, biannual, survey called the Pulse.

[00:29:09] I think that's a very important one, for us. And in fact, it really sets the tone. it's through Gallup. it's a global, global survey. we're actually in the survey window as we speak. so I think with Adam's, onboarding, most recent onboarding, I think this will be, really pivotal, as to how he steers the organization over the next few years.

[00:29:32] onto the next, time we administer, the survey. I tend to look, I tend to look at turnover like most, but I'm looking for trends, spotty trends in turnover. we have not seen as, as high a turnover, rate in the last couple of years, which has me even more puzzle sometimes, but I often go back to, often go back to the pulse, the pulse survey. One of the things we've we're also tracking too are we've seen a big spike in litigation matters. I'm also tracking that, I'm noticing some interesting trends. we tend to see more in a white collar environment than we do in our blue collar population, which as we, most, most curious.

[00:30:13] and then there are times where I will share that with the respective, ex executive committee member. I'm very selective on what I share and how I share it. I try my best to share it one-on-one versus in a public setting. The last thing I wanna do is, you know, so to speak, drop grenades in an executive, meeting, which.

[00:30:35] Can suggest it's more about me and the statement I'm trying to make as opposed to the impact or value that we ultimately need to arrive at given, given the specific, metric. But I go back to it that, that employee engagement score is, is vital, and that's not rocket sized to anyone. I, think everyone is measuring that to some degree, but it's really, really important.

[00:30:55] Adam Chamberlain: And there's two other things I look at. one is, as. Being an auto automotive retailer. In, in, in automotive retail in North America, the North American Dealer Association is a very strong body and they do the, every year they survey all of their dealer partners by OEM, by manufacturer and they ask a whole bunch of questions you can probably imagine.

[00:31:13] But one of them that's really important to me is trust in the leadership team. And 'cause that tells me as well how our teams are representing us with our key business partner, right? So that tells me that's how I look at that. and there's one other thing. We do a town hall once a quarter of, they've done a lot, we've done four in the last three months.

[00:31:29] Yeah. 'cause I was keen to do a kind of, hello, I'm, here. Then a first I want to do one after 60 days to say initial observations. Then we did another one. So, but during those town halls. We have kind of an open mic either through online questioning or microphones in the room. And, I'm less, I'm always interested in the, personal questions, obviously, but no one's really gonna ask and very rarely someone ask you a different question.

[00:31:51] But the online questions are always interesting to me to have a quick look at and let's get a sense of what people are asking for.

[00:31:57] And the tone of those has been excellent. Yeah. Excellent.

[00:32:00] Lars Minns: Mo There's one that, in fact on my drive down, I had a meeting with my team to really talk about measuring burnout.

[00:32:08] From two different dimensions. Obviously there's a, burnout, which we think we can measure through, a platform we use called Headspace. but I'm also, I also wonder too, apart from the burnout, is there, something going on operationally with the team where we see the greatest amount of burnout?

[00:32:28] and are people clear with where we're headed? Because I think over the last, the last few years, we've created a, an upheaval of work. Not necessarily directed towards, any, specific objective. It's been a lot of work and I think that has led to a lot of burnout. So this is one of the things that, we intend on measuring.

[00:32:48] Measuring. I'm a big proponent of wellbeing. I think if we're going to get to 400,000. Every employee has to feel well. And wellbeing is not just, you know, your, traditional metrics. It's are they bought in, do they have the level of energy? Is there a leader providing the right level of energy so that they can have the, the right, environment.

[00:33:07] Mo: And what are you all doing to promote wellbeing in terms of programs?

[00:33:11] Adam Chamberlain: It's a well time question.

[00:33:12] Lars Minns: Yeah, it is. It is. We just, we just end, we're ending our wellness week. this is the first time we've ever done a wellness week. I'm a big proponent of wellness. Adam certainly is too. And I think with his onboarding, we've been able to now usher in this renewed commitment on, on the impact of, of wellness.

[00:33:30] so more, much more to come. but we are really trying to combine the overall wellness. A winning attitude, which is very personal. Both are very personal to the employee. And then what is your overall contribution to, to Mercedes-Benz? I think we get those three dimensions, working in the right direction.

[00:33:48] I think then we have a real chance. I wish you could measure energy. because then, that would give us a clear indication that our messages and our overall message is clear. And it's giving people confidence. but, obviously that's, a work in progress.

[00:34:05] Mo: Yeah. so Adam, this is a new role for you Next five years, it'll be a success one.

[00:34:13] Adam Chamberlain: It'll be a success when, I mean, it's a, really interesting time, honestly, because I could go on for hours about what's going on in our industry. It's, I've never seen, I remember gonna school and people talking about political social dimensions and pressures. I've never seen such a period where you've got craziness going on in geopolitics where politics, right?

[00:34:32] So that kind of one dimension. Then you've got a very uncertain business environment. It's very hard to plan when. You get a tariff and other countries are doing similar things. And then with our industry, you've got a real kind of word of vortex because you've got, in some parts of the world, electrification.

[00:34:47] So battery electric vehicles are the dominant powertrain in North America. Only 7% of vehicles the country buys. That's the best way of framing it. A battery. Electric vehicles. So you've gotta, if we were investing in a normal cycle, seven to 10 billion. Euros over a five year period. we're doing double that, but the revenue isn't growing accordingly, right?

[00:35:09] Because the market, the world economies are just kind of flat. So you've got these big, dynamics going on. So that's my caveat. But, in JI, I will think that the, role being successful when. One, obviously we have a hard target towards 400,000 cars and towards we talk about it 'cause we wanted to have a big north star.

[00:35:28] We need to have consistent growth over the next five years. So that's the way we think about it. when we have a, leadership team that is empowered, feels great, and we can create some succession in that team, that's a key job for us, Lars. And we have a team that feels united. And, energized and gives us good feedback in the Pulse survey.

[00:35:50] This is an amazing place to work. I think the combination of those three things will be at a high level, will be pretty cool.

[00:35:56] Mo: And Lars, how will you know when Net Team is united?

[00:36:01] Lars Minns: so I, I have a clear vision for, for HR hrs role, which is in direct correlation with what I'd love to see. As a unified, body across the executive team, it as long as we, if we can play this catalyst role to unlock the potential across all of our employees, so they help us create this competitive advantage, I think we've won a b.

[00:36:26] If our executives can get behind that, and then, as Adam said, to start to identify what are the value creating roles across the organization and not of the individuals. I think then we have a formula for, for absolute success. what is nice about our executive team, and this is all executive teams, from the time I've been with the, the company, there's a distinct pride that they have in the brand.

[00:36:49] That's actually not the, not only the executive team that's down to every employee. It's the number one thing that we've measured. It's, the thing that we've measured over the years and it's become, it's always been the number one. so that's a really good basis, but I think now we have to make sure their personal endeavors are aligned with, where we want to go.

[00:37:07] and that I think, will bring great confidence across the rest of the employee population. And when we think about

[00:37:14] Mo: culture, how would you describe the culture? Amongst those team members.

[00:37:20] Lars Minns: It's very open. I see great dialogue, even to the extent sometimes that it gets emotional. a lot of courage, a lot of courage, people who are very willing to take on, the tough message and the tough task.

[00:37:37] There's a time I think, as an executive team, much, much prior to, to Adam. We were afraid on, on, on tackling the tough decision, which of course meant, being reluctant on the, tough message. I don't see that anymore. and I think there's one thing in leadership that is absolute, that must be a absolutely, present.

[00:37:58] And it's courage. And courage is a big word. You know, it's not just standing up and saying what needs to be said, but also living that, e courage also equals empathy. And I think there's, great, I think there's, quite a bit of prominence, if you have executives, doing that. But, that's the one thing, those are the two things.

[00:38:17] Courage and then the willingness to, take on the, the tough message, and, decisions.

[00:38:22] Adam Chamberlain: And I, would, I wholeheartedly agree with that. The only thing I'd add to that is by collapsing some of the kind of formal meeting structures that we had, Lars. 'cause what happens if you have executives meeting 4, 5, 6, 7 times a month?

[00:38:34] Everyone's preparing either PowerPoints or notes or something, right? And all of those teams are preparing something by, by, by default, expecting a, an outcome or result. So I think there was a little bit of inertia as, and I think we've created energy just by collapsing some of those structures that didn't need to be there.

[00:38:52] 'cause people feel a bit liberated. They're not just preparing charts that never get an answer. And we can have. You know, I think about a thing we did a few weeks ago. We just said, okay, we need to meet. Let's meet at eight 30 on a Tuesday morning. Made the decision in 45 minutes. Didn't need to have the whole of the executives in the room to make that decision, right?

[00:39:07] You just get together and say, yeah, let's do it.

[00:39:10] Mo: And what, specific activities have you all done to build this team? To create cohesion other than getting out on a soccer pitch, as you call it, and, and hammering it out?

[00:39:20] Adam Chamberlain: I think, again, this is coming on the 16th, we have a, we're so fortunate, the wonderful stadium next door has our.

[00:39:27] Brand on top of it. Yeah, literally. And, we get to use it a couple of times a year so that our teams will, I'm, in Germany sadly, so. Yeah, I won't be there. I won't, be there. It's probably better. but, I'm in Germany, but the, our teams get to go and play flag football and soccer on that field and in a.

[00:39:44] Very inclusive environment. So it is not about young guys ripping around and tackling everybody. It's everybody gets to play if they wanna play. But the other thing I think we, Lars and I talked about is, so when we did my kind of first 60 day town hall, we organized a cookout for the team. Yeah. And we, we had a band and we had some kids activities and we had a charity give back for the furniture.

[00:40:09] Charity, Lars, remind me the name. Yeah.

[00:40:12] Lars Minns: I think it's the furniture bank.

[00:40:13] Adam Chamberlain: The furniture bank, their warehouse burnt down at the end of June, so they lost about 1800 pieces of furniture, which they then gift. And so we were, with our team of people, our 700 people on site, we were able to build about 1200 pieces of furniture for that charity, which is great.

[00:40:26] but I think the one, the thing that, that Lars had said. We had, I think 800 people turn up. It was the biggest attendance we'd had in a couple of years last, right? Correct. And I think, so we're building that feeling of inclusivity again. And, we had the, if anyone knows Atlanta United Soccer, they're goalkeeper's, a guy called Pride Gaza.

[00:40:43] He turned up and he is having kids shooting. Goals at him. And so we just had that kind of community feel. It was pretty cool, honestly, and obviously we're privileged to be able to do things like that, but, it was pretty cool doing all of that and making the teams feel included and having, making sure that people bought their kids.

[00:40:58] We allowed the staff to go at four o'clock 'cause some of them live Atlanta traffic. For those you not in the city is a nightmare. After four o'clock and someone 'em can live, it's 15 miles, but it can take an hour. So we allow people to leave at four o'clock so they could get back with their families by 5 30, 6 o'clock.

[00:41:13] And that kind of feeling of inclusivity, I think really fosters what Lars was talking about.

[00:41:18] Lars Minns: Yeah, absolutely.

[00:41:19] Mo: And I can't let you go without touching on ai. Okay. 'cause it is, certainly part of the conversation and, impacting all of us apart from the AI in the cars themselves. 'cause I know that's coming and, maybe we should hear a little bit about that just to give us a glimpse of the future.

[00:41:36] but how are you all using ai? In your organization, in what ways is it really showing up for

[00:41:41] Lars Minns: you? Listen, I'm, happy to report Mo HR was one of the first to launch a platform, it's called auto.ai. We launched it about a year ago. We've since sun it down because there've been a number of, initiatives, across the company globally.

[00:41:56] we're, in my opinion because. I am a fast mover when it comes to AI or like to think I am. we're not doing as much as we can, but we've certainly, invited all employees to, to take full, full advantage of it. Interestingly enough, we've exhausted 10,000 licenses globally, using, Microsoft's, suite.

[00:42:18] there are two. Weekly endeavors where employees gathered together to really talk about, some of the more cutting edge, initiatives. our it, organization is really fast moving. They've really, they've also pushed it into our dealer network. so they're using, ai, with, some of the dealer communications, as I said before, we're using it, specifically in, in HR. The one thing I would say, and I was in Dubai, I had the pleasure of being, at a s SHRM event last week in Dubai, where I mean, they are talking incessantly about, about AI for the late adopters. What I hope people really understand is AI is like the wind. You cannot. We can certainly harness it and we can certainly use it to, to our advantage.

[00:43:07] I think there's some unique opportunities, what I'm asking my team on a consistent basis to do, and I've attended some of these, some of these discussions on a weekly basis with the rest of the employees keep thinking of use cases. We have to keep identifying how we, how we use it. And the more that happens, I think the more we'll see that, that, that adoption, because it's, based on testimonial.

[00:43:28] The more one employee talks about how they're using it, the more it takes off. And then we can bring that into a use case environment and really start to deploy it across the, the entire organization. But it really started as a spark, a couple of employees, a couple more, then that started to exponentially grow.

[00:43:43] Adam Chamberlain: We encourage that. We encourage, you know, if, some employees wanna take a lead on something, we'll get them. We, will give them the tools, but we'll, get them to set up a lunch and learn type of experience where they bring more guys and girls together. And that kind of then propagates through the organization.

[00:43:58] we have an executive one next week. I think we, well we have, coming, someone coming in, from Microsoft to spend an hour with the executive team just talking about the latest trends. 'cause the thing, it's moving so quickly, right? Yeah. We have it. And we also, things like. If I think about dealer call centers, dealers used to call in to ask us questions about what do they need to do in case of this or that.

[00:44:16] You know, million different questions. AI does all that for now. We have a system now called Benbo and ai. AI does that for now. AI on our website, if you go onto our website, AI will take, will guide you through the website. There's an assistant that will help you build a car, et cetera, et cetera. So I think it's pretty, we're, we are not at the cutting edge, but we're not, we're by no being, covering our eyes and pretending it's not happening.

[00:44:38] I think the interesting question for me is. Given AI and how fast accelerating, what is the workforce of the future like? That's a really interesting question. I can't answer that question by the way, but I think it's a really interesting, 'cause I think about it, you know, we all talk about making, helping humans be more efficient, be smarter, be quicker.

[00:44:54] But there's a reality if you look at some of the legal firms that aren't hiring to any extent, the level of interns they're used to, 'cause AI can do all that research. But then in hai, the interns, what happens to the legal firm in 10 years? 'cause they haven't got the, they haven't got the, Young interns becoming paralegals, becoming everything else.

[00:45:09] So I think there's a really interesting workforce question in general. Let's not go there today, but I think we should at some point. We've gotta start thinking about that.

[00:45:16] Mo: And real quick, one thing my car is gonna do when I buy a Mercedes enabled with ai,

[00:45:20] Adam Chamberlain: it's gonna learn which route you go. If you stop a Starbucks and it's gonna take, tell you how long it's gonna take Starbucks in the morning, that's gonna tell you how long it takes to get to your office.

[00:45:27] 'cause it'll learn where you go, what you do, and how you use the car. And they'll do that today. Amazing. Very exciting.

[00:45:33] Mo: Adam, Lars, thank you so much for joining us. Appreciate the conversation.

[00:45:39] And that's where we'll end it for this episode of People and Strategy. To learn more about the Visionaries conference, visit SHRM dot org slash en events.