Volkswagen

Getting through the COVID crisis with a head start

For HR, the last 6-8 weeks were mainly characterized by operational topics surrounding COVID-19. The focus was on document security and health, virtualization and digitalization of work processes and – depending on the industry – capacity adjustments.

  • How unexpected was the extent of the pandemic despite your previous experience in China?

  • In what ways did you have to react different depending on the brand, country and function and where could you adopt a uniform approach within the company?

  • What did you learn during this phase in terms of:

    • the flexibility of employees, their managers and decision-making bodies?

    • cross-departmental cooperation in the search for long-term solutions?

    • establishing the HR function in relation to such crises?

Gunnar Killian: The speed with which Corona swept over Germany and Europe naturally took us all by surprise. But you’re right: the temporary nature of the pandemic in China gave us the decisive advantage of having already gone through a lockdown and restart of our plants. This has given us decisive insights that have helped our organization secure an orderly approach in other parts of the world. The course of action for this was similar all over the world – even if national distinctions had to be taken into account.

In my view, German short-time working, for example, once again proved to be the best way of dealing with a major disturbance in the labor market. That is why we have observed that many governments around the world have quickly come up with comparable arrangements. As far as the behavior of our employees is concerned, I can only say that I am extremely thankful that they all accepted and followed our sometimes drastic measures. The restart has also been characterized by great discipline, with hardly any breaches of safety measures occurring.

It is difficult for me to assess the efficiency and effectiveness of our crisis management myself because I head the Volkswagen crisis team together with my colleague on the Board of Management Frank Witter. All I can say is that we all do this work with the utmost concentration and seriousness. And I could add: not a single one of the 125 Volkswagen plants worldwide has experienced a major pandemic outbreak. In addition, just a few weeks after the crisis began, we were already in a position to support the public health care and thus the outstanding work of the doctors and nursing staff. For example, through our EUR 40 million aid package or the paid release of our medically trained colleagues for voluntary work in the fight against the virus.

With regard to the HR functions in the companies, it seems clear to me that there has been a clear upgrading in recent weeks and months – first and foremost, of course, where HR staff sit on the crisis teams or manage them, but also in other instances. After all, lockdown, health protection and rebooting are all about people and organizational issues.

In the next 3-9 months, as is the case with many companies, VW will have to re-start operations under still restrictive conditions. The issues on the personnel side will mainly revolve around the logic and sequence of employees returning to work, the medium-term protective measures that can be taken as well as how managers can enable providing security and orientation in the ongoing situation.

  • What is the logic behind your plan to resume operations and which personnel-related factors played the greatest role in your decision?

  • How do you deal with the current uncertainty? Are there any particularscenarios that you are planning from an HR perspective?

  • How do you specifically support managers so that they can deal with the situation even more effectivelyin the coming months?

Gunnar Killian: The experience of recent weeks, during which we have gradually ramped up our production, shows us: Volkswagen has more than well prepared itself for the re-start. Although there may be slight differences in some countries, we have still clustered all jobs in red, yellow and green. In the red area, for example, where minimum distances cannot be maintained despite the greatest efforts for technical reasons, a mouth-and-nose protector must be used. Moreover, we are dividing the way back to normality everywhere into three phases. We have created a manual with 100 protective measures for everyone to follow and are distributing it globally. This is now also considered state-of-the-art by our suppliers as well as many other companies.

How things will now continue depends, of course, largely on how the crisis develops and plays out. The health protection of our team has priority. In addition, the aim is to ramp up production in parallel with the rise in demand until we are back to our usual level. The protection of employees, as described, has priority at all times, but our economic foundation is of course also a valuable asset. All personnel policy decisions in the coming weeks and months will take place between these two poles.

This also brings us to the subject of uncertainty: since no one can predict exactly how the situation will develop, we have to be prepared for various options. Fortunately, our collective bargaining agreements throughout the country include flexibility provisions that give us the space we need to breathe in the factories.

In 9-18 months, a “new normal” will emerge, and many questions come to mind. What parts of the COVID-19 crisis will linger? How will companies have changed their structure? Where has digitalization accelerated its entry? How have the attitudes and preferences of consumers and employees changed? And most importantly: Has the organization emerged stronger and more resilient from the crisis? The company as well as HR reality might have changed permanently. While the financial market crisis in 2008/09 mainly called for the skills and knowledge ofthe CFO, in our opinion, this time the CHRO is at the forefront.

  • Will the role of the HR function at Volkswagen be permanently changed by the crisis?

  • What three things will remain atVolkswagen after the Corona crisis (and which would you like to keep) – which things will be of a more temporary nature?

  • What is the one thing you would give to other HR directors and CHROs?

Gunnar Killian: Regarding the first point, I hope to be able to return to my regulatory job as soon as possible, because at the moment it’s very exhausting here. One of the lasting things about Corona is certainly the experience of just how vulnerable our modern world is. Although it was always clear to us that a global production network can be fragile, no one had expected such a sudden and unexpected shutdown. At the same time, however, the advantages of a global orientation have also become clear. In China, for example, we are seeing clear signs of recovery, while in Europe and the USA we are currently trying to get the economy going again. It remains to be seen to what extent this will lead to a discussion about new forms of company organization, for example in the sense of moving away from the clear center-periphery structure. Decentralization and the greatest possible autonomy of sub-areas are certainly not the wrong path to take.

We will definitely see the greatest changes in the area of office-bound knowledge work. Millions of knowledge workers have been working from their home offices since mid-March 2020. Services such as Skype, Microsoft Teams and other digital collaboration tools became the preferred working tools for knowledge workers virtually overnight. Corona has thus helped digitalize office work to achieve a breakthrough, and also led to a quantum leap in the digital literacy of German employees. In the Human Resources department of Volkswagen we have taken a closer look at this development with our own study on “Home Office, Virtual Leadership and Collaboration during the time of COVID-19”. One thousand colleagues took part in this study and the tenor was unanimous: mobile working worked well during the crisis. It seems unlikely that this development can be turned back to pre-Corona times and transferred to the old culture of presence. Not only will young parents in particular continue to have major childcare problems for many months to come: Many employees have noted during the crisis that it is in some respects easier and more productive to work from home.

The weeks and months of home office had and still have their downside: the loss of stabilizing contact with colleagues and the resulting social isolation, which was especially hard on younger employees, the so-called millennials. This generation of employees entered the labor market in the middle of a decade-long exceptional boom; during this time, they were highly sought and were able to establish a lot of freedom in their professional life. Now this cohort is experiencing its first severe economic crisis and it will be interesting to see how they cope with it. The signals of loneliness and care that many millennials sent out during the Corona period have not only transformed the classical managerial understanding of leadership – these signals also show that many of the millennials are not yet sufficiently prepared to deal with the toughness of the working world. Finally, as far as my advice to colleagues is concerned, I am tempted to respond with a quote from Willy Brandt:

“Nothing comes by itself, and very little is permanent. Therefore, remember your strength and that each time calls for its own answers and that you have to be on top of it if you want to achieve good things.”

Gunnar Kilian
Gunnar Kilian
Chief Human Resource Officer Volkswagen AG
Jens Müller-Oerlinghausen
Jens Müller-Oerlinghausen
Partner, Head of Leadership Practice

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