How Goodyear’s CEO is shifting the 121-year-old tire manufacturer to a ‘technology-driven mobility company’

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  • Goodyear is in the midst of what CEO Richard Kramer calls a shift from being a legacy tire manufacturer to a “technology-driven mobility company.” 
  • Alongside the core tire business, Goodyear is pivoting to AI and predictive maintenance tools as future innovations like self-driving cars inch closer to reality. 
  • That push remains, even as the coronavirus pandemic ravages Goodyear’s operations and the global economy at large. 
  • “We don’t go backwards,” Kramer told Business Insider. “Society rarely regresses, it always progresses — even though it goes through difficult times.”  
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Goodyear has a case of dual personalities. 

The organization is undergoing a major shift from legacy tire manufacturer to what CEO Richard Kramer refers to as “technology-driven mobility company.” 

That means keeping its core tire business intact, all while preparing for future upheaval in the industry as innovations like self-driving cars inch closer to reality — or, as Chief Technology Officer Chris Helsel refers to it, the split between “tires and beyond-tires.” 

It’s a switch that many companies could soon find themselves in, as the coronavirus pandemic prompts a sudden and quick pivot to digital. 

“The impetus of the transformation is for us to continue to be relevant,” Kramer told Business Insider. “We have to change and we have to transform ourselves into how consumers and how end-users are going to use our products.” rich kramer hq (1)Goodyear

And now, even with the coronavirus pandemic ravaging the global economy, the company is doubling down on that transformation. 

“We don’t go backwards,” said Kramer. “Society rarely regresses, it always progresses — even though it goes through difficult times.”  

But shifting the culture of a 121-year-old company is no easy task. And Goodyear had a few missteps along the way. 

The organization, for example, tapped an outside hire with “a big innovation background” to help support the pivot. Helsel said he soon realized that was a mistake. 

“We watched that struggle,” he told Business Insider. “We had a pivot to then promote people who had walked in the shoes of the traditional business and then skill them up.” 

But Goodyear is also able to tout significant innovations over the past few years. 

Its AndGo platform, for example, gives fleet owners predictive maintenance capabilities to stay ahead of potential repairs. In January, Goodyear announced it would invest in new driving simulators to help test out new products before prototyping them. 

And it’s developing a new “intelligent tire” that relies on sensors and AI to constantly track metrics like road conditions. Combined with self-driving technology, the information could allow vehicles to automatically adjust driving patterns to navigate conditions like icy roads. 

“The unique thing about digital is it gives you an opportunity to differentiate your offering, but also at the same time gives you an opportunity to add productivity. And productivity just never goes out of style,” said Helsel.

We talked to both Kramer and Helsel to learn what’s driving the transformation and the cultural changes within Goodyear to support it. 

‘We’re no less committed to that change’ 

When Kramer was Goodyear’s chief financial officer during the Great Recession, he was asked constantly by investors about the future of the company and how it would survive once people pivoted to smaller vehicles. 

At the time they may have thought Kramer was naive when he simply answered: “That’s not going to happen.” 

In the years that followed, however, car sales surged. And it wasn’t the smaller cars that sold. It was the large SUVs and heavy-duty trucks that dominated. 

That same mindset is guiding Kramer as he leads Goodyear through the current crisis. 

The company had to shutter its US manufacturing plants — with some closing permanently. And employees working in innovation centers in cities like San Francisco found it more difficult to do their job in a remote setting without access to critical equipment, according to Helsel. 

Externally, automakers significantly scaled back production as demand plummeted. But while investments in future technology like self-driving cars might have temporarily slowed, Kramer argued that what’s driving the push remains. 

“Safety, environmental concerns, climate concerns, regulators, the trend of urbanization and the notion of cost, convenience, and reliability that comes with that mobility ecosystem; I would put forth that those aren’t going to go away. Those are still going to be here,” he said. 

“We’re going to calibrate, we’re going to be more focused, but we’re no less committed to that change happening,” Kramer added. 

It’s a battle Goodyear has been prepared to fight, after making innovation a central plank of its organization for decades. And while companies often pay lip service to the word, Goodyear has several examples of how it was able to stay ahead of the curve. 

It was one of the first tire manufacturers to launch an e-commerce site, according to Kramer. Now, he said, its website gets more traffic then the next four competitors combined.  

And its San Francisco-based innovation lab has also grown more than tenfold since its opening in 2017, showing the emphasis the company places on staying abreast of the latest tech. 

‘We don’t have those two sides fighting against each other’ 

Managing through such a transition is no easy task. 

For one, many of Goodyear’s employees are still dedicated to the core tire business and pursuing a change too sweeping, too fast could lead to backlash. 

What “really helped us a lot was that we don’t have those two sides fighting against each other,” said Helsel. “All of these things are adjacencies in our innovation approach to, still, our core, which is tires.” 

At the same time, failing to articulate and execute on the vision for the future could leave Goodyear eventually struggling behind competitors.  

“I, too, have to balance off the message as we go, but I have to lean toward where we’re going rather than where we’ve been,” said Kramer. 

For the CEO, that means putting resources behind innovations like the intelligent tire. But it also means keeping in touch with rapidly evolving consumer demands. 

Goodyear’s mobile service, for example, can meet customers wherever they are and replace their vehicles’ tires — all without having to come into physical contact with the person. 

“It’s constantly  setting that vision, setting that purpose forward. And then all my messaging sort of hangs off those,” he said. “That requires a tremendous amount of repetition, because left to our own devices … any organization will go back to what’s normal.” 

Many times, that results in supporting projects that don’t work — at least initially.  

But for Kramer, that’s important because it helps to change what was a culture focused squarely on return on investment to one that uses failure as a driver to move forward in a more productive or successful manner. 

“You’ve gotta be able to have the courage of your convictions and be able to articulate your strategy on where you’re going to get the buy in and to get people to stick with you,” he said. 

https://markets.businessinsider.com/news/stocks/how-goodyears-ceo-is-transforming-121-year-old-tire-manufacturer-2020-6-1029289037

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