In Conversation: Volvo Cars CEO Jim Rowan on the Technology That’s Enabling an EV Future

Catherine Parry: Great to have you with us, Jim, COE of Volvo Cars. You’ve held many positions before this, and quite a few of those in operations and supply chain. Can you tell us more about your career history?

Jim Rowan: Yes, sure. I actually started my career as an apprentice. So at that particular point in time in the UK, you had the vocational route that you could go through and, obviously, the standard academic route. And I actually started my career as an apprentice working for a company called Tate & Lyle which was the big sugar manufacturer. And I served as a mechanical engineering apprentice and then, after that, went to college. But it was a wonderful start for me as a young person because you got to understand the shop floor dynamics at a really early age. And then, from there, I went to Digital Equipment Corporation. That was an operational role, but I think as you go through these different roles, you pick up something a little bit different every time. It’s a different industry, it’s a different company, you’re working with different people, and so on.

So I’m an advocate, especially in the early part of your career, for moving around a little bit and getting that experience. Certainly, for me, it was very helpful. And then moving into Flextronics and then from there to Blackberry, Dyson, and now, of course, with Volvo Cars. All of those, even at Dyson, I became Chief Executive, and I started in an operational role as Chief Operating Officer. I did that for five years and then moved into the CEO role from there. It’s been a career steeped in operations, but always with some flavor of different geographies, different industries, and of course, different companies.

Catherine Parry: Absolutely. Has there been one defining moment across your career that you can share with us?

Jim Rowan: I think probably when I joined Flextronics. It was an industry that was quite young. At the time, it was called Contract Manufacturing. Now it’s EMS, Electronic Manufacturing Services. And it was quite a young industry, but it was, even then, very, very dynamic. And, of course, it was growing like crazy. I joined Flex when there was maybe 800 million in revenue, and I was there for eight years, and by the time I left, I think they were approaching 20 billion. A lot of that was through acquisition. It was just a great perch upon which to learn about supply chain because what we had in Flex — big customers, we had Cisco, we had IBM, we had Motorola, all these really big hardware companies — we got to see how each one of them ran their supply chain. We could cherry-pick the best of them and then adapt that to our own supply chain architecture. So that, I think, was the defining moment, and it’s probably where I learned the most in a short period of time.

Catherine Parry: I was just about to ask you, what’s the greatest lesson you’ve learned in your career?

Jim Rowan: I think things just get a whole lot easier when you can build trust, collaboration, and teams. That’s probably one of the single biggest lessons that I learned, especially when you’re wrestling with really complex issues, and it is hard work, and people are working hard, and you’re facing daily challenges. Even today, with some of the disturbances and the turbulence that we see in supply chains between Covid and, of course, increasing raw materials, inflation, energy security, and all that stuff, it’s always there. When you’re working as part of a team, if you can build that trust, that drives collaboration.

Catherine Parry: And what’s the best advice you’ve ever received from another leader or colleague?

Jim Rowan: There’s simply no substitute for hard work. And as they say, hard work beats talent, especially when talent doesn’t work hard. So when I’m making choices about people in my team, I’m looking for people with talent, of course, but that talent gets wasted unless people actually put the effort in. I learned that from my dad. My dad had a tremendous work ethic, and I think that I learned that early on. So for me, it was quite natural. Like I did paper rounds and milk rounds and so on, and I think that’s maybe one of the harder things now for some young people, which is that they don’t have access to those areas to build a work ethic early on in life. But definitely, there’s no substitute for hard work and also communication. Learn to be a good communicator, which means being a good listener.
 
Catherine Parry: What was it that your dad did?
 
Jim Rowan: My dad was a mechanic, not a car mechanic, but he was a mechanic in a factory. He repaired the production equipment. He would buy old cars and then repair them.

Catherine Parry: Has that helped you today? Obviously, as CEO of Volvo, is that something that you’ve had a bit of experience in, having had a father who was a mechanic?
 
Jim Rowan: I think some of those conversations are nothing to do with the actual mechanics of engineering, but it definitely piqued my interest in engineering. So yes, indirectly, of course.

Catherine Parry: And how has the supply chain field changed since you started your career, and what changes do you see coming next?

Jim Rowan: Well, definitely digital. So the digitization of the supply chain, just being able to access information quickly and taking that data through a data analytics process to give the management team information they can act on. The big change, of course, will come with a deeper involvement in AI and machine learning. That’s really on the horizon. It started already, and just as we went through MRP systems and ERP systems, and then the digitization of supply chains and access to real-time information, now we’re going to see predictive AI. And I think this is going to be fascinating in the next two or three years.

Catherine Parry: Something you see that’s going to disrupt supply chains?

Jim Rowan: Those who invest in it early are going to yield massive benefits around the visibility of the supply chain, getting that first-mover advantage when you see material shortages or when you see dynamics changing. But those who don’t invest are going to be punished, I think, because it’s going to be one of these game-changing technologies that will make a real difference.

Catherine Parry: Just talking a little bit more about Volvo. Volvo’s purpose is to offer people the freedom to move in a safe, sustainable, and personal way. That’s one of the reasons why you said that you want to be a pure electric car maker by 2030. Can you tell us how you are reducing emissions across the board and what role digitization and technology must play in that?

Jim Rowan: Well, we took the company public about 18 months or so ago, and one of the things we said we would get done is that we’d be a fully electric car company by 2030, that we’d be halfway there by ’25, but also that we would reduce our CO2 emissions by 40% on a baseline of 2018. The quickest way to reduce our year two emissions is, obviously, to turn the fleet into all-electric. That’s the biggest single lever that we have. But then the choice of materials we use is something we can engage with, we’re still using steel and aluminum, of course, from a crash protectiveness point of view, we need those materials, but it’s about the ways in which those materials are now processed. So trying to use as much green steel as possible, as much green aluminum as possible, as much recycled plastics. And right now, globally, full circularity is still in its infancy, but I think we are pioneers in at least thinking about how we can take that to the next level.

One of the things I did recently was to give that sustainability a wider voice, then I moved the sustainability team to report directly to me. And that was picked up, I think, externally. But there was a big message internally as well. Sustainability reports directly to the CEO. Therefore, de facto, we’re definitely taking this seriously. And of course, as the CEO, you have those resources at your disposal. People on that, we need different talent, we need to make more investments. Then, of course, that’s the direct link to me as the CEO at that point in time. And so, we’re looking for suppliers who really understand the movement towards sustainability and circularity, we’re looking for digitization so we can have visibility across the entire supply chain, and we’re looking for new technologies that help drive that forward. And this is the thing with sustainability, there’s not one thing, it’s 100 small things that add up to make a difference.

Catherine Parry: Zero100 is all about 0% Carbon, 100% Digital supply chains. Is that why the mission has appealed to you in terms of the focus that you have on sustainability, digitization, and tech? Is this something that’s really resonated with you as a community?

Jim Rowan: Yes, I know quite a few of the people involved in the company, and I have tremendous respect for them. So it was partly about who’s the team because everything starts with talent, and who’s that team of people that want to make a difference? What’s their mission? And a lot of the people I know that are involved in Zero100 are mission-driven people. And then it says, as a company, 0% carbon and 100% digital. I think it’s a very good framework for where supply chains should be heading in the future.

Catherine Parry: What are the interventions to be made and milestones to be hit to deliver Zero100 supply chains in your view?

Jim Rowan: There’s going to be investment. Technology is usually one of the major enablers, whether that technology is digital technology and digitization. It’s about visibility across the supply chain and really understanding Scope 3 and the underlying technologies that allow us to get those new materials that are less carbon-intensive to design different ways of working, different ways of assembly process. And then there’s the energy part to that, how we can use much more renewable energies in the manufacturing processes of the raw materials themselves, but also the finished products.

Catherine Parry: Do you see any industries that are moving quicker than others?
 
Jim Rowan: For me, the biggest part is, who are the people that have got a really good plan to get to where they want to go? And in some cases, that’s going to take longer. It’s going to be much harder. It’s going to be a steeper climb, there’s going to be more investment than in some other industries. We’re really starting to see some momentum now because we are starting to see the investor community looking at investments and companies that are authentically moving in the right direction in sustainability. And I think that’s a positive sign.

Catherine Parry: Great. And what’s the number one thing supply chain leaders should be doing right now from your point of view, and what should they be looking out for next?

Jim Rowan: Well, it’s all about building resilience. We’ve been working inside supply chain for a long time; the pandemic brought it into very, very sharp focus over the last two years. And so now supply chain has become very topical, which is good. It gives it visibility. Hopefully, we’ll start to see a lot more CSCOs getting a seat at the table so that they can talk to senior management and, even to the board, about the big challenges that supply chains face. Part of that will be resilience and building that resilience, and it’s just in time because manufacturing processes are gone, and I don’t think they’re coming back soon, so how do you then build resilience in your supply chain across that entire network? And how do you do it in such a way so that it’s visible and, if you know if there’s going to be a breakage in the supply chain, where that’s going to occur? How do you use AI to predict those potential weak spots in the supply chain? And then, how do you build a global supply chain that works together because we’re moving, now, much more to regional supply chains (so ‘in region for region’). I think that’s the biggest change that we’re seeing on top of digitization and the use of AI tools – the actual architecture of supply chains is moving towards ‘in region for region’ as opposed to ‘build in the East and sell to the West.’
 
Catherine Parry: Got it. Well, thank you very much for your time. Much appreciated.

Jim Rowan: You bet.

This episode of Radical Reinvention was produced by Catherine Parry, Brian Egan, Ursalaan Khan, Diane Hope, Nick Heinimann, Duda Rodrigues, and me, Victoria Marin. Ko Takasugi-Czernowin composed our theme music. To find out more about Zero100 and to check out our content library, go to Zero100.com. If you’re interested in joining our community of contributors, send us a note at hello@zero100.com.