[Transcript]
Narrator (00:00):
Hello HR professionals. Good news. This episode of the Love your people Podcast is valid for 0.5 professional development credits towards SHRM-CP, SHRM-SCP and HRCI recertification. Stay tuned to access your certification code.
John Duisberg (00:23):
Welcome to the Love your people podcast. I'm your host John Duisberg, and if you're new here, this is the show where we explore how people first strategies help organizations and their teams to flourish. Today I'm joined by a leader who's navigating one of the most significant workforce transformations in the automotive industry. Lars Minns is the CHRO of Mercedes-Benz, USA, an organization with approximately 11,000 employees and is one of the largest employers in the state of Georgia. In this episode, Lars shares his "Three R" strategy framework, reshape, reskill, and recharge, and challenges us to rethink the role of the CHRO as a catalyst for human potential. We also dive into his personal journey with AI agents and a unique approach to hacking benefits to drive true employee value. If you are looking for a visionary roadmap to lead your people through change, this conversation's for you, let's dive in.
(01:21):
And it is great to be back with everyone and the Love your people community. It's an honor to be here. We have an amazing guest, amazing leader. I've had the opportunity to get to know Lars over the months leading up to our podcast recording, and keep me honest here, Lars, I believe it's Mercedes-Benz USA is the seventh largest organization company in the state of Georgia, and it is seeing a lot of transformation, right, just like with all industries, but the move to electric, the starts and stops along the way and how you reshape and reskill and recharge. Just to go back to the title of our podcast, Love your people, this is the topics that we're going to dive into today. But Lars, thank you for joining us on the show today. It is so good to have you.
Lars Minns (02:11):
John, thank you very much and I'm happy to be with your audience. I want to say thank you to the ITA Group and I'd be remiss if I didn't say thank you to SHRM Atlanta. I have not only longstanding friendships, I have a lot of love for SHRM Atlanta. We go way back. So thank you very much for having me.
John Duisberg (02:29):
Awesome. Okay, well before we jump in, actually, I would love if you gave a little bit more of an intro for yourself, Lars, and I'm going to go out on a limb here and I'm going to say everyone in our audience knows Mercedes-Benz, but maybe a little bit more about the scope that you lead within Mercedes-Benz USA as well. I'd love to start there.
Lars Minns (02:52):
Absolutely, John. Thank you. Thank you again. So I'm the CHRO. As John mentioned earlier, for Mercedes-Benz USA, we are one of four divisions across the North American business. So Mercedes in general is made up of four unique divisions, research and development, manufacturing, sales and marketing. And in financial services, we recently merged sales and marketing with financial services, and then that leaves the other two primary divisions. So suffice it to say it's easier to look at us as four unique parts in the US there are 11,000 employees. I play a role as one of the HR leaders across those 11,000, but my division is specifically sales and marketing and financial services. And so it's easy to look at this part of the business as all customer facing. So anything that the customer wants, any desires that we want to create for our customers and that of our dealers, that's our business.
(03:56):
So pretty wide footprint. We're responsible for the sale of roughly 300 plus thousand vehicles on an annual basis. John mentioned it earlier by revenue size. We're about the seventh largest company in the state of Georgia, so pretty impressive. I love to say it's one of these small businesses doing big things. You're used to seventh largest in Georgia being hundreds of thousands of employees. That's not quite the case, but it is the case when you look at our entire footprint with our dealer partners. So that's, our business as far as HR is concerned, it's full end to end HR. It's everything from HR operations, talent acquisition, talent development, total rewards, which we'll talk about later, and certainly a very impressive HR business partner team that acts as our frontline to our business partners. So it's all of the challenges that you can think of, but also the triumphs, because I do believe that despite all the challenges, challenges we faced as an HR population, not just at Mercedes but nationwide and really globally, there've also been some unique triumphs, and I think it's equally as important for us to highlight those and hopefully some of that will come up today.
John Duisberg (05:14):
Okay, thank you, Lars. I love it. Well, let's dive in. So first topic, first question actually goes back to a comment that you shared leading up to today, which I thought was just super interesting, is a way to kind of frame the role of the CHRO. You called it the office of the CHRO, and you mentioned the word igniter or catalyst, and where our conversation went that I just thought was really interesting is kind of thinking as the office of the C-H-R-R-O as a way to open up or unlock this human potential that is embedded within your employees, right? The skills, the talents, the passion. How do you unlock this to be a competitive advantage, right? To actually be a unique differentiator in the market and thinking of as the role the CHRO in that way I thought was really interesting. So tell us more what this means to you. Tell us what this looks like in Mercedes-Benz USA. What's been the experience so far?
Lars Minns (06:22):
Yeah, no, John, I'm happy to, and I would say I didn't always think this way. It wasn't until about six months ago or so I really started to look at our value or the need for us deriving value and exporting that value across the organization. I do believe that the CHRO's mission as well as that of the HR organization is in fact to be a catalyst to help transform that human potential into a competitive advantage. We're in business certainly to have productive, engaged, satisfied employees, but we're also in business to be competitive, and I think we have to get the sequencing correct. The other thing too is you mentioned the word ignition or igniter versus catalyst. I like to think of it as catalyst more than igniter because I think that the definition is critical. The technical viewpoint of it is critical, and igniter is a one-time spark.
(07:22):
We want to be pervasive, we want to be effervescent, we want to move all the time, and we want to constantly push the organization. And that's why I think catalyst is the perfect description of what I'd like our organization to be. I don't have to be the loudest voice, I don't have to make heavy demands, but I do have to be a catalyst to really get the whole thing moving. And when I think of what great leaders often do, they can move whether they are soft spoken, vocal, present behind the scenes, they can move an entire organization. And so I oftentimes think what are the one or two things that are derailing us or perhaps serving as impediments that if those things are removed and unlocked, we have a unique opportunity to get this organization flowing in the right direction. I can give countless examples.
(08:16):
I'll just give you one of them. One of the things that we've been challenged by, and I think many organizations is return to work. And the more I think about it, the more I go, well, I think at the end of the day what we're all trying to do, be it employer or employee, is we're trying to have a great debate. We're trying to win the debate, and if we win the debate, then it gives us an opportunity to get what we want. Well, there's no debate to be won, number one. Number two, employees are looking for when and where. And I think organizations are also looking for when and where. So we've felt that the best way for us to unlock this great debate into remove it or push it to the side is to look at flexibility as being the order of the day as opposed to when and where you work.
(09:03):
Yes, we have specific policies and manage that, but let's forget policies for a second. Let's think critically about what we're trying to achieve. We want to win in the market at the end of the day. And so that starts to put a lot of the things that we've been discussing over the last three to four years. It starts to push that aside and it gets us focused on being ahead and thinking about our competition or us being competitive. That said, I do believe at the end of the day that this catalyst approach does move us in this direction. It remains to be seen how successful we'll be, but I think that's a big part of it. John
John Duisberg (09:46):
And I love the idea of the HR leadership role being a critical piece to a competitive advantage for the business in terms of the talent, the people potential. So the perspective just resonates. Talk to us a little bit more about the reshape, reskill, recharge. Tell us about where did that come from? What does this framework look like at Mercedes-Benz USA? I'd love for you to kind of touch on that a little bit.
Lars Minns (10:18):
Yeah, absolutely. So it's our global strategy. So I am a part of executing that strategy, and I think the simplicity of it, firstly is the beauty, but if you look closely each one of those Rs, there's profound importance related to them. So firstly, the recharge, we have a really good chance to move from a legacy based organization is something that is future focused. And future focus is something that we will be in constant pursuit of. So it's not something that has a resting place, but rather something that keeps us gunning towards opportunities well ahead of us in terms of reskilling, it's equal to recharge and that our employees, we will need to help define what the skills of the future will look like in order for us to be competitive, some of those skills are known to us. Some of those skills are also skills that will always be the case.
(11:17):
So they will operate in perpetuity or they'll be continue to be universal. I think about great collaboration, great discourse being problem solvers, being curious, all of those things. We believe if we put those into the spindle, our employees have a chance of not only being successful based on their own merit, but certainly the merit of the company and that of the marketplace. And then re-skilled, recharge, reshape. We have an opportunity, we think, in the end to reshape what the organization can look like. The way we've done HR isn't necessarily bad, but it doesn't mean that we have to continue that into the future. And so we've made some significant strides not only in North America but globally in changing what that looks like. And you know what? It's all good. It's all good. And I say it's all good because at first blush, anytime there's a change or a restructuring or a modification as to how you do things, you get a bit of bristling. But I think if you were to step back and really think about what do we ultimately want to achieve, I think it behooves us and it opens us up to a new viewpoint, which is ultimately we have a chance to really be good at this provided we're willing to change. And so those "Three Rs" in my opinion, are they really set the foundation, but they also set the pace for us.
John Duisberg (12:39):
Yeah, no, thank you Lars. And I don't know if you did it for me, but I like how simple it is so I could understand it. So I thank you. But I think that a lot of folks on the audience, in the audience today, they're going through a lot of change, right? Industries are evolving quickly and to frame the strategy, ultimately we want to unlock the human potential to be a competitive advantage and to frame the strategy, you just made it really simple, Hey, we have this "Three R" framework or the three X framework. I feel like that's just for all leaders in the organization outside of they understand that they can get it, they can remember that. So I like how you just created that framework. So let's take it one step further. And I know this is something that everyone is navigating to some extent, and that's okay. How does AI technology play a role in this, right? Do we embrace it? Do we try to protect ourselves against it? What are you doing at Mercedes-Benz? What has your experience been so far?
Lars Minns (13:49):
Yeah, great question. Let's just say that I think we've taken some very good yet measured steps as it relates as it to AI. I love to say to my team, I'm all in on AI, but it's also relative. The one thing I will say, and I feel a great sense of conviction around this, AI is very much like the wind. You can't stop it and it'll be in our best interest to harness it. And so I've taken the personal step as an organization starting, I think it was about 24 months ago to launch an AI tool. We've since sunset, it was called auto.ai, and that was our first foray into a full on AI chatbot. We got a lot of press early on. The team really got behind it. The organization enjoyed it. I think they also enjoyed it because AI, sorry, HR was one of the first to pioneer, if you will, one of the steps towards a full on HR technology environment.
(14:54):
Since then, we've really adopted some of Microsoft's tools or Microsoft shop, and I've personally onboarded seven or eight agents, and I love to say this, and I'll speak to the leaders primarily, but regardless of your level in the organization, either the first be the first, it is all around us. There's absolutely no reason for you to delve into it. And they're differing opinions as it relates to ai. But for sure, if you've ever interacted, been deeply involved, somewhat involved, that there are definitely some conveniences and some ways to efficiently get things done. And there's some ways in which AI has allowed us to be creative, much more creative. So we are having a lot of fun with it. As I said, I have seven or eight AI agents. They're a part of our workforce if you think about it, because they're getting work done and ultimately helping us to be competitive. I would like more people, particularly in HR, to get involved because then it changes the paradigm from something that is baseline or foundational to something that is a lot more bespoke and things that allow us to build more use cases. And the more use cases start to rotate in the ethos of HR, the better off we'll all be. We need to be all in on AI.
John Duisberg (16:14):
So it's really interesting what you said. I am going to repeat it, be the first. So as a leader, if I am looking to kind of help navigate the organization around policy, be the first, right? Put myself out there. And so I love what you said that, I mean, quite frankly, it's a challenge. And so challenging ourselves to be the first and to lead leaders should lead, right? The other thing you mentioned to having fun with it and allowing creativity, allowing flexibility, not knowing exactly how it may be used, but giving space to kind of play, for lack of a better word. And so share a little bit more about that mean, so HR was the first, and you put some arms around this, you allowed people to create their own eight. How much flexibility did you leave for folks on that?
Lars Minns (17:08):
Yeah, quite a bit. So we were approached by our IT organization and they said, Hey, we really think you guys can be one of on the front edge of our AI evolution, and I'm sure it benefited them, but we certainly took a full advantage of it benefiting us. So I got a group of individuals that I thought would find this most compelling, and we built single handedly. We built with the help of one of our internal employees who built our auto AI solution and eventually our journey, as I said, we've since sunset it, we now have an official HR agent that's built in the overall Microsoft environment. So any employee can interface directly with it. It's tied directly to all of our standards, all of our policies. And then we're able to butt that up against various thoughts and unique challenges that face us on a daily basis.
(18:03):
So I manage our travel policy, for example, I'll get wild requests, and for exceptions, I don't ask any questions at all. I go directly to the agent to prompt it and say, what do you think? And naturally the agent comes back and it gives me the background or the point of reference by way of the policy and then gives me a way to fully describe it, but explain it to the employee. That's what my job is every day. Granted, you could argue that, well, if I had an employee to do that, is that eliminating an opportunity for an employee? Well, in this day and age, when we're trying to be competitive, maneuvering the organization to things that are even more critical than answering questions about a travel policy, which in effect, if you think about it, I'm going to segue for a second. The reason why I found the agent to be so powerful is because when you get asked a question about a policy, you are almost double working. You've already done the work to fully explain it. And the policy oftentimes is highly, highly explicit. Well, if someone is asking you about a policy that was written at some time in the past that you thought was explicit, you're now doing double work, it almost becomes a waste. So the agent saves us from that waste, and now I can take an enable and capable and skilled individual and shift their perspective in a totally different direction. And I think that has major promise for us. So that's something I want to continue doing.
John Duisberg (19:27):
Yeah, no, that's a great perspective, Lars. Yeah. Alright, so Lars, again, leading up to this, you've dropped these little wisdom nuggets and I got to dive into it here. So you shared that you just see the role of the total rewards leader evolving quite a bit. There's a new total rewards kind of shift, and you mentioned the words hacking your benefits. That just sounds aggressive. So tell me what hacking your benefits means? What did you guys do? What did you find? Help us get our arms around this.
Lars Minns (20:11):
Yeah, I mean, let's just level set on one thing. Hacking does not mean, at least in my definition, hopefully the real definition. It doesn't mean you do anything illegal or wrong or underhanded. It simply means that you're trying to use what's been offered to you in uniquely different ways and to think of ways in which it can benefit you, though not explain that way. Ultimately built into the design. So let me simplify it. I think of total rewards as a bit of a reversible jacket. You buy a jacket, it's double colored, black on one side, red on the other. You tend to wear it with an outfit that compliments a black jacket. Lo and behold, you actually have a red jacket on the inside if you reversed it and you're able to use it and it doubles your wardrobe more or less. I see our benefits the same way.
(21:04):
Case in point, the HSA, the health savings account, for example, the health savings account in general, if used properly represents almost a third retirement account, at least in our environment. We have two other retirement accounts. This represents a third, and we know it has a dual purpose because it also helps you with your health savings or to help offset your health expenses. Just one example. So I'd love for our employees to look at what we currently offer and see how they can maximize the full yield of what we offer. I got some really inspiring information. Yesterday we rolled out something called Point Solutions a few years ago to help with muscular are musculoskeletal injuries that our employees might have. We have employees that have diabetic issues or might be dealing with weight management. So we rolled out these point solutions and the amount to listen to employees tell you and describe how they've used it was very inspiring.
(22:02):
So I've said to my team, I want us to really be on the forefront with getting more and more people to not only hack our benefits, to think of this reversible jacket concept, but also to get people that can influence other people because it won't be the HR organization. It'll be a group of micro influencers that will start telling our employees about the, what's it called? There's a ring that people use nowadays. I forget the name of it, but it tracks your sleep, your breathing, et cetera. We can buy this using our HSA, the Oura ring. Thank you very much to the person in the chat. I need the influencers to tell that story because then more and more people are using our benefits in the right way or in uniquely different ways. And when that starts to happen, it's cultural, but it's also supremely beneficial because ultimately what we're trying to do is have employees that are productive and competitive, but the best pathway for them to do it is down the path of wellness. And again, the HR organization cannot do that alone. We need a group of influencers. So longer winded way of saying that hacking is multifaceted, but we invest a significant amount of money and I want our employees to take full advantage of that investment.
John Duisberg (23:19):
Yeah, no, it's a interesting way you put it. Creating or identifying a group of influencers who are basically telling stories about how they were able to utilize benefits that are offered, right?
Lars Minns (23:36):
Better than me.
John Duisberg (23:37):
What's that?
Lars Minns (23:37):
Yeah, better than me.
John Duisberg (23:40):
Yeah, exactly right. Because it's real life stories and they're passionate about it because they receive that benefit and others probably would benefit from that too. So I love the idea of creating these micro influencers within your organization. This leads us to our final question. Definitely Lars would love for you to share any kind of key lessons learned or insights that you can leave our audience with in the context of this idea of, we're calling it mapping the moments that matter. So mapping the employee journey. And from my experience, I mean organizations, leaders go all in on mapping the customer journey from the moment they interact to the whole life cycle. Every detail is mapped. Why aren't we doing this for the employee journey and identifying those moments that matter and seeing where we have gaps as well. So we'd love to hear what your experience has been, what are some key findings, some stories, anything that you can share that helps our audience today when it comes to mapping that employee journey in those moments of matter.
Lars Minns (24:54):
Yeah. John, thank you. Thank you so much. And I would simply say this, we've had three iterations of these moments that matter, and I think that's well intended or that's purposeful one, those moments change. And so this is not a static event. We started six or seven years ago, and as I said before, we're now in our third iteration of what this looks like. Our population has changed, our workforce dynamics and demographics have also changed. So it's been important for us to also adjust those moments that matter. The moments that matter in my opinion, are very significant because it's less about what I provide by way of the HR portfolio and the overall total rewards of the employee experience is more about how they interact with those and how they consume what we provide because then that builds the proper framework as well as the building.
(25:50):
It provides the building blocks for a great culture. And so we want our employees to help us identify what are those moments. We suggest them and then they in turn tell us what's really important. And when it all comes together, it's quite a beautiful thing. I mentioned the total rewards experience. We had a wellness day three or four months ago, and the outpouring of participation and the multifaceted or a myriad of ways in which our employees participated was nothing that we could have ever planned or certainly we didn't expect. We had yoga classes, we had employees leading our yoga classes. We had smoothie days. We had a smoothie minute up with a smoothie contest. I mean, it was all sorts of stuff that employees ultimately curated, all because we opened the door for them as opposed to fully setting the table. I think that the moments that matter are really important.
(26:46):
It's backed by data. So we are looking at unique ways in which employees are using the total lifecycle of HR. And that's important because we want to not only measure effectiveness, but also measure where we're ineffective. And so that helps us arrive at what are the true moments that matter? And I'll just leave everyone with this. We have a daycare onsite at our headquarters and all along when we established and really built our partnership with the vendor, one of the things we thought we were doing it for convenience. It's in the basement. The building employees can read to their kids at lunchtime, they can drop them off whenever they know their kids are safe.
(27:28):
We increased the tuition on our employees at something ridiculous in hindsight, and our employees really balked at it. Now, keep in mind it was still well below the industry or the benchmark number. And what we quickly realized was we thought we were building a moment that matter based on convenience, when in fact it was really based on cost. And that was because we allowed our employees to inform us as to how they wanted or why they were utilizing this benefit to begin with. And I think when you get that sort of symbiotic relationship with the employee and also with the company, we have a chance of really building something special. And that's ultimately what we're chasing. Culture is something to be pursued. It is not something you have. You can have a great culture certainly, but it's in constant pursuit and it's always asking the questions of the employee. So those moments that matter is something that we find to be pivotal. Like I said, this is our third iteration. I'm really curious to see what comes of it. We have a group of young employees working on this, so even more we're expanding the viewpoint.
John Duisberg (28:37):
That's great. Lars, thank you so much. Culture is absolutely something that's pursued, and I'm so happy that we ended it right on that note. So thank you again for just your willingness to just share your lessons learned perspective as we wrap up today. Remember this, the insights you've gained are only as valuable as the action you take leadership and culture transformation. Start with each of us at ITA Group. We help people and brands thrive together because creating a workplace where people feel seen, valued and inspired is how we drive meaningful change. For more strategies, tools, and insights to help you lead with purpose and build people first organizations, visit itagroup.com/insights. Thank you for joining us, and until next time, keep leading with your heart and making a difference as a people first leader. Worth following.
Narrator (29:40):
Thank you for listening to the Love your people podcast. As promised, this episode is valid for 0.5 professional development credits toward your SHRM-CP, SHRM-SCP and HRCI recertification. To claim your SHRM credit, please visit itagroup.com/SHRM-podcast. For your HRCI credit, visit itagroup.com/HRCI-podcast. Complete the quick form to receive your certification codes. Again, that's itagroup.com/SHRM-podcast and itagroup.com/HRCI-podcast.