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Fast Company
19 minutes ago
- Fast Company
Here's what nobody tells you about building an innovative culture—not everyone will thrive in it. (And that's okay.)
Years ago, we had a manager named Ania running one of our publishing operations. She was well-liked, diligent, and responsible. Still, we felt the business needed a more creative spark, so we brought in a rising executive to take her place. Ania transitioned out gracefully and left the company on good terms. Things turned out well. Our business thrived and Ania became a highly sought-after interior decorator, renowned for her creativity. The problem wasn't that she lacked any creative ability. The problem was that we weren't giving her the type of challenges that excited her. While she languished in our business, she thrived in a different environment. The truth is that there is no such thing as a 'creative personality.' You set the conditions for the people in your organization to be creative. But as you set those conditions, you also narrow possibilities, making the environment fertile ground for some, but barren for others. Every leader needs to learn to make those choices. Culture matters. You need to shape it with care. A Misfit Trying To Find His Place Not unlike Ania, Chester Carlson didn't quite fit in. Unsatisfied with his work at the patent department at Bell Labs, he wrote down hundreds of ideas, the vast majority of which never amounted to anything. He was eventually fired and went through a few more jobs after that. Chester was a man looking for his place in the world. There was one idea, however, that he kept coming back to. He worked on it for years, even while holding down a day job and going to law school at night. When his wife got tired of the putrid smells and explosions he made mixing chemicals in the kitchen, he moved his experiments to a second-floor room in a house his mother-in-law owned. Eventually, he conjured up a working prototype in 1939, but it was far from a viable product. He continued to tinker and, eventually, teamed up with the Haloid corporation in 1946. Together, they refined his product further, but it still cost nearly ten times more than competitive machines. They tried to interest the great companies of the day—Kodak, IBM and GE—but all demurred. Much like Chester himself, his invention didn't fit in. There just didn't seem to be a value proposition that would justify the cost of the machine. Yet Haloid's CEO, Joe Wilson, saw potential. He figured that once companies had the machines, they'd make more copies than they ever imagined. Wilson also figured that Carlson's concept needed a name that would signal that it was something truly different and, after some deliberation, settled on 'xerography.' And that's how the Xerox Corporation was born. The Rise And Fall Of A Business Model Wilson saw the challenge as a classic chicken-and-egg problem. Since nobody had ever used a Xerox machine before, they had no idea how useful they could be and weren't willing to buy such an expensive product. At the same time, unless they bought the machines, they wouldn't ever use them and see the value. But what if Xerox leased the machines for a fraction of the cost and charged per copy? Since customers weren't planning to make many copies, there was little risk in trying it out. Wilson was willing to bet that once the machines were installed, customers would discover needs they never knew they had. He calculated that the model would be profitable at 2,000 copies per month. In 1959, Xerox launched its 914 copier, which became an instant hit. The technology made copying so much easier that, before long, customers were averaging 2,000 copies per day, instead of per month. Wilson's bet had paid off. Revenues grew at a 41% compound annual rate for over a decade, and the small firm soon became a titan of American business. Xerox became laser-focused on optimizing its business model. Its profits depended on the number of copies printed and that became Xerox's key performance metric. Everything the company did—from how it designed its copiers to how it marketed and sold them—was rooted in that one simple principle. Yet the company eventually became a victim of its own success. Japanese competitors like Canon and Ricoh began selling simpler, cheaper copiers, based on 20-year-old technology, that were easier to use and needed less maintenance. Rather than staffing a 'copy room,' companies could place these smaller, less expensive units on every floor. Xerox was being disrupted. Making Space For Misfits It was around this time that the company hired a young engineer named Gary Starkweather, Much like Ania and Chester, he found he didn't fit in. Part of the problem probably had something to do with his background. Copiers were largely based on chemistry and Gary's interest was optics. In particular, he was excited about lasers. But it was more than that. Gary wanted to build something outside the copier business and, in a way that was uncannily similar to Chester Carlson's situation, the higher-ups just didn't see how it fit in with their business. In fact, his boss actually threatened to fire anyone who worked with Starkweather on the project. Eventually, he had enough. He marched into the Vice President's office and asked, 'Do you want me to do this for you or for someone else?' In the business culture at the time, this was considered unheard of behavior, clearly a firing offense. Yet fate intervened and destiny had something very different in store for Gary Starkweather. As luck would have it, Xerox CEO Peter McColough was a bit of a visionary himself. He recognized the bind his company was in and wanted to shift the firm's focus to 'the architecture of information.' No one really knew what that meant, but a special unit, the Palo Alto Research Center (PARC), had been set up to figure it out. As luck would have it, the researcher there had been developing a technology called bitmapping that would revolutionize computer graphics. What they were missing was a technology that could bring those graphics into the physical world. An Organization Fit For Purpose At PARC, Xerox created a culture where creative minds could thrive. It was there that Alan Kay invented object-oriented software, Bob Metcalfe developed Ethernet; and so many other technologies were created that became central to the age of personal computers. Some of the technology was spun off into companies, such as 3Com and Adobe. It was also a place where Gary Starkweather, who had been a pariah in the old Xerox research lab back on the east coast, found he fit right in. The technology he had been developing became the world's first laser printer and brought the bitmapped graphics technology to life. As a product, it would prove to be so enormously profitable it would save Xerox. Yet even the most innovative cultures aren't fertile ground for every idea. Two researchers at PARC, Dick Shoup and Alvy Ray Smith, were working on a new graphics technology called SuperPaint. Unfortunately, it didn't fit in with PARC's vision of personal computing. Much like Starkweather, the two were seen as outcasts and would go elsewhere. Smith would eventually team up with another graphics pioneer, Ed Catmull, at the New York Institute of Technology. Later, they joined George Lucas, who saw the potential for computer graphics to create a new paradigm for special effects. Eventually, the operation was spun out and bought by Steve Jobs. That company, Pixar, was sold to Disney in 2006 for $7.4 billion. Great leaders build cultures that are fit for purpose. That means you have to make choices. Inevitably, that means that some things—and some people—won't fit. And some will.
Yahoo
2 hours ago
- Yahoo
Movie theatre business grew in 2024, but still short of pre-pandemic highs: StatCan
OTTAWA — Statistics Canada says movie theatre business grew in 2024 but still hadn't reached its pre-pandemic peaks. Every two years, the agency releases a look at the state of movie theatres. Its report for 2024 showed operating revenues hit $1.6 billion last year, up 12 per cent from 2022. Statistics Canada says that marked a rebound from COVID-era restrictions, but still fell 13.1 per cent below the record of $1.9 billion seen in 2018. Theatre attendance was also stagnating, the agency says, at roughly two-thirds the levels seen six years earlier. Statistics Canada says the average ticket price rose to $12.54 in 2024, up 5.5 per cent from 2022 and 31.9 per cent from 2020. This report by The Canadian Press was first published Aug. 19, 2025. The Canadian Press Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
WIRED
3 hours ago
- WIRED
The Global Car Reckoning Is Here. Far Too Many Auto Companies Don't Have a Plan
Aug 19, 2025 10:56 AM How are the CEOs of Ford, BYD, Lamborghini, Polestar, and more planning to survive the hellscape that is the current automotive world? We asked them. Photography: GETTY; WIRED Staff On a drab, overcast March day in Amsterdam in 2022, Stellantis CEO Carlos Tavares took off his face mask and strode onto a makeshift stage to confidently explain to a crowd of journalists and analysts how the company that had recently unified brands as diverse as Fiat, Peugeot, Maserati, Ram, and Opel was going rewrite the rules of the car industry. His tie sat slightly askew and his greying hair needed a trim, the picture of a man far too focused on applying dynamic capitalistic principles to an ossified, margin-destructive business to worry about his appearance. The Portuguese CEO had it all planned out until 2030. By that point Stellantis would generate software-based revenues of €20 billion from selling customers subscriptions. Distribution costs would be slashed by 40 percent as the traditional dealer model was rebuilt. Electric vehicles would account for 100 percent of Stellantis sales in Europe and 50 percent in the US. Revenue would grow two-fold and margins would stay in the magic double-digit space reserved for the best premium and luxury brands. 'It is our blueprint. It is about how Stellantis will engineer the future of mobility,' Tavares said. If anyone could shake up automotive, it would be Tavares. He'd already spectacularly proven his abilities by returning the perennially loss-making Vauxhall-Opel brand to profitability after leading PSA Peugeot-Citroen's buyout from General Motors. Now he was ready to apply his private-equity style of management to the newly created behemoth blending PSA Group with Fiat Chrysler Automobiles. Here was a global company with all the fresh energy and scale benefits ready to face the new era. A little more than three years later however, Tavares is gone and the company posted a €2.3 billion net loss for the first half of 2025 after the new boss Antonio Filosa wrote off €3.3 billion, much of it related to those 2022 plans. A rather forlorn note now sits below the 2022 statement on Stellantis' website: 'Many of our Dare Forward 2030 targets have become increasingly challenging in view of the current trends in market dynamics, government policy and regulation that have emerged since the Plan's introduction.' Stellantis is not alone. Other results posted at time of writing included a €837 million half-year loss from Volvo, a second-quarter loss for Ford and a supposed return to the red for Tesla's automotive business once emissions credits had been stripped out, according to Philippe Houchois, managing director of autos research at investment bank Jefferies. Right now the auto business is very publicly grappling with an existential quandary. Many of the traditional big hitters are trying to navigate the seismic shifts taking place in the car business globally, led by, but not restricted to, the sunsetting of internal combustion and the arrival of cheaper and better EVs from China. But the real concern is that, facing such an onslaught of unfamiliar pressures, automakers—with very few exceptions—don't have a strategy to get them out of hot water. Moving Fast Breaks Things Car companies need long-term plans because it generally takes around four to five years to develop a new model. But the world is currently moving too fast for the industry to accurately predict what customers will want in four years, what new governments will demand, and what cost targets to hit to be competitive. 'In the good old days, you looked at the market, you looked at the competitors, you looked at the economy, you wrote the plan and it kind of happened,' Adrian Hallmark, CEO of Aston Martin and formerly Bentley, told a London conference hosted by the Society of Motor Manufacturers and Traders in June. 'Now, you write it, throw it away, and just wait.' His views were echoed by Jaguar Land Rover's chief financial officer, Richard Molyneux. 'It's not just the quantity and scale of some of these risks that's important. It's the speed,' he told analysts on the company's investor day in June. 'We saw a 1,000 percent increase in our tariff costs into the US with eight days' notice. [Our] industry simply cannot respond that quickly.' Porsche CEO Oliver Blume was blunt in a July memo to employees seen by Bloomberg as he laid out the threat from US tariffs as well as a slump in China sales and slow luxury EV sales. 'Our business model, which has served us well for many decades, no longer works in its current form,' he said. Amid the post-Covid, Tesla-inspired optimism that motivated Stellantis' Dare Forward plan, the smooth electric transition would be paid for by new forms of revenue generation such as software subscriptions and online sales. That turned out to be a mirage. For a while between 2021 and 2023, everything seemed to be going as planned as carmakers made profits close to record levels. Software engineers were hired in their thousands, plans emerged to replace the combustion engine, and dealers had their contracts ripped up as carmakers planned to sell directly to the public. However, much of the profit hike turned out to be a direct result of the chip shortage that slowed vehicle production and provided a once-in-a-generation opportunity to increase prices. Meanwhile, EV sales grew lumpily rather than soared universally; reengineering automotive software proved bloody hard; and car companies turned out to be much worse at selling cars than properly incentivized dealers. Formidable New Threat Suddenly carmakers were back to where they were five years earlier, discounting heavily to encourage sales and posting low single-digit profit margins. However this time they were facing a formidable new threat, especially to volume players such as Stellantis, Renault, and Hyundai. 'One of the challenges is clearly the rise of China as a global leader in car manufacturing,' José Asumendi, head of global autos at the bank JP Morgan, tells WIRED. 'They're taking market share globally.' Boosted by lower costs—achieved by a combination of subsidies and sheer hard work—China now exports around 20 percent of its production to claim around 5 percent of the European market and 10 percent in Latin America, according to JP Morgan's figures. In China, the share of sales taken by local automakers has risen to 65 percent up from 41 percent in 2021, the bank said. 'Those figures are obviously going to move higher in the next three years,' Asumendi says. The loss of China sales share is a blow to those including General Motors, Volkswagen Group, Ford, and others who benefited hugely from the emergence of China as the undisputed global number one marketplace for auto sales. China is still the biggest market for German brands including BMW and Mercedes. 'If you go back and look at the amount of capital that the Western OEMs have taken out of China over the last 10 to 12 years, its $80-plus billion,' Ford vice-chair John Lawler told a conference held by the Bernstein bank in May. 'That capital funded a lot of the investment that's happened in the industry. With that gone, everybody is not going to be able to do this on their own.' International carmakers have watched with a mix of fear and fascination as their local manufacturing partners in China have evolved their home-grown efforts from one of clumsy pastiche to a global force. 'It's the most humbling thing I've ever seen,' Ford CEO Jim Farley told the Aspen Institute's Ideas Festival in June. 'The cost and the quality of their [electric] vehicles is far superior to what I see in the west.' EVs now account for 30 percent of China's market, while the country's battery makers dominate the global supply chain. 'People don't realize that China has the IP that America needs,' Farley said. 'We need to learn, and how we learn is through joint ventures and cooperations and partnerships, but we can't be so obsessed with China as an enemy that we aren't humble enough to set up those business structures.' Farley regularly takes executives over to China to test the latest EVs, bringing back to Detroit the ones they really want to 'drive the crap out of,' and then strip down. The Porsche-like Xiaomi SU7 was a particular recent favorite. The Broken Subscription Model China is also threatening to rip up the software subscription revenue model, which was fueled by carmakers' hope that customers will pay for downloads like better map integration, superior entertainment packages, or to unlock vehicle features such as automated driving, potentially generating profit margins closer to Apple levels. 'For decades, the industry dreamed of moving away from a transactional-based business to a life-cycle revenue generator,' Philippe Houchois at Jefferies tells WIRED. Rather than waving goodbye to the customer at the dealership, the carmaker maintains a relationship digitally via the dashboard screen and phone app where it can offer 'new services' (even if the sophistication of these new services right now rarely extends beyond custom wallpapers on the cabin screens.) The urgency to generate this new revenue has ramped up as car sales have stalled globally. 'It wasn't existential [when it was first proposed] because the industry was still growing. If all of a sudden there is no growth, then it's not a nice-to-have, it's a must-have,' says Houchois. Charging for features as a mass-market brand requires everyone to go along with it, or customers just switch to the brand that offers it for free. So the news that BYD, China's largest carmaker and along with Chery, the country's largest car exporter, isn't at all keen on this business model is a blow to western automakers. 'This is not our motto,' executive vice president of BYD and president of BYD North America Stella Li tells WIRED. 'If customers need more technology, our platform can support them, but it's not what we pursue to make additional revenue.' Indeed, BYD has said it will package its upcoming 'God's Eye' assisted driving technology for free. Tesla is often compared with BYD in the global battle for EVs, but really is very different. Whereas BYD operates as a car company along mostly traditional lines, Tesla sees charging customers to access its automated driving as becoming one of its primary revenue sources. The problem is, CEO Elon Musk's long-promised software download to turn your Model 3 or Model Y into a robotaxi has yet to materialize. Houchois describes Tesla as a reluctant carmaker, forced to spend industrial levels of capital updating a physical product from which software levels of margin are always tantalizingly out of reach. 'Musk doesn't want to play the BYD game,' Houchois says. 'He thinks the BYD game is last year's game. Except until you have tomorrow's business generating cash, you need to play in last year's game.' Data Driven Shift All carmakers are still working very hard on creating the fully upgradeable vehicle. 'For me the software-defined car is really the game changer,' Xavier Martinet, head of Hyundai in Europe, tells WIRED. 'If everything is mechanical, if you want to go from manual air conditioning to automatic air conditioning, you cannot. If it becomes a software issue, you can actually sell it.' Carmakers however, while well-versed in selling physical options like leather seats or sunroofs, have yet to prove they can do the same with digital upgrades. Most now understand from early experiments in selling subscription access to preinstalled technology such as heated seats, or accepted freebies such as Apple CarPlay, appear greedy and can alienate customers. According to a survey from S&P Global customers increasingly don't like such subscriptions, with proportions of those saying they would pay for connected services dropping from 86 percent in 2024 to 68 percent in 2025. Undeterred, VW has just introduced a monthly subscription to increase the power of some of its electric cars, a move that mirrors Mercedes' Acceleration Increase for its EQ models, which initially cost $1,200 a year. Perhaps more crucially, automakers have been so entranced by the mere possibility of selling software in cars, few have been able to nail down precisely what in the future they'll sell that consumers will deem genuinely worth buying. Yet despite setback after setback, car companies are clinging to the dream that when this as yet largely unidentified genuinely useful new technology arrives, they can be the ones to monetize it, rather than losing out to more nimble tech companies or other suppliers. Forced to raise their game, carmakers are only now realizing they cannot repeat past mistakes such as letting others build up parts and services businesses off the back of their core product. 'They stole the business from us,' Martinet says, referencing as an example windscreen replacement companies. 'So I don't want them to steal the next one.' Hyundai is staying in the subscription sales business—a more flexible form of leasing. 'Sometimes you're losing money as a whole, but you're recovering a business that has been lost to leasing companies, to banks, to insurers,' he says. One car company that refreshingly seems to have more than just a rough outline of a plan for the next decade is Ford. Farley believes business customers are an excellent source of income for subscription revenue. 'The customer who uses their vehicle for business looks at their vehicle completely differently than a retail customer,' Farley told WIRED. 'When it's not working they lose revenue, unlike retail customers, who are just annoyed. So they pay for productivity software.' Ford claims it now has almost one million subscriptions for its 'Pro' software. What's more, Farley feels this success will translate to consumer sales. 'What we are learning in Pro is going to be the general model for our business model at Ford—not because it's a business, because the relationship with the customers changed. We're telling the customer how to use their asset,' says Farley. 'The data will be used for different things on retail, but I don't think it's going to be this land rush of autonomy that's going to make us all the money and add value to the customer. Certainly that will be the case for eyes-off-the-road highway driving. But the data… we can't even imagine what the data off the vehicle is going to be used for the customer yet.' 'And so the dealer in that model is a consulting role. It is not a selling role. 'We're noticing you're not using your vehicle the right way; we're noticing you're not paying attention on predictive failure of your components.' It's the same for retail. I don't think it's going to be different,' says Farley. Service Economy Car companies worry a great deal about how to keep their dealers happy. Having bought the car from the manufacturers below the retail price, dealers are fine with giving away some or all of their profit margin because the bulk of their profit comes from servicing and parts sales. But that delicate balance changes with electric cars, which don't need high-margin servicing. According to Li, BYD estimates that dealer income from servicing will fall from 50 to 30 percent. The company plans to overcome this by having dealers selling more new and used cars apiece to cover any shortfall. 'We are paying a lot of attention to make sure [our] per-store sales number is the highest in the industry,' Li says. Importantly, BYD already has the spare manufacturing capacity to massively ramp up car production. No new plants will be needed. Hyundai is also behind the idea of the superdealer. 'We have the FBB plan—fewer, bigger, better—because there are some dealers that will never be able to accompany us,' Martinet says, adding that the plan right now is to overcome a "short-term emergency" while a more solid but as-yet-unbuilt plan is cooked up. "We're just trying to outrun the [competition] and then find another way to defeat them," Martinet says. Plug-in hybrids as an interim technology is making carmakers, suppliers, dealers happy because they're higher priced, with more content per vehicle and more servicing opportunities. But they are not long-term. Lamborghini is making the move to Plug-in Hybrid Electric Vehicles with cars like the Urus SE and new Temerario, but CEO Stephan Winkelmann understands that in a future EV era a completely new business plan is needed. 'This is all undergoing a deep analysis, and nobody has a clear response,' he tells WIRED. 'It's clear that the complexity of a car is much higher than a cell phone or a computer,' Winkelmann says. One opportunity he mentions might involve tempting customers to spend more at service time by offering to upgrade the battery with a newer chemistry giving a longer range. Who makes that battery is another contentious issue. Parts suppliers are responsible for about 85 percent of the value of a new car, Stellantis' former CEO Tavares pointed out last year. Reducing that number should be an easy way to claw back revenue lost to the Chinese, to the global tech giants or to stagnant car sales. But in an electric world the battery supplier now has outsized importance, eclipsing the work carmakers have done to lower manufacturing costs. Assembling the car more quickly with fewer parts doesn't move the needle much when the battery costs as much as the rest of the car, Thierry Charvet, Renault's head of industry and quality, pointed out to journalists in June at event held at the company's manufacturing plant in Palenica, Spain. Then you have a dilemma: Do you take battery production in-house, as VW is doing? Or let suppliers—mainly from China—take the risk and grab the reward? As with GM and Korea's LG Chem, and as Ford plans with China's CATL, Renault favors a loose partnership. 'The chemistry is going very fast and battery plants are very, very capitalistic,' Charvet said, while acknowledging the dangers. 'The cell makers are very sensible. Their job is to sell chemistry which is available, not the chemistry they are working on for the future. We need to be able to challenge them.' Ford has just announced it is spending billions on a radical reinvention of auto manufacturing, making EVs in a completely new way, with battery production brought in-house. It's all aimed squarely at taking on Chinese competition—but if it works this truly bold move won't come to fruition until 2027 when the first vehicle from Ford's Universal EV Platform arrives, a midsize four-door electric pickup with an aimed starting price of $30,000. European Makers Want to Hit the Brakes With fewer and fewer international players able to compete in China, the pivot to electric is mainly a European challenge. Here tailpipe CO2 reduction is mandated up until 2035, when the sale of new combustion engine cars will be banned. Faced with heightened competition at home and the loss of their high-margin combustion-engine SUVs, European carmakers are lobbying hard to push back the ban. 'We need a reality check. Otherwise we are heading at full speed against a wall,' Mercedes-Benz CEO Ola Källenius, also president of the European auto lobby ACEA, told the German publication Handelsblatt. The US was going the same way on EVs, albeit at a slower pace, until EV-sceptic President Donald Trump rammed the direction of travel into hard reverse by removing EV sales credits and reducing manufacturer penalties for not meeting fuel efficiency targets to zero. That forces global carmakers to develop combustion engines and electric cars simultaneously, stretching budgets. With China racing to electric far faster than either of the other two big global regions, as well as requiring specific software unique to the country, carmakers are having to silo development for each region, if they can afford to. 'What's happening is a rapid fragmentation of markets in a way that I and our business has never seen before,' Aston Martin's Hallmark said. 'As a small player, we can't imagine having electric vehicles and combustion-engine vehicles in parallel, and coping with three radically different regimes around the world.' Just like BYD, Michael Lohscheller, CEO of EV brand Polestar, thinks that while ancillary revenues will be important for the car industry of the future, there's no getting over the basic tenet of the auto business. 'Cars are the biggest profit contribution [to any auto business], and it will stay like this,' he says. 'You have to make sure that you can make money [selling] electric cars—and it can be done. I'm not saying digital services will contribute more than the sale of the car. That won't happen. We are not dreaming. You have to make money with cars, and if you just hope that everything else will come from other areas, you have a big problem.' Bold words from the CEO of an EV company that lost $1.8 billion in 2024. In contrast, BYD made a record $5.6 billion last year. With an industry-wide accepted winning gameplan still not obvious, it seems the best that old-guard international carmakers can do right now to ensure survival is outrun their rivals. 'You cannot be average,' Hyundai's Martinet says. 'When you have newcomers as strong as [China's] are, you cannot be a B or B minus. You have to be an A at least.'
