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The Duke of Richmond, founder of the Nucleus event, speaks with Deloitte’s US and Global Automotive practice leaders Craig Giffi and Joe Vitale about the Goodwood Festival of Speed and why artificial intelligence is the theme of this year’s event.
The automotive industry—and the broader business of moving people and goods more conveniently and efficiently—is facing massive disruption and change. New technologies, a crowded and competitive business ecosystem, and evolving consumer expectations are just a few of the many things converging to reshape the mobility landscape. For senior business leaders, navigating this landscape can be complex. Where can they find opportunities to drive value? What critical partnerships and alliances will they need to form? How can they identify new technologies on the horizon that could further affect their business?
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Many executives across industry verticals are hungry for opportunities to connect with other senior leaders to discuss questions like these. For the last five years, Charles Henry Gordon Lennox, 11th Duke of Richmond, has created that opportunity at the Nucleus forum, held during the annual Goodwood Festival of Speed that he hosts on the grounds of the Goodwood estate in West Sussex, England. Nucleus brings together an elite group of CEOs and other senior executives from automakers, technology and telecom companies, startups, and other industry players to discuss the future of mobility. The conversation—conducted under Chatham House Rule—is designed to arm leaders with insights and perspectives that can help them lead their organizations into the future.
Recently, Craig Giffi and Joe Vitale, the leaders of Deloitte’s US and global Automotive practices, sat down with the Duke of Richmond to learn more about his views on the automotive industry, why the festival and Nucleus are critical to the mobility dialogue, and why he selected artificial intelligence (AI) as the theme for Nucleus 2019.
Craig Giffi (CG): The automotive industry is undergoing significant disruption and looks as though it is poised for a great transformation. What do you think are some of the most exciting changes we’re going to see in the next decade, and do you have any concerns about where the industry is headed?
Duke of Richmond (DoR): I find the transformation itself and where the industry is headed very exciting. The idea that we are going to witness this massive transformation is something many industries don’t experience very often. We are already seeing the effects of the disruption of the automotive industry. As a result, there has been consolidation within the industry and relationships being forged between companies that previously wouldn’t have dreamt of working together.
A completely different world of mobility is coming. The ongoing debate continues to be how quickly is it going to happen and how rapidly traditional car companies can change to be successful in that world. They don’t really have a choice: Innovation, new entrants, legislation, regulation, shifting consumer expectations are all converging to make the need to change unavoidable. How quickly they can change is debatable, as is whether they want to be leading that change or if they want to step back and learn by letting others go first. It is like the tortoise and the hare, and individual automakers deciding which they want to be in their quest to win. They are certainly behaving very differently than a few years ago in terms of willingness to change and trying to accelerate change within their organizations.
What also concerns me is if we are ultimately heading toward a future where mobility is merely a commodity—a service you buy, like water or energy, where the value is simply based on how much it costs you to get from point A to point B—then all of the other value intrinsic to automotive, such as the love of driving and the personal relationships many people have with their cars, would simply disappear over time.
CG: Why is the Goodwood Festival of Speed important to the automotive industry, and, more broadly, to the future of mobility?
DoR: Part of what we do during the festival is to celebrate cars of all kinds—past, present, and future—and celebrate the love for motoring. If we are headed toward a future where mobility becomes a commodity, the festival is going to continue to be an important voice for memorializing the history of the automotive industry, celebrating the wonderful vehicles automakers produce, and advocating for the love of motoring.
That being said, emerging technologies will also very likely allow those passionate about driving to experience new thresholds of speed and performance. The festival ensures we don’t lose sight of the past, but it also continues to be a destination where automakers and others building the vehicles of tomorrow come to showcase machines that allow those of us who love driving to experience new frontiers of performance.
For most people, mobility will likely become a commodity over the next 10 to 15 years. Even for enthusiasts like me and those who attend the festival, the benefits stemming from the commoditization of mobility in our day-to-day lives can’t be denied. What that means for those of us who are passionate about motoring is that driving becomes a leisure activity. A hobby like riding horses. And much like riding horses, there will be a growing need to create destinations for those who enjoy the hobby of driving to actually get behind the wheel and push the limits of their personally owned luxury vehicles and hypercars. I believe the festival plays that role already today, but I think that role will continue to grow in importance and scale as many societies migrate toward shared, autonomous mobility. Automotive enthusiasts will continue to want a place to drive their cars the way they were designed to be driven, and I want to make sure the festival is at the heart of creating those experiences for people passionate about driving.
CG: As you look back at what you created with the festival, the objectives you’ve set out, what are you most proud of at this point?
DoR: We are really celebrating more than 100 years of the motorcar in all its various forms. In doing so, we have created a gathering that is unique in the world. It stands out from different types of events in the way we are able to gather business executives—people who love the industry, who love motoring—and in the way we celebrate cars and motoring. I believe it is distinct from anything else, and I am extraordinarily proud of that.
Joe Vitale (JV): When you created Nucleus as a forum for dialogue, what did you envision, and how far have you gotten in terms of realizing that?
DoR: Our vision was to create an environment where senior business leaders representing multiple industries could safely confront and talk about the challenges facing their businesses. I think we’ve done that, but we’re not done. It’s a continuous process. For example, Nucleus was quite disruptive for some people when we started, and some people still find it very challenging. But participants have adapted very quickly, and that is good for everyone—particularly for traditional automakers that have historically been slow to adapt to change. Nucleus has put key people in front of the heads of the global carmakers that warned of the coming disruption from technology and offered some hope that there was a path to survive and even thrive in the changing environment. I hope we have played our own tiny role in helping the automotive industry become more open to change and, perhaps, react more quickly to it.
JV: Are there unique things you’ve done at Nucleus that have helped create this environment for open dialogue and discussion around the future?
DoR: One factor that has contributed to the forum’s success and the openness of the dialogue that goes on there is that there is no hidden agenda. All we are trying to do is bring together an eclectic group of leaders who are leading some terrific companies, and at the same time are challenged with a lot of uncertainty as they see their industries change, converge, and collide with other industries in the ecosystem. It’s unusual to have such a mix, and I think our ability to create a safe environment where they can talk about these challenges has contributed to the appeal of Nucleus among the C-suite and other senior business leaders.
What also makes Nucleus unique is that no matter where participants operate in the mobility ecosystem, we are creating a shared experience and a sense of connection among attendees. I think that is important because, in a way, the forum also helps push everyone in the same direction. That is truly important for the future of mobility, because we know that no one single company or one single industry is going to make that future a reality. It’s going to take multiple players working together in harmony, and we are creating the connective tissue to drive that through the relationships and discussions that thrive at Nucleus.
JV: In the several years that you’ve been doing this, is there a particular memorable moment that you want to share?
DoR: We have had a number of interesting moments, but one in particular comes to mind. It was during one of the early Nucleus gatherings; in fact, maybe the first Nucleus. Because of our Chatham House Rule, I think it would be unfair to attribute this comment to the individual directly. However, we had the founder of a new mobility technology company join us, and at the very beginning of the conversation, the individual said something like, “You’re all dead men walking. Half of you will not exist in 10 years’ time.” That caused quite a reaction, particularly with this being one of the first Nucleus gatherings and participants feeling on edge and defensive to begin with. As you can imagine, that was quite a powerful and interesting moment.
JV: You’ve mentioned the group is getting more comfortable with exploring things that are disruptive to their business, and also that they’re getting more comfortable interacting with individuals from other industry sectors that participate in Nucleus. Do you intend to continue creating that ecosystem to ensure that the complex issues and challenges surrounding mobility continue to be discussed?
DoR: Absolutely. It’s really important. But at the same time, we need to continue including people who are really on the edge and who are able to challenge others in the group. Part of the objective is to try to balance the types of companies we invite to participate in the Nucleus dialogue, so we can have new and provocative insights and perspectives each year. It’s one reason we theme each annual conference. It allows us to focus the discussion on what is really a very short and sharp agenda, stay true to our objective of bringing together an ecosystem of players, and insert fresh perspectives that make people still feel a little uncomfortable.
CG: Why did you select artificial intelligence (AI) as the theme for this year’s discussion?
DoR: We feel the moment has come and it is a critical moment for AI in mobility. There is so much discussion around AI and machine learning and how it is going to enable new technologies across nearly every industry vertical, but the industry has so far used AI mainly to make its traditional processes smarter rather than push forward new initiatives. It’s just so massive, and for the executives working in mobility, extremely relevant.
I go back to what we talked about previously regarding the role of the festival and celebrating new frontiers of technology and performance. AI is a perfect example of that. If we actually get to a place where there is widespread use of AI in the car, you can imagine the speeds and performance people could experience. We could finally break through the barrier imposed by human limitations on how fast people can safely drive. AI could totally change that, and I am looking forward to talking about that at Nucleus and celebrating it in the coming decades.
CG: Do you have any concerns about AI in getting into the technology mix?
DoR: Like many, I am concerned about the vulnerabilities in an increasingly connected world. Bad actors attacking a network is a real concern in terms of safety, privacy, and even the trust people have riding in vehicles equipped with these technologies. I am also curious about the ethics issue. What happens when an accident is inevitable, and we’ve handed the decision of how to react over to a machine that lacks emotion and empathy? I think all of those topics are interesting and fascinating.
Editor’s note: This article is part of an ongoing series of interviews with CEOs, CFOs, and other executives. Mr. Charles Henry Gordon Lennox’s participation in this article is solely for educational purposes based on his knowledge of the subject, and the views expressed by him are solely his own.