WSJ article on the new CEO

The Wall Street Journal
When he took the wheel of the world’s most iconic luxury carmaker, Benedetto Vigna quickly decided that something was wrong with the organizational culture.

Ferrari was too slow. For a company originally built to race cars, this was something close to sacrilege. The problem, he discovered, was that Ferrari was being weighed down by its “bureaucratic mass index,” his name for the excess layers of an organization. The only solution was one that would make Ferrari leaner and faster.

“When the environmental condition is changing at high speed,” Vigna says, “you need to have a team that is able to adapt at high speed.”

Since his first day on the job in 2021, Ferrari’s stock price has nearly doubled, and the company has outper --formed the rest of the world’s biggest automakers. It’s now worth more than Ford Motor or General Mo --tors. But that may not be the best way to measure Ferrari. In fact, Vigna doesn’t even think of Ferrari as a car company.

“It’s a luxury company,” he says. “It’s a luxury company where, contrary to other luxury companies, technology plays an important role.”

It manages scarcity and desirability to the point that there might not be a single product with a wider gap between the number of people who own it and the number of people who can only dream of it. Last year, Ferrari sold a total of 13,663 cars. Forget about buying one. There are so few Ferraris on the road that it feels like a rare occasion any --time you see one.

But even if Ferrari is unlike any other company, any company can be more like Ferrari.

The management philosophy that its chief executive brought to Ferrari’s bellissima headquarters in Maranello, Italy, applies far beyond this place that produces the sexiest cars on the planet.

Before he was a car guy, Vigna was a chip guy. At the University of Pisa, he studied physics and wrote a thesis on
quarks and gluons. He took a job as a research-and-development engi --neer at STMicroelectronics, the French-Italian semiconductor company where he worked for more than 25 years, filed for hundreds of patents and climbed to division president. One product his group sold: accelerometers.

Vigna, 55, seemed like an im --probable choice to run a luxury company that happens to make products on wheels. He was such an outsider that he drove his first Ferrari not in Italy but Silicon Val --ley, where a friend let him take an F50 for a spin. He never expected to find himself in the driver seat of the entire company.

But he was tapped for the job because cars these days are as much about computational power as horsepower. As a tech executive, he understood the forces reshaping the auto industry.

As an Italian, he speaks about sports cars with such reverence that he makes the name Ferrari sound like it has five syllables. When he was a boy, he carried a backpack with a red Ferrari on it, and he fiddled with the antenna on his roof so he could watch racing on television. He once snuck away from home for the weekend without telling his parents to watch a Ferrari driver win the San Marino Grand Prix.

Ferrari has been synonymous with opulence, meticulous craftsmanship and ridiculously fast cars for nearly a century. The key to the company’s success is the same now as it was then.

“Factories are made of machines, walls and people,” Enzo Ferrari once said. “Ferrari is made most of all by people.”

Once Vigna traded semiconduc --tors for supercars, his first act as CEO was interviewing as many of Ferrari’s people as he could. By the end of his listening tour, he’d spo --ken with 300 employees in every role imaginable. He finds it odd when executives believe more of what they hear outside than inside their own companies. “Some consulting company offered to help me,” he says. “But the best consultants of a company are the people themselves.”

From the outside, Ferrari appeared to be humming. The stock price was up. The company’s operating margins made the industry salivate. The employees were motivated and highly competitive.

But talking with them opened his eyes to problems that only people inside the company could see.

There were too many silos. There was a bit too much distance between the CEO and the rest of the company. And the bureaucratic mass index was much, much too high.

As a result, the Prancing Horse was too plodding. At one point, Vigna counted nine levels of employees in a cybersecurity meeting and noticed that only the lowest-ranking person had anything useful to say. He restructured groups and reduced the number of organizational levels.

Vigna discovered something else during those conversations that floored him: There were people at Ferrari who had never been in a Ferrari.

After the company invited employees to a test track to experience the cars for themselves, he says one woman came up to him on the verge of tears. She had been mounting Ferrari’s dashboards for decades, but only after seeing her work in action—at several hundred kilometers per hour—did she really understand her job.

 

"Since his first day on the job in 2021, Ferrari’s stock price has nearly doubled, and the company has outper --formed the rest of the world’s biggest automakers. It’s now worth more than Ford Motor or General Motors. But that may not be the best way to measure Ferrari. In fact, Vigna doesn’t even think of Ferrari as a car company."

Looks like Enzo did have the last laugh re: Ford vs Ferrari