Transformation as Strategy: CES 2026: Beyond the Show Floor — What Executives Are Really Talking About

00:00:00: Hello, everyone, and welcome to.

00:00:03: Transformation as Strategy, creating a lasting competitive edge.

00:00:08: A podcast

00:00:09: brought to you by the experts at Roland Burger Americas.

00:00:12: I'm your host, Sean McMahon.

00:00:14: And for today's episode, we're going to focus on the recently completed consumer electronics show in Las Vegas.

00:00:21: Joining me for that conversation is Philip Leitaker, head of digital in North America, and Stefan Kies, managing director of North America.

00:00:30: Gentlemen, how are you doing today?

00:00:32: Very good.

00:00:32: Excited to be here.

00:00:34: Very good.

00:00:35: Thanks for having us.

00:00:36: It's wonderful to have you here.

00:00:37: As I mentioned, CES twenty-twenty-six just wrapped up.

00:00:41: I want to kick off today's conversation by asking each of you for some of your key takeaways from this year's gathering.

00:00:47: Philip, let's start with you.

00:00:49: Obviously, CES again was a blast.

00:00:52: It was a massive event.

00:00:54: There were lots and lots of people and many miles to cover, walking the halls.

00:00:59: Overall, I have to say, though,

00:01:01: there

00:01:02: has been less excitement on the booths, less excitement on the shop floor, and instead, a grand showing of executives, senior decision makers, and people who just came to Vegas to network and to have those conversations that are so important.

00:01:19: I understand.

00:01:19: So a little different flavor for you.

00:01:21: What about you, Stefan?

00:01:24: I think it was a great show as always, but the show has evolved over the last few years.

00:01:30: If I think back to the show, especially pre-COVID, twenty eighteen, twenty nineteen, you walk the halls and every single booth you stopped, you were, you saw something truly new, truly innovative, truly different.

00:01:45: And honestly, the big surprises and the big developments were not on the floor this year.

00:01:52: The executives were, and it was great to network and to connect.

00:01:56: But the big announcements were all made in the press releases, in the keynote speeches, or in the talks in the hallway with different companies.

00:02:09: And that's what the true value of CES today led from me.

00:02:13: It was the connection with executives from all around the world, from Europe, from Asia, of course, from the US, where you could catch up on latest trends, latest developments, and learn.

00:02:24: about the innovations that the companies had done.

00:02:28: But many companies have cut down their investments at CES, have downsized their boosters in order to focus on the content much more than on the show itself.

00:02:41: Okay, so Stefan, did you notice any particular industries that were kind of stressing more of what the announcements were rather than product reviews?

00:02:50: Automotive, of course, is always a very big participant.

00:02:53: But not all of the OEMs were present at CES this year.

00:02:59: You can see big showings from a handful of OEMs, but many of the big contributors from the past, they said the executives, they didn't have the showing.

00:03:09: What you did see were gradual progressions on autonomy, on HMI, on human machine interface, on electrification.

00:03:20: They weren't the big breakthroughs as in the past, but there were continuations and smaller steps in the right direction towards industrialization and towards mass marketing of these new technologies.

00:03:34: The second big area that was very prominent was robotics.

00:03:37: Those humanoid robotics, as well as all kinds of different applications, heavily in the hands of the Chinese.

00:03:45: Not very surprising.

00:03:46: We estimate that about fifty percent of the global market in robotics at the moment is dominated by Chinese manufacturers.

00:03:56: And they showed new innovations that were both impressive and I would have to say disappointing at the same time.

00:04:07: Impressive because the advancements that were done especially in the area of visual perception and of haptics on the individual applications were really astonishing.

00:04:20: You saw very detailed, very accurate assembly operations by different robots.

00:04:30: You saw robots playing ping pong.

00:04:32: probably better than I could have played it.

00:04:35: But at the same time, you also saw a lot of mistakes, a lot of errors.

00:04:40: You saw human robots simply collapsing on the floor.

00:04:44: You saw sweeping robots falling downstairs.

00:04:48: So it's clear that the technology is progressing, but it's not quite yet where I would consider it ready for mass market rollout.

00:04:59: Philip, I don't know how you saw it.

00:05:02: I think one of the areas I was most excited about was obviously artificial intelligence.

00:05:08: And that was the big topic at the fair.

00:05:12: A lot of discussion, a lot of trying to get meat behind the hype that we've been seeing in the last couple of months.

00:05:20: I feel like many executives were at the Consumer Electronics Show just to get their fingers on the pulse and maybe discuss with their peers.

00:05:32: how this topic is developing, where we are currently seeing progress, what tangible impact is being made, and which challenges are still

00:05:41: underway.

00:05:43: The big players in artificial intelligence, especially the chip companies, had a massive role at the organization.

00:05:52: We saw

00:05:53: a lot

00:05:53: of highlight events, a lot of interactions of their senior executives, a lot of announcements.

00:06:01: And what we really saw was that especially Nvidia, but also their competitors like AMD, like Qualcomm, move from just being a manufacturing company to an ecosystem player.

00:06:15: Showcasing the strength of their technology, the opportunities that their technology provides with their partners, with potential people who can put this in play, who can bring this from the chipset and the model.

00:06:30: maybe into the physical world, maybe into the enterprise.

00:06:34: And that was really the main play of these kinds of platform companies.

00:06:39: And something that I did feel was happening was that, as we shared before, the big announcements were maybe a topic of twenty twenty-five.

00:06:51: But now people were really building those blocks that are necessary to make them become true.

00:06:58: We had a lot of big announcements which may not have the thunder of a walking robot, but which would have massive impact in the industry.

00:07:09: Think about the new energy-efficient chips on Vera Rubin, which NVIDIA claims will reduce the power consumption of data centers and thus allow us to have more compute on the existing or future build-up of our electricity grid.

00:07:26: I think that's something to take in mind,

00:07:28: how

00:07:29: the equation AI energy and build out of chips is changing day by day as these developments.

00:07:40: Okay, now you mentioned there was maybe more announcements from executives rather than product displays or as you mentioned in some product displays that were impressive and some that perhaps weren't.

00:07:50: Did you notice any Progress on, you know, major announcements or major products from previous years, perhaps stuff that from twenty twenty five or twenty twenty four that was announced that even at the time the executive said, hey, this is going to take five, ten years.

00:08:03: But now there's a little bit of an update provided at this year's CES.

00:08:06: I think you saw gradual, small step developments.

00:08:10: For example, Suks or Waymo had their cars out on the street and instead of doing a big splashy display.

00:08:19: They were actually using it to transport transport people around.

00:08:22: You didn't have that a couple of years ago.

00:08:25: So you saw how these new technologies are slowly being brought into every day's lives.

00:08:34: Philip was talking about AI and I mean AI was everywhere.

00:08:39: Every single booze had.

00:08:41: to have some form of AI component, whether it fit the product or didn't, didn't really matter.

00:08:46: They had to be AI as part of the boost.

00:08:50: And that leads to applications where you have to question the true value add.

00:08:59: If your watching machine tells you what's to communicate with you, that's a nice gimmick, but I'm not sure how practicable that truly is.

00:09:11: But once again, if you then go back to the conversations you have at the hallways, the conversations you have at one of the many events, and you meet with the companies that tell you how they deploy AI on very specific pain points, pain points in R&D, pain points in manufacturing, pain points in sales forecasting, where they bring these concrete big data solutions, they enrich them with an AI agent, with an AI bot to make it even more powerful and get to the next level efficiencies for the companies.

00:09:53: That for me was truly new.

00:09:55: I did not have those conversations two years ago because people didn't really know yet on how to solve these pain points through an AI enabled solutions.

00:10:05: So again, a progress on a small scale, but very important, very powerful if deployed in the right applications.

00:10:16: I really feel that this experience that Stefan just shared on autonomous driving is maybe a little bit of forecast of what we're going to see on physical robots walking the hallways.

00:10:31: That conversation of the self-driving cars now already a couple of years old.

00:10:37: There was a lot of hype in the beginning.

00:10:39: People communicated very short timelines.

00:10:42: Then there was, you know, a little bit of disappointment.

00:10:46: It took us several years to make meaningful progress.

00:10:50: Maybe some players left the field early and thought, you know, these problems, these challenges are too difficult to solve.

00:10:58: And now we see this resurgence.

00:11:00: And now we see that the field of players who are advancing right now may be very different.

00:11:05: from those which were hoping for short-term wind a couple of years ago.

00:11:10: So executives are understanding better how the current wave of technology is affecting their operating models, what kind of timelines are realistic, and they understand that they need honest and grounded advice on what timelines they should plan for different technologies to impact their operating models and to be really applicable.

00:11:34: for the kind of work that they do.

00:11:36: Okay, it's wonderful to hear about all this technology and AI and all that, but I'm quite curious.

00:11:42: In a year like this, with so much uncertainty going on in the world, did you hear anyone talking about how to approach twenty twenty six from both a strategic and perhaps an operational perspective?

00:11:54: I think at that point we don't only talk about.

00:11:57: technology, we talk about the general political and economic environment as well.

00:12:03: And I mean, the world has become so complicated, it would have been surprising if that would not have been a topic at CES.

00:12:11: Everyone just started into the new year, everyone had just wrapped up twenty twenty five twenty twenty five on the roller coaster for most organizations.

00:12:20: And of course, The number one topic, even before you talked about AI, before you talked about technologies, was always, how is twenty twenty six going to shape up?

00:12:31: And the general expectations from the executives is that twenty twenty six, unfortunately, will be a repeat of twenty twenty five.

00:12:38: The volatility, the dynamic that we have at the market, the changing environment, whether it's on the trade side, whether it's political.

00:12:49: whether it's even conflicts or whether it's technology developments, this volatility will remain and will continue throughout the year.

00:13:01: One of the key topics where all the executives agree is that flexibility is a number one priority.

00:13:14: It's really the cornerstone of the operating model.

00:13:18: as we move into the new year.

00:13:21: Simply because flexibility allows you to handle the volatility in the market, the dynamics much better.

00:13:30: And you have to approach that flexibility, of course, even in your efficiency measures.

00:13:38: So having the rigid plans that we had in the past very clearly laid out, it's probably not going to work anymore because you have to we be able to adapt and react fast to the developments that you have.

00:13:53: By the way, and this brings us back to the technology.

00:13:56: Technology here can help.

00:13:57: And we see this, and this was another big agreement, especially AI can help.

00:14:02: Because one of the biggest supporters for flexibility at the end is data transparency.

00:14:09: And AI can create a level of data transparency that organizations haven't seen before.

00:14:16: So that's where executives are particularly interested at the moment.

00:14:20: How do I deploy AI applications that create more transparency on individual processes, on individual business functions to help me gain more efficiency while also being able to react better to the ever-changing environment?

00:14:40: And it's clear that there are very tangible ramifications of the statement that Stefan has just made, allowing us to understand how we need to shape a transformation agenda.

00:14:53: If that's true, then everything executors focus on needs to be kind of bite-sized.

00:14:59: We need to be able to iterate in smaller steps, and we need to be able to course correct when we find out that our assumption of the future are no longer true because the environment has just changed.

00:15:11: And so I believe that when we're thinking about innovation, when we're thinking about reconfiguring our supply chain, when we're thinking about those transformation topics, we're no longer in the world where we're going to see single massive investments and long thought through roadmaps.

00:15:31: We're going to be in a world where we have a clear North Star where components like more resilience, more flexibility.

00:15:39: more agility of organizations going to be key.

00:15:42: And then a lot of individual, self-funded, bite-sized projects to move us through that future.

00:15:50: So I think we're going to move into a world where those big, large transformation projects, when we're thinking about big reconfiguration of supply chains, big data-driven transformation topics, big technology topics, are going to be transformed.

00:16:06: And we're going to look at more flexible, More pay as you go, more self-funded, smaller innovation cycles towards a clear knowledge division where elements like flexibility, like, you know, resilience, like multi-optionality are going to be ingredients of a future strategic positioning.

00:16:28: So when you think back to CES, and you know, the future of global business.

00:16:34: What were some of your key insights that you gleaned from either the speakers or just in your conversations on the sidelines?

00:16:39: So you're being a little bit more skeptical on some of the new technologies and talking a bit about the evolution in smaller steps rather than the big technological breakthroughs and i think.

00:16:53: That will hold true for the next coming years.

00:16:55: I would be surprised if you see radically new step change innovations suddenly pop up at CES.

00:17:04: I think if I actually go back to autonomous driving as a very nice comparison and I remember CES.

00:17:16: where all the OEMs, all the technology providers came out and said we will have autonomous cars out on the roads by twenty eighty.

00:17:25: That was a very specific press release made by a very prominent OEM.

00:17:30: Now we are in twenty twenty six and we still have a really insignificant market share as it comes to urban mobility of autonomous drive.

00:17:43: I think the same will be true for things like human-eyed robots.

00:17:47: We will see a small step progression for the next couple of years.

00:17:52: We will see more and more applications.

00:17:55: We will see the technology evolving.

00:17:58: But I think we will be in the late twenty thirties until we see any form of larger rollout of humanoid robots in daily life applications, even on the horizon.

00:18:16: And I think the same goes for autonomous driving.

00:18:21: Until we'll see autonomous driving in the inner cities of Mumbai or Mexico City, I think we'll probably have to wait for a few more years.

00:18:32: Way more is now.

00:18:33: successful is now.

00:18:35: prepare to move into Miami and to move into London to start covering some additional cities in carefully mapping them out and geo ring fencing the areas in which the vehicles can operate.

00:18:49: So we will see a gradual rollout and application of the technologies,

00:18:54: but

00:18:55: it just takes time for these technologies to mature.

00:18:58: And as we always see the technological Challenges are not as easy to overcome as people may assume at the very beginning.

00:19:08: I agree.

00:19:09: It's really about we overestimate what can be done in a year.

00:19:14: We underestimate what happens in ten years.

00:19:17: We underestimate the ramifications something can have as essentially a humanoid robot or a self-driving car would change our economy.

00:19:26: But at the same time, I think it's important to also understand the underlying technologically steps that are necessary for our companies to remain competitive and remain good partners in this emerging ecosystem.

00:19:43: And I think here topics around hardware as a platform play a massive role.

00:19:48: We've seen a lot of innovation on different form factors on different applications throughout CS.

00:19:56: Are all of them going to become mass market?

00:19:58: Probably not.

00:19:59: but how to sustain the flexibility, how to sustain the opportunity to partner, how to sustain the agility to essentially execute on some of these things.

00:20:09: That's only possible if we rethink also our hardware stack, if we rethink the kind of innovation that we're doing on, you know, chip level design, firmware design, form factor design, and make sure that we think in, you know, non-linear timeframes, open and modular approaches of how future products are going to look like.

00:20:29: in order to make sure that we are successful with innovating and modernizing our portfolio and operating model in these very uncertain times.

00:20:40: Okay, so with all this innovation that's coming forth across various sectors, it's coming to us at a time when there's also a lot of uncertainty going on around the world.

00:20:50: So we're speaking to one of your clients.

00:20:53: If they're listening to this show, what advice do you have for them for turning all that uncertainty into their own competitive advantage.

00:21:00: We talked earlier about the dynamic that they have in the market, the volatility and the need for transparency and flexibility.

00:21:14: And I think the same, to a certain extent, goes for innovation.

00:21:19: You absolutely need to have a North Star.

00:21:21: You need to have an objective.

00:21:23: You need to know where you want to go.

00:21:27: But at the same time, you need to be agile enough in order to incorporate the developments, whether they are economic developments, political developments, or technological developments, into your innovation roadmap.

00:21:42: And that also relates to the CAPEX that is tied up into innovation.

00:21:48: You need to be able to plan in line with the business development.

00:21:53: You want to be bold, but at the same time cautious.

00:21:57: And that's a bit the conundrum in which we lift that the best plans at the moment become very quickly obsolete with one or two new announcements on the political front and with all the different changes that we have.

00:22:16: So you need to retain the flexibility in your operating model and in your innovation pipeline.

00:22:23: I agree.

00:22:24: I think really important that we stay super flexible and super close to all kinds of development, whether they're innovation, whether they're politics, whether they're trade relations.

00:22:36: And at the same time, that we really reassure ourselves what our organizations are capable to delivering when it comes to transformation, when it comes to putting change on the ground and to be realistic, what kind of timelines and what kind of effort it takes to really move forward towards that future state.

00:22:59: And so I encourage all of us to bring these different factors together and chart a realistic, tangible, and bite-sized approach forward as we navigate twenty, twenty-six and beyond.

00:23:13: And maybe one last statement.

00:23:16: In this world, cash is king.

00:23:19: And it's important for companies to also moderate their outlook, maximize their performance.

00:23:26: And I've seen very well performing companies at the end struggling because they didn't have the balance sheet to follow through.

00:23:37: with what they were intending.

00:23:39: So it's great to have the mood shots.

00:23:41: It's great to go after all the advanced technologies, but you have to make sure that you have the performance in the underlying core business that creates enough

00:23:51: cash

00:23:51: to actually be able to finance those investments.

00:23:55: Okay, well, I appreciate that insight, Stefan, that last little nugget about cash being king.

00:23:59: It seems very, very appropriate since we're talking about an event in Las Vegas, right?

00:24:04: Gentlemen.

00:24:05: I appreciate you sharing all your takeaways and your key insights about why CES continues to shape the innovation agenda.

00:24:12: And thank you both very much for your time today.

00:24:15: Thank you, Sean.

00:24:16: Thank you, Sean.

00:24:17: Thanks for having us.