Where Will You Go Next, Big Three?
The automotive industry needs an innovation network
I think I need to grow a multi-billion dollar company, only to start mistreating my customers and ignoring them when they complain. Maybe then I can get my hands on some of this bailout money rolling out of Washington like an ocean wave. Out of touch with your customer base? No problem. Not making your numbers? No sweat. Another day, another bailout. The automobile industry seems to be the only kid whose hand the government isn’t gagging to hold. Bummer.
So where will the big three go next?
The answer to the question: to your customers. Attention, Big Three: open classes are now in session, and Professor whurley’s about to impart.
Three consistent problems I see with the American automobile industry:
- You ignore the needs of your customers.
- You engage in large-scale duplication of effort (i.e., waste).
- Your research and development efforts have grown stiff, clumsy, and slow.
Today we’ll discuss how embracing openness, or an open source approach, can help the industry survive. The glory days may be gone, but your extinction is not inevitable.
How hard is it to connect with your customers? You hear them complain every day. Step one: take a page out of Peugeot’s book and start listening. For the last five years, Peugeot has given independent designers the opportunity to submit innovative designs for concept cars. At the Beijing Motor Show in April 2008, they debuted prototypes based on designs submitted from around the world.
Is there a better way to connect with customers and ensure demand then letting the customers design the products? Don’t do exactly what Peugeot did—you still have to produce a viable product—but take the example to heart. Consider soliciting feature designs from customers, or allowing customers to select the feature list in the first place.
Larry Houston, former Procter & Gamble executive, set an incredible example of how to involve customers with his Connect and Develop innovation network. The network serves as a model for how to engage your customers, reduce your research and development costs, and boost your stock price. Perhaps you can start by holding a BarCamp-like event that encourages customers and engineers to collaborate on efficient, practical, affordable designs.
Do I think you’ll apply what you’ve learned today? Probably not. These ideas are so simple, you probably fail to see their value. Just remember you’ve reached terminal velocity, so risk is free. You can’t fall any faster, so unburden your R&D department by involving your customers. They will always know far more about what they want than you.
I agree, I hope some of their executives come across this, actually I think this rings true for most big companies.
Thanks for the comment Wardell. I seriously doubt the automotive industry will change it’s tune anytime soon; which is sad.
[...] manufacturers are starting to see the benefits of open collaboration. For the last five years, Peugeot has given independent designers the opportunity to submit innovative designs for concept cars. At the Beijing Motor Show in April 2008, they debuted prototypes based on designs [...]
I enjoyed this article, and for the most part i agree, however i do not think that innovation is at their heart of this company’s problems, but rather a symptom of the core problems. located in the US, Gm sources mostly american designers that are among the most talented and inventive lot in the world. We already know that they can produce phenomenally designed cars like the Corvette and the Chevy Malibu ( a beautiful car for its price), so i’m not entirely sure that design is the core problem here.
I think that more than a lack of innovation, the source of GM’s problem is really 2 fold:
1. they produce too many vehicle models, and their brand is extremely watered down because of this.
2. they cut corners constantly in an effort to watch the bottom line. the company is never willing to take a loss in order to innovate. they dont see the big picture, just the next 12 months of profit or loss. this has to change immediately.
What we don’t see coming from GM is consistency of quality and design, and in my mind this is a result of an ongoing effort to cut corners (costs) in the name of protecting the bottom line. Case in point is the Toyota Prius. Toyota knew that they would initially lose money on this design, but they produced it anyway and thought long term over short term bottom line. GM needs to adopt this approach and overbuild some of its cars at near zero profit (or even at a loss) in order to win back the market. This is not possible though unless they close at least 50 percent of their plants, and cut their lineup to a maximum of 10-15 vehicles. Right now they probably have 40 different models, and there absolutely no way they can control quality and costs with that much diversity. The brand is as watered down as the number of models they produce.
2 sports cars, 3 sedans, 2 trucks, 3 suvs. 1 minivan. any more than this and there really is no way for this company to control quality and build cars that have a memorable legacy. Off the top my adice would be to close Saturn and Buick immediately. These brands have zero cache and zero emotional brand recognition with the consumer. Focus only on Chevrolet, GMC, and Cadillac. Those are brands that have
some chance to be recovered.
America is all about bigger is better, and we are quickly learning that this is not a model for success. Companies like Apple and Google have shown us that if you concentrate your efforts on just a handful of products that work exceptionally well, that you can have massive success and tremendous brand recognition.
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