Major incumbent companies that develop groundbreaking technologies have at least two traits in common.
First, they have laser-like focus on their customers’ daily existence, identifying opportunities to help them live the lives they want to live. Second, they can create new cultures or adapt their old, legacy structures to meet new market realities by combining novel or previously disparate disciplines to build these groundbreaking products.
Detroit’s auto industry must do both to avoid being left behind.
For most of us, our cars must be Swiss Army knives, all-in-one tools to serve multiple goals — from commuting to carpooling our kids to taking vacation road trips. Only the wealthy few can afford multiple cars tailored for a particular use, and, even then, they may be used only occasionally.
So the vast majority of individuals and families spend a lot of money investing in one or two purchases, compromising on everything to maximize a single function — typically some form of commuting. That, however, is beginning to change as emerging companies innovate in ways that lessen our need to compromise in affordable ways.
The advent of apps, driverless cars and services to provide mobility on demand signals an end to the car industry as we know it. It is a clarion call to Detroit to innovate to stay in the game.
The emerging companies have looked at how we live, why we buy (or don’t buy) cars, and why we drive and have begun to provide alternatives that increasingly serve us better than buying cars as we know them today. Detroit must start designing and building cars that fit our lives better than those alternatives, or it will not survive over the long haul. To its credit, Detroit has begun to explore this path in auto design labs around the world through development of specialized vehicles. However, these innovative concepts most often die as they make their way to market — because they were too “niche.” This has to change as niche will become “mass” when they are shared.
Of course, we have read headline after headline about the big U.S. automakers investing in ride-sharing, electric vehicles and driverless cars. We have read countless stories about Detroit automakers partnering with Silicon Valley to advance their r&d. While General Motors investing $500 million in Lyft and Fiat Chrysler’s parent partnering with Google on self-driving minivans are an important start, they must do more.