Open source cars

wilder-young-frankensteinIn the immortal words of Dr. Frankenstein, played by Gene Wilder in Young Frankenstein, “It… could… work!!!!”

In my Free Advice for GM series, I suggested an “open source” model of organization as a radical way to remake SATURN into a viable brand.  Well, last week I was at a conference where Bob Johansen of the Institute for the Future presented their Ten Year Forecast.  One of his examples of the future (in action today) is a company called Local Motors. Check it out, they are already running a car company along the lines I suggested for SATURN.

It’s a small scale, regionally focused car company that uses a growing base of active participants to design, build, and sell cars.  Their first model, called the Rally Fighter, was designed by a student! The Rally Fighter

Does anyone know a SATURN dealer?  Send them my way so we can create another example of building cars in a more sustainable, interesting, and profitable way.

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What to do with Saturn

With the news today about Penske breaking off talks with GM on their deal to buy Saturn, I thought it would be fun to revisit my post on this topic from back in July.  Given the over abundance of car brands, and the lack of differentiation in the market, take a look at this idea and see if you want to invest.  I really think it could work!

Free advice for GM… er Penske #4

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Free advice for GM…er Penske #4

We’re moving downstream of the GM break-up so this post is obviously not going to help GM explicitly, so listen up folks at Penske!  This is about how to imagine SATURN as a (really) different kind of car company.  The brand heritage points us in this direction, but the operations history never quite got there.  While establishing itself as a new car brand, the most significant difference in their approach to running the company was the creation of a new dealer network from scratch, and calling it a retail network to indicate a stronger belief in customer service as a competitive advantage.

Using the organization ecosystem model from the first post in this series, I would place Saturn in the “independent” corner and really push the envelope on how to design, build, and market a car using an open source model, borrowed from the software industry.  As you know this model has produced some amazing products like the browser Firefox from Mozilla.

In fact, some of these ideas are already in rough formation.  From Wikipedia I’ve learned that Penske will not be buying the GM factories and will eventually have other car companies build cars sold as Saturns. At this point, GM will build the Aura, Vue, and Outlook for Penske for two years. To replace GM as the brand’s manufacturer, Penske is in discussions with several global automakers, including Renault Samsung Motors of Korea.

Pit Crews have focus and pride

Pit Crews have focus and pride

What if they really push for something different and create an open source project for each model?  With the Penske passion for cars and the SATURN commitment to customer service, it’s not hard to imagine a really cool hometown facility that attracts car nuts with prototype vehicles, computer workshops, and a heavy dose of car culture.  Rather than staffing these “stores” with sales people, SATURN could staff them with car designers and engineers that help guide the process and manage the inputs via the open source process.  Interested players could be organized in “pit crews” who develop relationships with each other over time and work on specific elements of the car prototype.  Perhaps stores could work in regional “car craft” networks that involve small scale manufacturing and parts suppliers in the creation of regionally specific models.

Once the prototypes are in final form and are on the road being tested, contracts with larger manufacturing companies could be established to put the vehicles into limited production.  The viral connection to each model would be a grassroots sales force that would bring back the days of localized automotive pride, only it would be distributed throughout the country instead of centered on Detroit.

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Free advice for GM #3-Put SAAB back on the edge

I was going to go with Saturn next, but a tweet from Diego on Metacool got me motivated to play with SAAB.  He says, SAAB should get back into rallying, which lends support to my understanding of this brand.

Rally to the edge

Rally to the edge

Technology, cool, edgy, unique.   Born from jets.  Svenska Aeroplan Aktie Bolaget is Swedish Airplane Company in Swedish.  Somewhere it all fell apart and they ended up another mediocre GM-mobile that had no style, no technology, and poor quality.

The organization behind an edgy car has to be edgy.  This is called brand integration (the outside and the inside have to align).  To create edgy things, people have to take risks and push the envelope.  Edge is by definition NOT THE MAINSTREAM.  Okay, I’m ranting… but it’s amazing to me how something edgy can get so rounded off to fit into a corporate model, that it’s no longer viable.

The interdependent organization archetype is a great model for SAAB because it could bring together an array of people and companies from many centers of excellence to work on the coolest automotive technology in the world.  There would need to be lots of experimentation (and failure) going on to find out what new ideas work and what theories don’t hold water.  You just can’t pull this kind of behavior off, if you are trying to please heads of engineering and design at the top of a corporate pyramid.

Key traits of the new SAAB organization:

1. Ad hoc reciprocal structure- each car should be viewed as a project, with full design-build responsibilities.  The designs should connect to the heritage of SAAB (e.g. efficient drag coefficient) but the technology should represent the best of what’s possible in the current market.  These teams should work under temporary agreements with other companies to bring resources necessary for manufacturing.

2. Each model is an experiment- transparency while prototyping (instead of secrecy) promotes involvement from others and improves quality.  Check out Martin Eberhard’s post on how blogs helped at Tesla Motors.  Instead of a long line of reductionist designs, hidden in secrecy while the companies round off the edges to save money, the clean slate approach gives the model team a chance to be truly innovative.  An open process pushes everyone to solve the complex tensions between viability, feasibility, and desirability.  The prototypes should be rallying all over the world to show off and test the new ideas.

3. Entrepreneurial leaders- leadership in today’s auto market is coming from disruptors like Tesla and Fiskar Automotive.  These are entrepreneurial ventures with something to prove and lots of backing to get there.  Each model should be considered and investment and live up to a market based promise of innovation.  Leadership teams should have to start over again with each model to prove this new idea is worth making (and buying).

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Free Advice for GM #2- A Chevy for Everyone

Continuing in a series of posts about GM and organization design, let’s take a closer look at creating the right organization for Chevrolet.  I know restructuring is not this simple; so take this as the first installment in a high level comparison of organization design options, not a comprehensive plan of action.

A return the the chevy brand essence?

A return to the Chevy brand essence?

Let’s start with Chevrolet, because that’s the easiest to imagine given their current situation.

To me, Chevy is Americana.  This is the car that represents the American Dream, value, performance, and accessibility.

Chevrolet should help people get their first car, the family car, and have a competitive truck option.  This market means head-to-head competition with Toyota and Honda, so it has to be efficient and cost competitive and produce top quality, reliable, desirable vehicles.  Check out this post on The Truth About Cars for a quick review of the Chevy brand.

Key Traits of the new Chevrolet organization:

1. Efficient hierarchical structure. Clean lines of authority to provide clear direction, efficient decision-making, speed to market, and drive focus on customer needs as the basis for every action.  This market is not about sexy cars, it’s about helping people feel good while they get places safely and manage household costs.

2. Make each model a business. Get past the silos of design, engineering, marketing, etc. and organize each model around a General Manager, with a P&L outcome and a target consumer to drive functional integration.   Fidelity Investments organizes this way (dozens of P&L units), and it works really well.  Develop a rabid consumer orientation as a rallying point, rather than being fractured by functional expertise.

3. Restructure the supply chain. As pointed out by Charles Mann in Beyond Detroit, source great parts from the best suppliers by developing a modular platform.  Don’t try to own everything, focus on total design, build, and sell.

4. Engage employees. Focus on great leadership and build pride (See Jon Katzenbach). The days of management v. labor must be left behind.  This organization needs every single person engaged in a mission to deliver cost competitive, high quality vehicles.  Organize production around manufacturing teams provide job rotations to help employees learn, grow, and develop as a natural component of work.  Use the portfolio of models to allow employees career movement.

5. Reward performance. Pay individuals, teams, and business units more when they meet performance goals in revenue, quality, and costs.  Create healthy internal competition between the businesses.

Next up, how to recover the SATURN brand through an open-source organization.

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Free Advice for GM #1

If you are interested in organization design, you should read Beyond Detroit in the 17.06 issue of Wired magazine. Chris Anderson offers a great introduction arguing that a new era of global business (long heralded) is really here.  The point is, that with the Big Three disintegrating, it’s time for the “little guys” to proliferate in a market of automotive technologies that includes many, many more players and will produce much better results.

Saturn WreckedDespite the deep malaise in the auto industry and the lackluster efforts by the federal government, articles like this show there is light at the end of the tunnel with practical ideas and solid advice. I thought I’d join the fray with an idea for how GM might move forward to a better place. I’m not claiming to be an auto industry expert, but my distance from it might be an advantage (at IDEO we call this the “naïve mind”).

Awhile back, I shared a framework for organization design inspired by the animal kingdom. Fundamental to that approach is the concept of biodiversity in an ecosystem.  Changing circumstances require entities within the system to evolve and adapt or they will die. And evolution is about letting an existing trait emerge and thrive when new conditions emerge and demand it. See this interesting blog post by Robert Patterson for more on this line of thinking.

While GM has had dozens of brands and even some difference in their range of businesses, they have sought to keep everything operating on the same model and use scale as a lever to create efficiencies. This “no variance” strategy crushed Saturn, one of their best hopes for survival.

So a mortal enemy of a sustainable organization is homogeneity, and GM is the poster child of homogeneity.  Using this framework, we can explore how GM might diversify their organizational structures to be more successful in four different consumer categories, with four different auto brands.  It’s likely that these different consumers want different things from their cars, so the organizations should operate differently to meet those needs.

Below you can see four GM brands plotted on the “organization ecosystem” model to guide our exploration.  Based on their unique brand attributes, and the demands of the market and consumers of those brands, each of the companies could be structured and operate quite differently. It’s funny to me that two of these brands are being jettisoned in the current restructuring actions.

Check back here for my next several posts and deeper descriptions of each example.

How could GM have an ecosystem of companies and brands?

How could GM have an ecosystem of companies and brands?

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