Ford turns to start-up teams to develop new businesses
Ford Motor Co. is tapping into the company’s entrepreneurial roots to look at new ways it can expand into moving people and things.
Most recently, Ford launched its GoRide non-emergency medical transportation service with Beaumont Health. The service started when the automaker gave Ford employee Minyang Jiang $500,000 after she presented a plan to use Ford Transit vans to get elderly people to and from medical appointments.
Jiang, a Ford employee, pitched the idea for GoRide before Ford’s senior leadership. She spent the last several months with a five-person team building a service with 15 customized vans transporting people in southeast Michigan to more than 200 Beaumont facilities.
“It’s good to know that young people within the company can start and run their own business,” said Jiang, who goes by M.J. “The opportunity existed before, but it’s standardized and faster. You get to drive, and that’s amazing.”
Ford moved recently to increase the number of ventures like Jiang’s. The Blue Oval brought in some help from Silicon Valley to bring that startup spirit to the company.
In January it announced it would shake up Ford Smart Mobility, the segment of the company responsible for developing electric powertrains, self-driving vehicles and other futuristic ventures. Sundeep Madra, then-CEO of the recently acquired connected-vehicle cloud company Autonomic, was brought on to run Ford X, a new team that acts like a startup business incubator focused on mobility ideas. While GoRide didn’t spin out of Ford X, Ford X wants to develop more things like it.
Madra’s home base is in Ford’s Silicon Valley outpost known as Greenfield Labs. Prior to Ford, he ran technology and app incubators, and moved with Autonomic to create a platform on which mobility solutions could operate — much like the Apple App Store that has a platform that tech developers use to launch programs.
His joint-venture Hatch Labs was the incubator that launched the Tinder dating app in 2012. At Ford, Madra said he and his team are helping the automaker adjust to developing mobility applications and companies that will be new Ford products.
“That requires thinking more similar to how startups get started,” Madra said. “There’s been great innovation happening here. What we’re doing is bringing our lens to the existing innovation that’s here. And we’re helping break some of the pre-existing notions or rules that exist within Ford.”
Some of that involves asking critical questions. Another aspect is getting Ford to understand that within its mobility arm, ideas and products can grow with a much smaller budget, and they have a high potential to hit big and generate a lot of profit, Madra said.
But Madra had to push to get those teams operating with the right mindset and at the right speed.
“The culture here wasn’t to kill things quickly and move on,” he said. “The greatest ideas are only born through failures and pivots. We need that culture here. If we stand up 20 projects, and we have to keep them all alive and we have to fund them all, then the investors and the company aren’t going to put up with that. It would just drain away all the profits. This is a fitness exercise around innovation.”
That’s something Carla Bailo, president and CEO of the Ann Arbor-based Center for Automotive Research, said will be a hurdle for auto companies as they try to modernize business practices to attract and retain younger engineers who look for different things in a job than previous generations.
“Automotive companies are often seen as very slow-moving companies,” Bailo said. “As a result, they’re not getting people lined up at the door. They’re no longer seen as places of innovation. These new types of programs will help them not only attract, but retain good people.”
Ford wants to develop a more formal program to invest in in-house ideas. Detroit-based Quicken Loans and its parent company Rock Holdings Inc. has had one for years. Known as the Cheese Factory, it’s a digital suggestion box for employees to submit any ideas.
Rocket Fiber, a Detroit-based gigabit internet service provider, launched as a startup from a suggestion that came through the Cheese Factory. Matt Thompson, team leader of Quicken’s Mousetrap, the team that sifts through the Cheese Factory ideas, said the team got about 100 entrepreneurial ideas from current employees in 2017. Some of those will get seed money.
“Companies that invest in team members are more productive than companies that don’t,” Thompson said. “You have a voice. You’ve impacted something across the organization of more than 25,000 people ... . (But) most companies aren’t willing to make that investment.”
Ford’s Madra said 80 percent of Ford X’s investing goes to people and ideas that come from within Ford. He said his team moves quickly to figure out which of those projects need to be “killed.” Teams now have 90 days to either abandon a project or launch a beta test.
Some projects have already been killed. Others have received continued investment.
That has people excited. Madra pointed to an unnamed delivery project within Ford that had been two years into development without a planned launch date. Madra pushed the team to launch that project days after meeting with them to figure out whether or not it worked.
“The younger folks I think are definitely very excited by it,” he said. “The folks who’ve been here a longer time, they’re just getting used to that change, but they’re not pushing against it.”