Silicon Valley outpost offers lens into Hackett’s Ford
San Francisco — For a glimpse into how Ford Motor Co. CEO Jim Hackett thinks, look to the team of engineers inside the Blue Oval’s Greenfield Labs not far from here. It’s rethinking how people might use transportation in the future.
“Our mandate is Ford is in a transition from making cars to providing mobility,” said Jonah Houston, creative director for Ford’s Greenfield partnership with Ideo, a design firm based in Silicon Valley. “Hopefully the way in which we work, we start to change some of how the rest of Ford thinks about how to approach those challenges.”
That’s Hackett’s point. Changing the way the 114-year-old company thinks, how it works and how quickly it moves are critical challenges — and the driving force behind the board-level decision in May to oust former CEO Mark Fields and replace him with Hackett.
Companies like Ford and General Motors Co. are using research facilities, partnerships and acquisitions to grow their respective footprints in Silicon Valley as the century-old automakers push to make a lot more than cars. The multitude of moves are designed to expose the Detroit automakers to high-tech players and tap valuable research in the country’s cradle of innovation.
And with Hackett scheduled to brief the United Auto Workers, Wall Street and Ford employees on his vision for the company over the next month, those looking for early cues on how the new CEO will run the company could look to his west coast ventures. They might learn something.
Ford’s approach to establishing mobility services — ride-sharing, bike-sharing, shuttle services and ride-hailing programs — as well as autonomous vehicles and electrification is guided at Greenfield Labs by a thought borrowed from Ideo: “design thinking,” which basically means products are conceived according to how customers will use them.
Hackett, a man who calls late Apple Inc. founder Steve Jobs one of his personal heroes, started Greenfield Labs in Silicon Valley a year ago when he was head of Ford Smart Mobility LLC. That arm of the company is responsible for autonomous and electric vehicles, for ride-sharing, ride-hailing and bike-sharing, for delivering innovation in transportation.
“This is 100 percent Jim,” Houston told The Detroit News. “We’re small and we’re nimble and we’re used to working very quickly. It’s easier for us to try ideas out.”
The partnership between Ford and Ideo, a design firm based in Palo Alto, replicates what Hackett did years ago as CEO of Steelcase Inc. He needed to keep the Grand Rapids-based office furniture company afloat, so he looked to the Silicon Valley company to help change its business.
The quick-moving, 40-person Greenfield Labs team experiments with business strategies Ford could use to lay the groundwork for future products, such as the autonomous vehicles it plans to bring to market by 2021. Together, the companies want to augment pedestrian movement along streets in a city’s transportation ecosystem, not disrupt it.
“But for today, we haven’t gathered together to start working on that problem,” Hackett said during Ford’s City of Tomorrow symposium held last month in San Francisco. “What we’re trying to change at Ford is we need all of these perspectives at Ford to design a more fit model.”
And industry experts say the Ideo partnership will at the very least bring new eyes to the automaker’s view of the future. “It’s an interesting approach to trying to figure out both the business models and the user experience for mobility as a service,” said Sam Abuelsamid, analyst with Navigant Research. “Ford, like other (manufacturers), has been selling cars in the same way for over a century.
“But as the market makes its likely shift to services, they need to figure out how customers are going to interact those services and with the vehicles. Partnering with Ideo may help them get some fresh ideas to try out.”
The Greenfield Labs team aims to apply the Ideo design process to Ford’s mobility solutions. They focus on bringing products to market that address a human need — in this case, getting from here to there more efficiently — in the most basic, ergonomic and innovative way possible. Teams arrive at conclusions by studying how someone might react to seeing an autonomous vehicle on a road, for example, or what kind of bicycles would benefit certain neighborhoods for a bike share program.
“We want to bring human-centered design into the conversation about how Ford scales their mobility services,” Houston said. “How do you create a service that has people at the center and not just profit?
“We helped Jim transform Steelcase from a hardware manufacturer to a company that supports work. We’ve kind of been through this rodeo once before, but obviously the scale is absurdly larger.”
Silicon Valley outposts are attempts by automakers to be more attractive to younger technical engineers on the coast. They also open historically closed doors within the auto companies, according to multiple analysts. West coast operations won’t guarantee innovation, but planting flags here signals a fundamental change in the industry.
“The car companies’ natural instinct for most of their history has not been to rely on other companies,” said Karl Brauer, analyst with Kelley Blue Book. “It’s important to stake your claim and get into this (mobility) area as early as possible. They’re so desperate on that, they’re willing to give up some level of control.”
Expansion here is happening across the industry. GM is juggling a few different approaches on the west coast. Kevin Kelly, a GM spokesman, said the company is taking a “three-pronged” approach to mobility services that opens options to build, buy or partner on any new product or service.
GM Ventures is a small team responsible for finding startups and partners, companies to invest in or to acquire outright. That team is responsible for finding San Francisco-based Cruise Automation, now a subsidiary of the company that GM bought a year ago to help with autonomous vehicle software development. GM now employs 250 people in downtown San Francisco through Cruise. The company plans to increase that to 1,100 over the next five years.
Such moves could pay dividends.
“The smartest thing would be for one company to be doing both partnerships and a sort of think tank,” Brauer said. “The company that wins this race is going to be one that effectively coordinates a collaboration of entities.”