General Motors (GM) is a company that evokes memories stretching back decades, from one of the first real production cars to the huge Detroit factories used to make millions of new cars each year. The fact that they are still the second most prolific car manufacturer in the world, only 900,000 behind Toyota shows that they are mainly making the correct decisions. It led global vehicle sales from 1931 to 2007, a 76 year winning streak that has hardly let up and the drop to second has been driven mainly by the Asian market’s preference for Toyota.
I was therefore excited to talk with Frankie James, Managing Director of GM's Advanced Technology in Silicon Valley.
Having worked at the company for nearly 7 years, Frankie started only 5 months after arguably the biggest technological innovation of the past 20 years, when the iPhone was released. Since then she has overseen many of the most important and imperative technological innovations within the automotive industry.
Despite the daunting task, Frankie seems to appreciate the challenge ‘Smartphones and tablets innovate and improve on a much shorter time scale than we're accustomed to in automotive, but we know that we have to be ready’. They have been ready despite the unprecedented pace of change that has been seen in the past few years, and they seem to have a firm future proofing strategy ‘Consumers are not going to be happy buying a new car that can't work with their new phone, or that won't work with their upgraded phone 1-2 years from now’.
One of the biggest challenges is that the manufacture of automotives takes considerably longer than electronics, but they are expected to be fully compatible despite this. ‘We've needed to face the challenges of anticipating what consumer needs and wants are going to be when a car first hits the showrooms, and considering what we can do over the vehicle's lifetime to avoid obsolescence’.
Before 2007 having a car that could receive directions, music or calls from a smartphone, was not only unheard of, but would have been impossible to comprehend. Beyond a simply hands free kit, this kind of innovation was not needed, but from June 29 2007, it became imperative. This has meant that the focus of GM has had to shift, not just in terms of driving, but searching what other industries are doing and adapting to this ‘the speed of innovation has been forced to increase: there's an eagerness to understand what's happening and what's trending in industries adjacent to automotive so that we're ready to act and anticipate our customers' needs and desires for upcoming products’.
That Frankie and her team is based in Silicon valley is no coincidence. Many would ask why a company like GM is placing themselves amongst the Googles and Facebooks of this world, but Frankie’s role goes beyond just thinking up new ideas, she needs to communicate new developments back to GM headquarters in Detroit. ‘My team plays a big part in that: we're in Silicon Valley to take advantage of the startup community and the early adopter culture, so that we can try to pull out the important new ideas and communicate them back to the rest of GM’. Having an innovative team in the the most innovative business centre of the world has it’s advantages and kicking it with the early adopters is chief amongst them.
This communication goes beyond just talking to the board in Detroit though, GM has manufacturing operations in 37 countries and as such I wanted to know how Frankie managed to communicate new innovations across a company that employs 212,000 employees worldwide. ‘The experience of driving and using a car varies a lot depending on culture, geography, and other factors. New innovations are not ‘one size fits all’, and may not be relevant in every country or region’. This isn’t even just a inter-country or continent difference, but ‘Even just looking within the US, GM has different market segments that we are trying to address with our different vehicles and brands’.
The differences between segments is also significant, with Chevrolet Sonic targeting young drivers who want to play as much as possible through smart devices whilst Cadillac drivers tend to be older and less likely to use smart devices, but still wanting effective infotainment in their cars. This provides an interesting challenge for the team, but one that they are no doubt prepared for.
One of the main ways that they are meeting this is through the use of data. As society has become more data driven, it has provided GM with a significant advantage over traditional assumptions or small focus groups, but according to Frankie ‘looking at consumer data gets you closer to the truth of what's really needed’. A prime example is the Volt, where data showed that people generally tended to travel less the 40 miles per day:
‘There were plenty of people who were convinced that 40 miles would not be enough, as they wanted to drive electric all the time and not consume any gas. But our data showed that most consumers traveled less than 40 miles per day.
We also found that cars are like cats - they spend 90% of their time "asleep" (or rather, parked). We know that a car is usually parked at home at night, and second most common parking situation is at an office during the day. That caused us to focus our efforts on charging infrastructure around home charging and commercial charging stations for businesses, so that drivers could be confident about their ability to charge up during a typical night or day.
Since the Volt has come out, data from actual owners has shown that our assumptions were valid. Volt customers drive primarily on electric power - about 2/3 of all Volt miles are electric. And, on average, drivers are going 900 miles between fill-ups, so the 40 mile range seems to be working. To be sure, we are looking at longer-range batteries and all-electric powertrains, but we were able in this case to use data to make some assumptions for this particular vehicle, the Volt, and then collect usage data to prove out our assumptions after the fact as well’.
This kind of data driven approach, combined with the innovative approach to working with early adopters in Silicon Valley are the kind of activities that are keeping GM on top of new innovations and managing the production time difference that could have been a disaster if not properly managed. ‘If we wait to make a move until one of our competitors embraces a new trend, we run the risk of falling even further behind just trying to catch up’.