How would Google change Detroit?

In this week's BusinessWeek, they ran an article that looked at how Google might approach the challenges of the Big 3 automotive companies in Detroit.  It was based on an excerpt from a new booked called "What Would Google Do?", by Jeff Jarvis.  I have written about this book before, but hadn't had a chance to read any of it prior to this article.  

After looking through the article, I was glad that many of the concepts aligned with some of the ideas I had written about in a previous Decision of the Week.

At first blush, the idea of open collaboration for product design probably sounds completely foreign to most people that work in industries where that information is closely guarded.  But as we're beginning to see with many industries, the pace of change is forcing them to look for more ways to solve problems.  I'd be interested to hear how my classmates think their companies could benefit from open collaboration with their customers, partners or even competitors  to solve their most critical challenges.  

"Decision of the Week" - Building a 21st Century Car Company

OK, here goes...we're going to see if we can create some interaction on the site. This question is open to everyone, and all comments are welcome. I'm thinking this one relates to everyone (we almost all drive cars) and it relates to class, as we're taking a mix of Marketing, Operations, Technology and Accounting classes.

We've all been watching as the Big-3 US Auto companies fly to Washington DC and ask for money (bailout, bridge loans, etc.). I believe the total is somewhere between $25-$34B at this point. While these companies all have their share of HUGE challenges (retirement costs, union costs, inefficient operations, poor brand images, etc.), they also have a number of valuable assets (engineering knowledge, production facilities, etc.).  

So here's the question... 

What if the US Gov't (Congress, TARP, Treasury..whoever) decided that instead of giving the existing companies the $25-$34B, they were going to give it to you and asked you to create an automotive start-up. You'd be allowed to pick and choose from existing US Auto expertise, personal, facilities, suppliers, etc., because they all went under. How would you build a 21st century automotive company?  

Some initial thoughts...

My initial thought was to see if I could envision an automotive company being setup and run like a Silicon Valley company that sells hardware and software.  So this new company might look something like this:

• Design - This would be a combination of world-class engineering talent (in-house) and the use of crowdsourcing efforts to continue to stimulate innovative ideas and leverage "proudly found elsewhere" mentality for global ideas.  Build communities of potential consumers to give you real-time feedback on potential designs and demands.
• Production - Why do the automotive companies need to own their own plants?  I wouldn't advocate outsourcing all the production, especially since the funding came from US Taxpayers.  But I would advocate using some of the funding to kick-start a few production facilities that would be spun-off and allowed to compete against each other for the business.  
• Sales and Distribution - We buy books and media from Amazon or iTunes.  We buy groceries and homegoods from Target.  But we have to go to a brand-specific dealer for a car?  No way does that model continue.  And I'm not even sure the Auto Superstores are the right answer either.  
• Messaging & Vision - Maybe this is really advertising, but the American automotive companies really need to start making ads that create a desire to be in their cars. Knowing that I get the employee discount does nothing to give me that awesome feeling you get in a new car and the adventures it could bring.  

OK, that's a few starting points.  I'm interesting in other areas of innovation, or other aspects to consider for change.  Ideas are welcome....

The Pace of Change

Following up on the recent Discussion of the Week, I found myself reading a recent BusinessWeek article on the World's Most Influential Companies. I thought it was worth highlighting this article, as it provides an alternative perspective on the pace of business change, which I previously highlighted. Sometimes really big numbers are good to get people's attention, and sometimes it's useful to bring a more focused lens.

Let's take a quick look at the list, and compare it with the 1990s and even the early part of this decade.

1. Apple - Two things are amazing here - First, we don't call them Apple Computer anymore, because while that is still the core of their business, the influence they have created are in Lifestyles, Telecommunications, Music, and Video. Second, they've overtaken Microsoft. Actually, both Apple and Google (also on the list) have ovetaken Microsoft. 10 years ago, Microsoft was fighting a worldwide anti-trust suit because of their might and size. 10 years later, they are quickly becoming a non-player on the Internet and are seeing their marketshare for computing reduced.
2. Google - The article makes a great comment, "Ten years ago, all Google had was Larry, Sergey and an idea." There it is again, 10 years. That's all it has taken for Google to not only capture 70% market share in Internet search and advertising, become a verb, and crush Yahoo and AOL, but also prove that by freeing information to the masses, people are able to create new economies.
3. Unilever - I don't know as much about Unilever as some of the other companies on the list, but the explanation given for their global success - reaching out to and building emerging communities, giving away knowledge to communities, rapidly adjusting their product at the edge to experiment with new business models - all of these align with the 21st century way of thinking about Edge Economics, Long Tail Economies and building value through Tribes.  This should be an interesting battle to watch between Unilevel and P&G in the consumer space, as P&G has also been extremely active in "Proudly Found Elsewhere" innovation model.
   
4. JP Morgan - While JPM has been around for years, it was their (relative) prudence and foresight that allowed then to come through the crisis head and shoulders ahead of Citi, Lehman (R.I.P.), Merrill, BoA, Wachovia and many others. One interesting aspect for MBA'ers to realize is that Jamie Dimon (CEO) was fired by Citi because he wasn't able to implement the ideas has has since implemented at JPM. It's important to build a network of people that look at the world in different ways, and be willing to understand them (although not always agree), because you never know when you'll be able to tap into that network.
5. NewsCorp - Not AOL, not TimeWarner, not NBC. None of these companies had the foresight to see that two critical elements were needed in a digital entertainment world - First, you have to build a platform. Silos don't allow integration, sharing and flexibility to adapt to new markets and technology. Second, you have to embrace and adapt to the Internet and digital media. NewsCorp has done this better than almost anyone (although ABC/Disney/ESPN isn't far behind...plus they have tight ties to Apple/Pixar because of Steve Jobs).
6. Toyota - Even though all the signs were on the wall, few people truly believed that Toyota could overtake GM as the #1 auto company. Not only are they far and away #1, but nobody really talks about Honda or the Europeans (BMW, Renault, Mercedes-Benz) anymore, other than as a niche. What's amazing to me is that they will let you tour their factories and teach you their model, but we haven't seen any of their executives leave to run one of the other companies.
   
7. Huawei - Never heard of them? You're not alone. Outside of the telecommunications industry (and China), Huawei is a well kept secret. But they are quickly eating into 900lb gorilla Cisco Systems in the race to build the next-generation of connected networks.

10 years!  Just 10 years....  

That's all it's taken for this list to go from Microsoft, Cisco, Citi, Big3 Autos, and TimeWarner to Apple, Google, Huawei, JPMorgan and Toyota.  

A lot of this change had to do with companies that truly embraced the new technology, but it's also highlighted by companies that took a very different view of their markets and changed the rules.  

It's a potentially scary place to be if you're looking for long-term success with models from the 20th century.  But on the flipside, it's an extremely exciting place to be if you're willing to look outside the box (maybe a long way outside) and challenge some conventional thinking, rapidly adopt technology, and explore some of the concepts that will be demanded by the global economy in the 21st century.