Why is it so hard to innovate in the automotive sector?
I am working in automotive sector since my very first job as a Software Tester in my last year of studying Computer Science in 2011.
How I ended it up in this sector? Well, as simple as being the first job to apply to because my mother said that she will cut my allowance. It’s funny because I was never into cars, but my than boyfriend (now husband) was a real car fan so I looked cool in his eyes. So nothing fancy about my career selection.
In these years I went from testing the software of different car components to now being a product person in this traditional sector. I spent all these years learning how cars are made and that it takes at least 5 years to develop and start production of a new car model. A new model must go through several steps before it is ready for production, like market survey, modeling, prototype building, testing, evaluation, correction, design and production of the manufacturing machinery, and final assembly.
When agile was becoming more and more popular, automotive sector wanted to be agile as well. We wanted to innovate as well in our company. This was when it hit me hard in my face that things don’t change that easily and I was asking myself… why? why is it so complicated?
To understand let’s look back at history:
- On January 29, 1886, Carl Benz applied for a patent for his “vehicle powered by a gas engine.” The patent — number 37435 — may be regarded as the birth certificate of the automobile. In July 1886 the newspapers reported on the first public outing of the three-wheeled Benz Patent Motor Car, model no. 1. (Mercedes-Benz Group source)
- On Dec. 1, 1913, Henry Ford’s Assembly Line Starts Rolling, Bringing Car Ownership to the Masses. Determined to “build a motor car for the great multitude,” pioneering American car maker Henry Ford implements the first moving automotive assembly line for his Model T, soon trimming its production time from 12.5 hours to 93 minutes. Between 1908 and 1927, Ford builds 15 million Model T’s, changing the very fabric of industrial and agricultural in America. (History source)
- On Aug. 13, 1959, Volvo Offers Drivers Their First Chance to Buckle Up. Nils Bohlin — an ex-aviation engineer who worked on flight ejection seats — develops a V-shaped, three-point front seat belt for Volvo. (History source)
- In 1968 Allen K. Breed’s affordable, $5 crash sensor leads to the first electromechanical air bag system. Five years later, General Motors offers the first passenger airbag on its Oldsmobile Toronado. Breed Technologies becomes one of the world’s leading suppliers of safety systems. (History source)
- Fast forward to June 12, 2012 when Tesla Model S Disrupts Fossil-Fueled Industry. Elon Musk’s first car is the Tesla Roadster, based on a Lotus Elise chassis, heavily reengineered to run on electricity. But the Model S sedan is the world changer: With its slinky shape, moonshot acceleration and revolutionary tech, Musk’s upstart has global automakers tearing up product plans and realizing that electric cars are the future, not a fad. (History source)
There are 101 years of car manufacturing history between the first production line and Tesla disrupting the automotive world.
During this time we have manufactured cars by following the rules of management 2.0.
What is management 2.0? To understand it, we have to look back at the 19th century when the early management pioneers were obsessed with two problems:
- First, how to get semi-skilled employees to do the same things over and over again with near-perfect replicability and ever-increasing productivity?
- And second, how to coordinate those efforts in ways that facilitated the large-scale production of complex goods and services?
The first question was answered by de-skilling and routinizing work.
The second by developing reporting and accountability relationships that maximized control and minimized deviations from plan.
Thus was born the modern bureaucratic organization.
Car manufacturers and factories have clear hierarchy, where engineers and managers are having the knowledge to develop the projects and the tasks to be followed, whereas the technicians and line workers are the ones executing the tasks. This is how it worked and still works since 1913. During this time all the big car manufacturers put in place processes on how a factory works, how cars are produced. Each car being produced was a project, which had very clear steps which had to be followed strictly. The tolerance for error or failure was non existing. There were no big surprises in the process and people working in the factory had clear roadmaps, repetitive tasks, where no innovation was required.
With technology and internet coming at full speed into our lives, innovative companies started to ask why we do things in a certain way? How can we improve the lives of our users? Which problems do they have?
While reading the No Rules Rules by Reed Hastings & Erin Meyer I came to the conclusion that the car manufacturers can’t innovate at the same speed as Netflix, because they have 101 years of experience in producing cars in the same management style. This style was passed from generation to generation and it is harder to change than it looks like. To do so, we have to change human behavior.
The biggest challenge of automotive sector to go at full speed as other domains is the management style. With strict hierarchy, rules, processes, bureaucracy there is very little room to innovate, be creative, be fast and flexible. They don’t lead with context, but with controls.
With this information in mind, I am more prepared in the product journey in the automotive sector.
- I won’t get frustrated that I can’t do a proper user research for the factory supply chain.
- I won’t get angry when stakeholders will want to talk to my boss because this is how they think they can put pressure on me.
- I won’t get annoyed with feature proposals coming from a manager that has little knowledge of the problems his team has in the factory.
This is how they worked for the past 101 years and it worked perfectly fine. So fine that nowadays automotive industry is one of the world’s largest industries by revenue.
If you plan to change sectors as a product person and move to the automotive sector, bare in mind that the journey is challenging, innovation comes slow because we have to change the management style first.
The goal is to upgrade the automotive sector to the management 3.0, where everyone feels responsible for management and where the managers learn to manage systems instead of the people.
