Better Than New

Hi everyone! For those still keeping this blog live on their feed readers, I appreciate the support — I’ve been down a dark hole finishing up a major writing project that I will be able to talk about soon. But all of that is to come. Now, let us enjoy a new post.

The American car companies are typically the poster children of inventors without purpose. General Motors had a mostly production-ready electric car in the late 1990s but pulled the plug before release after its legal challenge to an emissions standards law succeeded. Rather than continue the EV-1’s development over the next decade so it would be road-ready by 2005 or so, the company shifted its R&D budget to making bigger and more powerful trucks and SUVs.

Ford was at least as irresponsible as GM, though its missteps are almost sadder. When Bill Ford, Jr. took over Ford in 2001, he pledged to make innovation a key mandate for the organization. And his staff responded, facilitating the creation of River Rouge, the world’s greenest car factory, and the Ford Escape Hybrid, the first production hybrid from a U.S. company. Unfortunately, such moves had no long-term impact, largely because they were divorced from the rest of the world. People interested in hybrids had little interest in getting an SUV with slightly better mileage than a Subaru — they were looking for the American Prius. Ford was perfectly willing to spend money on leading-edge technologies. Tragically, its leaders didn’t understand why such exploration was important — because it could connect with what people out in the world value.

Now Ford and GM are at crossroads as organizations. They either need to double down or get out of the game. Of the two, Ford is showing more promising directions for the former. While GM has launched an ad campaign proclaiming itself an alternative energy leader (mainly because of ethanol compatibility, a fuel most people don’t have access to, and the plug-in hybrid Volt, which won’t be released until at least 2010), Ford has brought in a homegrown marketing whiz who has deep experience seeing beyond conventional market wisdom to tap new sources of growth. Jim Farley, profiled in this BusinessWeek article, really seems to get that Ford’s salvation won’t be found in the organization’s brain trust; it will be found at the intersection of Ford’s capabilities and people’s needs. Even better, he’s tapping the wisdom of his dealer network to make sure that the company’s entire network understands how to pursue its goals and how to win new marketshare and capture emerging categories.

As a native of Michigan, I’m delighted by this development and hope that Farley might be a signal of change in Detroit thinking generally. Here’s hoping Ford shows GM and Chrysler that being market-driven doesn’t have to mean following the conventional wisdom of analysts.