As some U.S. automakers face inevitable restructuring, the key questions are what should they become? What is the best way to do it? The answer depends on what battle they think they are fighting. In simplest terms: should they build better cars? Build cars better? Build cars?
Consider the battles U.S. automakers have fought against the Japanese and other automakers. How has Detroit done in: design? quality? productivity? brand building? Given the steady loss of market share and margin, they seem to be losing. There are a variety of reasons, some of their own making and some not.
There is one battle worth winning more than the others – the battle of ideas. U.S. automakers need to outperform the competition in one definitive way – systematically develop and deploy a steady, uninterrupted stream of novel ideas and inventions across all aspects of their business. At the risk of falling deep into the “easier-said-than-done” category, I offer my blueprint for change for U.S. automakers: reframe, retrain, and redeploy…a model based on my own experience.
Automakers should reframe their internal corporate culture as a first step. The culture of a company is both a blessing and a curse. It is a blessing because it defines the shared values and norms of how employees relate to each other and the company’s mission. It is a curse because it makes change difficult. The U.S. automakers are no different. Resistance is strong. Like any large company, automakers have ingrained cultures, inbred thinking, fear of job loss, and risk aversion. The industry has many stakeholders to appease: unions, suppliers, regulators, retirees, and now…the U.S. government.
To reframe, I recommend the Competing Values framework by Dr. Jeff DeGraff at the University of Michigan. This model outlines a company’s “innovation genome” defined by four quadrants as show below. To use the model, companies start with an assessment tool to learn which quadrant defines its dominant behavior. Next, the companies need to adopt behaviors from the other quadrants to counterbalance and complement its dominant quadrant. Auto makers, in my view, are squarely in the Control Quadrant. To reframe, they need a plan of change (to include a new staffing model) to instill behaviors from the Create, Collaborate, and Compete quadrants. Without this, the next two steps will not succeed.
Innovation is a skill, not a gift. Auto employees need to be trained a systematic method of innovating that helps them “innovate on command.” Innovation needs to become a routine, almost boring part of the daily corporate regimen. Innovation needs to be scheduled. Training people how to use a proven model makes this possible.
Training has to be far-reaching to include employees from the commercial (marketing), technical (engineering), and operations (manufacturing) aspects of the business model. Auto makers need to re-think how they design and make cars. Continuing to make cars the same way yet expecting a different result is, well…you know the rest.
Auto makers must re-deploy how innovation is used to design and make vehicles. But they also need to “creativize” – use innovation on non-traditional things like budgeting and hiring. A simple approach: start with a pilot innovation workshop. Bring 12 to 16 employees together to form an innovation team using a facilitated process. Pilot the workshop around a key product or high visibility project. Next, develop a train-the-trainer program to create in-house innovation facilitation resources This keeps it cost-effective and flexible at the same time. Finally, acknowledge the results. Form a new team and move the pilot program to another area. Begin to flex the cultural behaviors from all four quadrants of the Competing Values model.