Posted by: Jerry Garrett | April 18, 2011

What The Auto Industry Could Learn From Steve Jobs

Automakers dilemma: Should we compete in every segment? Correct answer: Lets not... (Jerry Garrett Photo from 2011 Geneva Motor Show)

At a recent auto show, Ford Motor Company’s much-respected CEO Alan Mulally said, “We will compete in every segment.” This means if someone else is offering a mid-size SUV, or an econobox or a big honkin’ truck that won’t fit in the average garage, Ford will offer one too.

I’m not just picking on Ford here; this is a promise I’ve heard, at one time or another, from almost every automaker.

Vehicles like this made Detroit what it is today (Griswold Family Archives)

But it’s a philosophy that inevitably results in a bunch of “me too” products. It’s related closely to “badge engineering” – the practice of making a whole family of very similar products from one vehicle (i.e., Ford’s Fusion, Mercury Milan and Lincoln MKZ; or General Motors’ Chevrolet Equinox and Captiva, Pontiac Torrent, Saturn Vue, Cadillac SRX, Opel Antara, GMC Terrain, Saab 9-4X, Daewoo Winstorm and even the Suzuki XL7). They’re all the same basic vehicle.

When cars were different.

The lack of innovative, demonstrably better and unique offerings has made marques such as Oldsmobile, Plymouth, Mercury, Pontiac, Saturn, among others, what they are today: Dead.

The innovator who came up with the first SUV, the first minivan or even the first hybrid gas-electric car scored big wins. The copycats who came along afterward, to offer “me too” minivans, cute utes and so forth were just scavengers willing to grub for smaller and smaller pieces of the pie. If there’s only one pie, the “odd man out” eventually starves to death.

So, what does this have to do with Apple guru Steve Jobs?

Read this: “How Steve Jobs out-Japanned Japan,” by Jeff Yang. In it, Yang (find his excellent blog at originalspin.posterous.com) discusses how Jobs studied during the 1970s what Sony Corporation was doing to rule the electronics market. A major component of its success was Sony founder Masaru Ibuka’s mission statement: Sony would not make bad products. In fact, even if a competitor was making a successful product, and Sony had nothing to offer that was new or different or significantly better, Sony would stay out of that market.

Even Apples can go rotten.

(This is kinda related to the Zen concept of “ma”, of which Jobs is supposedly a proponent; in “ma” what “is not” carries importance similar to what “is”. Example: Jobs is as reportedly as proud of some of the products Apple opted not to make, as he is of the relatively few it has made.)

Yang relates how Sony stayed out of the color television market for many years, while competitors made dozens of “me too” color TV products. Early color TVs, for those old enough to remember them, broadcast blurry, over-saturated sludge. Ibuka said Sony would wait – until it had better than copycat crapola to offer: “No. We will only do great products. We will do only high quality goods. We will only do breakthrough technology.”

An early Trinitron

The result? Sony discovered the revolutionary technology that led to “Trinitron” – brighter, better, clearer colors. Trinitron smoked the competition – and Sony went on to have the best-selling color television in the industry for the next 25 years.

Yang recalls how Steve Jobs once told Nike CEO Mark Parker, “You make some of the best products in the world – but you also make a lot of crap. Get rid of the crappy stuff.”

Sony became great by refusing to make crap – insisting only on great products. It defined what it wouldn’t make. That was then, anyway – Yang notes Sony has lost its way now; in introducing a recent product that featured “nonessential technology with minimal” value, Sony CEO Howard Stringer told USA Today, “No – you have to launch it. It’s there. Competitive pressures – you read in the paper, so-and-so is the first to release 3-D TV. You don’t want to be the last.”

So wrong...

Sounds like the auto industry executives who say, “Our competition offers a [insert vehicle of choice here – crossover, sedan, SUV, truck], so we will offer one.” This is the kind of thinking that has resulted in such automotive atrocities as a Ferrari station wagon, a Porsche SUV and a Cadillac pickup.

I am reminded of a question put to Jobs a few years ago: “Will Apple offer a low-cost netbook?” Jobs said flatly, “No.” He said netbooks had limited capability, limited value and limited profit potential.

So, as Acer, MSI and others made a quick killing on cheap netbooks, and everybody else in the consumer electronics industry seemed to be in a head-long rush to make “me too” netbooks, Apple – despite criticism from Wall Street – wisely stayed out of the netbook market. (Confession: I bought one; it’s crap).

Worth the wait.

Apple stayed out until it came up with something different, and demonstrably better: the revolutionary iPad – which is very promptly putting the entire netbook industry out of business; now most netbook copycats are in a rush to make iPad clones instead. (Good luck!)

While an Apple netbook might not have been a disaster, who could argue it wouldn’t have been blown away, too, by the game-changing technology of the iPad? Or, would Apple have been so distracted, trying to make a copycat netbook, that it wouldn’t have had the resources leftover to even make the iPad? Once again, Apple has found success by ignoring the distraction of a product it shouldn’t have made, in favor of making a far better one.

R.I.P., netbooks

What if the auto industry could exercise that kind of restraint? Maybe we wouldn’t have more than 62 different crossover vehicles (honestly, after No. 61, the Toyota Venza, came out a couple of years ago, I lost count). What other types of breakthrough products might be possible, if the automakers weren’t diverting so much of their engineering expertise and resources to developing “me too” products?

Jerry Garrett

April 17, 2011


Responses

  1. […] What The Auto Industry Could Learn From Steve Jobs « Garrett On … Share and […]

  2. […] See more here: What The Auto Industry Could Learn From Steve Jobs « Garrett On … […]

  3. […] and producing too many products are among their worst vices, as Jerry Garrett pointed out in a very good piece that highlights Steve Jobs’s insistence in “not making crap” and insisting on great […]


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