Connected vehicles as a technology platform: Don Butler, Ford Motor Company

Don Butler, executive director for connected vehicles and services at Ford Motor Company, discusses digital transformation in the automotive industry. Butler talks about what Ford means in terms of automobiles being connected and defines the three aspects of connectivity they incorporate, beamed in, brought in and built in.

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(32:45) And it’s really about keeping one foot sort of firmly in the present, right. Because we have got $100 billion plus business that we need to run on behalf of our shareholders and other stakeholders. We need to do that in the most efficient and effective way as possible. So is keeping one foot in the present and doing that really really well, while also having a foot in the future, and a future that we are trying to create as opposed to a future that will inherit.

Michael:         (33:17) So it’s very hard to talk about this topic without thinking about Tesla. And I hope that’s not rude of me to bring up Tesla but they are dedicated to this, whereas Ford is obviously a much larger and older company which has its pluses and minuses. So can you maybe talk a little bit about your view of Tesla and the industry as a whole?

Don:                (33:40) Sure I think Tesla is a, I’ll use the word microcosm and I don’t mean that in a diminishing sense. But is a microcosm for where the industry is headed and how the industry needs to think. The benefit that Tesla has had is that they were able to start with literally a clean sheet of paper.

(34:06) And sort of take the best in terms of thinking like a software company, right. Because you know that was their origin and so guess what, their vehicles are updatable over the air. They do have a platform and architecture that is software-based and software capable.

(34:29) And they are thinking about mobility models, and so not that I’m envious of Tesla, but I admire what they have done and we can learn from some of the things that they’re doing in the benefit that we will have and if we do it correctly and if I do my job correctly, I think we can absolutely get there.

(34:50) Being able to bring a scale and a sense of integration, a sense of a broad existing customer and dealer network that we can – in the case of the dealer network we can take advantage of as a strength and have them change, and have them evolve with us as we go on this journey.

(35:10) And that is one of the other things that I am really excited about -- we aren’t looking at the future and living in fear of it and hoping it doesn’t kind of impose on the way we do business today. We are thinking about the future, and thinking about how we can shape the future. How do we take advantage of the assets that we have.

(35:33) How do we understand the limitations that we have and how those limitations need to change, and how we do we do this journey together. So yeah, Tesla again is a company that is admirable and you know a company that we can learn from in that sense. But also that’s something that reinforces our thinking and where we are going to be going and understanding how we can take that to the next level as well.

Vala:               (36:00) It’s amazing, and what a journey, and I bet you love your job and I can just sense it in the way that you answer the questions with such passion and you can feel it through the screen. But in terms of when you talk about a dealer network and you know a large company like Ford and this digital transformation that includes so many different stakeholders because it’s such a large ecosystem. Talk to us a little bit about the Ford culture, because you need a great culture to be able to execute to this awesome vision – which is a great vision and that’s where we need to be as companies.

Don: (36:47) Yeah, you’re absolutely right. What I like most about the Fort culture is first it’s very connected to my own internal value system. My own personal viewpoint, and I’m happy that that passion has come across because it’s genuine and it’s real. If you are in a place where the values of the company that you’re working for are aligned with all of your internal personal values, then that is synergistic. They feed on themselves and you enjoy what you’re doing, and you enjoy the people that you are doing it with. And that is true here at Ford and it really I guess in a sense it starts with the fact that it’s Ford.

(37:39) It’s the Ford name. It’s the Ford family, it’s going all the way back to its origins as a starter, right. And so even that, and it sounds a bit hokey but even that notion of its Ford and your part of that family and your part of that original notion of opening highways for all mankind.

(38:02) And there really is something to that, and whether it is internal with Ford, or whether it is with our dealer partners, or whether it is with our UAW partners, there is this notion that we are part of this family.

(30:18) And within any organization, anytime you get – and if you get more than two people together right, there is conflict, but the challenge is not in the conflict. It’s in how you resolve that conflict. And I would be silly to say you know it’s all roses and rainbows everyday here at Ford but I’ll tell you when we do have conflict we resolve it in a healthy way. We resolve it in a way that puts the customer first, and you know, are we expert at every single facet of that? No, but we are constantly challenging ourselves and pushing our self in that I mentioned to really again kind of help fulfil Henry Ford’s original vision of opening the highways for all mankind.

(39:07) And again to repeat a theme that we talked about earlier in the hangout, you know that originally opening highways for all mankind was a single point transportation solution that we controlled every aspect of. But increasingly, opening highways and opening experiences for all mankind is going to be a multi-part solution, and from a Ford perspective we just want to play our part.

Michael:         (39:31) Don, we are just about out of time and we have just a few more minutes left, but we have about two hours of conversation that we want to continue with you. So in that spirit let’s do a lightning round of questions. We’ll ask you some questions and maybe give us some very short answers to so we can compress two hours into the next five minutes.

So you have a Palo Alto R&D Center, why? Why does Ford have a Palo Alto R&D Center?

Don:                (40:16) A couple of quick reasons, the culture of innovation in Silicon Valley and just wanting to be present there, wanting to be part of that and understand you know the ideas and just be part of that community, because we think it’s critically important.

Vala:               (40:33) Do you work with startups and if you do, what advice do you have to startup founders who would like to approach Ford with their innovation.

Don:                (40:43) We have absolutely worked with startups, and one of the ways that we do that is through some think what we call Aplink, which is a kind of internal structured API protocol inside our vehicles to allow mobile applications, to take advantage of our voice controls, our vehicle controls for instance. And we’ve got a developers site that is open to everyone from startups to even government entities.

(41:10) The only thing that I would say that if you’ve got great ideas, bring them. We love listening to them. We love hearing them. And we want to be a company that again, I go back to our Palo Alto office, we want to be a company that’s part of the community and part of again that co-creation, because that’s really when great things happen. I think when there is a synergy between partners create something that neither on their own can do. So from a startup perspective leveraging things like Aplink, and even also if it is not application based but if it is technology-based, or if it is software based you know there is a way to connect to Ford either through our Paulo Alto office or here in Dearborn and you know listening for ideas and being part of the experiments that we are undertaking.

(41:56) Again, we want to think like a software company and the more we interact with software companies I think the better we are all going to be.

Michael:         (42:03) Another question relating to startups and innovation. Do you think, obviously what you are describing is highly innovative disruptions, adaptations, and evolutions cars, software, hardware as a platform. Do you think consciously, deliberately about startups as extending Ford corporate innovation efforts, do you think about that explicitly?

Don:                (42:37) I do, but I would say it’s more implicit than explicit to be candid. But what we have done, and again one of the reasons that we are dramatically growing our presence in Silicon Valley is to understand what are the things that we need to think about and in terms of maybe being that more explicit part of how we do our business, and how we think about the future.

Michael:         (43:04) And one final question from me and then maybe Vala one final one, we have about two minutes. What are the appropriate measurements for corporate innovation efforts?

Don:                (43:19) That’s a good question.

Vala:               (43:22) That’s not a lightning round question

Don:                (43:24) I’d say the ultimate measure is satisfied customers. Internally, there are a number of things that we are doing in terms of you know, idea generation, IP or patent applications, the extent to which employees in those innovation in areas feel excited and feel happy about what they are doing. So engagement surveys and it starts with understanding how the employees are feeling, and then goes to measuring some of the hard tangibles in terms of IP generation and what’s happening there.

 (43:36) But ultimately hopefully, it will resolve and represent itself in satisfied customers.

Michael:         (44:03) Vala do you want to take the last word.

Vala:               (44:05) My last word is Don, this was the fastest 45 minutes of my week, so thank you so much for dropping so much science on us. It’s going to make it that much easier for Michael and I to write up a summary of this great afternoon session. Thank you so much.

Michael:         (44:20) You have been listening to episode 109 of CXO-Talk, and we've been discussing digital transformation in the automotive industry with Don Butler, who is the executive director for connected vehicles and services at Ford. Don, as Vala said thank you so much for taking the time. We really appreciate it.

Don:                (44:47) Hey, it’s been a fun conversation. Thank you guys.

Michael:         (44:49) And as always Vala, I hope you have a great week ahead of you.

Vala:               (44:57) You as well, thank you so much.

Michael:         (44:58) Thank you Vala, and I hope everybody who is watching comes back and joins us again next time. Bye, bye.

This story, "Connected vehicles as a technology platform: Don Butler, Ford Motor Company" was originally published by CIO.

Copyright © 2015 IDG Communications, Inc.

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