CXO

How Ford plans to win the future like a software company

Ford has used technology to recreate itself as a 21st century car company. Now it wants to build new experiences and innovate like a software maker.

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Ford World Headquarters in Dearborn, Michigan
 Image: Jason Hiner/TechRepublic

When Don Butler came to Ford Motor Company at the beginning of 2014 and stepped into his new office at Ford's Product Development Center in Dearborn, Michigan, it was kind of like a star athlete slipping on the uniform of his cross-town archrival.

The move was a huge win for Ford's journey as a technology company, because Butler came from General Motors where he had combined his expertise in engineering, marketing, and business development to lead two of the auto industry's premier technology projects — GM's OnStar system and the Cadillac CUE interface.

Meanwhile, over the past five years Ford has generated its own technology mojo with the spread of its SYNC and MyFordTouch systems, which despite a few hiccups and imperfections, have successfully integrated information technology and consumer electronics into millions of new cars and trucks.

With Butler on its team, Ford has the potential to take its technology strategy to the next level. And, Butler hasn't wasted any time figuring out how Ford needs to think differently to get a jump on the next evolution of the auto industry.

SEE: Ford's Don Butler: Car Tech Wizard. Connectivity Guru. Bridge Builder.

"[This role] was tailor-made for me..." said Butler in a recent interview with TechRepublic. "I'm passionate about being able to help this company and this business... My role has been, first of all, to synthesize our vision around connectivity. What does connectivity mean for us? Then after that, what's the strategy to accomplish that vision?"

Butler and his Ford colleagues have broken down vehicle connectivity into three buckets:

1. Brought-in connectivity - Butler refers to this as "leveraging smart devices and the capability of those smart devices," including their apps, media, and communications capabilities, as well as 911 Assist and vehicle health reports; he said Ford is already in a leadership position in this area.
2. Beamed-in connectivity - This involves external connections such as satellite radio, Wi-Fi, and Bluetooth.
3. Built-in connectivity - The final piece is what Butler describes as when "the vehicle itself, independent of any other devices, has its own built-in data connection through on-board data mode."

Ford has obviously done good work with No. 1, but there's still more work to do in making the interface easier for users to navigate, and Butler brings fresh experience from working on this problem with Cadillac CUE.

In terms of No. 2 and No. 3, Butler brings all of his experience in telematics from his days helping to launch OnStar at GM. The fact that Butler gave equal weight to these three indicates that Ford is likely to get a lot more serious about connecting vehicles to the internet beyond just tethering to smartphones.

While he didn't divulge the details of Ford's future connectivity plans, Butler did talk about the two big changes Ford is going to make to its long-term strategy:

1. Learn how to innovate like a software company
2. Move to long-term relationships with customers

As straightforward as those goals may sound, pulling them off will involve deep cultural changes at Ford and that's where Butler is using his considerable energy to drive change.

"At a high level in terms of business, thinking and acting more like a software or technology company is really what we need to be about," said Butler.

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Ford's Don Butler
 Image: Ford
Of course, that makes perfect sense since software is destined to power more and more of the systems inside Ford vehicles, but Butler is also thinking bigger in terms of the way Ford builds its vehicles, creates a platform to innovate, and delivers a next generation of services to the people who buy Ford vehicles.

"When it comes to thinking like a software and technology company, [we need to make sure] the vehicle is updatable over time, and we want to plan on a certain number of software updates throughout the year," said Butler. "Device makers have been doing it for a long time. Automakers haven't been doing it for a long time... Enhancements on an ongoing basis need to be thought about and planned... There's some fundamental changes in terms of how we need to organize business."

One of the biggest obstacles remains the product development lifecycle of a new automobile. In most cases, it's five years or more. That means decisions have to be made about technology at an early stage in the process, and many of the technologies involved will become obsolete by the time the product comes to market. That's the kind of product rhythm that carmakers are used to. That's what Butler and team have to change.

What Butler wants to do is to create a "platform for innovation" where Ford doesn't have to predict the future so much in making its decisions about tech during the product development cycle. Instead, it can create a platform that solidifies a few key elements while leaving the door open for evolution during the process of developing a vehicle, as well as afterward when the vehicle goes to market. He cited four elements that would make up this platform for innovation:

1. in-vehicle hardware and software
2. IT back-end infrastructure
3. processes
4. people

The end game: Move a lot faster and be more adaptable.

Butler said, "We need to enter a culture of rapid experimentation — really rapid, small-scale experiments to learn from, and then if something doesn't work, don't go forward with that. More of a beta testing kind of environment."

And Ford isn't wasting any time getting started. It recently announced a partnership with Intel to bring next generation user interfaces — including facial recognition and gesture UI — into vehicles. It's called Mobile Interior Imaging or "Project Mobii." It could be used for recognizing the person that sits in the driver's seat and adjusting the car's controls, seat position, and music playlists to that person's preferences. If the person isn't recognized, then the car could immediately send a photo to the car's primary owner to verify the unrecognized driver has permission to use the vehicle. The system could also use gestures and voice commands to control the car's systems, such as waving a hand in a certain way to open the sunroof or speaking a command to change the temperature of the vehicle.

"Mobii is a great example of this culture of experimentation," said Butler. "I don't know what the future of UI is going to be; I don't know what the user experience inside of the vehicle is going to be. I know that increasingly I've got sensors, cameras, technology, [and it's] trying to mash some stuff together and see what might happen. The use cases that were portrayed are things that we think might make sense."

And partnering with Intel was a perfect fit because both Ford and Intel already had researchers working on the same issues, Butler said. In fact, Butler sees Ford working a lot more closely with partners in the years ahead.

"This is an area where you literally have to create the future together," he said. "We might have some ideas of where we want to go, but if [Ford] can partner with the right people, I think we'll come up with solutions that neither of us on our own could have come up with. Whether it's with Intel, or NVIDIA, or Google, or Apple, we talk to a number of different companies. We have to be comfortable with inventing the future together."

And, it's not just partners that Ford needs to build closer relationships with, according to Butler. If the company is going to evolve to run its product more like a software company, then it also needs to change how it relates to its customers.

"Once someone has decided to begin a relationship with Ford, we want to earn their trust and their loyalty by delivering a safe, superior, connected experience. It's that simple," said Butler. "And the challenge that we've had — not only Ford but automakers in general — is we haven't thought of it as a relationship. Nor have our customers, quite candidly... And we want to change that."

That's the other big opportunity that Butler is chasing: building deeper, longer term relationships with customers so Ford can add value to their lives and to their vehicles.

"[What] connectivity does for us is it enables us to literally connect and know the customer better," he said.

That translates into big data. Ford has been an early pioneer in collecting and processing big data and using it in ways to enhance its business. But now, it wants to use big data in the same ways that companies like Google, Amazon, and Facebook use it — to streamline and customize the user experience.

Fortunately, Butler realizes that before Ford launches into that arena it needs to think very carefully about some of the critical currency of the digital age: trust, privacy, and security.

"Our philosophy is one of stewardship. The question is who owns the data, whose data is it. It's the customer's data. They are the owners," Butler said. "This notion of stewardship is both one of protection and creation of value... Steward is a word not used very much, but in ancient times a steward is someone who a land owner put in charge of their property. The landowner still owned the property, the steward didn't, but they were in charge of taking care of it. And not only taking care of it, but stewards made sure it was in better condition when the landowner returned than when they left. Our notion is if customers trust us to take care of, manage, and use their data, we will then leverage that to improve their experience in the vehicle."

That means Ford has to put systems in place to allow users the right-to-be-forgotten and the ability to opt out and to remove or anonymize their data.

"We want to be in a position that a customer has control over any data that is associated with them, can be personally identifiable to them. They need to be able to say 'I'd like you to extract all of that from your database.' ... Now, how many people do I think would actually do that? Not many at all. Because if that's your inclination, you probably wouldn't have given us permission to use the data to begin with. But if you know you can do it, I believe you'll be more trusting. You are in control, and we want our customers to be as in-control as possible."

But, for those who buy Ford vehicles and entrust Ford with access to some of their data, Butler believes Ford can add a lot of new value to the equation of owning a vehicle.

He gave the example of the oil light blinking in your vehicle. Today, you see that and you know that you need to go schedule an oil change, and you'll typically procrastinate for a while until you have time to check your schedule and call and set something up. Butler said Ford could turn that into a "seamless, almost painless experience" if it used the information it knows about its customers. Ford services could detect that your vehicle is low on oil or due for an oil change and could then use the information it knows about your preferred dealership to automatically check that dealership's calendar, look at the window of time when you've scheduled past appointments, and then automatically schedule something in an available slot and email you a calendar notification. Obviously, you could reschedule if needed, but getting it on your calendar right away makes it more likely you'll actually go and do it on time.

As important as those services are — and as much as it also means an additional revenue stream for Ford — Butler still keeps his eye on the ball about what the whole process means for Ford.

"Nothing happens in our business today until we sell or lease a vehicle," he said. "We are primarily in the business of designing and selling vehicles. So the first thing connectivity has to do for us is make our vehicles more attractive, make them more desirable."

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About

Jason Hiner is Editor in Chief of TechRepublic and Long Form Editor of ZDNet. He writes about the people, products, and ideas changing how we live and work in the 21st century. He's co-author of the book, Follow the Geeks.

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