by Rob Enderle

Ford vs. Cisco: Two ways to approach innovation

Jan 16, 2016
InnovationTechnology Industry

Columnist Rob Enderle compares Ford’s innovation approach with Cisco’s and concludes that a combination of both would work best. Here’s why.

Last week, I talked about how Apple could likely learn from Ford’s approach to innovation, which favors promoting experimentation and shifts focus from blame for failure to encouraging and rewarding experimentation. This week I attended the opening of Cisco’s new Innovation Center in Toronto [Disclosure: Cisco is a client of the author] and it struck me that the differences between Ford’s Research and Innovation Center in Silicon Valley and Cisco’s efforts were very different, but not necessarily mutually exclusive. It also stuck me that a technology company might find both approaches useful. Given that Apple is moving into the automotive space we may, at some future point, see a blending of the concepts.

Ford’s Research and Innovation Center

At CES Ford spoke of its relationship with Microsoft [Disclosure: Microsoft is a client of the author] and how their personal relationship with Bill Gate’s and his company allowed them to jump start their in-car technology efforts. FORD Sync, once tied to Microsoft’s technology, and now tied to BlackBerry’s QNX [Disclosure: BlackBerry is a client of the author], became a huge competitive advantage for the firm. Recognizing the power of having tech people and auto people work close together Ford decided to build their Research and Innovation Center in Silicon Valley to create a stronger competitive advantage tied to tech. Silicon Valley remains the technology center of the world.

[ Related: How Ford SYNC 3 works with Android Auto and Apple CarPlay ]

This type of Technology Center is inward-focused. It is designed to bring innovation in (from companies like Cisco) early in the car planning process. Because it takes up to half a decade to get a car though the planning process, making sure advancements are contemplated early can go a long way towards assuring that late changes don’t damage either time to market or manufacturing line setup costs adversely.  

This also works against the “not-invented-here” mentality that often plagues legacy car companies by force feeding advancements from outside and both enabling and encouraging collaboration to anticipate and resolve issues in a timely manner and create more compelling solutions.   This will likely be critical as we move from cars driven by people to cars driven by computers.  

Cisco’s Innovation Center

Cisco’s effort is largely focused outside and they use their centers as both a showcase for what can be done and a place for their customers to come and work with them to solve problems focused on particular industries. Toronto is focused on smart cities/buildings, healthcare and finance.   What is created in these innovation centers is eventually shared with other Cisco customers, which lowers the cost and risks associated with the efforts by spreading them across companies.  

One of the interesting things about the Toronto location was that by using innovations from other centers they were able to lower the build cost by $700,000, lower energy consumption, lower the costs of moves adds and changes, and create a far more friendly workspace that automatically adjusts for the employees using it. It is an operating showcase of how innovation can lower costs and increase employee effectiveness. So much so that the firm managing the building is taking the underlying concepts to all of their properties.

Blending/contrasting the concepts

The advantage to the first approach is that advancements are largely contained and focused on Ford exclusively so that change is driven into the company. The advantage to the second is that it improves sales, customer success, engagement and employee effectiveness in the center. The Ford effort has little direct impact on Ford customers and the Cisco effort has far less impact on how Cisco does things than the Ford effort does.  

This suggests a blended approach where a large company has a focused effort like Ford’s and used innovation centers like Cisco’s (to benefit from the lower costs of shared efforts and avoid the expense of solving problems that have already been solved), and their own Cisco-like innovation centers focused on helping customers use products more effectively. In Ford’s case this applies mostly to customers buying their business solutions, such as government and delivery companies.  

And here is the key, all of the efforts would be networked so that ideas could flow across them resulting in a synergy between vendors and clients that would be unprecedented in the modern age, but fully enabled with the collaborative technologies we are currently up to our necks in.  

[ Related: Microsoft shows how self-driving cars could be the next mobile office with dash-mounted Windows 10 ]

Self-flying cars

We have long anticipated the idea that someday cars will be obsolete and that we’ll have our own flying car to commute in. That isn’t as far away now as you might think because the technology being developed for self-driving cars and delivery drones should be applicable to self-flying vehicles. One such concept was showcased at CES this year from China with an announced 2016 launch.   But it likely is only through the tight integration between companies on the cutting edge of self-driving, transportation, drones and artificial intelligence that this could happen quickly in the U.S. (By the way, for this effort, they might want to include Moller, who has been working on a flying car for decades).

If we were able to tightly network all of these areas of expertise toward this one goal it suddenly becomes possible. I believe a blending of the Ford and Cisco concepts could go a long way towards making that happen in the U.S. as opposed to China where it currently is more likely to emerge first (or, given the prototype, is already emerging). Something to think about this weekend.