Open Innovation Is Driving a Cultural Shift at Ford

From horseless carriages to driverless vehicles, the automotive industry has undergone significant transformation since the 20th century. On this episode of Mastering Innovation on Sirius XM Channel 111, Business Radio Powered by The Wharton School, guest Dr. Venkatesh Prasad, Senior Technical Leader of Open Innovation at Ford Research and Innovation, discusses how established players continue to transform the industry today through through open innovation with non-traditional partners.

Prasad’s team works to identify strategic sources for innovation by examining consumer, business, and financial aspects, along with emerging technologies. He touched on prominent trends within the auto industry, including autonomous cars, new sources of energy, and shared ridership models. Prasad ultimately emphasized the need to encourage open innovation, whether in investments in unprecedented partnerships or open-source toolkits for experimentation.

An excerpt of the interview is transcribed below. Listen to more episodes here.


Dr. Venkatesh Prasad (Senior Technical Fellow, Ford)

Saikat Chaudhuri: We’ve got autonomous vehicles, we have different sources of energy, and we are even thinking about this notion of ownership versus shared assets, in terms of an Uber-driven or a ridesharing type of economy. All this means that not only technologically, but also strategically and organizationally, business model-wise, we might have to rethink how the auto industry runs and makes money, and what it’s designed to do.

Dr. Venkatesh Prasad: Right. These are all very major tectonic plates that are shifting more or less at the same time. On the one hand, you have the machine itself that is now transforming to have an increased amount of intelligence to handle control and a deeper understanding of who the riders are. This is the car or the vehicle that may not have a driver in the human sense. There’s that piece of really understanding who’s riding and what their requirements might be, so in a very broad sense, artificial intelligence is applied to all that.

Then comes the notion of how the value proposition is presented. No longer does it necessarily have to be done through a transaction where you go to a dealer and buy a vehicle you own, to have the option of being able to ride out at two in the morning someplace. You can now get that same option without ownership, but through a shared ridership model or a shared ownership model. We have all those business models that are coming in at the same time and shifting existing assumptions on business value and business models by themselves.

Then, you have the notion of the infrastructure getting smarter in its own ways, and being able to receive and embrace this change, in which it has a good value proposition for public investment and the interaction of those public investments with private investments.

“Not only technologically, but also strategically and organizationally, we might have to rethink how the auto industry runs.” – Saikat Chaudhuri

Chaudhuri: That makes sense. Now, let me shift gears a little bit and ask you: you’ve been at the forefront of driving forward thinking and innovation efforts, both internally as well as through open innovation, which looks outside. the organization. What are some of the lessons that you’ve learned? What are the challenges that you face? I wanted to ask you this in particular because, in some ways, bringing your Silicon Valley-like thinking into a long-established company and industry, is that not challenging?

Prasad: It’s a challenge on the one hand. On the other hand, it’s fascinating to see how much some of what we, today, attribute to Silicon Valley was, in fact, deeply rooted here 100 years ago. If you just turn the clock back to Henry Ford and the people that he worked with, Henry Ford was busy as a chief engineer at Edison Electric in his 40s when he started Ford Motor Company. He was tinkering and making things with the community of his cohorts and working with bankers trying to figure out what the value proposition might be.

The point is that this entrepreneurial spirit of just going out and trying things has always been here. It’s just that when you scale and you become the incumbent, a different perspective is based on risk and risk-taking, in general. We are seeing that all these bridges — between Silicon Valley, the technologies that come out of the Valley, the opportunities that the auto industry offers, and what we see here at Ford — are pretty spectacular. This is a great opportunity to come together in ways in which we’ve already exceeded and played in Ford. It’s a good time to be here and be part of this whole change.

“It’s fascinating to see how much of what we attribute to Silicon Valley was, in fact, deeply rooted here 100 years ago. This entrepreneurial spirit of going out and trying things has always been here.” – Venkatesh Prasad

Chaudhuri: How are you making this change? How are you able to effect these changes and bring back that mojo that this industry used to have, and is now forced to have, because of all the changes taking place?

Prasad: You touched upon open innovation. One of the things that one has to come to terms with is that we don’t know it all. We have to figure out how to learn, and learn quickly. Sometimes, learning means just realizing that you don’t have to do everything and that you have to engage in different ways through partnerships that might seem very different from what we might be used to, in the traditional equipment manufacturer-supplier partnership.

We’ve begun working in making investments in startups and the consequent acquisitions coming from those investments. That’s another way to, in some sense, ignite an ecosystem that is necessarily going to be quite different from what we are used to, and it’s going to augment what we already have in various forms. That’s one of the ways by which we are trying to effect that change.

There’s also a very deep cultural change that’s needed, so we’re looking at different ways with which we can understand how work gets done. Part of that involves creating tool kits that allow different ways to work and realize both the learnings through failure and learnings through success in this new way to work. We’ve taken a number of steps there — a number of interesting interventions, if you will — creating maker-spaces and hacker-spaces within the firm, and then the tools that go with those environments to enable a different way of experimenting. We’ve got an open-source toolkit. It’s called OpenXC. It’s open source software, open source hardware. All the documentation is placed under the Creative Commons Attribution, and in very general terms, that toolkit could be a financial toolkit. It could be a business modeling toolkit.

It’s these interventions, providing spaces that make you think and work differently. It’s not the traditional meeting room, whether you go into it with a certain precondition or predisposition to these things that help effect that cultural change that’s needed.

Chaudhuri: Yes. What’s been the biggest roadblock or challenge that you face in trying to implement this cultural change?

Prasad: Often, it’s ourselves. It could be a person you see when you stand in front of the mirror. It could be the team that might be looking at reviewing how work might have to happen differently. It’s really accepting the fact that we are, in fact, the biggest agents of change, and that we could inadvertently be the impediment that we are fearing, or not calculating, or not factoring into our change process.

About Our Guest

Dr. Venkatesh Prasad is a Senior Technical Leader of Open Innovation at Ford Research and Innovation. He is known as Ford’s “What’s Next” guy, responsible for influencing both transformative and organic innovation at Ford. His revolutionary thinking of a contemporary vehicle as an inter-networked platform-on-wheels in early 2000 has led to the successful development of the renowned Ford SYNC® system, which has directly impacted Ford’s present vehicle production.

Before joining Ford Motor Company in 1996, Prasad worked as a senior scientist at RICOH Innovations in Menlo Park, Calif., developing automatic “lip reading” as a novel human-machine interface. In addition, he was at Caltech and the NASA Jet Propulsion Laboratory in Pasadena, Calif., where he worked on the world’s first telerobotic visual surface inspection system to help design the International Space Station.

Mastering Innovation is live on Thursdays at 4:00 p.m. ET. Listen to more episodes here.