Open Innovation in Automotive: The Cadillac Paradox

Open Innovation in Automotive: The Cadillac Paradox

By Justin Starr

In 2014, the automotive industry was abuzz with talk about Cadillac. For years, the brand had struggled with its identity: While baby boomers and senior citizens still saw Cadillacs as aspirational vehicles, younger generations didn’t quite know what to make of it. Cadillacs weren’t sporty like BMWs, they weren’t as refined as Mercedes, and they weren’t as safe as Volvos. Yet in the 2014 model year, Cadillac had hip-hop artists raving about the Escalade, electric car fanatics talking about the ELR, and drivers describing the redesigned CTS-V sedan as a BMW-killer.

Yet, amid all of this positive news, there was a dark spot: Nearly every review of the company’s products noted that the in-car infotainment system, CUE, was not at all up to expectations. Consumer Reports said that “CUE controls are complicated, confounding, and confusing, substituting a finicky touchscreen and flush touch surfaces for most normal knobs and buttons.” Car and Driver admitted that its review of the XTS sedan was dominated by coverage of the CUE system, because its reviewers were so frustrated by the experience. The publication went on to describe it as a perfect example of form over function hindered by touch screens that were “woefully inaccurate.”

Cadillac was not alone. Many other carmakers struggled with their infotainment systems. described Subaru’s system as “unintuitive”, Fiat’s as “clunky,” and Ford’s as “flawed and hiccup-prone.” The graphics on a 2014 Honda’s built-in screen were compared to Windows 98 – a computer operating system that was nearly 16 years old at that time, and a symbol of obsolescence.

Phones vs. cars – Differences in development cycles?

This was a paradox. By 2014, the iPhone had been a part of consumer culture for nearly 7 years. Average users were comfortable using touch screens and manipulating objects with gestures, and were beginning to warm up to the idea of voice control. Newer iPhones and Android devices continued to perfect the user experience and had done so successfully for years. Why, then, was it so difficult for automakers to make something comparable?

Many industry insiders blame the long development cycle for most automobiles. It takes automakers 2-3 years to develop and release a new platform, and even incremental improvements to standards like fuel economy can end up on a 1.5-year cycle – an eternity in the technology field. Further, since automotive platforms can have lives exceeding 7-8 years, carmakers are forced to design for the future.

Yet this is not set in stone. Some carmakers have been praised for their in-car entertainment systems: Volvo Cars recently deployed an all-new infotainment system that has been heralded as the future of in-car entertainment. Mazda’s Connect has been praised for keeping things simple and not pushing the envelope. Why have these automakers succeeded where others have failed?

Avoiding NIH syndrome:

The answer is simple: Due to years of inertia, many automakers suffer from NIH syndrome. NIH stands for not invented here, and it is a syndrome where organizations prefer internally developed solutions over partnerships, collaboration, or incorporating existing technology – even if the external solutions are more competitive.

Cadillac’s CUE was designed to look like a smartphone and had a list of compelling specifications, but it struggled in practice, simply because GM did not have the UI experience of a company like Apple. By contrast, Volvo’s system is Android with a few customizations grafted on. Volvo didn’t have to invent gestures, do usability testing of icons, or experiment with multitouch screens – the company was able to leverage Android and focus on car-related usability improvements. Similarly, critics loved Mazda’s new system because it took a minimalist approach and let Apple’s CarPlay system do much of the heavy lifting.

Why has Apple’s CarPlay system been described as “dragging the in-car computing experience into the 21st century,” while automakers continue to be panned for unintuitive designs? Quite simply, Apple and Google have billions of devices in use, and they actively collect and analyze data from users. This translates to trillions of user interactions that result in refined, intuitive user interfaces. Even if an automaker like GM were to invest $1 billion into infotainment research, it would still be playing catch-up to the likes of Apple.

This case study provides a roadmap for innovation in the automotive space. While carmakers value the opportunity to provide a unique brand experience, the most successful players are differentiating themselves by leveraging open innovation to partner with others so that internal R&D efforts can focus on true core competencies. While Volvo Cars may use Android as the foundation of an in-car entertainment center, the core experience is still uniquely Swedish.

This extends beyond the realm of audio and touchscreens. GM has realized the value of open innovation and founded its own venture capital arm in 2010 to invest in promising technologies and secure exclusive access to technological developments before they become known in the market. However, while GM’s VC arm has been extremely active in Silicon Valley, Michigan, and other familiar territories, it is impossible for an internal effort to keep tabs on all promising developments around the world.

PreScouter – Identifying and vetting technologies on a global scale:

What is the solution? Open innovation. PreScouter’s Research Support Service can make your company familiar with startups, inventions, and patents that have been developed anywhere in the world. Our advanced-degree researchers can investigate the readiness of technologies for commercialization, interview lead scientists on your behalf, and help you make a “build vs. buy” decision without devoting internal resources.

Investing in smaller startups or partnering with other companies does not mean that integrating technologies into an automotive ecosystem is as simple as plug-and-play. Ruggedizing and hardening subsystems to enable them to meet Federal Motor Vehicle Safety Standards for redundancy and reliability can be a significant effort – one that tier 1 suppliers and automakers have already refined – and that successful integration is enough of a value add to be successful. Consider Volvo’s elegant Android infotainment system compared to the generic aftermarket head units available on AliExpress.

Why have your team try to develop a system that another company has perfected? Don’t pay expensive consultants for unnecessary advice. Do what you are good at. Play to your strengths, and bring in technology to compensate for your weaknesses. Stick to your core competencies, and let PreScouter minimize the risks of external collaboration. Get started here!

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