"Ford's Big Reveal" (Fast Company Article)

8/9/2019 "Ford's Big Reveal" (Fast Company Article)

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APRIL 2010

Itrducig America’s Mst Surprisig Csumer-Electrics Cmpay

By Paul Hochman

Google, GE & the Smart Home Adam Carolla Unca

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FORD’S BIG REVEA

“It’s cool to connect. But it’s past coIt’s a reason to buy. We’re going to be the

coolest, most useful app you’ve ever ha—ALAn MULALLY

CEO, Ford Motor Vehicles



The next generation of Ford’s Sync technology will tur n its cars intorolling, talking, socially networked, cloud-connected superm

Introducing America’s most surprising consumer-electronics comp

By Paul HochmanPhotographs by Stephen WilkesFord’s

BIG REVEAL90 FASTCOMPANY .COM April 2 010 April 2 0



A TALL WOMAN IN A

TAUT SKIRT ENTERS.

She takes my drink order,and then I watch her disap-pear down a burnished-mahogany-paneled hall.¶ It’s library quiet. Throughthe glass walls of the wait-ing area, past three MarcelBreuer chairs, I can seeanother woman seated at a

huge desk, in an enormousmahogany office, talkingon the phone. Suddenly,she stands up, reflexively straightens her f lannelskirt, and smiles at some-body I can’t see. ¶ Thenshe looks over at me. Beck-ons. Time speeds up. I’mushered across the hall.

The episode of Mad Menends and reality begins. And there he is,

Alan Mula lly, the chief e xecutive of Ford Motor Co., his red hai rcombed in the old-timey coif of a former Boeing engineer. He leaps

to his feet.“C’mere!” he says, and puts his arm around my shoulder. “You’ve

got to see this.”Mulally drags me into his giant inner office and points out the

20-foot-long window. “Look!”There is a broad, sweeping view of the Rouge River; a hundred

factory buildings; smokestacks.

“That’s GM,” he says, “right there. Bankrupt!”He turns to his left, still with his arm around my shoulder, spin-

ning me with him. I’m off balance.“See that over there? Chrysler. All gone. Unbelievable, right?”

He’s silent for a moment. He’s not gloating, just amazed at thecataclysm right outside his window. “Unbelievable.”

Mulally has steeredFord away from the brink in the four years since he arrived from

Boeing. He cut labor costs by almost 22%; rallied his company around a printed four-point mantra that 200,000 Ford employees

can carry around on a card in thei r wallet; and with his f ormer chief financial officer, Don Leclair, even managed to raise cash the old-

fashioned way—by borrowing from a bank, securing $23.5 billion inloans without asking the government for a penny. The moves paid

off. In 2009, while his competition stalled, Ford made a $2.7 billionprofit; by early 2010, the company had earned “car of the year” and

“truck of the year” awards from the auto press and its stock price rose700% from its 52-week low.

Mulally also culled his brand’s herd of nameplates, to fewerthan 20, from 97. This achievement especially thrills the CEO, who

still becomes unhinged thinking about how unfocused, how uncool,the Ford brand had become. “I mean, we had 97 of these, for God’s

sake!” he says, pointing at a list of old models. “How you gonna make’em all cool? You gonna come in at 8 a.m. and say, ‘From 8 until noon,

I’m gonna make No. 64 cool? And then I’ll make No. 17 cool afterlunch?’ It was ridiculous!”

Mulally has certainly benefited from his rivals’ recent tendency toslash their own tires—as when GM was repo’d by American taxpayers,or when Toyota inadvertently installed its accelerators in the

“always on” position. But his most recent move is his boldest: He’s get-ting out of the car business. Or rather, he’s joining forces with a most

un-automotive cabal, the consumer-electronics industry. In his questto change Ford’s culture, redefine its image, thrill young customers,

and even revolutionize the car itself, Mulally wants to connect hisautos to the Internet and to the souls of the people who surf it.

“Look, it’s cool to connect. But it’s past cool,” he says, standingup in the middle of his sentence. (He’s getting worked up again.)

“It’s a reason to buy. Tech is why people are going to buy Ford! We’regoing to be the coolest, most useful app you’ve ever had, seamlessly

keeping you connected.”Ford is transforming the car into a powerful smartphone, one

that lets you carry your digital world along with you and then cus-tomize it. And by the way, says Mulally, it “makes you a better driver.”

How? By freeing you from the tyrannies (and dangers) of messing with that little phone while you drive and letting you command your

technology, through the car, using only your voice; by establishingthe car itself as your connection to the cloud; and by giving mobile

developers a way to create an ever-expanding portfolio of servicesdesigned for—and around—your vehicle.

And if the thought of a sl ightly stooped , graying mult inationalhooking up with a hot young industry leaves you a little queasy, here’s

the surprise: Ford is not just basking in the borrowed glow of thelikes of Pandora and Twitter; the car company is generating heat as

well. To the surprise of t echnologists and CE wonk s, Ford has dis-covered a way to make the world’s most popular high-tech device—

“It’s cool to connect. But it’s past cool. It’s a

reason to buy.We’re going to be the

coolest, most useful app you’ve ever had.”

—CEO Alan Mulally

92 fastcompany.com April 2010



the phone—stronger, just by bringing it into a car. Ford’s systemtakes the power, features, and much of the content on your smart-phone and gives it a human-scale outlet t hat’s easy and safe to oper-

ate at 65 miles per hour.It’s a new foundation for the ultimate mobile device. The automo-

bile will never be the same.

B y alm ost any mea sur e,Ford’s in-car Sync communications platform, introduced in part-

nership with Microsoft in January 2007, has been a huge success,largely because Sync enabled Fords to do something dramatic.

Where once driv ing entailed a kind of socia l disappeara nce, Syncwas a break throug h bec ause it al lowed you to move se amless ly

from the connected world contained in your phone to an equally connected one inside your car—without touching a single button.

Calls are automatically transferred to the car’s speaker system, forexample, when you get in. To make a phone call without taki ng

your hands off the wheel, all you have to do is press themedia

but-ton on the steering wheel and say out loud, “Make a call.” The sys-

tem speaks back to you and guides you through the process, all thewhile acces sing the address book and call information you have on

your cell phone. If t hat feel s a lit tle old h at, consi der this: Ford’sso-called Service Delivery Network can also connect your car wire-

lessly to the cloud. SyncMyRide, for example, a Web-based service,lets you load a destination into your kitchen computer and pull it

up on your car’s navigation system, so you don’t have to print outdirections and then hold a fluttering piece of paper in front of you

while you drive .Fords with Sync already sell twice as fast as identical Fords

withou t the system . A mi llion a nd a h alf S ync-en abled c ars ar enow on the road. But this spring, Sync, now firmly established as

Ford’s big strategic focus, wi ll get a k iller user-interface upgradecalled MyFord Touch. Coming first in the 2010 Edge and the Lin-coln MKX, then the 2011 Focus, the new UI is a voice- and touch-

activated system, layered on top of the Sync operating system inthe same way new software is updated onto your PC’s OS. And it

will d ramatical ly simplify the Sync ex perience. (More impor tant,it will also satisfy Mulally’s first commandment: “We won’t do it

unless it lets you keep your eyes on the road and your hands on thewheel. Otherw ise, you’re not adding value to the cus tomer—you’re

just adding butt ons.”)For example, the MyFord Touch interface is customizable. Two

LCD panels sit on either side of the speedometer, and drivers canchange the layout of the instrument cluster above the steering wheel

to suit their needs. Don’t need to know about your car’s climate rightnow, but you’re lost? Get rid of the climate-control graphic and re-

place it with the navigation display. On a long stretch of highway anddon’t care about the nav? Replace it with the radio-station informa-

tion or phone controls—whatever is most important to you at thatmoment. (You can even watch video on the center console, but only

when the car’s in park.)Being able to choose which digital information sits in front of you

is a nice way to reduce what Ideo, Ford’s partner in researching thesystem’s design, calls “cognitive overload.” But the most dramatic

changes in MyFord Touch will be profoundly human. The new voice-recognition system, created by Burlington, Massachusetts–based

Nuance Communications, will let you speak to the car as if it wereanother human being.

to enter the space and compete. Ultimately, what Ford is doing ismoving the automobile into the next century.”

Other car companies are chasing the same space, including Kia, which now uses Microsoft’s open platform to create some rudimen-

tary Sync-like features. (Ford had only 18 months of exclusivity w ithMicrosoft, which has expired.) But Ford’s hope is that in the same

way the iPhone’s hardware became the platform for an internationalapp explosion—who thought a phone would one day be a carpenter’s

level, a remote control, a compass?—Sync will transform Ford.

Dearborn was not always

this app-happy. In fact, by 2001, things were looking dire. To under-

stand how far Ford has come, digitally speaking, it’s important torecognize how dark the technological night was before the dawn.

“Everybody has been through thi s,” says Mulally, “where they think they can manage everything. Where they make proprietary

systems that don’t work with anybody else’s. The ‘not invented here’syndrome kills all kinds of g reat ideas. It’s the same thing in air-

planes. The minute you make it proprietary, you’re dead meat.”Mulally’s EVP and Americas president, Mark Fields, who looks like

he could bench-press a Camry, characterizes the old days of techno- co

In fact, according to Vladimir Sejnoha, vice president and chief

scientist of Nuance, the next version of Sync actually approachesartificial intelligence. It predicts what word you’ll say next based on

the string of words you’ve already spoken. It also “learns,” tuning itspredictions based on its past interactions with each speaker.

Nuance’s software breaks down every sound you make into its most basic components and compares them against a giant database it has

collected over the past decade. “It’s a what-if proposition, millions of times,” Sejnoha says. “We don’t understand the speech, per se. We’re

just saying the input signal looks like this sequence of this model, so we’re going to guess.”

All of w hich makes sitt ing i n th e co ckpit of a 2011 MyFordTouch–enabled car a little disconcerting—sort of like talking to a

cat and having it understand you. Or like talking to a cat and hav-ing it listen to you and then go get you a beer. Stored in Nuance’s

system are more than 10,000 commands associated with driving,allowing you to speak normally to the car. Instead of talking to the

dashboard in a stilted series of menu commands, you just say, “I’mhungry,” and out comes spoken restaurant advice, matched up with

the nav system. If you’re in the mood for Oscar Peterson, you don’thave to say “music,” then “playlists,” then “artists”; you just utter thephrase “I’d like to hear some jazz.” Up comes every piece of jazz

music attached to the car, whether it’s in your phone or on youriPod. If you have Sirius Satellite Radio in the car, you can say, “Find

talk radio” to pull up your preferences.But perhaps the best thing about voice recognition is what it does

for the devices you bring into the car. It lets you control them with your voice too. For starters, making a phone call tak es one verbal

command—“Call Paul at home”—instead of five or more. But evenmore impressively, you can control your smartphone (and run mobile

applications) through the dashboard controls. No more fumblingaround with your Droid as you swerve into that semi-trailer’s lane.

No more thumbing through tweets (the car even reads them aloudto you). The mobile applications from Pandora and OpenBeak (a

Twitter client), as well as Stit cher, an audio news aggregator, are now available to you by simply saying the word. And those are just the

first three services Ford has partnered with; more will follow.The new combination of skills has all the earmarks of being a

game changer. “I’d go one step further,” says Thilo Koslowski, a VPand lead automotive analyst for Stamford, Connecticut–based Gar t-

ner. “MyFord Touch could be a c ategory killer. Right now, Ford hasredefined this market, and it has made it very difficult for anybody

tentativity more bluntly. “We used to have a sathat we were a fast follower,” he says. “Which m

Starting a decade before Mulally arrived inFord had been spending millions of dollars try

GM’s in-car phone and modem system, OnSt arson: OnStar, rolled out in 1996, was highly su

of thousands of car owners bought the system basic cell- phone call s a nd c onnect wit h em

needed. And owners paid for OnStar three timphone/modem box, for the $199 annual subs

the marked-up phone minutes. By 2001, GMhundreds of millions in revenue from that feat

Ford couldn’t figure out a way to counter. Thand killed not one but two competing “telem

was $160 million into a third, Wingca st, whendirector of Ford Connected Services, realized

mental flaw in the GM model: OnStar’s phon vehicles. That meant GM wou ldn’t be able to

evolving technology outside the car. Each ge would be obsolete almost a s soon as it was ins

Weeks before Wingcast was slated to go on tgans had a vision. And that vision was Bluetoo

much more affordable method of hands-free cotelematics system],” he says, “and way, way, way

tooth, now ubiquitous, was then just getting stlanguage that allows all brands of consumer-

Clmate Change

MyFord Touch lets youmodify the instrumentcluster, swapping outthe navigation display,

say, for climate controlor even Pandora.

Speak t me

Sync features voice-recognition technology

from Burlington,Massachusetts–basedNuance Communica-tions. The next upgradecomes with a big onefrom Nuance too, doingaway with layeredmenus and respondingquickly and accurately to 10,000 normal-

speech commands.

Cl Cnate

Quick visual cues are better

(and safer) than text-basedones, so Ford color-codedthe basic functions on yourdashboard—orange forphone, for example, andgreen for navigation.

nt nvente hee—f g eaSn

The five-way “smart” buttondesign did not originate withFord. It mimics the iPod, bring-ing the gold-standard consumer-electronics interface into the car.

a Bg

Tirelike iDerrmadlargeeven

car’s

Have You Talked to a Ford—Lately?The instrument panel for the 2010 Ford Edge, featuring the next iteration of Sy

“The ‘not invented here’ syndrome

kills all kinds of great ideas,”

says Mulally. “Theminute you make it proprietary, you’re

dead meat.”

94 fastcompany.com April 2010 April 20



and smartphones to talk to one another; a cheap, wide-open, universal protocol for voice and data that, to users, is invisible, ag-nostic, everywhere.

Wingcast ’s CEO initially kiboshed VanDaegens’s idea of integrating Bluetooth. Van

Daegens went to Ford’s leadership. “Fordtook steps to insert me as the CEO andchairman of the board of the division,” hesays, in a diplomatic retelling. “They said,‘Here’s what we’d like you to do. We want youto walk into the board meeting and politely tell everybody that their services are no lon-ger required.’ That was the point at which wesaid, ‘We’re not going the way OnStar went.’ ”

Still, almost three years passed betweenthe death of Wingcast and the birth of Sync.Only in 2005, after a Dearborn meeting be-tween “the Two Bills,” Gates and Ford, wasthe Sync concept hatched.

When Mula lly arrived as CEO in 2006,a Sync prototype was among the develop-ment projects he was presented. That’s when he surprised everyone by pointing toSync as the future of the company. Mulally seized on a strategy already being developedto use the low end of the Ford lineup as thetech’s showcase, seeing it as a way to do what Henry Ford had done back at the beginning: “democratize a brand new tech-nology. Make it available to the masses.”Instead of making Sync a feature for itshigh-end Lincolns, it would roll out in the2008 Focus. “People said, ‘Aren’t you mak-ing a big bet on small cars?’ ” recalls Mu-

lally. “And I said, ‘Wait a minute, there’s nota market for small cars in the U.S.? Have you heard of the Japanese?’ ”

To hear Ford executives tell it, theimplosion of Wingcast and rise of Sync pre-sented an opportunity to redefine the com-pany. At its core, that meant meshing theslower, bigger teeth of the car business withthe smaller, faster-spinning gears of thehigh-tech world. “These [high-tech] com-panies work at a very dif ferent clock speedthan Ford,” says Fields, “a much faster clock speed. We had to jump in. We had to learn.”So in that new embrace of an open system, what had changed at Ford? “Simple,” hesays. “We started think ing like a softwarecompany.”

as a piece of software, Sync wasdesigned to be a basic general-purpose plat-form that sits in a car and allows other com-panies’ products to connect to it—a simple,sturdy foundation. Outside tech experts,such as smartphone manufacturers andsoftware designers, could connect theirproducts to a Ford (and let their customers

connect to the world) by writing code that works on top of Sync’s operating system.

“It’s Windows CE,” says Walter Sullivan,a senior product manager in Microsoft’sautos division, “with a standard Win 32 API [programming interface]. Eight milliondevelopers and 400,000 partner companiesaround the world know how to speak it. It’sa massive community.”

Mulally sees huge advantages in thisopen platform, and in the community thatalready understands it; he knows he doesn’thave to be responsible for developing all of the improvements. He just has to make surethey meet his standards. In fact, with somany outside experts familiar with Sync’s basic OS, and with an easy-to-mate plat-form, upgrades come faster and cheaper.Updated services—traffic, directions, busi-ness searches, even news, sports, and weather—can just be “beamed in” from oneof six data centers around the country. Pan-dora and OpenBeak created Sync-specific

software in just 10 days.

Ford’s group VP of global product devel-

opment, Derrick Kuzak, gets a wee bit emo-tional talking about the power of Ford’sstrategic change. “That openness,” he says of the universal platform, “you don’t know how profound that impact was on some of us. Wetook that fundamental learning and took itall the way to the electrical architecture of our vehicles.” It’s late on a bitter cold Michi-gan evening, in Kuzak’s big, low-slungoffice on the Dearborn campus; he leans inand extends a disapproving, Dickensian fin-ger at my BlackBerry, sitting on his desk.“You talk about gears spinning at dif ferentspeeds,” he says softly. “That phone in 10 years w ill be lucky to be a doorstop. Every-thing we’re doing, we’re trying to do faster. We’re even designing new cars 50% fasterthan we did three years ago, because it’s allabout speed. . . . We got that in part fromconsumer electronics.”

In turn, Kuzak gave something back tothe CE world: the dashboard. As anyone whohas fumbled with a 2-inch-wide BlackBerry knows, the miniaturization of electronicshas brought devices nearly to the vanishingpoint, where the keys are actually too small

for the meaty fingers dancing across th Wouldn’t it be nice if you could turn up volume on you r palm- size handheldtwisting a big knob? Wouldn’t it be ni your phone was as easy to use as a stee wheel? Wouldn’t it be nice if you could talk to it? Why yes, yes it would.

And when Kuzak and his team connethe two—smartphone and dashboard—

realized that the dashboard actually mthe newest technology both more poweand easier to use. Play Pandora through ySync system and the result is better t your car radio ever was. But it’s also bethan Pandora ever was. “Voice is far melegant than typing or touch,” says Pandfounder Tim Westergren. “It’s like beinthe audience at a concert and yellingthe song and having the band play it.” OKuzak says, “When you bring your modevice into our vehicle, you’re actually buing a better one.”

The great thing for Ford, of course, is

the more Ford improves a customer’s faite handheld device, the more likely it is people will want to carry their handhdevices into a Ford. And if you think thall a niche play, think about this: Pand was the most popular Internet-radio apcation in 2009, with more than 40 milusers, of whom 18 million listened on tmobile devices and 9 million listenetheir cars. As Julius Marchwicki, Fodirector of mobile applications, said at year ’s Consumer Elec tronics Show, th9 million people “fumbling with their ph voting, bookmarking, changing stationall while driving.”

None of which means Ford’s lead innew space is secure. Competition is loomIn addition to Kia, Audi, Mercedes, and omanufacturers are working on their owntems. “They obviously have a big lead,” Koslowski, the Gartner auto analyst, abFord, “but sometimes being a first mdoesn’t pay off. Think of Apple. There wplenty of MP3 players in the market befointroduced the iPod. For Ford, the burdehas put on itself is to keep innovating. I ththe company is capable, but it takes a cmitment all the way from the top.”

Up in his office on the 12th f loor of FoDearborn world headquarters, Mullooks out the window for a moment. Thelooks me in the eye. “I’m not worried,says. “We’re committed to this thing. Lthis is part of Henry’s [Ford] vision, ‘Oping the highways to all mankind.’ I thinkis the way to do it.”

Paul Hochman is the gear and tech editor

for Today on NBC and host of msn.com’s

GearDaddy.

[email protected]

“People said, ‘Aren’t you mak-ing a big bet on small cars?’ ”recalls Mulally. “And I said,‘Wait a minute, there’s nota market for small cars in

the U.S.? Have you heardof the Japanese?’ ”

ford’s Bi continued from page 95

April 2010 fastcompany.com

"Ford's Big Reveal" (Fast Company Article)

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