Friedman to Detroit: Batteries R U

Soyuz Boosters
Soyuz rocket (Photo by James Duncan, CC 2.0 license)

Following up on my post yesterday about the Detroit bailout, today I wanted to mention Tom Friedman’s op-ed in Sunday’s New York Times “The Real Generation X.” It is primarily about how Obama’s stimulus package should focus on preparing us, especially our young people, for the future, not saving old dinosaur industries like Detroit:

We not only need to bail out industries of the past but to build up industries of the future — to offer the kind of big thinking and risk-taking that transforms enormous challenges into world-changing opportunities.

But what I thought was both charming and an important call to action was specifically about the auto industry bailout – an audacious challenge to Obama and Detroit:

You want my tax dollars? Then I want to see the precise production plans and timetables for the hybridization of all your cars and trucks within 36 months. I want every bailed-out car company to move to hybrid electric drive trains, because nothing would both improve mileage and emissions more — and also stimulate a whole new 21st-century, job-creating industry: batteries.

I love the audacity of this idea. It’s a big idea, and breaks the commonly held “20 year” rule that says it takes 20 years for a laboratory discovery to make it into industrial production. But we’ve overcome that rule occasionally before, in moments of great crisis, haven’t we? The Manhattan Project and the conversion of U.S. industry to war production during World War II, and the Apollo program both accelerated the 20 year rule significantly.

Do you have other audacious suggestions for Obama, or examples of technologies that broke the 20-year rule? I’d love to hear about them in the comments section!

Old Failures And New Rules For The Auto Industry

The best pieces I’ve read on the auto industry bailout/failure/bankruptcy are Bob Sutton’s giant flame, “Thoughts About Why GM Executives Are Clueless And Their Destructive ‘No We Can’t’ Mindset” and Umair Haque’s “Detroit’s 6 Mistakes and How Not to Make Them.”

While neither of these articles are about green energy or hybrid cars or sustainability per se, they both get at some of the big issues that industry and finance worldwide have to overcome for the the world to change as it must.

Sutton is a measured and careful writer, whose primary beat as a teacher (at Stanford School of Engineering, B School, and D School), business consultant, and writer, is using effective techniques for creating innovation, and using evidence to understand whether the decisions you make are taking you in the right direction. His post, in a measured and careful way, excoriates GM for decades of practices that go against those precepts:

I could list hundreds of management, cultural, and operational reasons why I believe that GM is such a flawed organization, but to me, a pair of root causes standout: Most of the senior executives — and many of the managers — are (1) clueless about what matters most and (2) suffer from a “no we can’t” mindset.

Haque, on the other hand, looks to the good future of what he calls “the new rules of 21st century business,” using Detroit as the example of the old rules.

Old rule: Choose evil. Industrial era business is unrepentantly and almost sociopathically evil: shifting costs onto others, while striving to internalize benefits. Detroit chose lobbying, marketing wars, and low-cost hardball – to always and everywhere try to socialize costs and privatize benefits. Never was this truer than Detroit’s lobbying against public transport throughout the 20th century. Why does public transport in the States suck? Because Detroit’s lobbying machine doesn’t.

New rule? Choose good. In the 21st century, every moral imperative is also a strategic imperative: doing good – for customers, employees, suppliers, or society – is a radical strategic choice that unlocks new pathways to innovation and growth. The opportunity cost of defending evil for Detroit was never learning how to choose good – and that’s a crucial mistake other auto players didn’t make. Tata chose to make a car that was accessible to the world’s poor. Porsche and BMW chose to invest in talent, people, and imagination. Honda and Toyota chose to invest in renewables and partnerships with the public sector. All opened new avenues to growth for an industry at the brink of extinction.

Tomorrow I’ll be posting again about the auto industry, focusing on Obama’s pledge on Saturday for “public works on a massive scale” and Tom Friedman’s Sunday op-ed, in which he suggests we tie any bailout to a commitment by the car makers to having their entire fleets running on hybrid power plants in 36 months.