Roger Lanctot is Associate Director of Strategy Analytics, and a thought leader in the connected-car space. He is an influential voice in the field of automotive infotainment systems, and safety, in cars of the present and future. This guest article was originally posted at Strategy Analytics.
How do you fill an executive position no one wants? One of my sons, an IT professional, recently told me about his boss leaving. I asked if he was a candidate to replace the boss. He said he wasn’t interested.
“It’s an impossible job. It’s a no win proposition. He is regularly asked to do, forced to do, impossible things,” my son said. “I know why he left and I don’t want that job.”
I backed off. I get it.
It reminded me of a couple of recent airplane boarding situations when the airline is seeking “volunteers” to take a later flight. In both cases the “auction” started at $250 for volunteers willing to fly later and proceeded up to $600. For about 30 minutes no one moved. At $600, someone finally volunteered.
The message from both of these situations:
Sometimes the seat has a price and sometimes no price is high enough to fill that seat.
I thought of these scenarios as I considered the connected car industry where multiple senior level positions remain open at multiple car companies. It seems to me that the process of filling these hot seats has become the equivalent of locating volunteers willing to take a later flight, only worse. It’s not about the price.
Why are these jobs so hard to fill? Because, like my son’s boss’s job, they are impossible jobs with impossible expectations, insufficient resources and management short-sightedness and ambivalence. It’s no wonder the automotive industry is suffering a talent hemorrhage in the direction of Silicon Valley or non-automotive-related industries.
Internal connected car teams to this day are still struggling to cope with competing internal organizations that look at vehicle connections strictly as a source of cost rather than as a source of customer engagement and warranty cost avoidance. The device and the related wireless service are a cost center.
Only slightly worse is the automotive organization that expects the in-vehicle connection to spout a fountain of cash from connected services. This is NOT going to happen – but this business model persists.
This internal mentality sets up irrational and unachievable hurdles for return-on-investment. Throughout the industry the four-year rule persists. The embedded car connection is expected to provide a return on investment – ie. pay for itself – within four years.
As if this expectation weren’t enough, the connected car team is now further perceived as a security risk with the latest rash of car hacks. The under-resourced connected car team is expected to deliver a secure connected vehicle even as the car company itself is firewalling itself from the connected car team.
And to top off the security issue, multiple car company CEOs have promised to preserve customer privacy at all costs – even at the expense of preserving the integrity of vehicle performance and security. At a time when car companies can’t locate the current owners of cars with potentially fatal (recall related) flaws, the need for an attractive opt-in proposition for consumers could not be higher.
The reality is that car connectivity is a C-level responsibility. Car connectivity changes everything about the car ownership experience and the Chief Car Connectivity Officer should be given a seat at the table with the CFO, the CTO, the CMO and the CEO.
It is hard to think of a single decision today being made by car companies that will not be impacted by vehicle connectivity. Connected car teams today are expected to beg and plead for buy in from the CEO. The reality is that the CEO should be leveraging the connectivity team, consulting with that team, working hand in glove with that team to redefine the driving experience – while providing political cover from competing internal organizations.
It is worth noting that GM might never have seen the launch of OnStar without the unwavering support given to OnStar founding president, Chet Huber, from the CEO, Rick Wagoner.
Even worse, some CEOs are singularly focused on charging customers for apps and services delivered via the vehicle connection. The reality is that customers don’t want to pay even though they are interested in connectivity. When push comes to shove, the driver will simply use his or her smartphone – safely or not.
The connected car industry today is like a game of musical chairs where none of the participants wants to sit down. It’s time to change the tune, change the rules, raise the internal profile of connected services and break down the corporate silos and firewalls. If we fail to do these things we will miss out on the billions of dollars to be realized from improved customer retention, improved aftermarket service capture and improved warranty cost avoidance. Can you name that tune?
A good read Roger and I agree that C level ownership is crucial to the success (digitally & financially) of car connectivity – at the end of the day the consumer doesnt care about the how or the who, just that they get what they want, when they want it, without fuss and overcharging – at the moment (from the various conferences I attend on this, as well as discussions with OEMs) nobody has really got it “joined up” interns of concept, let alone delivery. C level ownership of all aspects of customer engagement, including through connectivity, should be the hot topic at Board level but it still appears fragmented and in someways secondary to “day to day” business. The impact on dealerships from connectivity is also pretty significant, with OEMs for the first time holding all the cards in terms of knowing how cars are being driven, where and when. Huge opportunities exist for OEMs, dealerships, suppliers and most importantly, consumers, but to date no OEM has really made the step forward with the single view of the customer that digital promises.