Tuesday, November 25, 2008

US automakers vs. Honda

"You need to give people the freedom to spend and the freedom to make mistakes," says Takeo Fukui, Honda's 61-year-old president. "If management oversight is too strong, then it's difficult to innovate."

"There's not a company on earth that better understands the culture of engineering."

Very interesting article in Forbes about engineering-dominated Honda vs. marketing-dominated automakers in the US.

This is generally true beyond car manufacturing - at most US companies marketing and finance rules, technology and manufacturing get outsourced.

Even in hi-tech, there are fewer and fewer engineers at on near the top - the trend started during the .COM boom when the geekish software companies got "integrated" into society as a legitimate make money fast industry, and it never really ended.

How many VPs did you see that are "proud of the smart people who are making all these great products", but are decidedly (and pointedly) not one of them?

We're now reaping the "rewards" of the culture where it's not smart to be smart...



NS said...

Rick Wagoner is an engineer. A good one, by all accounts.

Anonymous said...

Rick Wagoner is not an engineer. He has a degree in economics and an MBA.

NS said...

Hm. Yes, that's true, not sure where I got that idea.


Our current CEO is an engineer, the last one was of marketing origins. Between the two, I'd rather have the previous one.

BadTux said...

One thing I might note is that Honda and Ford sales are off about equally between the two (around 30%). Ford is in by far the best condition of the domestic makes despite several pitfalls, probably for the same reason Honda is still in reasonable condition -- a sizable proportion of its stock are held by the company founders who run it as a multi-generational family project rather than as a quarterly-profit generator. And yes, Ford's CEO, Alan Mulally, is an engineer -- though not an automotive engineer (he's an aerospace engineer who started out designing planes for Boeing).

One thing I like about our current company is that the VP of Engineering and the CTO are a) both engineers who can and do write code, and b) drive the product line as much as marketing does. Our new product addresses a central problem in our area that competitor's products don't address, and would have never come from marketing, which always calls for just improvements of whatever consumers are currently buying (i.e., DEC Syndrome, where DEC asked their customers what they wanted, and their customers said bigger and faster VAX mainframes... leading DEC to totally miss out of the Unix server and PC desktop markets). Instead it came from our CTO after he attended some forums in our area and realized the implications of what they were saying in terms of the technology now available to us, who shared his thoughts with the VP of Engineering who dabbled around and came up with some core code that implemented the lowest level of the technology, asked me to implement a wrapper around the core technology to make a proof-of-concept prototype, and then who drove it through marketing and past potential customers to judge whether it was something customers would actually buy. When the answer turned out to be "Yes" then we redirected a number of our company's engineering teams to working on aspects of the new technology and the top three guys' jobs turned back to being managers. Completely the inverse of what happens at most companies, where marketing comes to engineering and says, "I want product X that fills market Y", and one reason why I'm not leaving anytime soon even though our CEO is the exact opposite of an engineer :-).

Sergey Solyanik said...

We're lucky in hi-tech I guess.

I've never seen a product that was conceived by marketing anywhere I worked (Bentley, Microsoft, Google, Microsoft), either...