Think Again About Th!nk Mobility

Think Again About Th!nk Mobility

The demise of Ford's Th!nk Mobility line electric vehicles says more about what went wrong at Ford -- and what can go wrong when behemoths attempt to radically innovate in general -- than it does about what can happen when companies fail to consider the needs of their consumers when attempting to eco-innovate. By Jacqueline Ottman

Ford Motor Company recently announced the end of its Th!nk Mobility line of neighborhood electric vehicles (NEVs). On the surface, it appears that one more well-intended product now enters the Green Graveyard, buried alongside the likes of Hefty photodegradable trash bags, GE’s Energy Choice light bulbs, and Deja recycled shoes.

But lest the reader think that the demise of Th!nk represents yet another demonstration of consumer reluctance to pay a premium for green, or indifference to greener goods, think again; the demise of Th!nk says more about what went wrong at Ford -- and what can go wrong when behemoths attempt to radically innovate in general -- than it does about what can go wrong when companies fail to consider the needs of their consumers when attempting to eco-innovate. Taking some time to think about Th!nk provides valuable lessons for companies of all sizes—and their stakeholders—looking to successfully spur sustainable innovation.

Design a different type of company. New ideas need to germinate far from the inbred thinking of parent companies. That’s why GM created its Saturn Division. MicroCompact Car (MCC) knows this, too. It’s the European-based division of Daimler-Chrysler that started in 1994 as a joint venture between Mercedes-Benz and Nicolas Hayek, the creator of Swatch. MCC makes Smart Cars, tiny two-seater cars designed for commuters to navigate crowded city streets. Smart Cars are built at a factory complex called Smartville. There, cars are "configured" —-not "manufactured" —- by a consortium of ten on-site suppliers who put up nearly half the $370 million investment in the site and who pay the salaries of over half of the 1,900 people working in Smartville and other production workers; MCC prefers to spend their money on branding and innovation.

Compare this to Ford, who selected a former engineer for the Ford Expedition and Explorer SUVs to head up its Th!nk Mobility division. Ford also chose to market their cars through conventional dealers with no incentive or education to feature Th!nks to consumers who still largely equate big with better. No wonder Smart Cars racked up global sales of 110,000 vehicles last year, compared to 1000 over the past three years for Th!nk.

Provide value. Empirical evidence shows that consumers are willing to fork over hefty premiums for greener products that provide added value in the forms of durability, health, convenience, or long term cost savings. In Th!nk’s case, consumers were asked to pay a premium over small cars like the Honda Civic with a much farther driving range. In stark contrast, Smart Cars cost $10,000, go up to 69 miles on a gallon of gas, can be parked in the smallest of spaces, and the candy-colored side panels can be changed as easily as replacing a Swatch watch face.

Market differently. As Apple and Swatch continue to demonstrate, radical innovation requires radical new marketing. Using the mantra "Reduce to the Max," MCC plays up the small size of its cars, and generates enthusiasm with the big idea of displaying colorful car upon colorful car, Matchbox-style, in glass "Smart Towers" in European cities. Calling their product "two-thirds product and one part philosophy," they claim to sell a philosophy of transportation, not a car.

Think like a system. Perhaps the biggest lesson of all from the demise of Th!nk was positioning this unique technology against conventional cars, SUVs and the like designed to navigate conventional streets and highways, rather than as a component of a larger system of neighborhood mobility. In doing the former -— and in dropping the line in order to focus on hybrid and fuel cell technologies -— Ford continues to define itself as a car company rather than a solver of customers’ mobility needs. This is the crux of the problem, and where the opportunity lies for electric vehicles.

Until technical leaps in battery technology occurs, what electric cars do best is provide emission-free mobility for short distances. That’s why the technology well serves niche markets like transporting golfers around pristine courses and the infirm inside of enclosed spaces like airports.

If cars could be slotted into Darwinian niches, electric vehicles would find a cozy and important spot as ideally suited for short hauls (leaving the long hauls to hybrids, rail and air transport), and, importantly, within a larger system designed to serve the full needs of a consumer for convenient mobility and pleasant communities.

This is what Budget Rent-a-Car discovered when they made their electric cars available for rental at LAX . And it is what Global Electric Motors (GEM), the leading manufacturer of NEVs in the United States, found when they positioned their cars as feeders into the car sharing schemes that are cropping up around the United States. It also sells its cars as one component of the overall transportation systems that are being installed in planned communities like DC Ranch in Arizona, Celebration in Florida and Bay Harbor in Michigan.

In fact, Playa Vista, a community in Los Angeles, recently selected GEM (another division of Daimler Chrysler), and a companion company, eMotion Mobility, to develop what promises to become the most comprehensive zero-emission vehicle mobility system in the nation. Envision wide use of an array of GEM NEVs for passenger and utility purposes as well as zero-emission trams to canvass the property, and you’ve got the concept.

Residents and businesses will reserve vehicles through an Internet reservation system or by calling a toll-free number. In fairness, Ford apparently landed on this notion over the course of its development, but decided the market potential too limited. Big Machines need to be fed Big Volumes -- another inhibitor to radical innovation at behemoths.

Persevere. With a billion dollars in losses last year, and in need of playing catch-up in clean car technologies with more immediate mainstream appeal like hybrid vehicles, Ford found it could not continue to invest beyond the $123 million it already plunked down on Th!ink. With the help of its suppliers, MCC, which has already invested over a billion, can afford to hold out until 2004 until it makes its first projected profit, and it continues to invest in new styles and models, while Daimler-Chrysler continues to support growth of GEM.

The early death of Th!nk represents a greater loss to Ford than meets the eye. Lost are the opportunities to begin the transformation to a new kind of transportation company; to provide Ford’s 400,000 employees with a much needed morale boost; to gain access to new markets here in the U.S. and abroad; and, of course, to demonstrate the personal commitment to sustainability of its family-born CEO, Bill Ford Jr.

We will all have lost much more if we don’t heed these lessons, and begin to grapple with the larger issue of systems change. How can industry, government, community, environmental groups and others work together to bring about change in the way we live, work, and transport ourselves on the scale needed to achieve sustainability? What can be expected of one company however large? How might government re-think policy so as to foster systems-change rather than target specific technologies? How might we support eco-innovation in smaller businesses who can take a stand on niche technologies.

We applaud Ford’s attempt to at least step to the plate and support their stated interest in a more sustainably mobile future. We wish them well in their turnaround, and encourage them to share their learning so that we all can take some next steps together, next time with more confidence. END.

Jacquelyn Ottman is president, J. Ottman Consulting, and author, Green Marketing: Opportunity for Innovation. Dan Sturges , guest co-contributor, is director of Mobility Lab, which serves as a resource for communities designing sustainable transportation.