“Is Ford cool?” asked a curt tech reporter during the auto company’s grand opening of its new computing-focused Silicon Valley center in Palo Alto, California on Thursday. The reporter likely meant: Will Ford be able to attract the best Valley talent when it’s competing with the hottest companies and startups from Twitter to Uber to Tesla to staff its new center with up to 125 employees by year’s end?
In response, the company’s enthusiastic CEO Mark Fields, shouted “Yes!” That led the dozens of Ford engineers standing behind the exec to cheer wildly and pump their fists. If they’re not exactly cool yet, they’re definitely nerd-cute and will fit right in with the legions of T-shirt-wearing, mountain-bike-riding engineers who currently fill the South Bay.
But the awkward question does make me wonder: does launching a presence in Silicon Valley really work for these types of big industrial companies? The region is filled with Silicon Valley branches of huge global tech firms like Nokia, Samsung, and Orange, retailers like Walmart and Target, infrastructure giants like GE, and, increasingly, auto companies, all trying to tap into the ever-elusive means of creating innovation that seems to thrive in the Bay Area like no other place on earth.
Fields told the group of reporters “we want to be viewed as part of the ecosystem of Silicon Valley,” noting that Ford originally came to the region with a small group of eight in 2012. By the end of the year, Ford hopes to have “the largest dedicated automotive research team in the Valley.” Ford’s CTO, Raj Nair, said the center will help the company “accelerate innovation.”
The company is using all the right buzzwords. But most of the projects we checked out in the center on Thursday are, well, pretty tame. There was little evidence of the type of counter-culture thinking, and risk-taking, that often comes with the Valley’s truly disruptive innovations.
For example, the company is experimenting with car swapping internally for its employees and it has built a nicely-designed mobile app that facilitates the process. It probably won’t ever be a commercial product and execs said that they’re experimenting with the service to see how Ford cars operate under such conditions.
But car sharing isn’t exactly an emerging phenomenon. Zipcar, now owned by Avis, is a large, profitable 15-year-old company, and its customers’ reserve Zipcars every six seconds. There’s a wealth of data on car sharing in the real world out there, some of it even published.
Another project at the lab is focused on allowing Ford to easily upgrade the hardware infotainment systems in its cars, when pushing software upgrades to the dashboard just won’t do. The execs explained that gadgets and phones are upgraded every year or two, but the same cars will be used for six or seven years. This isn’t so much innovation, but a way to defend the real estate that is being usurped by the rate of innovation that’s happening with the cell phone.
Don’t get me wrong, Ford’s new Valley center seems like a positive step for the company. But these types of Valley labs these days are more of a defensive strategy than an offensive one. A company like Ford can’t afford not to have a presence in the Valley, as technology continues to cannibalize other sectors, and “software eats the world.” All companies are tech companies and if you don’t recruit talent from the epicenter of the tech industry you’ll be leagues behind.
Yet these types of Valley labs seem like they mostly have only geography in common with the high-stakes brutal world of startups and venture capital in the Bay Area where entrepreneurs gamble everything and often times lose. The billion dollar “unicorns” (as Fortune’s latest cover describes startups that became rapidly valued at billions of dollars) are inspiring, disruptive tech stories that keep the Valley going but they have little in common with these types of satellite corporate facilities.
Innovation doesn’t usually act like osmosis (though sometimes it can), where big thinking will just seep into the culture because there are big thinkers near by. Yet a company like Ford will need an increasing presence in the Valley if it wants to do deals and have partnerships with the tech leaders.
Of course not all the tech companies in the Valley are disruptive startups, but some of the most established internet companies like Google and Facebook are well versed on how fast innovation and disruption can fade in big corporate environments. That’s why Google launched Google X and its 20 percent time projects, and why both companies aggressively buy startups way outside of their core businesses.
If Ford really wants to embrace the innovation and disruption of Silicon Valley, it should mimic the way these older Valley giants try to constantly kick start their cultures.