New questions, new answers
The automotive industry is at a crossroads. The price of fuel is likely to rise over the coming decades, potentially pricing many people out of car ownership. Governments are tightening their stance towards emissions. And a new generation of megacity dwellers is emerging, characterised by a reduced need for private transport and a mounting apathy toward car ownership.
This is the kind of situation that might prompt some car manufacturers either to bury their heads in the sand or else to head for the hills. But at BMW, it has prompted a fundamental questioning of their company’s future: if individual mobility is going to be viable in 2020, how can BMW turn these challenges into opportunities for increasing its influence? In 2007 BMW’s Chief Executive, Norbert Reithofer, established ‘project i’ to develop ‘sustainable and visionary’ concepts for mobility. The project was set up as an internal think tank of eight people, with Ulrich Kranz at its head. The project team was handed a blank sheet of paper and initially worked outside the normal company structure to create an aspirational vision for the future of BMW. This is one of the most striking aspects of the project: in the beginning, there were no preconceptions about the solution. There was simply a very big question to consider. As Mr Kranz explained to us:
“We started thinking about what the future might look like. We went to big cities all over the world and interviewed potential customers. Some of the team lived with them in their homes for a couple of days. We drove with them in their cars. We also interviewed mayors and city planners because we wanted to know their requirements concerning the future.”
The ‘project i’ team reviewed over 300 global trends and through this combination of insight and foresight established a vision for the future of mobility. As the project gained momentum, the team extended its influence through dialogue with other parts of the company, drawing on the talent and experience across BMW Group.
“People need to have the freedom to think outside the box otherwise you are sitting inside an existing system and plans. I took the team from all the divisions of BMW, we had production guys, architects, designers, purchasing guys, logistics, finance and some planners. We sat together and we thought, “Who do we need for the next couple of months to work together and to prove if these things are possible?” The good thing is that we have lots of smart engineers in the company. My colleagues in the other product areas watch us closely. They look at what kind of technology is developed in ‘project i’ and what they can use. I am convinced that you will see the BMWi technology in other company brands.”
In 2010, these ‘smart engineers’ were joined by Benoit Jacob, ‘project i’s Head of Design. Although his background is in car design, it was clear from the outset that his task was to develop far more than just a new car. BMWi’s aim is to design a completely new set of behaviours.
“Our job is to create emotion. Our job is essentially to create desirability. To combine desirability and efficiency. Responsibility and sustainability. There’s little point making something highly efficient if the world doesn’t want it. BMW is well positioned to convince the world that sustainability and responsibility can be combined with attraction, beauty and sexiness. Not as a few statements on a piece of paper but to actually turn [sustainability] into an experience, and an experience that is great.”
‘project i’ is more than BMW’s response to a changing future: it is a clear statement that the company intends to take responsibility for authoring a more desirable, more sustainable world for future generations. It’s staggering to see how much has been accomplished in just five years. BMW has set up an entire value chain from scratch. The body of the vehicle is spun from carbon fibre produced in a purpose-built facility powered by a hydro-electric plant. The BMWi plant in Leipzig is powered entirely by renewable energy. BMW has set up a venture capital company in New York to invest in a broader set of mobility services that will create an entire ecosystem around BMWi and extend the company’s influence far beyond the role of a traditional car manufacturer. These services include a network of charging points, an online marketplace for parking spaces and smartphone apps that deliver location-based mobility services. Uli Kranz calls this a ‘360’ approach.
“What was clear in every market is that users want a connection to public transport. They want communication between their car and telephone, so they always know the state of charge and how far they can go. These are the mobility solutions that customers expect from us and these are the things we are going to introduce, or that we have already introduced — for example ‘Drive now’, the premium car sharing service, and other solutions. We are going to give them access to public charging spots. We are going to check their house: what kind of charging speed is available? What kind of infrastructure do they have to install?”
“What we learned pretty early on is that we have to offer more than just zero emission vehicles. This is what we call the 360 approach. We have a complete 360 package available when we hand over the vehicle. This is just the start. There is more to come. As soon as there are more electric vehicles we will see more opportunities. We are doing more than just bringing an electric vehicle into the market. We are 100% convinced that this kind of vehicle and the 360 approach that we are offering is new and there are customers out there who will appreciate it."
BMWi is a remarkably pure vision, not just of BMW’s future but all of our futures. Nothing was compromised in the achievement of this vision. Everybody involved in the project is extremely clear on this point. BMWi has to deliver ‘pure driving pleasure’. It has to reflect the company’s DNA. It has to build on the business’ rich heritage. It has to demonstrate what the company understands by ‘next premium’. The story of BMWi encompasses many of the themes discussed in this book. Establishing a vision with integrity. Demonstrating curiosity about the future.
Crafting an entire ecosystem. Developing elegant solutions to enormously complex problems. Time will tell whether prosperity ensues. What we can say for certain is that BMWi demonstrates what is possible when a company takes its future seriously. Given how many companies struggle with the issue of business model innovation, BMW’s approach is remarkably straight- forward: set up an internal think tank, give it a problem to solve and then assimilate what you’ve learned into the wider organisation. In Benoit Jacob’s words, “New questions are likely to generate new answers.” All you need is a blank sheet of paper and the right combination of imagination, dialogue, investment and ingenuity. Everything else is just an excuse. Ulrich Kranz summed this up in his parting comment to us:
“It is not rocket science — if you have the right people, motivation and support.”