TEI 214: Want more innovation? Build a partner program – with Ed Krause

Choose the right university partners to drive research and innovation Let’s face it, the smartest people don’t all work in your organization. The thought has been shared by many leaders, such as Steve Jobs and Bill Gates, and is originally attributed to Bill Joy, the co-founder of Sun Microsystems and UNIX contributor. He said, “The smartest people in the world don’t all work for us; most of them work for someone else.” To benefit from the creativity of smart people who are external to your organization, you need a way to find and attract them to contribute their brain power. There are time-tested ways to accomplish this, including traditional open innovation, incubators, and startups. Another approach is a partner program. Ford Motor Company has used this approach for decades. By continuously learning and improving, they are a leader in the approach with answers for others considering a partner program. To explain how their system works and tips for implementing a partner program, Ed Krause joins us. He is the Global Manager External Alliances Research and Advanced Engineering at Ford Motor Company. He has global responsibility for developing cutting edge technology and competitive advantage for Ford by developing relationships and collaborative projects involving universities and partner companies. Anyone interested in open innovation or a more formal partner program will find this discussion valuable. Summary of some concepts discussed for product managers [2:26] What types of partnerships do you manage at Ford? My team is responsible for our global R&D alliances with universities, national laboratories, and a few companies. The bulk of the work is with universities. Ford has been working with universities since the 1950s and formed our first strategic alliance with MIT . In 2006, we added Michigan and Northwestern to the program. To date, we’ve given 950 awards, or unrestricted grants, to universities. [4:42] What was the motivation to start the alliance program? Universities in the 1990s looked ahead and forecast a significant decline in government funding. At the same time, internal corporate research labs were also becoming financially difficult and companies were looking for a different model. At Ford, our CEO served on the board with the president of MIT and they decided Ford and MIT would form a new alliance model. We quickly learned that spending money is easy but getting value is more difficult. We’ve evolved the model over time to increase the value to the company. [6:53] What types of projects come out of the university partnerships? When we first came out with our Sync system (a voice-controlled entertainment/calling system), there was concern that it would be distracting and shouldn’t be allowed in vehicles. We had the data, but the regulators didn’t believe us because they thought the data was biased. We worked with the University of Michigan to gather thousands of hours of independent driving data to validate what we knew was the case. Another example is an F-150 trailer backup feature that was proven to be possible at the University of Michigan. We took their idea and applied our production processes to it. [13:12] What are the characteristics of a successful partnership? It has to be a win-win at the alliance level. It’s always a win for the universities because they receive funding and industry-relevant research problems to work on. Ford needs appropriate IP rights to give us the ability to put the work into production. Not every project is successful, but we’ve had enough success to justify growing the alliance program. There’s a huge overlap between what’s academically interesting and what’s relevant to us. We’ve been able to move beyond fundamental research and students are earning their PhDs by doing this work.