“Given the ever-increasing barriers to entry in what Peter Drucker famously called the “industry of industries,” it’s a wonder that any automotive startups defy the long arc of consolidation by establishing themselves as viable competitors. And it’s even more notable when these newcomers present a model that just might challenge the incumbents to the core. Lean thinker Mark Donovan recently asked LEI founder Jim Womack whether the path taken by Tesla founder Elon Musk points to a new machine that can change the world. ”
Sourced from The Lean Post
Michel Baudin‘s comments:
Are the barriers to entry into the auto industry “ever-increasing,” as asserted in the 2010 HBR article linked to above, or did this article get it wrong? Could it be that the barriers are actually falling, with advances in electronics and information technology leveling the field between incumbents and new entrants?
In 2016, cars are no longer the “industry of industries.” Electronics has, at least, as solid a claim to this title. And, in a discussion of Toyota and Tesla, what is the relevance of Peter Drucker? I see him as a pied piper, who led American management astray through eloquent advocacy of questionable ideas . We owe him Management as a profession in its own right, where selling sugared water qualifies you to run a computer company. We also owe him Management By Objectives (MBO), that he acknowledged after 45 years was ineffective.
If we must quote an American management thinker, how about Deming? As a writer, he didn’t hold a candle to Drucker. He only wrote a few books, badly structured and with misleading titles, but his ideas were deeper than Drucker’s and, unlike Drucker’s, most of them have stood the test of time.
I see Tesla as a graft of the Silicon Valley culture onto the car industry. Mark Donovan hails Elon Musk as a hero, and, perhaps, the Tesla story would not have been possible without him, but I see him as the last in a long line of outstanding business leaders who have built what is Silicon Valley today for the past 80 years, starting with Bill Hewlett and Dave Packard and continuing with Andy Grove, Steve Jobs, Mark Zuckerberg, and plenty of other, less known figures.
Jim Womack goes through the entire official history of Toyota and the emergence of its cautious, stepwise approach to innovation, and contrasts it with what he perceives as Tesla’s reliance on “genius and adrenaline” to compensate for the lack of a plan or a business system. I don’t know how Tesla works or whether they have good plans. What I do know is that Silicon Valley has no shortage of ideas on how to develop innovative products and bring them to market, backed up by success stories. While different and sometimes at odds with the Toyota Way, TPS, or Lean, it should not be underestimated.