Which Business Score Counts???

at Martin's Tesla Founders Blog
there is a very lively debate
on how to keep score of a business.

Most of the businesses are automakers
and the products are usually cars.

The majority camp believes that products are what matter
and the minority camp (that myself and Martin subscribe to)
value business systems as more important than business products.

In Built to Last by two Stanford Professors,
the argument is deepened further,
akin to "clock building" vs "time telling."

Clock building is focusing on things in your company's DNA,
like for Toyota, kaizen, or values like frugality that help
employees on business trips order ramen instead of sushi.

Telling time is like making a MP3 player because everyone else is.

The hybrid and electric vehicle is much like the iPod for the world'
largest business and companies are all over the place in searching
for strategies: some are product based and few are systems based.

IF I WAS TO STARTUP AN AUTOMAKER SYSTEM...
I WOULD START WITH ? ENTITIES...
but let's save that for another blog, sorry...

BACK TO TESLA FOUNDERS BLOG AND MY RESPONSE TO A BLOGGER KINDLY ANSWERING MY QUESTIONS ABOUT PATENTS AND MARTIN'S RESPONSE

One of the most lively debates appears under Martin's posts on Kaizen.

In response to my question," How many patents does the Tesla Roadster have compared to the Prius?"

TEG wrote:
"Here are some examples:" and proceeded to list some important details that obviously costs his voluntary time!

FIRST OF ALL TEG, I would really like to say THANK YOU for going out of your way to do some research and answer my question. That is very kind of you!

You have taught some of the value of a blog (as I'm new to this system, although I've been scribbling for decades)...

Back to the question about patents related to the topic of kaizen.

COMPANY OR CAR???
As Martin and I try to hit home over and over, it's about the business system and much less about the product.

Kaizen is simply one example, and it DOES NOT mean that anything Toyota touches is golden. Anyway, that system had roots in Deming's work, who had also worked with Ford. So, yes you need a team AND a system, but I argue, system first, most argue team first...

Martin said:

"A lot of you seem to miss my point. Kaizen applies to the way you run a factory, work with suppliers, negotiate contracts, structure the company, etc. The whole point is to encourage evolution so that your business gets better over time and learns from its mistakes.

I am talking about evolution of business processes."

THIS IS PROFOUND AND PROVED IN BUILT TO LAST!!!

SO IF WE ARE COMPARING companies and technologies under the system approach, how do we keep score???

Traditionally, we measure sales, or consumer acceptance. That to me only measures the products, half the battle. After all, a company is a collection of resources working in a unique system.

What about measuring the system???

PATENT SCOREBOARD
I would argue that the patent trade war is a good place to start.

What is a patent anyway???

Well, is it not the result of several failures???

Trial and error inside of a business system.

If so, than the number of patents is a great metric for evaluating business systems (companies), especially startups that don't have customers yet.

BACK TO TEG's hard work on Tesla vs. Toyota patents. FIRST OF ALL, it's unfair to compare these two business systems, Toyota is a collection of hundreds of businesses and thousands of suppliers and tens of thousands of employees, while Tesla is a startup.

BUT, I was very curious to see if anyone out there knew that the G21 project that failed through 80 car designs to accidentally land on the Prius and filed 650 PATENTS ALONG THE WAY!!!

The bottleneck for the most successful digital automobile every produced was the high voltage controller. Even Silicon Valley knows little (has far fewer patents on than lo voltages) about high voltage.

Toyota plowed $1 billion into a secret factory head up by an engineer that started his career scrubbing catalytic converters 30 years prior, churning through the system of Kaizen, where failure in R&D is acceptable. Up in Northern Nagoya, the guy built the brains that became the Hybrid Snergy Drive. The product WAS NOT the goal, it was a system to run the first Prius because no supplier could come up with enough high quality controllers.

AGAIN THAT WAS A POTENTIAL $1,000,000,000.00 FAILURE (IRONICALLY THE SAME PRICE AS THE EV-1) WITH MANY SMALL FAILURES ALONG THE WAY THAT BECAME PATENTS (IRONICALLY HOW MANY GM EV-1 PATENTS ARE ON THE SCOREBOARD?).

So the reason I keep bringing the Prius into the picture is that VERY FEW people understand how many failures occured and how the Toyota system worked through those with a rush deadline for the Kyoto Protocol. The managers and engineers hated each other on the project.

The other misunderstanding is that people calculate the $1 billion dollar factory into just the Prius and don't realize it's a system that will probably last until Toyota's last day.

SO WHAT IS THE SCORE???

Toyota ($1 billion high voltage controller secret factory and 650 patents that became the Hybrid Synergy Drive)
GM's how many patents on E-Flex
Tesla's how many patents on energy management
Mitsubishi's how many patents on in-wheel electrics
Ford's (300+ related to the Escape hybrid) how many plug-in controller patents

Where we can get a scoreboard of patents on the high voltage race to the digital automobile???


PS I'm not asking for patent search help, as this is not an engineering scoreboard, think ESPN that reports the score on each of the sports systems running. Just the area of patents and number by company.

Short Prius History

In response to a blogger incorrectly identifying the origin of the Prius in 2007 before it went mainstream because he didn't realize it was a remainder design after 80 others were thrown in the trash, I wrote this blog piece:

Correction: this car was designed under the G21 project for Global 21st Century not a one car design project. The vision was about energy and environment. The mission was to double the mileage of a concept in R&D. The manager in charge of the 1,000 engineers demanded doubling the mileage so the team had to throw out 80 designs to get to the funky little remainder car that became the Prius.

It was designed to get twice the mileage of a standard Toyota compact to unveil right around the Kyoto Protocol. It was being driven as a visionary concept, not as a city car. It became that type of car after the popularity exceeded everyone’s expectations in response to celebrities and  more powerful and roomier American versions were exported to Los Angeles.

Did you know that Japanese version has an electric only switch? I imagine it would create lawsuits in the US from abusive users that could burn up the Hybrid Synergy Drive 650 patents, so they left a blank spot on the American dash. The Prius design was driven by an open ended simple goal, double the kilometers per liter.

I love the Reflex and Volt!!!

Raw Response to
Ford Considers Plug-in Hybrid
at Wired's Autopia
avail http://blog.wired.com/cars/2007/01/ford_considers_.html

Conventional cars only use about 12 or 15 barrels of oil for every 100 raped from Earth to turn our wheels...

Hybrids double that.

Plug-ins go even further...

Electrics get up to 90% efficiency!!!

Conventionals are yesterday, hybrids are now, plug-ins are next and electrics are the future.

Ford's decision to work on plug-ins will only help in the mid term. Since Toyota used over 650 patents on its hybrid technology, rivals have to license or throw in the towel in the short run.

Ford and GM have a giant opportunity to leap ahead on plug-ins and electrics if they can get to 1,000 patents before Toyota.

If those hybrid patents (by the way, Ford used 350 on the Escape Hybrid with 21 blueprints from Toyota) cross-over to electrics or plug-ins, Ford and GM might want to collaborate or find a new powerplant that can beat the Prius at 37% vehicle efficiency and eventually run with Tesla 90% efficient roadster...

Good luck Detroit, I love the Reflex and Volt!!!

Posted by: John Acheson | Jan 20, 2007 6:47:10 PM