Top 5 Takeaways With Rick Wagoner

December 11, 2023

We are proud to feature Rick Wagoner as part of Applied Intuition’s Top 5 blog post series. Rick Wagoner is the former Chair and CEO of General Motors. He visited our Mountain View, CA headquarters for a fireside chat with Applied Intuition’s leadership team.

Here are five takeaways from our discussion.

1. For physical products, good design is really important.

“In the 1990s at GM, one of the things we needed to do was fix our quality. Brands like Toyota and Honda did well because people didn’t have problems when they bought their cars. Then I hired Bob Lutz to run the product function [as Vice Chairman of Product Development]. Bob said: ‘It’s all good that you have high quality, but your cars are kind of boring.’ He really challenged us to create more exciting designs. We had been too focused on avoiding mistakes rather than focusing on executing well and asking: ‘What excites me about the vehicle?’”

2. Incumbent OEMs find it hard to fully embrace the software mindset.

“Over the next 5 years, the key to differentiating yourself with software-defined vehicles is to create software that works. Customers are used to reliable hardware, and they are going to grade OEMs pretty directly when it comes to software: ‘Does everything in the vehicle work like you marketed, 100% of the time?’ OEMs might also struggle to understand customer requirements and educate customers about new products. The engineers who built the software might know a lot more about it than the customer who is buying it for the first time. Making sure you get the customer experience right is very important.”

3. The automotive competitive landscape is changing.

“It used to be the case that incumbents, due to their scale, established manufacturing base and supplier infrastructure, technology, and distribution networks, made it difficult for anybody new to come in. Tesla really changed that. And then, what’s changing it now is that the shift to EVs and software is resetting the rules where you may not need to develop everything yourself. You can just buy software from one vendor. You can buy batteries from somebody else. If you’ve got a different concept that creates value elsewhere in the automotive value chain, it’s possible that we could see a couple of new players trying something different. Though in the end, it’s hard to become a big player without scale.”

4. We shouldn’t apply traditional fueling infrastructure principles to the EV charging industry.

“The great thing about EV charging is that you can do it at home. You plug in every once in a while, and if you’re like me, you don’t even really pay attention to how much it costs because it gets added directly to your electric bill. The US is well set up for EV charging, given the percentage of home ownership. Over time, people who buy EVs will get home chargers installed, and that will cover about 90% of EV charging needs. The problem is: The expectation that we’ll fix this immediately is unrealistic. Fueling infrastructure was built over 30-40 years. It’s going to take some time.”

5. Great companies manage to keep their vision and human touch.

“Pick the right people, work with them, and motivate them. The best people are the ones who can continually take a bigger picture view while overseeing the execution of their responsibilities. As your company grows, you have to evolve the way your company operates and also try to figure out how to keep the human touch, how to keep the vision, and how to keep your employees motivated. These are the things that set apart the really great companies from average ones.”