Sheryl Connelly is the head of Ford's Global Trends and Futuring Division, where she separates trend from fad and helps the automaker determine what global changes will influence the market in years to come.
Join us to learn Sheryl's insights on how demographics, technology, the environment, and other global issues have shaped today's market, what these trends could mean for our future, and how one company is responding.
A full transcript follows the video.
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Brendan: Hi, folks, I'm Brendan Byrnes and I'm joined today by Sheryl Connelly. Sheryl's the head of Ford's Global Trends and Futuring Division. First of all, thanks so much for your time.
Sheryl: My pleasure.
Brendan: It sounds like a very interesting job. Could you, first, just very quickly describe your job and what, exactly, you do for Ford?
Sheryl: Sure. Informally, I'm often referred to as Ford's "In-House Futurist," which is a bit of a misnomer, because I am the person that spends most of their time reminding people that no one can predict the future.
What I try to do is help give input to strategic discussions. What are the assumptions that are built into our plans? What happens if the assumptions that we have are wrong?
To challenge those things, I look at trends -- global trends -- through the lens of social, technological, economic, environmental, and political arenas, because while we'll never be able to predict the future, we know those are the five things that will shape the landscape.
Brendan: What's the process for that? You look at a bunch of surveys? I assume it's a lot of reading?
Sheryl: It's a ton of reading. It's a lot of reading. It's not very numbers-based. It's really qualitative, and it's subjective. I have to really make sure that I am trying to take out my own personal bias.
We work with thought leaders inside and outside the company. I've been doing it for nine years, so the process that I have today is quite a bit different from what it used to be. Today, it's just a lot of pattern recognition. You get it into your head that there's a certain trend, and suddenly you seem to see evidence of it everywhere.
Brendan: I assume it's a pretty tough job, trying to separate long-term trends from maybe short-term fads. Is there a specific way you do that, or does that come with experience? How do you separate the noise?
Sheryl: I have a really specific illustration I always use, talking about the difference between trends and fads. I talk about denim, or blue jeans.
Blue jeans have been around for 150 years. In the early 1900s, it was often used as a work uniform because it was inexpensive, highly durable, the more you wear it the more comfortable it became. But it was associated with this lower socioeconomic status.
Today, blue jeans are high fashion. You wear them to the office. Some designers within Ford tell me they spend more money on their blue jeans than they do on their suits, and indeed people will pay hundreds of dollars for a pair of blue jeans.
Over the last hundred years our values, our attitudes, and behaviors toward denim has changed. That's a manifestation of a trend. By contrast, styles of blue jeans -- high rise, low ride, colored denim, skinny leg, acid wash -- those are fads, and those change with the season.
For our purposes within Ford, if the things that we watch are changing that frequently, that's our first clue that we're watching the wrong things. Part of that is driven because our product cycle is three years out, so we always have to make sure that we're pushing ourselves to have a long view.
If we were doing something different -- if we were in cell phone technology, which changes much more rapidly -- then maybe our lens would be shorter.
Brendan: Can you give us an example of how your research into trends has shaped a Ford product, or at least changed it in some way? Something that you see before a lot of people, that they say, "I didn't think of that."
Sheryl: Sure. Trends 101 is to follow the aging population. Worldwide, the population is aging, and the United Nations has actually declared that this will be one of the greatest challenges that you and I face during our lifetime.
I try to understand that. I try to understand it from a global standpoint, because aging is an interesting idea, but what do you do with it? One thing is to challenge our assumptions.
Aubrey de Grey is a scientist who has declared that the first person to live to be 150 years of age has already been born. It's kind of shocking to think that you or I could live to 150, or maybe my children, or maybe my grandchildren. You may not agree with his point of view, but intuitively it makes sense.
One of the questions we have to ask ourselves internally is, "If I'm a driver of a car and I'm 83 years old, I might be more than willing to surrender my car keys because I think I'll only live to be 85. But does that process change if I think I'm going to live to be 105?"
We have to challenge ourselves to say, "What are the things that we can do to design and engineer a car that will enable the freedom and autonomy of owning and operating your own vehicle?"
I never talk about what we do with that, inside of cars, because I'm not the subject matter expert when it comes to cars. I would take that insight and I would say, "Here's how cell phones are responding. Here's what the government in Japan is doing. Here's where you can see trends of aging in hospital products."
I share that with the designer, engineer, someone in marketing, and then they use it as a springboard for inspiration. That's where I enter it. I would never single-handedly take credit for any of the things that Ford has entered into the car, but I'd like to think that I'm like one ingredient in a sausage grinder.
In terms of the way you see it manifested on the car, there are lots of ways to see it. Design wise, we lower the lip of the vehicle so it's easier to get in and out of the vehicle.
We know that the changing physiology that comes with aging means reduced response time, impaired vision, limited range of motion, so that creates a business case for putting a camera on the dashboard so that you can have almost 180° view of what's behind the vehicle, for those people who can't turn their neck.
We have Active Park Assist for people who have range of motion or dexterity issues, so the car can park itself. Even response time, we now have adaptive cruise control, so it measures how far the car is in front of you and will slow down if they start to brake, and some collision warnings.
The key is that you can't design a car specifically for an old driver. We approach it through universal design. We hope that these features will have the same appeal to someone who's 71 or 17.
Brendan: When you look at these trends, how far out are you looking? Obviously you're not looking for the trend next month, even next year. Do you go decade long?
Sheryl: Sure. It really depends on who I'm talking to, but we do explorations 5, 10, 20...
Right now I'm doing a lot of discussions about what 2050 might look like. You just start with demographics. Demographers would tell you that demographics are destiny. I'm not sure that's the whole story, but it's an interesting place to start because you can see where patterns of populations are migrating.
This aging population is interesting because of the dependency ratio. As you have an aging population, you have to ask yourself, how many workers do you have to support your retired population?
As that number becomes imbalanced in a place like Japan -- which is expected to be upside down on their dependency ratio; they'll have like 108 retirees for every 100 workers -- it means their economic output will drop, their famously high savings rate will dip, they'll have less money for innovation and investment.
This will mean that their technological prowess will decline, and their political influence and sphere of social reach will change.
That can be a really interesting conversation when you're talking about long term, where are the opportunities. Of course you also have to say, "What's Japan trying to do to change that? What are the programs and policies that they're putting in place?"
I don't predict what's going to happen. I just say, "Let's explore the what-if, the possibilities."
Brendan: You mentioned the aging population, especially with developed countries. What are some other trends that you're looking at overall, when you're talking about either United States or the world?
Sheryl: Near term, something that's probably a little bit more front and center is a trend that we started talking about four or five years ago.
It's called Information Addiction. It's readily identifiable, and it's based on this concept that having information at your fingertips, delivered in a just-in-time fashion, means that you're better able control your environment. You're presented with more opportunities, you can act more spontaneously, and that for some people, that will translate into power, success, maybe even wealth.
If that hypothesis proves to be true, our reliance on it will continue to grow. That's the top-line hypothesis, but what are the drivers? What are the arguments that you can make for that case?
One of the arguments that we make is that information is becoming an important status symbol. Being in the know, being recognized for your influence, is a really interesting way to assert status in a marketplace where conspicuous consumption has fallen out of favor.
Brendan: One of the things, with the Information Age, a lot of millennials, the younger buyers, Gen-Y, they say they'd rather own maybe a smartphone. There are less drivers. Less people are getting their licenses among the millennials. More people are moving into cities.
Is this a trend that you're watching carefully, and what kind of things can you recommend? On the product side, they decide what goes into the cars, but what are you seeing as far as people moving away from cars, especially young people, and how that affects Ford?
Sheryl: We've been talking about this inside of Ford for a long time. The Department of Transportation issued a report a few years ago that basically said 70% of all 16-year-olds do not have their license. That's a challenge. That's going to be a challenge for a car manufacturer that wants them to have their license and to drive.
We explored it. There's no clear-cut answer as to why this is happening, so I'll run you through some of our theories on it, one of which is that it's harder to get your license today than it's ever been before. The states have a graduated system, and that's changing, but that can't explain all of it, because the numbers are down for 17- to 18-year-olds and 19-year-olds.
We think economics play a role. When I got my driver's license, it was free. It was offered through the local high school, but today it can cost anywhere from $200-800 to get private driving lessons. Then to add a teenage driver, for a family to take on that cost, is also equally expensive.
That's part of it, but I don't think that's the whole story. You've already alluded to what I think is probably the biggest driver, is this ubiquitous connection of technology.
We have devices that make us feel like we are with people, even though we are physically apart. That virtual connection means that we don't always have to be together. We have text messaging, Skype, Twitter; things that make us feel like we're in company with our friends.
We also know that what the car means to people today is evolving. If you were a baby boomer, when you came of age a car was a gateway purchase.
Brendan: It was freedom.
Sheryl: Yeah. It was freedom, it was independence. It meant that you had arrived. You were officially an adult. But if you ask my daughters, they would say the gateway purchase into adulthood is a cell phone, and that is freedom and independence.
That's a new context that we're trying to bring into it. The way that Ford is dealing with that is that we're making sure that our cars are much more than just transportation. For those who want it to be a status symbol, and are drawn to the engineering and the exquisite design, we'll still deliver that.
But for those customers that aren't in tune with that, we need to make sure that we're delivering it as a lifestyle enabler. We do that through bringing in platforms like SYNC, which let you pair any Bluetooth device with it, so you engage on your cell phone or your MP3 player through voice activation and hands free.
We also are engaging with more communications with millennials. Marketing used to be a monologue, and now it's a dialogue. It's a two-way discussion, so we're leveraging that.
A couple of years ago when we were bringing the Ford Fiesta over from Europe and we were going to launch it here in the U.S., we took people that were very influential in the social media space. I think they were 100 Fiesta agents, and we let them drive a Fiesta for six months.
All that we asked was that they report, share the word, document their experience; good, bad, or indifferent. Just tell us what you think.
That was really powerful because young people, as you said, are so tech-savvy, they're marketing-weary. They've been inundated with messages their whole life, so that word of mouth, that authentic voice of someone who's interacted with the product, is a way that we reach young people that we haven't done in the past.
Brendan: Your job is Ford's Futurist. It sounds incredibly interesting, but it also sounds incredibly difficult when you're talking about looking decades out, at times, to try to spot trends. Are there any you look back on and you say, "Man, what were we thinking on that one?"
Sheryl: Sure, you do. It's not easy work, but it's really rewarding. I want to be clear, I don't do it by myself. There are lots of people inside the company that I collaborate with. Then, equally importantly, we also tap into the thought leadership of people outside the company, people who aren't thinking about cars, because they have extraordinary insight for us.
One of the things that I do look back on ... your perspective changes over time, so when I first started doing trends we had identified a trend called the Middle Market Squeeze. We were looking at the democratization of luxury. A lot of higher-end brands were moving downstream, but then a lot of new, emerging brands were trying to become a little bit more premium.
You could really see this in automotive. BMW had started to change the price points for their entry-level offering, then at the same time Kia was moving up in terms of quality and their premium offerings, and Ford was feeling squeezed.
We said, "This phenomenon is happening in lots of categories. There are players in the middle market that are being squeezed out of business." I think that was more symptomatic of where our position in the market was.
What was really happening was globalization and market fragmentation, and the desire for customization, personalization, and niche offerings. Those were probably the cause, and we miscalled it and said that it was probably a symptom. We missed the mark on that.
Brendan: You spoke about globalization. I assume, when you're looking globally at trends, it changes very rapidly per country, when you look at different countries. Ford plays in a lot of different countries around the world, but we also have the One Ford plan, which is going toward more common platforms and common vehicles.
How do you recommend adapting your vehicles to local trends, when you're going toward common platforms? Is that a challenge?
Sheryl: Sure. When the Trends and Futuring Team was established in early 2000, their mandate was to become a center of excellence. The idea was that Trends and Futuring wasn't new to Ford. You had people in Strategy or PD or Design that were always thinking about the future, but they weren't always sharing their ideas with everyone else.
Ford of Europe might have their set of trends; Ford South America might have a different set of trends. The concern was that this disparate work might produce inconsistent but, more worrisome, incompatible trends.
The early work of the Trends team was to globalize it. We said, "Regardless of where you are in the world, when you're having a discussion about the future, these are the things you should pay attention to."
As our work has become more sophisticated and nuanced, now we say, "Here's the global trend, but let me tell you how the implications are regional." Aging is a global trend, but it feels quite different in China than it does in Germany, or Brazil. You play against that, and that's where we start to do that.
In terms of our global platforms, that was really important in terms of manufacturing efficiency, and also brand equity; making sure that Ford stood for the same thing. Wherever you were, whatever car you bought, or truck or SUV, it still had these hallmarks, the DNA of design.
We still do that, but then when you market it regionally there are some elements of customization that can be tweaked, so that's more reflective of the marketplace and the consumer body.
Brendan: Obviously there's a huge Green movement and Ford took advantage of that in the past couple of years, moving more toward electric vehicles now, maybe away from the internal combustion engine in some forms, maybe hybrid designs.
Are you seeing anything trend-wise, long-term that says one will win out over the other? You have electric, you have gas obviously, natural gas even. That's a long way off as a commercial vehicle, but do you see any of those trends winning over one another?
Sheryl: Yeah. When I started doing this work, everyone talked about peak oil. "Where are we on peak oil? Have we hit it? How close is it? What will we do?" You don't hear that conversation anymore. It seems to have kind of dissipated.
I think in terms of the future of energy sources, we don't know and we can't know. What Ford has done is they have adopted a path of parallel investment and innovation. We're investing in the internal combustion engine, but we're also investing in hybrid and hybrid electric and pure electric. We'll continue to do that.
More importantly, I think it's a smart strategy because even if one of them does take the frontrunner position in terms of popularity, it's not going to be universal around the world.
If you look at Brazil, with their rich resources with sugarcane, they've basically said, "Ethanol. Ethanol makes sense for us. We're going to use the resource that's abundant for us." Then you compare that to China, who has been very clear on saying, "We're going to rely on electric. We think electricity is going to be an important part of our strategy."
Ford's process is to develop all of these, then let the consumer decide.
Brendan: What would you say, overall, when you're looking decades out? Are you optimistic about the worldwide auto market?
Sheryl: I am optimistic. I think I'm inherently optimistic about all things, but it's sometimes hard to be optimistic. When you play in this space of futuring, one of the things we do a lot is scenario planning. Interestingly enough, it's much easier to write a negative scenario than it is to write a positive scenario.
I think human nature is such that it's a lot easier for us to imagine all the ways that things can go wrong ...
Brendan: Right. We don't want to miss anything.
Sheryl: ... than all the things that could go right.
It is exciting, but I think that Bill Ford, our Chairman and the great-grandson of Henry Ford, has really interesting points of view that he's shared on this. He said there was a point in his life that all he did was think about how to sell as many cars as possible and now he actually worries, "What happens if we sell as many cars as possible?"
When you look at the increasing population, some people say that there could be up to four billion cars on the road. Is that necessarily a good thing? When you already have famously congested areas -- São Paulo, Shanghai, Beijing -- during the Beijing Olympics they had an 11- or 12-day traffic jam, and that was after the government had instituted this odd- and even-day paradigm.
I love the way that he brought it down to something that I think is really fundamental. He said, "Henry Ford had this idea that mobility was an integral component of the advancement of freedom and innovation. If we get to a place where we have global gridlock, do we then also put the advancement of freedom and innovation in peril?"
I love the direction when you hear him talking about, "Maybe we are part of a system of multimodal forms of transportation." Maybe we elevate our thoughts, not just about being a manufacturer, but an enabler of mobility in lots of different forms and different contexts.
Brendan: Very interesting discussion. Sheryl Connelly, thanks again for your time.
Sheryl: Thank you.