Why would a company best known for its vacuum cleaners invest more than half a billion dollars to pursue building an electric automobile?
In a recent article on his forthcoming book, Invention: A Life, James Dyson answers that question and shares the story of his company spending years and north of $700M to build an electric car that won’t be going to market.
That previous line reads like a cautionary tale – and in some respects it is. Few organizations have an innovation budget where they can afford to eat $700M without seeing any tangible return on investment. So why did Dyson bother to pursue an electric vehicle instead of staying in its own lane?
While Dyson could continue to make vacuums, lighting, and other personal care products, it’s the technology and solutions built into those products that lead to other opportunities. Here’s how Dyson explains it:
“At Dyson, we were developing more efficient batteries by 2014. We had been working on high-performance electric motors for some time. We also had research programs on air purifiers and heaters. We were pursuing a range of new ideas for products including hair care. It occurred to me that what we were developing was the technology and know-how that together spelled the development of an electric car.”
An industrial designer by trade, Dyson embraces a vision that other companies and leaders often struggle to see: the ability to recognize opportunities to move from core products toward adjacent business opportunities or transformational breakthroughs. Staying in your own lane (core) can be comfortable. But it also can be limiting and, over time, put the company at a competitive disadvantage.
Technology-driven vs. product-driven
If Dyson were a product-driven company, moving from vacuums and hand dryers to electric cars appears to be a massive leap in hopes of a transformational moment. But at its core, Dyson is a technology and design company. It solves problems with a mindset of applying technology expertise that can be integrated into a myriad of thoughtfully designed end-user products that customers desire. This shift affords broader thinking about what’s possible and, despite how it might appear, is less risky.
This is a shift in mindset that legacy businesses, traditional manufacturers, and product-driven companies need to adopt if they want to compete and win going forward.
Success, failure and key learnings
During the course of development, Dyson grew an internal team of more than 500 to build this electric car and didn’t partner or employ outside design or technology expertise. Few companies have those kind of resources, and perhaps some of that insular thinking prevented a clear assessment of the three things every innovation and technology-powered solution demands: desirability (is it what customers want?), technical viability (is this the best workable and effective solution?), and project feasibility (will this produce results and ROI?)
Here’s the interesting twist: Dyson actually built a desirable, viable electric car with the potential to be transformational in the market. But it failed when it came to the third requirement. Its input costs and direct-to-customer sales model wasn’t feasible, and that pushed the price point to more than $200K. As a result, the private company decided to scrap its production plans.
Your company doesn’t have the luxury of swinging and missing, let alone of this magnitude. Determining what deserves to be built – before building it – requires confirming if a project is desirable, viable and feasible. Otherwise, it shouldn’t get built.
Even without a vehicle to show for the effort, Dyson maintains a continuous learning and growth mindset that more companies and leaders need to adopt when navigating technology-driven innovation:
“We did, though, push ourselves to learn a great deal in areas including batteries, robotics, air treatment, and lighting. We also learned more about virtual engineering as a tool in the design process and how, ultimately, we would be able to make products more quickly and less expensively. These were all valuable lessons for the future.”
Dyson’s aspirations weren’t overly ambitious. Rather it was a misstep in following the fundamental requirements for successful innovation that must show a return on the investment.
Contrary to the myths surrounding innovative breakthroughs and digital transformation – all of it can be achieved through a proven and repeatable process. Once you embrace technology and user experience as the driver versus solely thinking about product enhancements, you’re on the road to making breakthroughs and innovating. There’s also a pathway to follow with guardrails that will keep focused all the way to the finish line – successfully and profitably.