- General Motors’ innovation team has a clear directive: Projects must add at least $100 million in revenue.
- Rachel Kuhn, director of innovation at the automaker, is not a “car person,” and previously worked in management consulting and as a Starbucks executive.
- In an interview with Business Insider, she explained what problems the team is hoping to solve as GM and the rest of the automotive industry look toward an electric, driverless future.
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Rachel Kuhn has what could be one of the hardest jobs at General Motors, and that’s because it’s a job outside of the area the company has long dominated: cars.
As head of the innovation at the US’ largest automaker, she and her team are charged with thinking outside of the box to solve problems not addressed by GM’s “automotive core,” which makes up 89% of its total business. Basically, she’s helping GM think beyond cars — and beyond the emissions that come with the internal-combustion engines often powering them — in an effort to ease some of the climate issues the automotive industry itself has helped to create.
But to make sure the innovation unit isn’t merely a marketing effort or a PR feel-good story for the company, there’s a clear mandate: It needs to meaningfully add to GM’s top line.
The problem? GM’s 2019 revenue was roughly $137 billion.
“If we’re going to contribute anything meaningful to the company’s top line, that’s a large number,” Kuhn, who is 41 and previously worked in consulting roles and as a Starbucks executive, told Business Insider. “So, our definition of ‘starting small’ is, I think, different than most of the world’s definition of ‘starting small.’ It’s just really, really hard to move the needle in a company of this size.”
For most, $100 million — the minimum accretion GM wants from Kuhn and any projects undertaken by her team — is definitely not starting small.
Luckily, the company seems focused on a world where cars, and the market for them, are radically different than in the past century. And with Mary Barra at the helm, a transformation has begun.
“Our belief in the science of climate change drives our commitment to create a zero-emissions future,” the chief executive said at a capital markets day in February. “We know we have more work to do today to reduce the environmental impact of our operations and of our products.
“There is excellent work going on across the company, and we are integrating and accelerating that work because we believe it’s critical to the future, and we believe we have a responsibility to aggressively pursue it.”
The future is coming, that part is certain. But the question not even Detroit’s brightest minds have an answer to is: When?
That makes an innovation team’s work all the more precarious.
“It all starts as a much more complimentary conversation [to GM’s main auto portfolio],” Kuhn said, adding that these are conversations the company and its investors would be having regardless.
“We obviously do make a ton of money on our trucks and SUV portfolio,” she continued. “But that said, I think we have a recognition, and frankly a hope, that the world is moving towards the emissions-free future and are investing heavily in EVs [accordingly]. Because you have both, right? The profitability of the core is what enables innovation and future investment.”
Kuhn pointed toward the upcoming electric Hummer — which GM unveiled during the Super Bowl to complete with a rash of souped-up, outdoor-ready electric trucks and SUVs coming to the market — as an example of the synergies between the automotive core and innovation. It’s almost poetic, given the revival of an old, gas-guzzling name for a new, cleaner future.
This kind of electric transition is something every automaker has voiced in some manner. And while admirable, there’s plenty of work to be done for the entire industry — electric vehicles made up just 2% of new-car sales in 2019 and pollutants are still near all-time highs, according to US Government statistics.
That’s where GM’s innovation team hopes it can help.
“I really appreciate from our leadership, that recognition of ‘You don’t know what you don’t know,” Kuhn said.
“When you’re in this world of rapid change, having a group that’s relatively removed from the down-the-middle current corporate thinking, and given a task of completely setting that aside to a certain degree, and just looking at the world and its pain points, we do often end up having really interesting tie-ins that we can go address — and in the course of those conversations, can lead to a solution that, really, it’s great for the core business.”
The innovation team isn’t focused on snapping up startups like some competitors have done, but it is building some things in house. Last year, GM started taking orders for its first e-bike: the Ariv, which is pronounced like “arrive.”
Kuhn declined to give more specific examples, but noted more ideas “somewhat in the line of the bike” are soon to be announced in line with her team’s “commitment to zero emissions.”
“The question is, how do you take as much movement through a city that might not need to happen with a car, and how do you electrify that?” Kuhn said. “You can take emissions out of all types of places.”
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