With new technology and companies threatening to disrupt the trucking industry, Mercedes-Benz is caught between the need to change and the imperative to maintain traditional strengths like safety and reliability.
To chart a new course between its future and its past, the company created its very own start-up and plopped it into the middle of its traditional businesses.
Dubbed Digital Solutions & Services, its marching orders were to create a freewheeling, innovative culture to pursue daring ideas, and then find partners within Mercedes-Benz Trucks’ existing divisions to make them reality. It is part of Daimler AG, the German automaker that sells trucks under the Freightliner and Western Star brand names in the U.S.
Daniela Gerd tom Markotten, a research engineer with the company since 2003, oversees this seemingly impossible balancing act. After one year, the Digital Solutions & Services group has 600 ideas in the pipeline, divisions spread across the globe to find external partners, and a flexible organizational structure like no other at Mercedes.
With its first major initiative set to launch in July, the new department will soon see how well it has balanced its entrepreneurial spirit with the need to play well with others at Mercedes-Benz.
“We would rather see ourselves as speed boats going as fast as we want,” Gerd tom Markotten said. “But this is not innovation for its own sake. You have to build bridges to the classic departments. Because if we don’t do that, we’re not going to have an impact and we’re not going to be successful.”
In this case, the product involves Dailmler’s FleetBoard, the company’s telematics system that has been a workhorse for the trucking industry for more than 15 years. Over the past decade, FleetBoard has evolved from simple location-tracking capability into a multi-function communication device monitoring and transmitting the data being pulled from the 400 sensors embedded throughout a truck.
As a starting point when the group was created in April 2016, it was given this challenge: How can FleetBoard be turned into a platform that can be used to host and launch a limitless number of new services?
“The question was how to make more use of that,” Gerd tom Markotten said. “We see what’s going on with digital disruption and connected start-ups and autonomous start-ups. But let’s put the focus on digital solutions that are already there. There’s quite a bit of data right now that we can use for new services like financial services, predictive maintenance and there is even more potential.”
The solution was to develop a software development kit that would allow outside developers to create apps that run on FleetBoard. In July, the company will launch the FleetBoard Store, a marketplace for apps at appyourtruck.com.
Meanwhile, Gerd tom Markotten has hit the road to pitch the idea to developers outside the company.
Her challenge is to explain why someone thinking about building an iPhone app might have a much better opportunity creating a B2B app for the trucking industry. That effort took her to Mobile World Congress in Barcelona this month where she made several presentations at the mobile industry’s largest annual gathering.
Her bottom line: The trucking industry is enormous, ripe for new ideas and willing to pay money for apps that help them be more productive. And with 200,000 FleetBoard units installed in Mercedes and non-Mercedes trucks, the potential user base is a big one.
“It’s safe to say that logistics are the backbone of the economy,” she said during a presentation at the Mercedes booth at the Mobile World Congress.
“The B2B environment is somewhere you can make money,” Gerd tom Markotten said. “The trucks are not the center of logistics anymore. They are part of a large system.”
She demonstrated one Mercedes app called SpaceMapping. The app lets a driver take a picture of the inside of a trailer to calculate how much space remains to be filled. That information can be sent to a driver or dispatcher to determine what else could be loaded in the trailer.
Both Mercedes and the trucking industry are hungry for ideas that can help solve its big problems, like inefficient use of their existing fleet and the mounds of paperwork drivers have to manage.
“We’re reaching out for ideas,” she said. “The world is growing, and the whole ecosystem is growing so fast that we can’t develop all the apps ourselves.”
While the app store launch looms, it remains just a beginning for this new department. Just as interesting as its potential products is the way it generates ideas.
The group is organized using a structure Gerd tom Markotten calls “swarms.” That means that developers are placed into small teams to work intensely on a project or to test an idea, maybe for a few weeks or a couple of months. And then the groups are disbanded and employees are re-formed into teams around other projects.
The goal is to create a frenzy of creativity. According to Gerd tom Markotten, the department has generated 600 ideas in the past year. And to keep it from getting bogged down, it sits outside all other departments and reports directly to the division’s chief executive.
She built the department by recruiting about half the employees from across Daimler. The other half came from outside the company from start-ups and other tech companies.
The department is spread across four locations: Stuttgart, Berlin, Tel Aviv and Silicon Valley. Gerd tom Markotten wanted as many members as possible to sit far from its German headquarters, but she also wanted them to be in areas where they could connect with critical universities and ecosystems with specialties in things like artificial intelligence.
Gerd tom Markotten acknowledges that the rapid rhythm of her group has generated friction at times with other departments. But in some ways, that’s the larger point: To push the larger company’s culture to evolve, even if it’s uncomfortable.
“We are trying to be disruptive, and sometimes we have to fight with the classic departments,” Gerd tom Markotten said. “We operate in a way quite different than you would expect of Mercedes. But I very much believe in this organizational structure and the impact we can have on the company.”