How Mercedes is using software to rewrite product development playbook

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In a world of “software-defined vehicles,” old-school automakers are competing with new-school Silicon Valley for computer engineers, user-experience developers and coders.

General Motors said it would hire more than 8,000 tech workers this year to accelerate the development of electric vehicle and software-driven services. Mercedes, meanwhile, is recruiting an army of 10,000 software engineers in Berlin, China, India, Israel, Japan and the United States.

In a survey of 572 auto executives by research institute Capgemini, 97 percent said that four out of 10 in-house workers would need software skills within five years, from IT architects to cloud management professionals to cybersecurity experts.

Automakers are rewriting their product development playbook to prioritize speed and collaboration.

“We’re in a different competition right now,” Starzynski said. “We looked around and asked, ‘Whom can we learn from internally?’ ”

Mercedes found inspiration in its Formula 1 racing team, which relies on “continuous iteration” to shave milliseconds off lap times each weekend.

For EQ model line development, Mercedes has ditched department silos in favor of a flat organizational structure that encourages real-time collaboration.

“We brought people together from all areas, and they were fighting for the best ideas,” Starzynski. “Then we pulled management in” at the board level for quicker decision making.

The new workflow manifests in Mercedes’ development hubs from Shanghai to Sunnyvale, Calif. Open-floor workspaces foster serendipitous interactions and spark idea-sharing between teams.

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